Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
29 June 2023
Colorado Man Sentenced to More than Thirteen Years for Drug and Gun Charges.Read the Press Release
United States Attorney Steven A. Russell announced that Daniel M. Gutirez, 43, of Del Norte, Colorado, was sentenced on June 26, 2023, in federal court in Omaha, Nebraska, for Conspiracy to Distribute and Possession with Intent to Distribute Methamphetamine, and Possession of a Firearm in Connection with Drug Trafficking. United States District Court Judge Brian C. Buescher sentenced Gutirez to 160 months’ imprisonment. There is no parole in the federal system. He was also ordered to serve a five-year term of supervised release after his release from prison.
On December 1, 2021, Gutirez and co-defendant Sheri Griego were stopped while driving in the area of 8th and Brown Streets in Omaha after officers observed their vehicle commit several traffic infractions. After speaking with the two, officers became suspicious that they were involved in criminal activity. Gutirez was asked if he had any weapons. He said he had a gun in his waistband. He was detained and the handgun was found. A search of his person revealed a quantity of methamphetamine. A search of the car revealed a rifle and 67 grams of methamphetamine along with drug paraphernalia.
Co-defendant Griego is currently scheduled for trial starting August 8, 2023.
This case was the result of an investigation by the Omaha Police Department and the Federal Bureau of Investigation.
Central Coast County Organized Health System, Three Health Care Providers Agree to Pay $68M for Alleged False Claims to Medi-CalRead the Press Release
LOS ANGELES – A county organized health system (COHS) that arranges services for Medi-Cal enrollees in Santa Barbara and San Luis Obispo counties and three Central Coast health care providers have agreed to pay a total of $68 million to resolve allegations that they violated the False Claims Act and the California False Claims Act by submitting or causing the submission of false claims to Medi-Cal related to Medicaid Adult Expansion under the Patient Protection and Affordable Care Act (ACA).
The four entities that entered into settlement agreements with the United States and the State of California are the Santa Barbara San Luis Obispo Regional Health Authority, doing business as CenCal Health, a COHS that contracts to arrange for the provision of health care services under Medi-Cal, which is California’s Medicaid program; Cottage Health System, a not-for-profit hospital network operating in Santa Barbara County; Sansum Clinic, a non-profit outpatient clinic operating in Santa Barbara County; and Community Health Centers of the Central Coast (CHC), a non-profit community health center operating in Santa Barbara and San Luis Obispo counties.
The settlement agreements were executed earlier this month, and late Wednesday a federal judge unsealed the “whistleblower” case naming the entities.
Pursuant to the ACA, beginning in January 2014, Medi-Cal was expanded to cover the previously uninsured “Adult Expansion” population – adults between the ages of 19 and 64 without dependent children with annual incomes up to 133% of the federal poverty level. The federal government fully funded the expansion coverage for the first three years of the program. Under contracts with California’s Department of Health Care Services (DHCS), if CenCal did not spend at least 85% of the funds it received for the Adult Expansion population on “allowed medical expenses,” CenCal was required to pay back to the state the difference between 85% and what it actually spent. California, in turn, was required to return that amount to the federal government.
The four settlements resolve allegations that CenCal, Cottage, Sansum, and CHC knowingly submitted or caused the submission of false claims to Medi-Cal for “Enhanced Services” that were purportedly provided to Adult Expansion Medi-Cal members: by Cottage between January 1, 2014 and June 30, 2016; by Sansum and CHC between January 1, 2015 and June 30, 2016; and by certain other healthcare providers between January 1, 2014 and June 30, 2016.
The United States and California alleged that the payments were not “allowed medical expenses” permissible under the contract between DHCS and CenCal; were pre-determined amounts that did not reflect the fair market value of any Enhanced Services provided; and/or the Enhanced Services were duplicative of services already required to be rendered. The United States and California further alleged that the payments were unlawful gifts of public funds in violation of the California Constitution.
As a result of the settlements, CenCal will pay $49.5 million, Cottage will pay $9 million, Sansum will pay $4.5 million, and CHC will pay $3.15 million to the United States. In addition, California will receive payments totaling $1.85 million.
“These historic settlements demonstrate our steadfast efforts to eradicate fraud involving Medicaid Adult Expansion,” said United States Attorney Martin Estrada. “Health care systems and providers are on notice that the False Claims Act provides us with a powerful tool to ensure that taxpayer-funded health care programs are used for patient care, and not for furtive financial gain.”
“Medicaid expansion funds must be used for their intended purpose of providing health care services to low-income individuals,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “When health care systems and providers knowingly misuse Medicaid funds, they will be held accountable.”
“Federal health care programs are an important resource for millions of Americans to receive medical care,” said Timothy B. DeFrancesca, Special Agent in Charge at the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “HHS-OIG will continue to ensure that federal health care funds are used as intended and protected from fraud, waste, and abuse.”
“Medi-Cal is a lifeline that provides access to free or affordable healthcare services for millions of Californians and their families,” said California Attorney General Rob Bonta. “When any healthcare provider or agency defrauds the program, they break the public’s trust and put their own bottom line before the patients who count on them for honest, quality care and services. I am grateful to the Justice Department for its extensive efforts throughout the course of this investigation. The California Department of Justice and our law enforcement partners will continue to hold accountable those who defraud the Medi-Cal program, and protect those it serves.”
The civil settlements include the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Julio Bordas, CenCal’s former medical director. Under the act, a private party can file an action on behalf of the United States and receive a portion of any recovery. Dr. Bordas will receive approximately $12.56 million as his share of the federal recovery.
The United States previously settled similar allegations against Dignity Health (which operates Arroyo Grande Community Hospital, French Hospital Medical Center in San Luis Obispo, and Marian Regional Medical Center in Santa Maria) and Twin Cities Community Hospital and Sierra Vista Regional Medical Center, two subsidiaries of Tenet Healthcare Corporation, relating to payments they received from CenCal under the Adult Expansion program.
The partial resolution obtained in this matter was the result of a coordinated effort between the United States Attorney’s Office; the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section; and the California Department of Justice, with assistance from HHS-OIG and DHCS. This case is being handled by Assistant United States Attorney Jack D. Ross of the Civil Fraud Section, and Trial Attorneys Mary Beth Hickox-Howard and Tiffany L. Ho of the Commercial Litigation Branch.
The investigation of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The claims resolved by the settlements are allegations only and there has been no determination of liability.
California County Organized Health System and Three Health Care Providers Agree to Pay $68 Million for Alleged False Claims to California’s Medicaid ProgramRead the Press Release
Santa Barbara San Luis Obispo Regional Health Authority, dba CenCal Health (CenCal), a county organized health system (COHS) that contracts to arrange for the provision of health care services under California’s Medicaid program (Medi-Cal) in Santa Barbara County and San Luis Obispo County, California; Cottage Health System (Cottage), a not-for-profit hospital network operating in Santa Barbara County; Sansum Clinic (Sansum), a non-profit outpatient clinic operating in Santa Barbara County; and Community Health Centers of the Central Coast (CHC), a non-profit community health center operating in Santa Barbara and San Luis Obispo Counties, have agreed to pay a total of $68 million to resolve allegations that they violated the False Claims Act and the California False Claims Act by submitting or causing the submission of false claims to Medi-Cal related to Medicaid Adult Expansion under the Patient Protection and Affordable Care Act (ACA).
Pursuant to the ACA, beginning in January 2014, Medi-Cal was expanded to cover the previously uninsured “Adult Expansion” population – adults between the ages of 19 and 64 without dependent children with annual incomes up to 133% of the federal poverty level. The federal government fully funded the expansion coverage for the first three years of the program. Under contracts with California’s Department of Health Care Services (DHCS), if CenCal did not spend at least 85% of the funds it received for the Adult Expansion population on “allowed medical expenses,” CenCal was required to pay back to the state the difference between 85% and what it actually spent. California, in turn, was required to return that amount to the federal government.
The four settlements resolve allegations that CenCal, Cottage, Sansum, and CHC knowingly submitted or caused the submission of false claims to Medi-Cal for “Enhanced Services” that were purportedly provided to Adult Expansion Medi-Cal members: by Cottage between Jan. 1, 2014 and June 30, 2016; by Sansum and CHC between Jan. 1, 2015 and June 30, 2016; and by certain other healthcare providers between Jan. 1, 2014 and June 30, 2016. The United States and California alleged that the payments were not “allowed medical expenses” permissible under the contract between DHCS and CenCal; were pre-determined amounts that did not reflect the fair market value of any Enhanced Services provided; and/or the Enhanced Services were duplicative of services already required to be rendered. The United States and California further alleged that the payments were unlawful gifts of public funds in violation of the California Constitution.
As a result of the settlements, CenCal will pay $49.5 million, Cottage will pay $9 million, Sansum will pay $4.5 million, and CHC will pay $3.15 million to the United States. In addition, California will receive payments totaling $1.85 million.
“Medicaid expansion funds must be used for their intended purpose of providing health care services to low-income individuals,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “When health care systems and providers knowingly misuse Medicaid funds, they will be held accountable.”
“These historic settlements demonstrate our steadfast efforts to eradicate fraud involving Medicaid Adult Expansion,” said U.S. Attorney Martin Estrada for the Central District of California. “Health care systems and providers are on notice that the False Claims Act provides us with a powerful tool to ensure that taxpayer-funded health care programs are used for patient care, and not for furtive financial gain.”
“Federal health care programs are an important resource for millions of Americans to receive medical care,” said Special Agent in Charge Timothy B. DeFrancesca of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG will continue to ensure that federal health care funds are used as intended and protected from fraud, waste, and abuse.”
“Medi-Cal is a lifeline that provides access to free or affordable healthcare services for millions of Californians and their families,” said California Attorney General Rob Bonta. “When any healthcare provider or agency defrauds the program, they break the public’s trust and put their own bottom line before the patients who count on them for honest, quality care and services. I am grateful to the USDOJ for its extensive efforts throughout the course of this investigation. The California Department of Justice and our law enforcement partners will continue to hold accountable those who defraud the Medi-Cal program, and protect those it serves.”
The civil settlements include the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Julio Bordas, CenCal’s former medical director. Under the act, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned United States and State of California ex rel. Bordas v. CenCal Health, Cottage Health System, Sansum Santa Barbara Clinic, Inc., Community Health Center of the Central Coast, et al. Mr. Bordas will receive approximately $12.56 million as his share of the federal recovery.
The United States previously settled similar allegations against Dignity Health and Twin Cities Community Hospital and Sierra Vista Regional Medical Center, two subsidiaries of Tenet Healthcare Corporation, relating to payments they received from CenCal under the Adult Expansion program.
The partial resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, the U.S. Attorney’s Office for the Central District of California, and the California Department of Justice, with assistance from HHS-OIG and DHCS.
The investigation of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the HHS at 800-HHS-TIPS (800-447-8477).
Trial Attorneys Mary Beth Hickcox-Howard and Tiffany L. Ho of the Civil Division’s Commercial Litigation Branch, Fraud Section and Assistant U.S. Attorney Jack D. Ross for the Central District of California handled this case.
The claims resolved by the settlements are allegations only and there has been no determination of liability.
Cottage Settlement Sansum Settlement CHC Settlement CenCal SettlementBurlington Man Sentenced to Thirty Years in Prison for Conspiracy to Distribute Methamphetamine and HeroinRead the Press Release
DAVENPORT, IA – A Burlington man was sentenced on June 23, 2023 to thirty years in federal prison for conspiracy to distribute methamphetamine and heroin.
According to court documents, and evidence presented at sentencing, Kourtney Melvin Connors, 35, was identified by law enforcement as a distributor of methamphetamine through an investigation that began in the spring of 2019. During the course of the investigation, numerous individuals identified Connors as a supplier of large quantities of methamphetamine and heroin in the Burlington and Quad Cities areas. In all Connors was held accountable for more than 4,500 grams of ice methamphetamine, nearly 500 grams of heroin, and 40 grams of fentanyl.
This sentence was ordered to be served consecutively with any sentence of imprisonment imposed in relation to a criminal case in Marathon County, Wisconsin. After completing his term of imprisonment, Connors will be required to serve five years of supervised release. There is no parole in the federal system.
United States Attorney Richard D. Westphal of the Southern District of Iowa made the announcement. This case was investigated by the multiple law enforcement agencies, including the Burlington Police Department, Davenport Police Department, Bettendorf Police Department.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. In May 2021, the Department of Justice launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Brentwood Couple Sentenced for Conspiracy to Produce and Production of Child PornographyRead the Press Release
OAKLAND – Matthew Lee Pelton and Heather Electa Halwig Gharibian were sentenced to 360 and 264 months in prison, respectively, for producing and conspiring to produce child pornography, announced United States Attorney Ismail J. Ramsey and Homeland Security Investigations (HSI) Special Agent in Charge Tatum King. The sentences were handed down by the Hon. Jefferey S. White, U.S. District Judge.
Pelton, 50, of Brentwood, pleaded guilty to the charges on February 14, 2023. Gharibian, 53, of Brentwood, pleaded guilty to the charges on February 21, 2023. According to the plea agreements, both Pelton and Gharibian admitted that from March 29, 2021, to at least June 14, 2021, they conspired with each other to produce and film visual depictions of two minors engaged in sexually explicit conduct. The defendants communicated via WhatsApp messenger that Pelton used to request that Gharibian perform sexual acts on a then 10-year-old child in her care. Pelton described his arousal, gave instructions on how to perform sexual acts on the victim, and requested that Gharibian make a video of the molestation of the child. In response to Pelton’s request, Gharibian performed requested sexual acts on the victim, filmed it, and sent it to Pelton. Further, both minor victims described how ring cameras were placed throughout their house, including their bedrooms and bathrooms, allowing Gharibian and Pelton to view them at will.
In papers submitted in connection with sentencing, the government argued Gharibian sexually exploited the minor victims in her care for the sexual gratification of her then-boyfriend, Pelton, who the government described as a “pedophile with a seeming predilection for preteens and teenagers.” At sentencing, Judge White stated that the defendants stole the victims’ childhood.
On November 17, 2022, a federal grand jury indicted the defendants charging both with conspiracy to produce child pornography, in violation of 18 U.S.C. §§ 2251 (a) and (e); production of child pornography, in violation of 18 U.S.C. §§ 2251 (a) and (e). In addition, Gharibian was charged with two counts of distribution of child pornography, in violation of 18 U.S.C. §§ 2252(a)(2), (b) and (e); and Pelton was charged with two counts of receipt of child pornography, in violation of 18 U.S.C. §§ 2252(a)(2), (b) and (e). Both defendants pleaded guilty to the conspiracy and production charges. In accordance with the plea agreements, Judge White dismissed the remaining charges at sentencing.
In addition to the prison term, Judge White ordered Pelton and Gharibian to serve 180 months of supervised release, which will begin after their respective prison terms. Restitution will be decided at a later hearing.
Assistant U.S. Attorneys Kenneth Chambers and Kelly Volkar are prosecuting the case with the assistance of Jasmine Sanders and Laurie Worthen. The prosecution is the result of an investigation by HSI, the Contra Costa District Attorney’s Investigation Office, and the Brentwood Police Department.
Boise Man Convicted of Three Attempted Sex Crimes Against ChildrenRead the Press Release
POCATELLO – A federal jury convicted Mohammad Ali Alizadah Nawai, 45, of Boise for three attempted sex crimes, U.S. Attorney Josh Hurwit announced. The counts of conviction were (1) attempted transfer of obscene material to a minor, (2) sexual exploitation of a child, and (3) coercion and enticement. The crimes reflect the defendant’s attempted transfer of obscene matters to a child under 16 years of age, the attempted production of child pornography, and the attempted persuasion of a child to meet for sexual intercourse. Senior U.S. District Judge B. Lynn Winmill presided over the trial, which began on June 20, and concluded with guilty verdicts on June 23.
According to court records and evidence presented at trial, Nawai communicated with an undercover detective posing as a 13-year-old child on an online dating program. The detective was posing as a child to detect and investigate online offenders seeking children. Nawai, after being told the apparent child’s age, requested that the child produce sexually explicit content. Nawai further sent the apparent child obscene materials, which included bestiality and images he represented as child pornography. Nawai also made arrangements to meet the child for sexual intercourse. He travelled from Boise to Rupert on June 23, 2021, where members of the Rupert Police Department promptly arrested him.
Nawai is scheduled to be sentenced on September 13, 2023 and faces a mandatory minimum penalty of 15 years and up to life in federal prison. Judge Winmill determine the sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Hurwit thanked the Rupert Police Department for its efforts, which led to the charges. The case was prosecuted by Assistant U.S. Attorneys David Robins and John Shirts.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
###
Babb man admits multiple assaults of dating partner on Blackfeet Indian ReservationRead the Press Release
GREAT FALLS — A Babb man accused of assaulting his dating partner on three occasions within a year admitted to charges this week, U.S Attorney Jesse Laslovich said today.
Zachary James Cassidy, 33, pleaded guilty on June 28 to assault resulting in serious bodily injury and two counts of assault of a dating partner resulting in substantial injury. Cassidy faces a maximum of 10 years imprisonment, a $250,000 fine and three years of supervised release.
In a plea agreement reached in the case, the parties agreed that a specific term of between 48 months and 72 months of imprisonment is appropriate.
Chief U.S. District Judge Brian M. Morris presided. The court will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Sentencing was set for Nov. 30. Cassidy was detained pending further proceedings.
The government alleged in court documents that Cassidy and the victim, identified as Jane Doe, were in a romantic relationship between March 2022 and January 2023. During that time, Cassidy assaulted the victim on three separate occasions. In June 2022, Cassidy and the victim were at a bar in St. Mary when Cassidy became upset with Jane Doe. Cassidy physically assaulted the victim in the bar and dragged her outside using a chokehold. Cassidy continued assaulting Jane Doe in the parking lot, dragged her to a truck and drove to his residence, where he continued the assault. Jane Doe woke up on a couch, was alone and could not move. When found, she had to be carried to a car. Jane Doe sought medical attention the next day for multiple injuries and returned to the hospital a month later for follow up. In August, Cassidy assaulted Jane Doe at his residence. When a friend sought to intervene, Cassidy kicked the friend in the back and pushed her head into a truck. Cassidy told the friend she was trespassing and that he was going to shoot her. That night, a friend went to check on Jane Doe and tried to take the victim with her, but Cassidy wouldn’t let her. Eventually, Jane Doe’s family members came to get her and took her to the hospital for treatment of injuries. A third assault occurred on Jan. 9 as Cassidy and Jane Doe were traveling from Doe’s family residence toward Babb. Cassidy started getting mad at Jane Doe and his truck ultimately got stuck in the snow. Cassidy assaulted Jane Doe, who refused to get out of the truck. A neighbor witnessed the assault and called law enforcement.
Assistant U.S. Attorney Kalah A. Paisley is prosecuting the case. The FBI, Blackfeet Law Enforcement Services and Glacier County Sheriff’s Office, with assistance from the U.S. Border Patrol, conducted the investigation.
XXX
Attorney General Merrick B. Garland Statement on Supreme Court’s Ruling in Students for Fair Admissions Inc. (SFFA) v. President and Fellows of Harvard College and SFFA v. University of North CarolinaRead the Press Release
The Justice Department issued the following statement from Attorney General Merrick B. Garland in response to the Supreme Court’s decision in two cases — Students for Fair Admissions Inc. (SFFA) v. President and Fellows of Harvard College and SFFA v. University of North Carolina:
“The Supreme Court’s decision undercuts efforts by universities across the country to create a diverse group of graduates prepared to lead in an increasingly diverse nation. It will significantly set back efforts to advance educational opportunity for all Americans. And it upends nearly 50 years of precedent.
“The Department of Justice remains committed to promoting student diversity in higher education using all available legal tools. In the coming weeks, we will work with the Department of Education to provide resources to college and universities on what admissions practices and programs remain lawful following the Court’s decision.”
Atlanta man indicted for allegedly distributing fentanyl that killed oneRead the Press Release
ATLANTA - Antonio Milner has been arraigned on federal charges of distributing fentanyl resulting in the death of another. Milner allegedly distributed fentanyl to a person who was found dead in a vehicle alongside I-75.
“Fentanyl is an extraordinarily dangerous substance and even the smallest quantity can be lethal,” said U.S. Attorney Ryan K. Buchanan. “The Department of Justice is committed to prosecuting these cases to combat this scourge plaguing our communities.”
“Fentanyl poisonings and other dangerous drugs are taking a terrible toll on our communities.” said Robert J. Murphy, Special Agent in Charge of the Drug Enforcement Administration (DEA) Atlanta Division. “This drug trafficker will face the consequences of his actions.”
According to U.S. Attorney Buchanan, the charges, and other information presented in court: On December 13, 2022, at approximately 8:00 a.m., the Stockbridge Police Department responded to a request for a welfare check at I-75 Southbound at mile marker 224. Upon arrival, officers located the victim deceased in the driver’s seat of a vehicle. The victim’s cause of death was determined to be fentanyl and morphine toxicity. The DEA traced the victim’s steps and established that Milner had allegedly distributed fentanyl to the victim just prior to her death.
Antonio Milner, 48, of Atlanta, Georgia, was arraigned before U.S. Magistrate Judge Justin S. Anand. Milner was indicted by a federal grand jury on June 27, 2023. Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Drug Enforcement Administration.
Assistant U.S. Attorney Amy M. Palumbo is prosecuting the case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Armed Drug Trafficker Sentenced to 10 Years for Distributing Carfentanil, Heroin, and CocaineRead the Press Release
DETROIT – An armed drug trafficker selling a fentanyl analogue advertised as “heroin” was sentenced today to 10 years in prison, United States Attorney Dawn N. Ison announced.
Ison was joined in the announcement by Orville O. Greene, Special Agent in Charge of the Detroit Division of the Drug Enforcement Administration.
Branden Smith, 38, of Detroit, Michigan, was sentenced by United States District Judge Victoria A. Roberts after he pleaded guilty to conspiring to distribute drugs and for possessing carfentanil. According to court records, Smith was identified by federal agents as a multi-state distributor of illegal drugs, including heroin. Following several months of investigation, undercover law enforcement agents purchased what Smith had advertised as “heroin,” but was in fact carfentanil, a dangerous fentanyl analogue. Investigators ultimately executed a search warrant at a residence associated with Smith. They found distribution quantities of multiple controlled substances (including carfentanil), multiple electronic scales, vacuum sealers, face masks, and rubber gloves. Smith was arrested on the scene, and investigators recovered a Glock 23 pistol in his waistband, as well as an AK-47 extended pistol in the driver’s side door of the vehicle he was observed exiting.
According to the Centers for Disease Control and Prevention, in 2020 alone, more than 56,000 deaths involved synthetic opioids in the United States, which accounted for over 82% of all opioid-involved deaths in 2020. Carfentanil is one of the most potent fentanyl analogues and is estimated to be 10,000 times more potent than morphine.
“Deadly drugs like carfentanil are lethal by themselves, but even more dangerous when they are marketed as another drug. Adding guns to that mix increases the harm and risk to the community exponentially,” U.S. Attorney Ison said. “That’s why federal law provides for sever penalties for armed drug trafficking, and we will not hesitate to insist on those penalties when necessary to keep this community safe.”
“Today’s sentencing underscores the commitment of the men and women of the DEA, the USAO EDMI and the Warren Police Department, to hold accountable, anyone who chooses to distribute deadly drugs like Carfentanil in our communities,” said Special Agent in Charge Greene. “Mr. Smith intentionally misrepresented the fact he was selling a fentanyl analogue, 100 times more potent than fentanyl and which is normally used to tranquilize elephants and other large mammals. Mr. Smith’s possession of firearms further compounded the danger he posed to the community and today he was held to account for his actions.”
The case was investigated by federal agents of the Drug Enforcement Administration, alongside task force officers from the Warren Police Department. Assistant United States Attorneys Caitlin Casey and Robert White prosecuted the case for the United States.
Appleton Man Sentenced to 10 Years for Possessing Methamphetamine for DistributionRead the Press Release
MADISON, WIS. – Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin, announced that Ari Lor, 30, Appleton, Wisconsin, was sentenced today by Chief U.S. District Judge James D. Peterson to 10 years in prison for possessing with the intent to distribute 50 grams or more of methamphetamine. Lor pleaded guilty to this charge on April 4, 2023.
In January of 2022, law enforcement agents began a drug investigation into Lor. On June 20, 2022, GPS location data from Lor’s cellular telephone showed he was driving towards Wausau, Wisconsin, from his home in Appleton. Based on information developed during the investigation, agents believed Lor was planning to meet with co-defendant Devin Needham to buy methamphetamine.
Law enforcement officers located Lor’s black minivan parked at a market in Wausau. Officers observed Lor leave the market carrying at least one plastic bag and get in the passenger side of the minivan. The minivan drove away but was pulled over by law enforcement officers a short time later for an expired registration sticker. After a K-9 positively alerted to the presence of narcotics, officers searched the minivan and found approximately one pound of methamphetamine in a white plastic bag.
Officers later reviewed surveillance video from the market and saw Lor and Needham walk around the store together. In the video, Needham is carrying a white plastic bag and the name of a store printed on the side of the bag was identical to the bag found in the minivan containing the methamphetamine.
During Lor’s arrest, agents seized two cellular telephones from him. Officers later searched the phones pursuant to a warrant, and on one of the phones found a message over the application “Telegram” from June 19, 2022, in which Lor asked Needham about the price of one pound of methamphetamine. Needham responded it would cost $4,000. Telegram messages prior to Lor’s arrest on June 20 show him and Needham making plans to meet that day in Wausau.
Lor’s criminal history includes four prior felony convictions, including convictions for strangulation and suffocation and possession with intent to distribute amphetamine. At the sentencing hearing, Judge Peterson concluded that a significant sentence was warranted because Lor’s criminal history showed a commitment to a criminal lifestyle. Judge Peterson also noted that Lor had been provided with many opportunities to turn his life around but failed to do so.
Needham pleaded guilty on April 5, 2023 to possessing 50 grams or more of methamphetamine for distribution. He will be sentenced by Judge Peterson on July 20, 2023.
The charge against Lor is the result of an investigation conducted by the Federal Bureau of Investigation’s Central Wisconsin Narcotics Task Force comprised of investigators from the FBI, Marathon County Sheriff’s Office, Wausau Police Department, Wisconsin Department of Justice Division of Criminal Investigation, Lincoln County Sheriff’s Office, Wisconsin State Patrol, Everest Metro Police Department, and Wisconsin’s National Guard Counterdrug Program. The Lake Winnebago Area Metropolitan Enforcement Group and the Marathon County District Attorney’s Office also provided assistance. Assistant U.S. Attorney Aaron Wegner is handling the prosecution.
Albany Sex Offender Arrested for Distributing Child PornographyRead the Press Release
ALBANY, NEW YORK – Stephen Brisee, a/k/a Sage Brisee, age 29, of Albany, was arrested today for distributing child pornography.
United States Attorney Carla B. Freedman and Matthew Scarpino, Special Agent in Charge of the Homeland Security Investigations (HSI) Buffalo Field Office, made the announcement.
The charge filed against Brisee carries a prison term of at least 15 years and up to 40 years; a fine of up to $250,000; and a term of supervised release of at least 5 years and up to life. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
United States Magistrate Judge Christian F. Hummel ordered Brisee detained pending a detention hearing scheduled to take place next week.
The complaint charges Brisee with distributing videos of adults subjecting girls between the ages of six months and 10 years to sexual penetration. At the time of the offense, Brisee was a registered sex offender on post-release supervision following a New York State conviction for promoting a sexual performance by a child.
The charges in the complaint are merely accusations. The defendant is presumed innocent unless and until proven guilty.
HSI is investigating the case. Assistant U.S. Attorney Jonathan S. Reiner is prosecuting the case as part of Project Safe Childhood.
Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorney’s offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
18 Firearms Seized After Domestic Violence Incident Leads to Federal Firearm ChargesRead the Press Release
DETROIT – A domestic violence shooting in Detroit has led to the recovery of 18 firearms, including a machine gun, and a federal criminal complaint against one man, United States Attorney Dawn N. Ison announced today.
Ison was joined in the announcement by James Deir, Special Agent in Charge of the Detroit Field Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
Saliah Algahmi, 37, of Melvindale, Michigan, was charged in a criminal complaint with being unlawfully in possession of firearms and knowingly in receipt of counterfeit federal law enforcement badges. He was ordered detained by visiting United States Magistrate Judge R. Steven Whalen.
According to court records, the charges stem from an incident on May 19, 2023, when Algahmi’s wife reported that Algahmi had fired a gun at her while she sat in her vehicle. Fortunately, she was not injured. This incident led police to search a residence in Melvindale on June 8, 2023. In the residence, police found 18 firearms, various ammunition, and two fake police badges. The ongoing investigation has preliminarily determined, through the National Integrated Ballistic Information Network (NIBIN), that the firearm used during the domestic assault on May 19, 2023, was one of the 18 firearms recovered from the residence. Several of the firearms were stolen and or unregistered, one had an obliterated serial number, and at least one firearm is classified as a machine gun. Algahmi also was in possession of a counterfeit badge of the Drug Enforcement Administration and a fake Department of Defense federal law enforcement badge.
For unlawful possession of firearms, Algahmi faces a maximum of 15 years imprisonment.
“Through his illegal possession of an arsenal of 18 firearms, including a machine gun, and his willingness to use a firearm against a family member, this defendant represented an ongoing threat to the community,” U.S. Attorney Ison said. “This threat has been stopped by the swift actions of law enforcement, and we are thankful this case did not result in someone being injured or killed.”
“All people deserve to feel safe in their relationships. Alhahmi’s repeated use of firearms to commit domestic violence is unacceptable” said, ATF Detroit Special Agent in Charge James Deir “ATF and our law enforcement partners remain resolute in holding violent offenders who threaten the safety of their family and our community accountable.”
The United States Attorney’s Office and the ATF are focused on prosecuting those individuals who are using firearms to commit violent acts against people in the Eastern District of Michigan. The strategy is a part of the United States Attorney’s Office’s Project Safe Neighborhoods (PSN) initiative. PSN continues to be the centerpiece of the Department of Justice’s violent crime reduction efforts. Through PSN, a broad spectrum of stakeholders works together to identify the most pressing violent crime problems and develop comprehensive solutions to address them. PSN is an evidence-based program that focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs to pursue lasting reductions in crime.
A complaint is only a formal charging document and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
This case was investigated by ATF with the assistance from the Detroit Police Department. The case is being prosecuted by Assistant U.S. Attorney David Cowen, assigned to the Violent and Organized Crime Unit within the U.S. Attorney’s Office for the Eastern District of Michigan.
13 Defendants Charged in Federal Drug Trafficking Probe Targeting Fentanyl-Laced Heroin and Cocaine Sales in ChicagoRead the Press Release
CHICAGO — A federal drug trafficking investigation has resulted in charges against 13 individuals for allegedly trafficking fentanyl-laced heroin and cocaine on the West Side of Chicago.
The multi-year investigation, led by Homeland Security Investigations, the Chicago Police Department, and the IRS Criminal Investigation Division, utilized covert surveillance operations, undercover narcotics purchases, and wiretapped communications to shut down an open-air drug market in Chicago’s Humboldt Park neighborhood. Many of the defendants, including the group’s suspected leader, are allegedly members of the Traveling Vice Lords street gang. In addition to federal drug charges, three of the defendants are charged with possessing firearms in furtherance of their drug trafficking activities. One of the defendants was recently arrested while illegally possessing a loaded handgun on the Chicago Transit Authority’s Green Line train.
Law enforcement on Wednesday executed court-authorized searches of multiple locations in Chicago and the suburbs. Law enforcement seized approximately ten firearms, two 50-round drum ammunition magazines, several extended ammunition magazines, more than a kilogram of cocaine, more than 250 grams of heroin containing fentanyl, and approximately nine vehicles that allegedly were used in furtherance of narcotics trafficking.
Charged with federal drug conspiracy are TERRANCE SANDERS, 40, of Aurora, Ill., SHAVELLE SIMS, 32, of Glendale Heights, Ill., TYRON PAULK, 36, of Bellwood, Ill., SAMUEL LOPEZ, 33, of Chicago, DEMECCO TARTT, 30, of Chicago, TARANCE BANKS, 30, of Calumet City, Ill., DEANDRE MADDOX, 34, of Chicago, DELAWRENCE ISON, 38, of Chicago, LAVELL GRIFFIN, 33, of Chicago, BRIAN WILLIAMS, 20, of Chicago, and RAHEEM SMITH, 30, of Bolingbrook, Ill. Sanders, Paulk, and Smith are also each charged with possessing a firearm in furtherance of the drug trafficking conspiracy.
Charged with possession of a controlled substance with intent to deliver are PARTGANAN BURCH, 36, of Chicago, and DEMORRIS HILL, 41, of South Holland, Ill.
According to a criminal complaint unsealed Wednesday in federal court, Sanders led a drug trafficking organization that operated the open-air market in the 3400 block of West Chicago Avenue in Chicago. Sanders and others utilized a “stash house” in the 1600 block of North Karlov Avenue in Chicago to store narcotics and prepare them for delivery to the open-air market, where they were then sold to customers, the complaint states. Sims supervised the collection of narcotics proceeds and met with Sanders to re-supply the drug spot as needed, the complaint states.
Most of the 13 federal defendants were arrested Wednesday and have begun making initial appearances in U.S. District Court in Chicago. In addition to the federal charges, 19 other individuals were charged in state court as a result of this investigation.
The federal charges were announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois; Sean Fitzgerald, Special Agent-in-Charge of HSI in Chicago; Fred Waller, Interim Superintendent of CPD; and Justin Campbell, Special Agent-in-Charge of IRS-CI in Chicago. Valuable assistance was provided by the Chicago High Intensity Drug Trafficking Area program (HIDTA). Assistant U.S. Attorneys Patrick Mott and Chester Choi represent the government.
The case was part of an Organized Crime Drug Enforcement Task Force operation. OCDETF identifies, disrupts, and dismantles the highest-level drug trafficking organizations and other criminal networks that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local enforcement agencies.
The public is reminded that a complaint contains only charges and is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Sanders et al complaint
28 June 2023
Woman Charged with Covid-19 Card FraudRead the Press Release
WILLIAMPSORT - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Collen Brungard, age 37, of Milton, Pennsylvania, was charged on June 28, 2023, by criminal Information with knowingly possessing and making a fake COVID-19 vaccine card.
According to United States Attorney Gerard M. Karam, the information charges Brungard with knowingly possessing and making unauthorized COVID-19 vaccine cards, specifically fraudulent COVID-19 Vaccination Record Cards, purportedly issued by the United States Department of Health and Human Services, Center for Disease Control to record medical information about vaccines purportedly received, and bearing the insignia of the Center for Disease Control.
The case was investigated by the Federal Bureau of Investigation and the Office of Inspector General, U.S. Department of Health and Human Services. Assistant U.S. Attorney Alisan V. Martin is prosecuting the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The maximum penalty under federal law for this offense is 6 months’ imprisonment, a term of supervised release following imprisonment, and a fine. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
# # #
Wetumka Resident Sentenced for Firearms OffensesRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Carl Lloyd True, age 56, of Wetumka, Oklahoma, was sentenced on June 16, 2023, for firearm offenses. True was sentenced to sixteen months in prison for one count of Making a False Statement During the Acquisition of a Firearm and sixteen months for one count of being a Prohibited Person Receiving and Possessing Firearms and Ammunition. The sentences will run concurrently.
The charges arose from investigations by the Hughes County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
On February 21, 2023, True pleaded guilty to False Statement During the Acquisition of a Firearm and Prohibited Person Receiving and Possessing Firearms and Ammunition. In June of 2022, True was charged in the District Court of Hughes County, Oklahoma, with felony Domestic Assault and Battery by Strangulation. Within days of being released on bond in that case, True provided false information on the ATF Firearm Transaction Record so he could illegally purchase two firearms despite being under information for the felony offense.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy based on fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
“Investigating and prosecuting what we refer to as ‘lie and buy offenses’ is a priority of the Department of Justice,” said United States Attorney Christopher J. Wilson. “In this case, the defendant could not obtain a firearm because he was charged in state court with a felony crime. He provided false information to the licensed gun dealer in order to obtain two firearms.”
The Honorable John F. Heil, III, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, presided over the hearings in Muskogee. True will remain in custody of the U.S. Marshal pending transportation to a designated United States Bureau of Prisons facility to serve a non-paroleable sentence of incarceration.
Assistant United States Attorney Edith A. Singer represented the United States.
Use of a Phone to Facilitate Cocaine Distribution on Menominee Indian Reservation Leads to Prison Sentence for Keshena WomanRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced that Candice A. Sanapaw (age: 42), of Keshena on the Menominee Indian Reservation, received a sentence of 12 months in federal prison following a conviction for use of a communication facility to facilitate a drug offense.
The sentence, imposed on June 26, 2023, by Senior United States District Judge William C. Griesbach, was the result of a guilty plea entered by the defendant on March 14, 2023. Sanapaw will also face one year of supervised release once she completes her sentence.
According to court records, an investigation revealed that on June 3, 2021, law enforcement responded to an address on 1st Avenue in Neopit, Wisconsin, on report of an unconscious female who was not breathing. Despite life-saving efforts by officers and first responders, the woman was declared deceased. A subsequent autopsy revealed the presence of cocaine metabolites and fentanyl, and the Milwaukee County Medical Examiner’s Office determined the woman’s cause of death to be Acute Mixed Drug Intoxication.
Examination of the deceased’s phone and interviews with her associates led to the identification of Sanapaw as the source of the cocaine that led to the woman’s death. The investigation further revealed that the deceased had purchased cocaine from Sanapaw on four prior occasions.
In sentencing the defendant, Judge Griesbach noted the seriousness of the crime the defendant committed and remarked upon the need to deter those who might consider similar actions to protect the community from the destructive effects of the abuse of controlled substances.
The Menominee Tribal Police Department and Federal Bureau of Investigation investigated the case, which Assistant United States Attorney Andrew J. Maier prosecuted in United States District Court.
# # #
For Additional Information Contact:
Public Information Officer
414-297-1700
Follow us on Twitter
United States Attorney Vanessa R. Waldref Announces Eastern District of Washington’s Participation in Coordinated National Health Care Fraud Enforcement ActionRead the Press Release
Spokane, Washington – United States Attorney Vanessa R. Waldref announced criminal charges against two defendants in connection with millions of dollars in fraud prosecuted in the Eastern District of Washington, as part of the Department of Justice’s 2023 National Health Care Fraud Enforcement Action. The Eastern District of Washington cases charge a physician and pharmacist in connection with separate schemes involving telemarketing fraud and falsifying COVID-19 vaccine information.
“These enforcement actions, including against one of the largest health care fraud schemes ever prosecuted by the Justice Department, represent our intensified efforts to combat fraud and prosecute the individuals who profit from it,” said Attorney General Merrick B. Garland. “The Justice Department will find and bring to justice criminals who seek to defraud Americans and steal from taxpayer-funded programs.”
“Health care fraud harms elderly and vulnerable members of our community, undermines confidence in our health care system, and diverts precious funds from vital government programs,” said United States Attorney Waldref. “It has a corrupting and devastating impact on our community. We will not rest in our pursuit of health care providers who abuse their positions of trust for their own personal benefit. Our office will continue to work hand-in-glove with our law enforcement partners to ensure that these fraudsters are brought to justice.”
The charges announced today by U.S. Attorney Waldref are part of a strategically coordinated, two-week nationwide law enforcement action that resulted in criminal charges against 78 defendants for their alleged participation in health care fraud and opioid abuse schemes that resulted in the submission of over $2.5 billion in alleged false billings. The defendants allegedly defrauded programs entrusted for the care of the elderly and disabled, and, in some cases, used the proceeds of the schemes to purchase luxury items, including exotic automobiles and yachts.
The Eastern District of Washington charges stem from two separate cases. In United States v. David Antonio Becerril, a grand jury indicted a Yakima area physician on sixteen counts of fraud, false statements, and conspiracy in connection with a telemarketing scheme and conspiracy to fraudulently bill Medicare for millions of dollars in medically unnecessary genetic tests and medical equipment. In United States v. Reynolds, an East Wenatchee pharmacist was charged by information with one count of making false statements in connection with health care matters for falsifying COVID-19 vaccination information for Washington state employees.
The Becerril and Reynolds cases are being prosecuted by the U.S. Attorney’s Office for the Eastern District of Washington. The other cases in the National Enforcement Action are being prosecuted by the Department of Justice Criminal Division, Health Care Fraud Unit’s Strike Forces in Brooklyn, Dallas, Detroit, the Gulf Coast, Houston, Los Angeles, Miami, Newark, and Tampa; the Health Care Fraud Unit’s National Rapid Response Strike Force; the U.S. Attorneys’ Offices for the Middle District of Florida, Southern District of Florida, Southern District of Georgia, District of Idaho, Western District of Kentucky, Eastern District of Louisiana, Middle District of Louisiana, District of New Jersey, Eastern District of New York, Southern District of Ohio, District of South Carolina, Southern District of Texas, and Eastern District of Wisconsin; and the State Attorney Generals’ Offices for Indiana, New York, and Pennsylvania, with assistance from the Health Care Fraud Unit’s Data Analytics Team. Descriptions of cases involved in today’s enforcement action are available on the Department’s website at www.justice.gov/criminal-fraud/health-care-fraud-unit/2023-national-hcf-court-documents.
United States v. Becerril is being prosecuted by Special Assistant United States Attorney Allie Jensen and Assistant United States Attorneys Dan Fruchter and Tyler H.L. Tornabene, and was investigated by the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG), Seattle Field Office. United States v. Reynolds is being prosecuted by Assistant United States Attorneys Dan Fruchter and Tyler H.L. Tornabene and was investigated by the Federal Bureau of Investigation (FBI), Spokane Resident Office and HHS-OIG.
The Fraud Section uses the Victim Notification System to provide victims with case information and updates related to cases charged by the Fraud Section in the National Enforcement Action. Victims with questions may contact the Fraud Section’s Victim Assistance Unit by calling the Victim Assistance phone line at 1-888-549-3945 or by emailing [email protected]. Victims with questions about the cases charged by the U.S. Attorney’s Office may contact (509) 353-2767. To learn more about victims’ rights, please visit www.justice.gov/criminal-vns/case/united-states-v-steven-diamantstein.
A complaint, information, or indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
United States v. Becerril, 1:23-CR-02029-SAB
United States v. Reynolds, 2:23-CR-00076-MKD
U.S. Attorney Sellinger Announces Participation in Coordinated National Health Care Fraud Enforcement ActionRead the Press Release
NEWARK, N.J. – U.S. Attorney Philip R. Sellinger announced criminal charges against three defendants in connection with health care fraud prosecuted in the District of New Jersey, part of the Department of Justice’s 2023 National Health Care Fraud Enforcement Action. The charges include the owner of a counseling center who filed false insurance claims and two men who pleaded guilty to their roles in a scheme to defraud Amtrak.
“These enforcement actions, including against one of the largest health care fraud schemes ever prosecuted by the Justice Department, represent our intensified efforts to combat fraud and prosecute the individuals who profit from it,” Attorney General Merrick B. Garland said. “The Justice Department will find and bring to justice criminals who seek to defraud Americans and steal from taxpayer-funded programs.”
“Our health care system exists to provide people with access to the medical services and treatment they need, but it also is a target for criminals who see it as a lucrative source of money to be plundered through elaborate schemes,” U.S. Attorney Sellinger said. “Working with our law enforcement partners, we continue to make sure that the resources that people need will always be there, and those who seek to enrich themselves illegally will be brought to justice.”
“This nationwide enforcement action demonstrates that the Criminal Division is committed to fighting health care fraud and opioid abuse by prosecuting those who allegedly exploit patients and health care benefit programs for personal gain,” Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division said. “Today’s announcement includes some of the largest and most complex cases that the Department has prosecuted, and demonstrates the Department’s commitment to seeking justice for those at all levels of the healthcare industry who put profits above patient care, from professionals in doctors’ offices to executives in corporate boardrooms.”
The charges announced today by U.S. Attorney Sellinger are part of a strategically coordinated, two-week nationwide law enforcement action that resulted in criminal charges against 90 defendants for their alleged participation in health care fraud and opioid abuse schemes that resulted in the submission of over $2.6 billion in alleged false billings. The defendants allegedly defrauded programs entrusted for the care of the elderly and disabled, and, in some cases, used the proceeds of the schemes to purchase luxury items, including exotic automobiles and yachts.
Devon Burt and Hallum Gelzer
Devon Burt, 50, of Blue Bell, Pennsylvania, and Hallum Gelzer, 44, of Enola, Pennsylvania, each pleaded guilty before U.S. District Judge Madeline C. Arleo in Newark federal court to separate informations charging them with conspiracy to commit health care fraud and conspiracy to communicate extortionate threats.
According to documents filed in this case and statements made in court:
Burt, a former Amtrak employee, and Gelzer worked with health care providers to recruit Amtrak employees to participate in a health care fraud scheme through the offer of cash payments in exchange for the employees allowing health care providers to use their patient and insurance information to submit false claims. The health care providers benefitted from the scheme by receiving payments from the Amtrak health care plan for services that were never provided or that were medically unnecessary. Burt received cash payments from providers in return for allowing the providers to use his personal and insurance information, and that of his dependents, to submit fraudulent claims. Both Burt and Gelzer received cash payments from providers in return for recruiting others to participate in the scheme.
From April 2022 through June 2022, Burt and Gelzer conspired to communicate extortionate threats to a health care provider who participated in the scheme. Burt and Gelzer threatened the provider by interstate telephone calls and text messages, indicating that the provider would be injured if the provider did not pay Gelzer several thousand dollars.
In total, the Amtrak health care plan paid over $9 million as a result of claims associated with providers connected to the health care fraud scheme.
The charge of conspiracy to commit health care fraud carries a maximum penalty of 10 years in prison and a maximum fine of $250,000, or twice the gross gain to the defendant or loss to the victim, whichever is greatest. The charge of conspiracy to communicate extortionate threats in interstate commerce carries a maximum penalty of five years in prison, and a maximum fine of $250,000, or twice the gross gain to the defendant or loss to the victim, whichever is greatest. As part of their guilty pleas, Burt agreed to pay $959,072 in restitution, while Gelzer agreed to pay approximately $1.66 million restitution. Sentencing for Burt is scheduled for Nov. 16, 2023, and for Gelzer, Nov. 15, 2023.
U.S. Attorney Sellinger credited special agents of the Amtrak Office of Inspector General, under the direction of Special Agent in Charge Michael J. Waters; special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Frank A. Tarentino III in New York; and the Amtrak Police Department, under the direction of Chief of Police Sam Dotson, with the investigation leading to the guilty pleas.
The government is represented by Assistant U.S. Attorney Katherine M. Romano of the Health Care Fraud Unit in Newark.
Maria P. Cosentino
Maria P. Cosentino, 60, of Garfield, New Jersey, is charged by complaint with four counts of health care fraud and one count of obstruction of justice. She made her initial court appearance before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court and was released on $100,000 unsecured bond.
According to documents filed in the case and statements made in court:
Cosentino, the owner of a Paramus, New Jersey counseling center providing counseling services and mental health treatment to children, families, couples, and adults, for years submitted false claims to private health insurance plans for counseling sessions that were never provided. Cosentino falsely claimed that various individuals had received counseling at the center when in fact they had been out of the country, had ceased attending the practice, or had never visited the counseling center at all. The false claims caused insurance plans to issue reimbursement checks to the center even though the individuals had never received any treatment.
When law enforcement sought to interview individuals at Cosentino’s counseling practice about Cosentino’s conduct, Cosentino tried to persuade at least one employee to cover up her billing practices and to lie to law enforcement.
The charge of health care fraud is punishable by a maximum of 10 years in prison. The charge of obstructing justice is punishable by a maximum of 20 years in prison. Both charges are also punishable by a maximum fine of either $250,000 or twice the gain or loss from the offense, whichever is greatest.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney DeNae M. Thomas of the Health Care Fraud Unit in Newark.
The Health Care Fraud Unit’s Strike Forces in Brooklyn, Dallas, Detroit, the Gulf Coast, Houston, Los Angeles, Miami, Newark, and Tampa; the Health Care Fraud Unit’s National Rapid Response Strike Force; the U.S. Attorneys’ Offices for the Middle District of Florida, Southern District of Florida, Southern District of Georgia, District of Idaho, Western District of Kentucky, Eastern District of Louisiana, Middle District of Louisiana, District of New Jersey, Eastern District of New York, Southern District of Ohio, District of South Carolina, Southern District of Texas, Eastern District of Washington, and Eastern District of Wisconsin; and the State Attorney Generals’ Offices for Indiana, New York, and Pennsylvania are prosecuting the cases in the National Enforcement Action, with assistance from the Health Care Fraud Unit’s Data Analytics Team. Descriptions of each case involved in today’s enforcement action are available on the department’s website at LINK.
The Fraud Section uses the Victim Notification System to provide victims with case information and updates related to cases charged by the Fraud Section in the National Enforcement Action. Victims with questions may contact the Fraud Section’s Victim Assistance Unit by calling the Victim Assistance phone line at 1-888-549-3945 or by emailing [email protected]. Victims with questions about the cases charged by the U.S. Attorney’s Office may call 1-973-645-2700. To learn more about victims’ rights, please visit www.justice.gov/criminal-vns/case/united-states-v-steven-diamantstein.
A complaint, information, or indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
U.S. Attorney Breon Peace Announces Two Arrests in Coordinated National Health Care Fraud Enforcement ActionRead the Press Release
Today, United States Attorney Breon Peace announced criminal charges against two defendants in connection with alleged Medicare and Medicaid fraudulent billing schemes. The charges filed in federal court in Brooklyn are part of the Department of Justice’s 2023 National Health Care Fraud Enforcement Action. Carlo Elomina Garcia, a licensed occupational therapist, and the owner of Carlo E. Garcia Occupational Therapy in Queens, was arrested and arraigned on June 26, 2023 and released on a $25,000 bond pending trial. Jian Ai Chen, a medical assistant and the owner of two pharmacies in Brooklyn, was arrested and arraigned on June 14, 2023 before Chief United States Magistrate Judge Lois Bloom and released on a $500,000 bond pending trial.
Merrick B. Garland, United States Attorney General; Breon Peace, United States Attorney for the Eastern District of New York; Kenneth A. Polite, Jr., Assistant Attorney General of the Justice Department’s Criminal Division; Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Christian J. Schrank, Deputy Inspector General for Investigations, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), announced the arrests and charges.
“These enforcement actions, including against one of the largest health care fraud schemes ever prosecuted by the Justice Department, represent our intensified efforts to combat fraud and prosecute the individuals who profit from it,” stated Attorney General Garland. “The Justice Department will find and bring to justice criminals who seek to defraud Americans and steal from taxpayer-funded programs.”
United States Attorney Peace stated, “As alleged, the defendants abused the trust placed in them by Medicare and Medicaid by falsely billing these essential programs for their own enrichment. This enforcement action demonstrates our continued commitment to vigorously prosecute healthcare providers who steal from taxpayer-funded programs intended to help those in need.”
“This nationwide enforcement action demonstrates that the Criminal Division is committed to fighting health care fraud and opioid abuse by prosecuting those who allegedly exploit patients and health care benefit programs for personal gain,” stated Assistant Attorney General Polite. “Today’s announcement includes some of the largest and most complex cases that the Department has prosecuted and demonstrates the Department’s commitment to seeking justice for those at all levels of the healthcare industry who put profits above patient care, from professionals in doctors’ offices to executives in corporate boardrooms.”
“In both of these cases, the defendants are alleged to have submitted fraudulent claims to Medicare and Medicaid for services and prescription medicine that were not provided. Abuse of Medicare and Medicaid harms not only the programs but also the everyday people whose tax money is used to fund these healthcare programs. The actions announced today highlight the FBI New York’s commitment to ensuring that those willing to attempt to take advantage of taxpayer-funded healthcare programs are held accountable in the criminal justice system,” stated FBI Assistant Director-in-Charge Driscoll.
“Federal health care programs are designed to provide access to high quality care to patients nationwide. When bad actors attempt to exploit those measures for illicit financial gain, they put greed before the needs and safety of their patients, and take valuable resources away from their intended recipients,” stated HHS-OIG Deputy Inspector General Schrank. “As today’s enforcement action illustrates, HHS-OIG and our law enforcement partners are committed to defending the federal health care system against fraud.”
United States v. Carlo Elomina Garcia
As alleged in the criminal complaint, from May 2017 through June 2021, the defendant, through his company, billed Medicare and Medicaid for over $3.9 million in occupational therapy services and was paid over $1.6 million. Many of those services were not eligible for reimbursement, were not provided as billed or were not provided at all, including repeatedly billing for over 24 hours of one-on-one occupational therapy services in a single day.
The government’s case is being prosecuted by Assistant United States Attorney John Vagelatos.
United States v. Jian Ai Chen
As alleged in the indictment, As alleged in the indictment, Chen is charged with conspiracy to defraud in connection with a scheme to pay over $5 million in kickbacks to Medicare and Medicaid beneficiaries in exchange for bringing their prescriptions to AC Pharmacy Corp. and A Star Pharmacy Inc., which she owned. Chen agreed with others to submit false and fraudulent claims to Medicare and Medicaid plans for dispensing prescription medications that were induced by the payment of kickbacks and not actually dispensed. Chen’s pharmacies received approximately $101 million as a result of the scheme.
The government’s case is being prosecuted by Trial Attorney Andrew Estes of the Brooklyn Strike Force.
The arrests and charges announced today by U.S. Attorney Peace are part of a strategically coordinated, two-week nationwide law enforcement action that resulted in criminal charges against 78 defendants for their alleged participation in health care fraud and opioid abuse schemes that included over $2.5 billion in alleged fraud. The defendants allegedly defrauded programs entrusted for the care of the elderly and disabled, and, in some cases, used the proceeds of the schemes to purchase luxury items, including exotic automobiles and yachts.
The Health Care Fraud Unit’s Strike Forces in Brooklyn, Dallas, Detroit, the Gulf Coast, Houston, Los Angeles, Miami, Newark, and Tampa; the Health Care Fraud Unit’s National Rapid Response Strike Force; the U.S. Attorneys’ Offices for the Middle District of Florida, Southern District of Florida, Southern District of Georgia, District of Idaho, Western District of Kentucky, Eastern District of Louisiana, Middle District of Louisiana, District of New Jersey, Eastern District of New York, Southern District of Ohio, District of South Carolina, Southern District of Texas, Eastern District of Washington, and Eastern District of Wisconsin; and the State Attorney Generals’ Offices for Indiana, New York, and Pennsylvania are prosecuting these cases, with assistance from the Health Care Fraud Unit’s Data Analytics Team. Descriptions of cases involved in today’s enforcement action are available on the Department’s website at www.justice.gov/criminal-fraud/health-care-fraud-unit/2023-national-hcf-court-documents.
The charges are allegations, and the defendants are presumed innocent unless and until proven guilty.
The Fraud Section uses the Victim Notification System to provide victims with case information and updates related to cases charged by the Fraud Section in the National Health Care Fraud Enforcement Action. Victims with questions may contact the Fraud Section’s Victim Assistance Unit by calling the Victim Assistance phone line at 1-888-549-3945 or by emailing [email protected]
The Defendants:
CARLO ELOMINA GARCIA
Age: 51
Astoria, QueensE.D.N.Y. Docket No. 23-MJ-596
JIAN AI CHEN (also known as “Maggie”)
Age: 48
Syosset, New YorkE.D.N.Y. Docket No. 23-CR-255 (WFK)
U.S. Attorney Announces Participation in Coordinated National Health Care Fraud Enforcement ActionRead the Press Release
MIAMI – U.S. Attorney Markenzy Lapointe announced criminal charges against fourteen defendants in connection with over $1.9 billion in fraud prosecuted in the Southern District of Florida, as part of the Department of Justice’s 2023 National Health Care Fraud Enforcement Action. The charges stem from various schemes to defraud government and private health care benefit programs by submitting false claims for items and services that were not needed and, in many instances, never provided as well as a scheme to unlawfully distribute adulterated and misbranded prescription medications.
“The results of this nationwide coordinated law enforcement effort that we announce today exemplify our office’s ongoing commitment to prosecuting health care fraud-related schemes,” said U.S. Attorney Markenzy Lapointe for the Southern District of Florida. “We will continue to hold accountable those who exploit health care programs for personal profit in South Florida.”
“These enforcement actions, including against one of the largest health care fraud schemes ever prosecuted by the Justice Department, represent our intensified efforts to combat fraud and prosecute the individuals who profit from it,” said Attorney General Merrick B. Garland. “The Justice Department will find and bring to justice criminals who seek to defraud Americans and steal from taxpayer-funded programs.”
“This nationwide enforcement action demonstrates that the Criminal Division is committed to fighting health care fraud and opioid abuse by prosecuting those who allegedly exploit patients and health care benefit programs for personal gain,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Today’s announcement includes some of the largest and most complex cases that the Department has prosecuted, and demonstrates the Department’s commitment to seeking justice for those at all levels of the healthcare industry who put profits above patient care, from professionals in doctors’ offices to executives in corporate boardrooms.”
The charges announced today by U.S. Attorney Lapointe are part of a strategically coordinated, two-week nationwide law enforcement action that resulted in criminal charges against 78 defendants for their alleged participation in health care fraud and opioid abuse schemes that resulted in the submission of over $2.5 billion in alleged false billings. The defendants allegedly defrauded programs entrusted for the care of the elderly and disabled, and, in some cases, used the proceeds of the schemes to purchase luxury items, including exotic automobiles and yachts.
The Health Care Fraud Unit’s Strike Forces in Brooklyn, Dallas, Detroit, the Gulf Coast, Houston, Los Angeles, Miami, Newark, and Tampa; the Health Care Fraud Unit’s National Rapid Response Strike Force; the U.S. Attorneys’ Offices for the Middle District of Florida, Southern District of Florida, Southern District of Georgia, District of Idaho, Western District of Kentucky, Eastern District of Louisiana, Middle District of Louisiana, District of New Jersey, Eastern District of New York, Southern District of Ohio, District of South Carolina, Southern District of Texas, Eastern District of Washington, and Eastern District of Wisconsin; and the State Attorney Generals’ Offices for Indiana, New York, and Pennsylvania are prosecuting the cases in the National Enforcement Action, with assistance from the Health Care Fraud Unit’s Data Analytics Team. Descriptions of each case involved in today’s enforcement action are available on the department’s website at www.justice.gov/criminal-fraud/health-care-fraud-unit/2023-national-hcf-court-documents.
The Southern District of Florida, in particular, worked with the Department’s Criminal Division and the following law enforcement organizations to investigate and prosecute the cases filed during the enforcement period: the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Miami Region; FBI, Miami Field Office; the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG), Atlanta Region; the Department of Defense Office of Inspector General (DOD OIG), Defense Criminal Investigative Service, Southeast Field Office, the U.S. Department of Veterans Affairs Office of Inspector General (VA-OIG), Southeast Field Office; IRS Criminal Investigation (IRS-CI), Miami Field Office; and the Office of Personnel Management, Office of Inspector General (OPM-OIG).
“Federal health care programs are designed to provide access to high quality care to patients nationwide. When bad actors attempt to exploit those measures for illicit financial gain, they put greed before the needs and safety of their patients, and take valuable resources away from their intended recipients,” said Deputy Inspector General for Investigations Christian J. Schrank of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “As today’s enforcement action illustrates, HHS-OIG and our law enforcement partners are committed to defending the federal health care system against fraud.”
“These cases serve to highlight the magnitude of health care fraud in South Florida, but unfortunately are only the tip of the iceberg,” said Jeffrey B. Veltri, Special Agent in Charge, FBI Miami. “Our health care system is under constant attack by fraudsters who are driven by greed. They pilfer billions of dollars from Medicare and other health care benefit programs. The FBI, Health and Human Services Office of Inspector General, Federal Deposit Insurance Corporation Office of Inspector General, Department of Defense Office of Inspector General, the United States Attorney’s Office for the Southern District of Florida, and the Department of Justice devote considerable resources to investigate, arrest, and prosecute these criminals. We will not relent. But, we need the public’s assistance. Please report suspicious activity, inform your insurance company if you see charges on your explanation of benefits for services you did not receive and protect your insurance cards and other personally identifiable information.”
“The cases described in today's announcement reflect the FDIC OIG’s commitment to investigating allegations of fraud, including health care fraud schemes, that threaten to undermine the integrity of our Nation’s banking system,” said Assistant Inspector General for Investigations Shimon R. Richmond of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG). “We will continue to coordinate with our law enforcement partners to investigate such schemes, and are pleased to join them in announcing today’s enforcement action."
“This indictment is an important step in protecting federal health care programs from fraudulent billing and ensuring patients receive uncompromised care through the Department of Defense’s TRICARE Program,” stated Special Agent in Charge Darrin Jones, Department of Defense Office of Inspector General, Defense Criminal Investigative Service, Southeast Field Office. “We will continue to work closely with our law enforcement partners to hold health care fraudsters accountable and to protect patient health and safety.”
The following defendants have been charged in the Southern District of Florida:
In United States v. Rubier, Case No. 23-cr-80105, Yosbel Roque Rubier, 43, of Miami, Florida, was charged by indictment with health care fraud and aggravated identity theft in connection with an alleged scheme to defraud Medicare of approximately $900,000 for durable medical equipment (“DME”) that was never supplied to Medicare beneficiaries. As alleged in the indictment, Rubier was the owner and operator of FCM Supply LLC (“FCM”), a clinic in Greenacres, Florida, that purported to provide DME to eligible Medicare beneficiaries. In a four-month period, FCM submitted approximately $900,000 in allegedly fraudulent health care claims to Medicare for DME that FCM never provided, and that Medicare beneficiaries never requested or needed. To support these fraudulent claims, Rubier used stolen means of identification of medical providers. As a result, Medicare paid approximately $443,000 to FCM. FBI Miami and HHS-OIG Miami investigated the case. Assistant U.S. Attorney Shannon Shaw is prosecuting it.
In United States v. Cesar, Case No. 23-cr-20259, Tania Cesar, 55, of Hialeah, Florida, was charged by indictment with conspiracy to commit health care fraud in connection with an alleged scheme to defraud health care plans managed by Blue Cross Blue Shield (“BCBS”). As alleged in the Indictment, Cesar was a licensed physical therapist assistant at Elite Therapy Group, Inc (“Elite Therapy”), a physical therapy clinic in Miami, Florida. Cesar signed patient therapy records misrepresenting that she had provided physical therapy to insurance beneficiaries, when in fact she had not. Cesar’s co-conspirators at Elite Therapy, who were convicted for the Elite Therapy conspiracy in United States v. Wated et al., Case No. 21-cr-20110-MGC, submitted millions of dollars in claims to BCBS for physical therapy that Cesar purported to provide, but never did. FBI Miami investigated the case. Assistant U.S. Attorney Joseph Egozi is prosecuting it. Assistant U.S. Attorney Joshua Paster is handling asset forfeiture.
In United States v. Bernal, Case No. 23-cr-20246, Arian Bernal, 43, of Hialeah, Florida, was charged by information with conspiracy to commit health care fraud in connection with an alleged scheme to defraud health care plans managed by Blue Cross Blue Shield (“BCBS”). As alleged in the information, Bernal paid kickbacks to beneficiaries to recruit them to visit several Miami clinics so that his co-conspirators could submit claims to those beneficiaries’ ASO insurance plans managed by BCBS. Those claims fraudulently represented that various health care benefits and services were medically necessary and provided to patients. FBI Miami investigated the case. Assistant U.S. Attorney Joseph Egozi is prosecuting it. Assistant U.S. Attorney Joshua Paster is handling asset forfeiture.
In United States v. Perez, Case No. 23-cr-20269, Silvana Perez, 44, of Miami, Florida, was charged by information with conspiracy to commit health care fraud in connection with an alleged scheme to defraud health care plans managed by Blue Cross Blue Shield (“BCBS”). As alleged in the information, Perez paid kickbacks to beneficiaries to recruit them to visit a sleep study clinic so that her co-conspirators could submit claims to those beneficiaries’ ASO insurance plans managed by BCBS. Those claims fraudulently represented that various health care benefits and services were medically necessary and provided to patients. FBI Miami investigated the case. Assistant U.S. Attorney Joseph Egozi is prosecuting it. Assistant U.S. Attorney Joshua Paster is handling asset forfeiture.
In United States v. Gonzalez, et al., Case No. 23-20248, Ariel Gonzalez, 54, of Naples, Florida, and Linda Taylor, 55, of Miami, Florida, were charged for their roles in an alleged health care fraudulent billing scheme, along with several others who were previously charged in a separate Indictment and have since pleaded guilty. According to the Indictment, Gonzalez was one of the owners of Phoenix Rehab Center Corp., a physical therapy clinic based in Miami, that offered and paid kickbacks to patient recruiters, including Taylor, in exchange for referring beneficiaries of Administrative Services Only corporate insurance plans held by employers JetBlue Airways and AT&T Inc. and administered by Blue Cross Blue Shield to Phoenix Rehab for various forms of physical therapy treatments that they did not need and in many cases never received. The indictment further alleges that Gonzalez provided funding to Phoenix Rehab to further the fraud, including by taking out a loan to obtain sufficient cash to pay kickbacks to patient recruiters and beneficiaries. FBI Miami investigated the case. Assistant U.S. Attorney Will J. Rosenzweig is prosecuting it. Assistant U.S. Attorney Annika Miranda is handling asset forfeiture.
In United States v. Gomez, Case No. 23-cr-20249, Carlos Jose Martin Gomez, 36, of Miami, Florida, was charged for his role in an alleged health care fraudulent billing conspiracy in conjunction with Arisleidys Fernandez Delmas, 32, of Miami, Florida and several others who were previously charged in separate indictments. The scheme involved several fraudulent physical therapy clinics that targeted Administrative Services Only corporate insurance plans held by employers JetBlue Airways, AT&T Inc., and TJX Companies Inc. and administered by Blue Cross Blue Shield. Martin Gomez was also charged with five substantive counts of health care fraud related to five clinics involved in the larger conspiracy. According to the indictment, Martin Gomez offered and paid kickbacks and bribes to patient recruiters for referring beneficiaries to the clinics and directly to beneficiaries of these insurance plans in exchange for allowing the clinics to bill these plans for various forms of physical therapy treatments purportedly provided to these beneficiaries that they did not need and in many cases never received. FBI Miami investigated the case. Assistant U.S. Attorney Will J. Rosenzweig is prosecuting it. Assistant U.S. Attorney Annika Miranda is handling asset forfeiture.
In United States v. Lazo, Case No. 23-cr-20250, Adrian Lazo, 45, of Miami, Florida, was charged with laundering health care fraud proceeds by depositing a $3,303,974 check from the Center for Medicare and Medicaid Services to YG Medical Supplies Inc. in October 2021. The indictment alleges that Lazo conspired with others to deposit the check for the purpose of concealing, among other things, the nature, source, and ownership of those funds. HHS-OIG Miami, DOD-OIG, Southeast Field Office, FDIC-OIG, Atlanta Region, and HSI Miami investigated the case. Assistant U.S. Attorney Will J. Rosenzweig is prosecuting it. Assistant U.S. Attorney Annika Miranda is handling asset forfeiture.
In United States v. Moreno, Case No. 23-cr-20266, Jesus Enrique Moreno, 48, of Miami, Florida, was charged by information with unlicensed money transmitting for transmitting health care fraud proceeds between December 2020 and February 2021. HHS-OIG Miami and FDIC-OIG, Atlanta Region, investigated the case. Assistant U.S. Attorney Timothy J. Abraham is prosecuting it. Assistant U.S. Attorney Mitchell Hyman is handling asset forfeiture.
In United States v. Blackman, et al., Case No. 23-cr-20271, Brett Blackman, 39, of Johnson County, Kansas, Gary Cox, 77, of Maricopa County, Arizona, and Gregory Schreck, 49, of Johnson County, Kansas, were charged by indictment with conspiracy to commit health care fraud and wire fraud, conspiracy to pay and receive kickbacks, and conspiracy to defraud the United States and make false statements, in connection with the submission of $1.9 billion in false and fraudulent claims to Medicare and other government insurers for orthotic braces, prescription skin creams, and other items that were medically unnecessary and ineligible for Medicare reimbursement. As alleged in the indictment, Blackman, Cox, and Schreck owned, controlled, or operated DMERx, which was an internet-based platform that the defendants programmed to generate false and fraudulent doctors’ orders in exchange for illegal kickbacks and bribes. Cox was the CEO of the company that operated DMERx prior to a corporate acquisition, and Blackman was the CEO and Schreck a Vice President of the company that operated it after the acquisition. The defendants are alleged to have offered to connect pharmacies, durable medical equipment (“DME”) suppliers, and marketers to telemedicine companies who would accept illegal kickbacks and bribes in exchange for orders that were transmitted using the DMERx platform. The defendants allegedly received payments for coordinating these illegal kickback transactions and referring the completed doctors’ orders to the DME suppliers, pharmacies, and telemarketers that paid for them. The fraudulent orders and prescriptions generated by DMERx falsely represented that doctors had examined and treated the Medicare beneficiaries when in reality, purported telemedicine companies paid doctors to sign these orders and prescriptions without regard to medical necessity and based on a brief telephone call with the beneficiary or sometimes no interaction with the beneficiary at all. In order to conceal and disguise the scheme, and obstruct investigations by Medicare and its contractors, the defendants allegedly removed references to telemedicine in the orders. The DME supply companies and pharmacies that paid illegal kickbacks in exchange for these orders and prescriptions generated through DMERx billed Medicare more than $1,963,000,000 in false and fraudulent claims. HHS-OIG Miami, FBI Miami, VA-OIG, Southeast Field Office, IRS-CI Miami, HSI Miami, OPM-OIG, DOD OIG, Southeast Field Office, investigated the case. Trial Attorneys Darren C. Halverson of the National Rapid Response Strike Force and Andrea Savdie of the Miami Strike Force are prosecuting it. Assistant U.S. Attorney G. Raemy Charest-Turken is handling asset forfeiture.
In United States v. Herrera, Case No. 23-cr-20264, Armando Herrera, 42, of Miami, Florida, was charged by information with one count of conspiracy to introduce adulterated and misbranded drugs into interstate commerce in connection with a nationwide scheme to unlawfully distribute adulterated and misbranded prescription medications, including HIV medications, valued at more than $16.7 million. As alleged in the information, Herrera and his co-conspirators illegally acquired these prescription medications through fraud or from individual patients for whom the prescription medications had been prescribed. The information alleges that these medications were then repackaged and resold with false labeling and documentation to conceal their true origin. It further alleges that, in some instances, the prescription medications Herrera distributed contained the wrong medication. HHS-OIG Miami and FDIC-OIG, Atlanta Region, investigated the case. Trial Attorney Alexander Thor Pogozelski of the Miami Strike Force is prosecuting it. Assistant U.S. Attorney Daren Grove is handling asset forfeiture.
In United States v. Vines, Case No. 23-cr-80107, Reginal N. Vines, 47, of Tuscaloosa, Alabama, was charged by indictment with conspiracy to commit health care fraud and wire fraud, health care fraud, conspiracy to defraud the United States and to pay and receive health care kickbacks, and receiving health care kickbacks, in connection with his role in selling doctors’ orders for medically unnecessary genetic tests to several laboratories. Vines obtained the orders by paying kickbacks and bribes to a doctor in exchange for the doctor signing prescriptions for genetic tests, without ever meeting or treating the Medicare beneficiaries for whom the tests were orders. In some instances, Vines allegedly forged the doctor’s signature on the prescriptions. The indictment alleges that the laboratories billed Medicare approximately $10 million for medically unnecessary genetic tests, of which Medicare paid $2.9 million. HHS-OIG Miami and FBI Miami investigated the case. Trial Attorney Reginald Cuyler Jr. of the Miami Strike Force is prosecuting it. Assistant U.S. Attorney Marx Calderon is handling asset forfeiture.
In addition to the above defendants charged in the Southern District of Florida, a defendant was sentenced earlier this month to 15 years in federal prison in connection with a nationwide scheme to unlawfully distribute diverted, adulterated, and misbranded medications, including HIV drugs:
In United States v. Hernandez, Case No. 22-cr-60129, Lazaro Hernandez, 52, of Miami, Florida, was sentenced on June 15 to 15 years in prison after pleading guilty to conspiracy to defraud the United States and to introduce into interstate commerce adulterated and misbranded drugs and conspiracy to commit money laundering, in connection with a nationwide scheme to unlawfully distribute more than $230 million in diverted, adulterated, and misbranded medications, including HIV drugs. According to court documents, Hernandez and his co-conspirators illegally acquired large quantities of prescription drugs from patients for whom the drugs had been prescribed but intentionally not consumed. Hernandez and his co-conspirators then sold the diverted drugs to pharmacies across the country. The diverted drugs were accompanied by false pedigrees to conceal their true origin. In at least several instances, the diverted HIV medication that Hernandez sold consisted of bottles containing the wrong medication, broken pills, and even pebbles, leading to complaints by pharmacies. Hernandez and his co-conspirators then laundered the proceeds of these illegal sales. Hernandez also used his share of the proceeds to purchase luxury goods, including a $280,000 Lamborghini, a $220,000 Mercedes, and three boats. HHS-OIG Miami and FDIC-OIG, Atlanta Region, investigated the case. Assistant U.S. Attorney Timothy J. Abraham and Trial Attorney Alexander Thor Pogozelski of the Miami Strike Force prosecuted it. Assistant U.S. Attorney Emily Stone is handling asset forfeiture.
The Fraud Section uses the Victim Notification System to provide victims with case information and updates related to cases charged by the Fraud Section in the National Enforcement Action. Victims with questions may contact the Fraud Section’s Victim Assistance Unit by calling the Victim Assistance phone line at 1-888-549-3945 or by emailing [email protected]. Victims with questions about the cases charged by the U.S. Attorney’s Office may contact [email protected]. To learn more about victims’ rights, please visit www.justice.gov/criminal-vns/case/united-states-v-steven-diamantstein.
A complaint, information, or indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.
###
U.S. Attorney Announces Participation in Coordinated National Health Care Fraud Enforcement ActionRead the Press Release
SAVANNAH, Ga. – Criminal charges have been filed in the Southern District of Georgia against a Florida man as part of the Department of Justice’s 2023 National Health Care Fraud Enforcement Action.
“These enforcement actions, including against one of the largest health care fraud schemes ever prosecuted by the Justice Department, represent our intensified efforts to combat fraud and prosecute the individuals who profit from it,” said Attorney General Merrick B. Garland. “The Justice Department will find and bring to justice criminals who seek to defraud Americans and steal from taxpayer-funded programs.”
“This nationwide enforcement action demonstrates that the Criminal Division is committed to fighting health care fraud and opioid abuse by prosecuting those who allegedly exploit patients and health care benefit programs for personal gain,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Today’s announcement includes some of the largest and most complex cases that the Department has prosecuted, and demonstrates the Department’s commitment to seeking justice for those at all levels of the healthcare industry who put profits above patient care, from professionals in doctors’ offices to executives in corporate boardrooms.”
“In collaboration with our law enforcement partners, we are committed to protecting the integrity of our nation’s health care system and medical safety net programs from those who would exploit them for profit,” said Jill E. Steinberg, U.S. Attorney for the Southern District of Georgia.
The charges announced during the 2023 National Health Care Fraud Enforcement Action are part of a strategically coordinated, two-week nationwide law enforcement sweep that resulted in criminal charges against 78 defendants for their alleged participation in health care fraud and opioid abuse schemes that resulted in the submission of more than $2.5 billion in alleged false billings. The defendants allegedly defrauded programs entrusted for the care of the elderly and disabled, and, in some cases, used the proceeds of the schemes to purchase luxury items, including exotic automobiles and yachts.
In the Southern District of Georgia, Christopher Ciani, 40, of Land O’ Lakes, Fla., is charged via Information with one criminal count of Conspiracy. The information alleges that Ciani, in 2019, operated a company called Ciani Medical Solutions and conspired with others in a scheme targeted at the Medicare program. As alleged in the information, Ciani brokered relationships between laboratories and various marketing groups that recruited Medicare beneficiaries and sent doctors’ orders and specimens for genetic testing to the laboratories in exchange for approximately $1.4 million in illegal kickbacks and bribes. The case is being prosecuted by Acting Assistant Chief Brynn Schiess of the Dallas Strike Force and Assistant U.S. Attorney Ryan Grover of the Southern District of Georgia.
Criminal Informations contain only charges; defendants are presumed innocent unless and until proven guilty.
Descriptions of other cases involved in today’s enforcement action are available on the Department’s website at www.justice.gov/criminal-fraud/health-care-fraud-unit/2023-national-hcf-court-documents.
The Health Care Fraud Unit’s Strike Forces in Brooklyn, Dallas, Detroit, the Gulf Coast, Houston, Los Angeles, Miami, Newark, and Tampa; the Health Care Fraud Unit’s National Rapid Response Strike Force; the U.S. Attorneys’ Offices for the Southern District of Georgia, Middle District of Florida, Southern District of Florida, District of Idaho, Western District of Kentucky, Eastern District of Louisiana, Middle District of Louisiana, District of New Jersey, Eastern District of New York, Southern District of Ohio, District of South Carolina, Southern District of Texas, Eastern District of Washington, and Eastern District of Wisconsin; and the State Attorney Generals’ Offices for Indiana, New York, and Pennsylvania are prosecuting the cases in the National Enforcement Action, with assistance from the Health Care Fraud Unit’s Data Analytics Team.
The Fraud Section uses the Victim Notification System to provide victims with case information and updates related to cases charged by the Fraud Section in the National Enforcement Action. Victims with questions may contact the Fraud Section’s Victim Assistance Unit by calling the Victim Assistance phone line at 1-888-549-3945 or by emailing [email protected].
U.S. Attorney Announces Participation in Coordinated National Health Care Fraud Enforcement ActionRead the Press Release
Louisville, KY – U.S. Attorney Michael A. Bennett announced criminal charges against four defendants in connection with two health care fraud and opioid abuse scheme cases prosecuted in the Western District of Kentucky, as part of the Department of Justice’s 2023 National Health Care Fraud Enforcement Action. The charges stem from pharmacy owners and employees taking opioids from their pharmacies and distributing the drugs on the street and, in some instances, billing insurance fraudulently.
“This nationwide enforcement action demonstrates that the Criminal Division is committed to fighting health care fraud and opioid abuse by prosecuting those who exploit health care benefit programs and patients for personal gain,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Today’s announcement includes some of the largest and most complex cases that the Department has prosecuted, and demonstrates the Department’s commitment to seeking justice for those at all levels of the healthcare industry who put profits above patient care, from professionals in doctors’ offices to executives in corporate boardrooms.”
The charges announced today by U.S. Attorney Bennett are part of a strategically coordinated, two-week nationwide law enforcement action that resulted in criminal charges against 78 individuals for their alleged participation in health care fraud and opioid abuse schemes that resulted in over $2.5 billion in alleged fraud. The defendants allegedly defrauded programs entrusted for the care of the elderly and disabled, and, in some cases, used the proceeds of the schemes to purchase luxury items, including exotic automobiles and yachts.
In the Western District of Kentucky, two separate cases were charged on June 14, 2023, and June 26, 2023. The charges included conspiracy to commit theft of medical products, conspiracy to unlawfully distribute controlled substances, health care fraud, aggravated identity theft, and making a false writing.
Specifically, in United Stated v. Joseph and Jenifer Huff, pharmacist Joseph Patrick Huff, 44, and Jenifer Huff, 44, of Bowling Green, Kentucky, were charged by superseding indictment on June 14, 2023, with one count of conspiracy to commit theft of medical products, one count of conspiracy to unlawfully distribute controlled substances, six counts of health care fraud-Adderall fraud, four counts of health care fraud-Eliquis fraud, two counts of health care fraud-Nicotrol and Linzess fraud, one count aggravated identity theft, and one count of making a false writing. The indictment charges the Huffs with conspiring to take, carry away, and conceal and knowingly possess, transport and traffic a pre-retail medical product, namely oxycodone and hydrocodone, with a value over $5000, and conspiring to sell and trade the oxycodone and hydrocodone for marijuana, methamphetamine, and cocaine. Additionally, Joseph Huff is charged with falsely and fraudulently billing various health care benefit programs for Adderall XR to obtain a higher reimbursement rate. Joseph Huff also is charged with falsely and fraudulently billing commercial insurance for dispensing Eliquis to a patient when in fact the patient never received the Eliquis medication. In addition, Joseph Huff and Jenifer Huff are charged with falsely and fraudulently billing Kentucky Medicaid for prescriptions dispensed to Jenifer Huff when in fact no physician or nurse practitioner issued an order for the prescriptions. Joseph Huff is also charged with using the name and National Provider Identifier number of a physician without lawful authority when he billed Kentucky Medicaid for a prescription dispensed to Jenifer Huff. Finally, Joseph Huff is charged with filing a false DEA Form 106, reporting the theft of narcotics, which were not actually stolen.
In United States v. Stephen Troy Wilmoth and Ashley Ramsey-Wilmoth, Stephen Troy Wilmoth, 45, and pharmacy technician Ashley Ramsey-Wilmoth, 41, of Hodgenville, Kentucky, were charged by information on June 27, 2023, with one count of conspiracy to commit theft of medical products and one count of conspiracy to unlawfully distribute controlled substances. The information charges the Wilmoths with conspiring to take, carry away, and conceal and knowingly possess, transport and traffic a pre-retail medical product, namely oxycodone and hydrocodone, with a value over $5000, and conspiring to sell and trade the oxycodone and hydrocodone. Ashley Ramsey-Wilmoth, an employee of Century Medicines, a retail pharmacy in the supply chain for oxycodone and hydrocodone, took, carried away and concealed unopened bottles of oxycodone and hydrocodone from Century Medicines prior to the oxycodone and hydrocodone being made available for retail purchase by a consumer. She then provided the oxycodone and hydrocodone to her husband, Stephen Troy Wilmoth, to sell and distribute.
These cases are being investigated by the DEA, the Bowling Green/Warren County Drug Task Force, the Kentucky State Police, and the Warren County Sheriff’s Office with the assistance of the Kentucky Cabinet for Health and Family Services Office of Inspector General.
These cases are being prosecuted by Assistant U.S. Attorney Joe Ansari.
Principal Assistant Deputy Chief Jacob Foster and Acting Assistant Chief Rebecca Yuan of the National Rapid Response Strike Force of the Criminal Division’s Fraud Section led and coordinated the enforcement action. The Health Care Fraud Unit’s Strike Forces in Brooklyn, Dallas, Detroit, the Gulf Coast, Houston, Los Angeles, Miami, Newark, and Tampa; the Health Care Fraud Unit’s National Rapid Response Strike Force; the U.S. Attorneys’ Offices for the Middle District of Florida, Southern District of Florida, Southern District of Georgia, District of Idaho, Western District of Kentucky, Eastern District of Louisiana, Middle District of Louisiana, District of New Jersey, Eastern District of New York, Southern District of Ohio, District of South Carolina, Southern District of Texas, Eastern District of Washington, and Eastern District of Wisconsin; and the State Attorney Generals’ Offices for Indiana, New York, and Pennsylvania are prosecuting these cases, with assistance from the Health Care Fraud Unit’s Data Analytics Team. Descriptions of cases involved in today’s enforcement action are available on the Department’s website at www.justice.gov/criminal-fraud/health-care-fraud-unit/2023-national-hcf-court-documents.
The Fraud Section uses the Victim Notification System to provide victims with case information and updates related to this case. Victims with questions may contact the Fraud Section’s Victim Assistance Unit by calling the Victim Assistance phone line at 1-888-549-3945 or by emailing [email protected]. To learn more about victims’ rights, please visit www.justice.gov/criminal-vns/victim-rights-derechos-de-las-v-ctimas, and for further information for victims about new federal charges in connection with the HIV scheme, please visit www.justice.gov/criminal-vns/case/united-states-v-steven-diamantstein.
A complaint, information, or indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
###
Two Men Sentenced in Large Drug Trafficking ConspiracyRead the Press Release
COLUMBIA, SOUTH CAROLINA — Gabriel L’Ambiance Ingram, 34, of Lancaster, and Carl Michael Mann, II, 41, of Rock Hill, were sentenced to federal prison for their involvement in a large-scale drug operation operating in Rock Hill and Charlotte, North Carolina. Ingram was sentenced to 260 months (21.66 years) and Mann was sentenced to 300 months (25 years) in federal prison after being convicted at trial.
Evidence presented during trial showed that the FBI and York County Multi-Jurisdictional Drug Enforcement Unit began to investigate a group of defendants who were obtaining large amounts of cocaine, methamphetamine, heroin, and marijuana from a distributor in Southern California. Based upon their investigation, the police were able to determine that members of the group were flying to California and having the drugs shipped back to the Rock Hill and Charlotte area. Based upon surveillance and other law enforcement techniques, the police learned that Darryl Hemphill was the leader of the group and helped introduce other members of the group to the California distributor. Later, the group began ordering fentanyl from California, which they used to make fentanyl-laced pills which were sold to users in Rock Hill, Greenville, Myrtle Beach, Charlotte, N.C., and Atlanta, Ga. Based upon their investigation, law enforcement showed that this group shipped more than 255 packages from California and distributed more than 5 kilograms of cocaine, 280 grams or more of crack cocaine, 500 grams or more of methamphetamine, 400 grams or more of fentanyl, 1 kilogram or more of heroin, and more than 1000 grams of marijuana.
Evidence showed Mann was a member of the conspiracy and was involved in obtaining the pill press machines used by the conspirators, the dye, and stamps used to make the fentanyl-laced pills. Mann would also operate the pill press machines for members of the conspiracy at different locations in Rock Hill and Charlotte. He was paid by members of the conspiracy with some of the pills he made for them. He was convicted at trial of conspiracy to possess 500 grams or more of cocaine, 500 grams or more of methamphetamine, 400 grams or more of fentanyl, and a quantity of heroin. Mann was also convicted of possession with the intent to distribute a quantity of crack cocaine found during a search of his home.
Evidence also showed Ingram was a mid-level dealer who purchased illegal drugs from Hemphill and other members of the conspiracy and sold them to lower-level dealers and users of the illegal substances. Ingram was convicted of conspiracy to possess 500 grams or more of cocaine, 28 grams or more of crack cocaine, and a quantity of heroin. Ingram was also convicted of three counts of being a felon in possession of a firearm, three counts of possession of a firearm in furtherance of a drug trafficking crime, and four counts of possession with the intent to distribute illegal substances to include heroin, cocaine, marijuana, and crack cocaine.
Eighteen defendants were initially charged in this case. Fifteen defendants pleaded guilty to their involvement while Mann, Ingram, and Darrell Crockett were found guilty by a jury.
United States District Judge Mary Geiger Lewis sentenced Mann to 300 months in prison and Ingram to 260 months in prison. Each will serve a term of court-ordered supervision following release from prison. There is no parole in the federal system.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
This case was investigated by the Federal Bureau of Investigation, York County Multi-Jurisdictional Drug Enforcement Unit, Bureau of Alcohol, Tobacco, Firearms and Explosives, Drug Enforcement Administration, Internal Revenue Service, Rock Hill Police Department, York County Sheriff’s Office, and Richland County Sheriff’s Department. Assistant U.S. Attorneys William K. Witherspoon, Elliott B. Daniels, Elle E. Klein, and Lamar Fyall prosecuted the case.
###
Three Plead Guilty to Conspiracy to Commit Wire FraudRead the Press Release
Tampa, Florida – United States Attorney Roger B. Handberg announces that Fabio Lanzieri (61, Fort Lauderdale) has pleaded guilty to conspiracy to commit wire fraud. Lanzieri faces a maximum penalty of five years in federal prison and a fine of $250,000. A sentencing date has not yet been set.
Two others, James Council (55, Valrico, Florida) and Robert Ronzio (49, North Providence, Rhode Island) pleaded guilty earlier this year for their respective roles in the same conspiracy.
According to Lanzieri’s plea agreement and other court documents, Lanzieri and Council worked as sales and marketing consultants for Company 1, a wholly-owned Largo-based subsidiary of a larger pharmaceutical business that manufactured injectable medications. Lanzieri acted as Company 1’s president and was senior to Council. As a manufacturer and vendor of injectable medications, Company 1 had entered into an agreement with a group purchasing organization (“GPO-1”) to facilitate product sales.
A GPO is an entity that helps health care providers realize savings and efficiencies by aggregating purchasing volume and using that purchasing volume as leverage to negotiate pricing discounts with vendors that have entered into purchasing agreements with the GPO. The primary way a GPO makes its profit is via a percentage administrative fee charged against any sales made by the contracted vendors to GPO provider participants, which have correspondingly entered into participant agreements with the GPO. Thus, once a GPO has negotiated pricing discounts with a vendor, that vendor will forward the pricing discount information to health care product wholesalers that will pass the discounted rate on to the GPO’s participants.
The Company 1’s purchasing agreement with GPO-1 was materially altered by GPO-1 in the fall of 2019, resulting in GPO-1 provider participants no longer being eligible to receive pricing discounts on the purchase of certain Company 1 products from wholesalers. As a stopgap to maintain its provider customer base, Company 1 temporarily established competitive pricing discounts for the affected GPO-1 provider participants, thereby eliminating any immediate impact upon Company 1 customers.
Later, in January 2021, Lanzieri conspired with Council and Ronzio to create a non-operating shell GPO named Honoris Purchasing, LLC (“Honoris”) in Wyoming as a purported functioning GPO. Ronzio opened a bank account for the company. The conspirators then caused a purchasing agreement to be created and executed between Company 1 and Honoris—notwithstanding that Honoris, as a non-operating shell, had no knowing participants—that was backdated to in or around May 2020. Lanzieri and Council then fraudulently recategorized the Company 1 customers that had been GPO-1 participants as Honoris participants in internal and external wholesaler records, allowing the customers to continue purchasing via competitive pricing discount schedules as if the customers were actually participants of the non-operating shell Honoris.
Thereafter, Council, in his role as a sales and marketing consultant for Company 1, prepared monthly an administrative fee report for GPOs contracted with Company 1, including for purported GPO Honoris, which contained information related to the total dollar amount of Company 1 product sales made during the month to each GPO’s participants, including the participants that the conspirators had fraudulently categorized as Honoris participants. Council then forwarded the monthly administrative fee reports to the Company 1 accounting department, which, per normal operations, calculated and paid to the identified GPOs an approximate 3% administrative fee based upon the total dollar amount of Company 1 product sales to the participants of each GPO, including Honoris.
In all, the conspirators received at least $960,000 in fraud proceeds from the scheme. Pursuant to their respective plea agreements, each has agreed to pay restitution and to forfeit $320,000, the proceeds of the wire fraud conspiracy.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Jay G. Trezevant. Assistant United States Attorney Suzanne Nebesky is handling the asset forfeiture aspect of this case.
Texas Man Sentenced for Conspiracy to Distribute DrugsRead the Press Release
United States Attorney Steven Russell announced that Jose Saul Delira, 49, of McAllen, Texas, was sentenced today by Senior United States District Judge John M. Gerrard to 17 years’ imprisonment for his involvement in a conspiracy to distribute and possession with intent to distribute 500 grams or more of methamphetamine mixture, 50 grams or more of actual (pure) methamphetamine, and unspecified amounts of cocaine and marijuana, with a prior serious drug felony conviction. Following his release from prison, Delira will serve 10 years on supervised release. There is no parole in the federal system.
Information provided to law enforcement indicated between August of 2020 and February of 2021, Delira was a member of a conspiracy to obtain methamphetamine and other drugs in Mexico, Texas, and Arizona, for transport to the Lincoln, Nebraska, area for resale. Delira introduced Lincoln residents to drug sources in Mexico and assisted with efforts to transport drugs from source locations to Lincoln.
In November of 2020, Delira was staying in Lincoln at the residence of another person involved in the drug trafficking organization. A search warrant was executed at that residence. During the search, investigators found more than 1/3 of a pound of methamphetamine, approximately one ounce of cocaine, four pounds of marijuana, assorted pills, firearms, and drug packaging materials.
Delira had a prior conviction for conspiracy to distribute and possess with intent to distribute methamphetamine in the District of Nebraska. He was sentenced to 188 months in prison in that case in April of 2005.
Delira’s co-defendant, Richard Garza, is scheduled for trial in August of 2023.
This case was investigated by the Lincoln/Lancaster County Narcotics Task Force.
Tampa Woman Sentenced to Prison for Distribution of Heroin and Fentanyl Resulting in DeathRead the Press Release
Tampa, Florida – U.S. District Judge Thomas P. Barber has sentenced Jackylin Bonifacio (38, Tampa) to four years and nine months in federal prison for distribution of heroin and fentanyl resulting in death. Bonifacio had pleaded guilty on February 12, 2021. The court previously sentenced her codefendant, Leslie Pagan, to 20 years in prison for her role in the offense.
According to testimony and court documents, Pagan obtained heroin and fentanyl from a supplier and provided it to Bonifacio and other coconspirators, who in turn distributed the substances to individuals in Hillsborough County. On December 19, 2019, Bonifacio provided fentanyl to a Tampa woman who, believing it was heroin, ingested the fentanyl. The next morning, the woman was found dead in her home.
The Hillsborough County Sheriff’s Office investigated the overdose death and identified Bonifacio as the person who had distributed the fentanyl to the victim. On December 20, 2019, Bonifacio was arrested and found in possession of 25 baggies of fentanyl, packaged for distribution.
The Hillsborough County Medical Examiner’s Office conducted an autopsy and determined that the victim died from ingestion of substances, including heroin and fentanyl. A toxicologist analyzed the baggies recovered from Bonifacio and residue from a syringe found near the victim at the time of the overdose and determined that they contained similar mixtures of fentanyl and Xylazine. Based on the circumstances of the death and the toxicology from the autopsy, the Medical Examiner’s Office determined that the use of the fentanyl caused the victim’s death.
A joint investigation led by the FBI identified Pagan as Bonifacio’s supplier. Pagan was arrested on September 1, 2020, and investigators recovered 97 grams of a mixture containing fentanyl, heroin, and Xylazine, and more than $105,000 from her residence.
This investigation is the result of a partnership between the United States Attorney’s Office, the Federal Bureau of Investigation, Homeland Security Investigations (HSI), the Drug Enforcement Administration, the Hillsborough County Sheriff’s Office, the Tampa Police Department, the Hillsborough County Medical Examiner’s Office, and the Florida Department of Law Enforcement. It was prosecuted by Assistant United States Attorney Michael Sinacore.
This investigation is the result of the Organized Crime Drug Enforcement Task Forces (OCDETF) program. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Stroudsburg Woman and East Stroudsburg Man Charged with Making Straw Purchases of Fifteen FirearmsRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Yesenia Ramos, age 43, of Stroudsburg, and Windall Mitchell, age 34, of East Stroudsburg, Pennsylvania, were charged on June 20, 2023, by a federal grand jury with multiple counts of making false statements to federally licensed firearms dealers.
According to United States Attorney Gerard M. Karam, Yesenia Ramos, age 43, of Stroudsburg, and Windall Mitchell, age 34, of East Stroudsburg, are charged with conspiring to provide false information to federally licensed firearms dealers regarding the purchases of fifteen firearms between May 15, 2021 and June 14, 2022, in Monroe County. The fifteen firearms were purchased from various federally licensed firearms dealers in Monroe County, including Dunkelberger’s Sports Outfitters in Stroudsburg and Brodheadsville, Pocono Mountain Firearms in Scotrun, The Gun Place in East Stroudsburg, and Lopez Firearms in Pocono Summit. The indictment also charges Ramos with fifteen substantive counts of making false statements to federally licensed firearms dealers, and charges Mitchell with being a convicted felon in possession of firearms.
The charge against the defendants resulted from an investigation conducted by the Bureau of Alcohol, Tobacco and Firearms (ATF), and the Pennsylvania State Police. Assistant United States Attorney Robert J. O’Hara is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
The maximum penalty under federal law for the offenses of making false statements to firearms dealers and for being a felon in possession of firearms is ten years’ imprisonment, a term of supervised release following imprisonment, and a fine. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
###
State Inmate Sentenced to 15 Additional Months in Prison for Threatening Federal JudgeRead the Press Release
Jacksonville, Florida – U.S. District Judge Brian J. Davis has sentenced Curtis Brown (35, Indian River) to one year and three months in federal prison, to follow the completion of his 30-year state sentence, for threatening to kill a federal judge and his family, and mailing a threatening communication. Brown had pleaded guilty on December 27, 2022.
According to court documents, Brown sent a letter to a United States district judge threatening to kill him or his family. At the time, Brown was in the Florida State Prison in Raiford serving a state sentence. The envelope containing the letter was stamped with the phrase “Mailed From A State Correctional Institution.” The return address included Brown’s name, inmate number, and the address of the prison. The letter was addressed to the judge’s chambers and stated that it was sent in retaliation for the judge’s refusal to grant Brown’s requested relief. The letter stated that Brown would use his “federally funded stimulus” to hire someone to shoot the judge. Brown also said that if he could not get to the judge in time, he would settle for his “child, loved one, etc.” In a postscript in the letter, Brown further threatened the judge that if the judge told anyone about the letter, it would get worse for the judge. Brown’s name and inmate number were also included in the letter.
On December 3, 2021, upon receiving the letter, employees in the clerk’s office at the United States Courthouse in Tallahassee notified the United States Marshals Service (USMS). The USMS notified a Florida State Prison’s Security Threat Intelligence Officer about the letter. Upon further investigation, the handwriting on the letter was a presumptive match for Brown.
The Federal Bureau of Investigation then began investigating Brown and the letter. Agents discovered that Brown had been engaged in civil litigation in the Northern District of Florida. In July and August 2021, Brown filed an emergency motion for a preliminary injunction and an emergency civil rights complaint about his confinement that were referred to a magistrate judge. Following the referral, several proceedings occurred in which the magistrate judge sought to verify that Brown was the same individual that had previously filed a complaint or lawsuit about his confinement as Brown had not indicated in his filings that he had done so. Throughout the proceedings, Brown maintained that he had not filed a previous federal complaint or lawsuit. However, the magistrate judge concluded that Brown was being dishonest with the court. On November 4, 2021, the magistrate judge issued a report and recommended the dismissal of Brown’s case with prejudice considering “Brown’s pattern of perjury and willful abuse of the judicial process.” On November 19, 2021, the district court judge ordered the case dismissed with prejudice based on Brown’s “pattern of abuse of the judicial process” as an “appropriate sanction for [Brown’s] bad faith.” The judgment was entered on the same day. On November 30, 2021, Brown sent his letter in retaliation for the judge dismissing his case.
This case was investigated by the United States Marshals Service and the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorneys Kirwinn Mike and Ashley Washington.
St. Louis Woman Admits Defrauding Her 96-year-old Great-grandmotherRead the Press Release
ST. LOUIS – A woman from St. Louis, Missouri on Wednesday admitted defrauding her 96-year-old great-grandmother.
Alexis Butler, 35, waived her right to indictment by a grand jury and pleaded guilty in front of U.S. District Judge Stephen R. Clark to one felony count of bank fraud. Butler admitted that sometime before Dec. 2, 2022, she obtained the personal identifying information of her great-grandmother, as well as her account information at St. Louis Community Credit Union. She then obtained online access to the account.
On Dec. 2, 2022, she transferred $2,000 to someone else. The next day, she opened an account for herself at the credit union and began transferring her great-grandmother’s money to her account. Butler admitted as part of her guilty plea that from Dec. 2, 2022 to Jan. 19, 2023, she fraudulently withdrew $26,700 from her great-grandmother’s account. Butler re-deposited $7,500 into the account on January 6, however.
Both sides have agreed to recommend a sentence of three years in prison for Butler, and she will be ordered to repay the money.
The case was investigated by the U.S. Secret Service and the Pagedale Police Department. Assistant U.S. Attorney Tracy Berry is prosecuting the case.
Six People Indicted for Conspiracy to Commit Bank Fraud and Aggravated Identity TheftRead the Press Release
HUNTSVILLE, Ala. – A federal grand jury today indicted six people on fraud charges, announced U.S. Attorney Prim F. Escalona, Federal Bureau of Investigation Special Agent in Charge Carlton L. Peeples, and United States Secret Service Special Agent in Charge Patrick Davis.
A 10-count indictment filed in U.S. District Court charges Ionut Iamandita, 28, Milena Iamandita, 25, Elena Matei, 18, Florin Matei, 27, Larisa Iordache, 28, and Marius Iordache, 29, with conspiracy to commit bank fraud. Ionut Iamandita, Milena Iamandita, Elena Matei, Florin Matei, and Larisa Iordache were also charged with aggravated identity theft.
According to the indictment, from February 2023 to June 2023, the defendants participated in a conspiracy that used skimming devices and covert video cameras to steal Listerhill Credit Union and Avadian Credit Union customers’ account information. Conspirators then withdrew funds from ATMs using stolen account information.
The maximum penalty for conspiracy to commit bank fraud is 30 years in prison. Aggravated identity theft carries a mandatory sentence of two years in prison.
The FBI and United States Secret Service investigated the case with assistance from the Lauderdale County’s Sherriff’s Office, Tuscaloosa County Sherriff’s Office, Hoover Police Department, and Vestavia Hills Police Department. Assistant U.S. Attorney John M. Hundscheid is prosecuting the case.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Sioux City Woman to Federal Prison for Meth ConspiracyRead the Press Release
Kailey Olson, 30, from Sioux City, Iowa, was sentenced June 27, 2023, in federal court in Sioux City, to 29 months’ imprisonment.
At the plea hearing on January 12, 2023, Olson admitted that from December 2020 through April 2021, she and others distributed more than 12 kilograms of methamphetamine in the Sioux City area. Olson was an interstate transporter of substantial quantities of methamphetamine and thousands of dollars in a Texas based methamphetamine distribution conspiracy that included the importation of liquid (for lab-based methamphetamine conversion) plus traditional vehicle transport of drugs from Texas to Iowa and bulk transport of money to Texas in payment for the drugs.
Sentencing was held before United States District Court Chief Judge Leonard T. Strand. Olson was sentenced to 29 months’ imprisonment and must serve a three-year term of supervised release following imprisonment. There is no parole in the federal system. Olson remains in custody of the United States Marshal pending transportation to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 21-4067. Follow us on Twitter @USAO_NDIA.
Repeat Offender Sentenced to 14 Years in PrisonRead the Press Release
HUNTSVILLE, Ala. – A federal judge today sentenced a convicted felon on drug and gun charges, announced U.S. Attorney Prim F. Escalona, U.S. Postal Inspection Service Inspector-in-Charge Scott D. Fix, Houston Division and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Marcus Watson.
U.S. District Court Judge Liles C. Burke sentenced Rayford Raymond Russell aka “Pete”, 74, of Rainsville, to 168 months in prison. In February, Russell pleaded guilty to conspiracy to distribute 50 grams or more of methamphetamine, attempt to possess with intent to distribute 50 grams or more of methamphetamine, use of a phone to facilitate a drug trafficking crime, and being a felon in possession of a firearm. Russell was on federal supervised release when he committed these crimes.
"Removing drivers of violent crime from our communities remains a high priority for our office and our law enforcement partners," U.S. Escalona said. "I am grateful for the hard work and cooperation that brought this repeat offender to justice."
“The U.S. Postal Inspection Service is committed to ensuring the U.S. Mails are not used as a tool to distribute narcotics to our communities,” said Scott Fix, U.S. Postal Inspector in Charge of the Houston Division. “The sentence handed down today should serve as a reminder to other perpetrators engaged in this type of criminal behavior that we will work closely with our law enforcement partners to bring them to justice. We extend our appreciation to ALEA, ATF, DeKalb County Sheriff’s Office, and Huntsville Police Department for their assistance with this investigation.”
“The ATF worked collaboratively and tirelessly with our local, state, and federal law enforcement partners to disrupt the illegal possession of firearms, distribution of narcotics, and other criminal acts that were committed,” ATF SAC Watson said. “The ATF will remain in lockstep with our local, state, and federal partners in our continuing effort to combat violent crime, maintain public safety, and remove criminals who continuously show total disregard for the law.”
According to the plea agreement, during the week of August 10, 2022, law enforcement investigated a series of suspicious packages being mailed to a residence in Flat Rock, Alabama. The package was intercepted by the U.S. Postal Service and contained approximately 10 pounds of methamphetamine. On August 12, 2022, a controlled delivery of the package was made to the intended residence owned by Cindy Franklin. Franklin was receiving packages for “Pete” and was compensated with money and marijuana for the packages she received. Between April 2021 and August 2022, approximately 350 pounds of methamphetamine and marijuana were mailed to Russell’s and Franklin’s residences. On August 12, 2022, Russell moved his firearms and ammunition to a residence in Dutton, Alabama. A search warrant was obtained for the residence. Law enforcement officers seized multiple firearms loaded with approximately 1,000 rounds of ammunition and other ammunition belonging to Russell.
On May 23, 2023, U.S. District Court Judge Liles C. Burke sentenced Cindy Land Franklin, 64, of Flat Rock, to 36 months in prison for use of a communication facility to facilitate a drug trafficking crime. Franklin pleaded guilty to the charge in February 2023.
In June 2010, Russell pleaded guilty in the U.S. District Court for the Northern District of Alabama to being a felon in possession of a firearm, conspiracy to distribute and possess with the intent to distribute a controlled substance, distribution, and possession with intent to distribute a controlled substance, possession of a firearm in furtherance of a drug trafficking crime, and money laundering. In March 2011, Russell was sentenced to nine years in prison.
The USPIS and ATF investigated the case along with the Alabama Law Enforcement Agency, Huntsville Police Department and DeKalb County Sheriff’s Office. Assistant U.S. Attorney Russell E. Penfield prosecuted the case.
Registered Sex Offender Pleads Guilty to Charges of Enticement, Attempted Transfer of Obscene Material to a MinorRead the Press Release
PROVIDENCE – A Waterbury, CT sex offender admitted to a federal judge in U.S. District Court in Providence, RI, that in March 2019, he engaged in a series of sexually explicit online communications with a person he believed to be a 13-year-old girl living in Rhode Island; that he attempted to arrange a meeting with the girl to engage in sexual acts; and that he sent obscene materials to the person with whom he was communicating, announced United States Attorney Zachary A. Cunha.
Jesus Maldonado, 59, pleaded guilty on June 27, 2023, to charges of attempted enticement of a minor to engage in sexual activity; attempted transfer of obscene material to a minor; and commission of a felony offense involving a minor when required to register as a sex offender.
In pleading guilty, Maldonado admitted that he engaged in a series of sexually explicit text message conversations with a person whom he believed to be “Jeni,” a 13-year-old girl living in Rhode Island. During the communications, he knowingly sent “Jeni” sexually explicit images and attempted to persuade her to engage in sexual activity. The person with whom he was communicating was, in fact, an undercover law enforcement officer assigned to the Rhode Island State Police Internet Crimes Against Children Task Force, and a Task Force Officer with Homeland Security Investigations.
According to court records, at the time Maldonado engaged the illicit conduct with “Jeni,” he had previously been convicted in two different cases of sexual contact offenses with female children and, as a result, was a registered sex offender, as required by law.
Maldonado is scheduled to be sentenced on September 26, 2023. The defendant’s sentence will be determined by a federal judge after consideration of the U.S. Sentencing Guidelines and other statutory factors.
The case is being prosecuted by Assistant United States Attorneys Denise M. Barton and Stacey A. Erickson.
The matter was investigated by the Rhode Island State Police ICAC, the Rhode Island State Police Computer Crimes Unit, and the United States Department of Homeland Security, Homeland Security Investigations (HSI) Office.
United States Attorney Cunha thanks the United States Attorney’s Office for the District of Connecticut, and HSI, New Haven, CT., for their assistance.
###
Queens Man Pleads Guilty to Smuggling SnakesRead the Press Release
ALBANY, NEW YORK – Calvin Bautista, age 37, of Richmond Hill, New York, pled guilty today to smuggling three Burmese pythons into the United States at the Champlain Port of Entry.
United States Attorney Carla B. Freedman and Ryan Noel, Regional Special Agent in Charge, U.S. Fish and Wildlife Service, Office of Law Enforcement, made the announcement.
Bautista admitted that on July 15, 2018, he smuggled the three snakes in his pants as he rode on a bus that crossed the U.S.-Canadian border at the Champlain Port of Entry. Customs and Border Protection (CBP) Officers discovered the snakes while reviewing Bautista’s passport and conducting a border search. The young adult snakes were in bags attached to Bautista’s pants near his inner thigh.
Bautista did not obtain the permits required to import these snakes. As their name suggests, Burmese pythons are not native to North America, and are an invasive species.
Sentencing is scheduled for October 26, 2023, before Senior United States District Judge Lawrence E. Kahn. Bautista faces a maximum term of 20 years in prison, a fine of up to $250,000, and a term of supervised release of up to 3 years. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
The U.S. Fish & Wildlife Service and CBP investigated this case, and Assistant U.S. Attorney Alexander P. Wentworth-Ping is prosecuting this case.
Pittsburgh Resident Indicted on a Charge Relating to Social Security FraudRead the Press Release
PITTSBURGH, PA – A resident of Pittsburgh, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge relating to Social Security Fraud, United States Attorney Eric G. Olshan announced today.
The one-count Indictment named Susan Mentser, age 70, of Pittsburgh, Pennsylvania, as the sole defendant.
According to the Indictment, from in and around June 2018, through in and around March 2020, Mentser stole and converted approximately $21,483.00 in Supplemental Security Income benefits, which had been deposited into her deceased mother’s bank account, to which Mentser knew she was not entitled.
The law provides for a maximum total sentence of not more than ten (10) years in prison, a fine of not more than $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Rebecca L. Silinski is prosecuting this case on behalf of the government.
The Social Security Administration Office of the Inspector General conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Picayune Man Sentenced to over 11 Years in Prison for Conspiracy to Possess with Intent to Distribute MethamphetamineRead the Press Release
Gulfport, Miss. – A Picayune man was sentenced to 135 months in federal prison for conspiracy to possess with intent to distribute methamphetamine, announced U.S. Attorney Darren J. LaMarca and Special Agent in Charge Brad L. Byerley of the Drug Enforcement Administration.
Eric Renard Scott, 39, was sentenced in U.S. District Court in Gulfport. According to court records, in 2015, an investigation began into a large-scale drug trafficking organization located largely in Picayune, MS (Pearl River County). In 2018, Eric Renard Scott and two others were identified as being part of the conspiracy. Federal agents used a confidential source to begin making purchases of meth. On October 24, 2018, a DEA confidential source purchased 27.9g of actual meth at 99% purity from Eric Renard Scott and two of his co-conspirators in Picayune.
Scott was charged in a federal criminal indictment on September 7, 2022 and he pled guilty on February 13, 2023 to conspiracy to possess with intent to distribute methamphetamine.
The case was investigated by the Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney Erica Rose.
The case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor- led, intelligence driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Permanent Injunction Imposed on Online Education Platform Company Edmodo, LLC for Alleged Violations of Children’s Privacy LawRead the Press Release
The Department of Justice, together with the Federal Trade Commission (FTC), today announced that Edmodo, LLC (Edmodo) has agreed to a permanent injunction and a $6 million civil penalty in connection with its online educational platform, as part of a settlement to resolve alleged violations of the Children’s Online Privacy Protection Act (COPPA), the Children’s Online Privacy Protection Rule (COPPA Rule), and the Federal Trade Commission Act. The civil penalty is suspended due to Edmodo’s inability to pay.
The Edmodo educational platform, sold to schools throughout the United States, enabled teachers to interface with students, including children under 13 years old, to host virtual class spaces, conduct discussions, share materials, make assignments, and provide quizzes and grades, among other things. In a complaint filed in the U.S. District Court for the Northern District of California, the government alleges that, until approximately September 2022, Edmodo collected the personal information of children under 13, including their names, email addresses, phone numbers, device information, and IP addresses. Edmodo allegedly collected such information without providing notice to the children’s parents or obtaining parental authorization to collect such personal information, as required by the COPPA Rule, and used this personal information to enable third-parties to display targeted advertising to student users between 2018 and September 2022.
The complaint further asserts that Edmodo was retaining this personal information indefinitely. As of March 2020, Edmodo retained the personal information associated with approximately 36 million student accounts, of which only one million were actively using the platform. This indefinite retention violated COPPA’s requirement that an operator not retain personal information of children for longer than “reasonably necessary to fulfill the purpose for which [the information] was collected.”
The stipulated order, entered by the federal district court yesterday, enjoins Edmodo from collecting personal information from children in a manner that violates the COPPA Rule and prohibits Edmodo from retaining children’s personal information for longer than reasonably necessary to fulfill the purpose for which it was collected. The order also enjoins Edmodo from collecting more personal information than reasonably necessary for a child to participate in any activity offered on its service. It also requires Edmodo to destroy personal information improperly collected from children under age 13 and to comply with reporting, monitoring, and recordkeeping requirements. Edmodo is also subject to a civil penalty judgment of $6 million dollars, which is suspended due to Edmodo’s inability to pay.
“The Justice Department takes seriously its mission to protect the online privacy rights of children and their parents. This order spells out clearly to all online providers that it is unacceptable to collect children’s personal information without their parents’ consent,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Department of Justice’s Civil Division. “The department is committed to protecting against unauthorized online collection and retention of information, especially from children.”
“This order makes clear that ed tech providers cannot outsource compliance responsibilities to schools, or force students to choose between their privacy and education,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “Other ed tech providers should carefully examine their practices to ensure they’re not compromising students’ privacy.”
“Children do not lose their privacy protections when they use the internet,” said U.S. Attorney Ismail J. Ramsey for the Northern District of California. “Congress and the FTC have established rules to govern websites and apps collecting and storing the personal information of children. The settlement being announced today demonstrates the Department of Justice’s resolve to enforce those rules. We will continue to work with our partners at the FTC to safeguard children’s online privacy.”
This matter was handled by Senior Trial Attorney James T. Nelson and Assistant Director Lisa Hsiao of the Civil Division’s Consumer Protection Branch, Assistant U.S. Attorney Vivian Wang for the Northern District of California, and Gorana Neskovic and Peder Magee of the FTC.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit its website at www.FTC.gov.
Permanent Injunction Imposed on Online Education Platform Company Edmodo, LLC for Alleged Violations of Children’s Privacy LawRead the Press Release
SAN FRANCISCO – The Department of Justice, together with the Federal Trade Commission (FTC), today announced that Edmodo, LLC (Edmodo) has agreed to a permanent injunction and a $6 million civil penalty in connection with its online educational platform, as part of a settlement to resolve alleged violations of the Children’s Online Privacy Protection Act (COPPA), the Children’s Online Privacy Protection Rule (COPPA Rule), and the Federal Trade Commission Act. The civil penalty is suspended due to Edmodo’s inability to pay.
The Edmodo educational platform, sold to schools throughout the United States, enabled teachers to interface with students, including children under 13 years old, to host virtual class spaces, conduct discussions, share materials, make assignments, and provide quizzes and grades, among other things. In a complaint filed in the U.S. District Court for the Northern District of California, the government alleges that, until approximately September 2022, Edmodo collected the personal information of children under 13, including their names, email addresses, phone numbers, device information, and IP addresses. Edmodo allegedly collected such information without providing notice to the children’s parents or obtaining parental authorization to collect such personal information, as required by the COPPA Rule, and used this personal information to enable third-parties to display targeted advertising to student users between 2018 and September 2022.
The complaint further asserts that Edmodo was retaining this personal information indefinitely. As of March 2020, Edmodo retained the personal information associated with approximately 36 million student accounts, of which only one million were actively using the platform. This indefinite retention violated COPPA’s requirement that an operator not retain personal information of children for longer than “reasonably necessary to fulfill the purpose for which [the information] was collected.”
The stipulated order, entered by the federal district court yesterday, enjoins Edmodo from collecting personal information from children in a manner that violates the COPPA Rule and prohibits Edmodo from retaining children’s personal information for longer than reasonably necessary to fulfill the purpose for which it was collected. The order also enjoins Edmodo from collecting more personal information than reasonably necessary for a child to participate in any activity offered on its service. It also requires Edmodo to destroy personal information improperly collected from children under age 13 and to comply with reporting, monitoring, and recordkeeping requirements. Edmodo is also subject to a civil penalty judgment of $6 million dollars, which is suspended due to Edmodo’s inability to pay.
“Children do not lose their privacy protections when they use the internet,” said U.S. Attorney Ismail J. Ramsey for the Northern District of California. “Congress and the FTC have established rules to govern websites and apps collecting and storing the personal information of children. The settlement being announced today demonstrates the Department of Justice’s resolve to enforce those rules. We will continue to work with our partners at the FTC to safeguard children’s online privacy.”
“The Justice Department takes seriously its mission to protect the online privacy rights of children and their parents. This order spells out clearly to all online providers that it is unacceptable to collect children’s personal information without their parents’ consent,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Department of Justice’s Civil Division. “The department is committed to protecting against unauthorized online collection and retention of information, especially from children.”
“This order makes clear that ed tech providers cannot outsource compliance responsibilities to schools, or force students to choose between their privacy and education,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “Other ed tech providers should carefully examine their practices to ensure they’re not compromising students’ privacy.”
This matter was handled by Assistant U.S. Attorney Vivian Wang for the Northern District of California, Senior Trial Attorney James T. Nelson and Assistant Director Lisa Hsiao of the Civil Division’s Consumer Protection Branch, and Gorana Neskovic and Peder Magee of the FTC.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit its website at www.FTC.gov.
Okmulgee Resident Sentenced for Assault and Firearms CrimesRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Lakota John Trumon Watson, age 23, of Okmulgee, Oklahoma, was sentenced for his role in a violent armed assault.
The federal district court sentenced Watson to 6 months imprisonment for one count of Assault with a Dangerous Weapon with Intent to do Bodily Harm in Indian Country, and 120 months imprisonment for one count of Use, Carry, Brandish, and Discharge of a Firearm During and in Relation to a Crime of Violence. The sentences are ordered to run consecutively for a total of 126 months.
The charges arose from investigations by the Henryetta Police Department and the Federal Bureau of Investigation.
On January 20, 2022, Watson entered a guilty plea to both counts. On September 4, 2017, during an argument outside of a Henryetta residence, Watson pulled out a .22 Magnum revolver and shot the victim in the stomach. Multiple witnesses identified Watson as the shooter. The crimes occurred in within the boundaries of the Muscogee (Creek) Nation Reservation, in the Eastern District of Oklahoma.
The Honorable John F. Heil, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, presided over the hearings in Muskogee, Oklahoma. Watson will remain in the custody of the U.S. Marshal pending transportation to a designated United States Bureau of Prisons facility to serve his non-paroleable sentence.
Assistant United States Attorney Benjamin D. Traster represented the United States at the sentencing hearing.
Oakland Motorist Charged with Being Felon in Possession of Ammunition After Firing Shots During I-580 Road Rage IncidentRead the Press Release
OAKLAND – Antoyne Terrell Bullock appeared today in United States District Court to face a federal charge that he possessed ammunition during a road rage incident on Interstate 580, announced United States Attorney Ismail J. Ramsey and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge Jennifer Cicolani. Bullock made his initial appearance today in United States District Court in Oakland before United States Chief Magistrate Judge Donna M. Ryu.
The charge was set out in a criminal complaint filed June 16, 2023, and unsealed in federal court today. The criminal complaint alleges the defendant, Bullock, 43, shot at a fellow motorist causing the motorist to lose control of their vehicle. Specifically, on May 25, 2023, the defendant, in his Ford SUV, sped up next to the driver of a Dodge truck, and while beside the Dodge, the defendant rolled down the rear back passenger window of his SUV and shot at the driver of the Dodge. The defendant struck the driver side window causing it to shatter.
The complaint further details, the driver of the Dodge ducked, while turning the steering wheel, causing his vehicle to collide with the defendant’s SUV. The SUV overturned, rolling over several times before coming to a stop on its roof. The defendant, and the female passenger, attempted to leave the scene of the accident when California Highway Patrol officers arrived. Upon canvasing the scene, officers recovered a P80 handgun and keys to the Ford SUV alongside the highway. When officers arrested the defendant, they recovered a loaded magazine in his pants pocket.
In sum, the complaint charges Bullock with being a felon in possession of ammunition, in violation of 18 U.S.C. § 922(g)(1). The statutory maximum for the charge for the violation is 10 years’ imprisonment, a maximum fine of $250,000, a maximum of 3 years’ supervised release, and a $100 special assessment. However, any sentence following a conviction would be imposed by a court only after considerations of the U.S. Sentencing Guidelines and the federal statue governing the imposition of a sentence, 18 U.S.C. § 3553.
The charges contained in the criminal complaint are only allegations. As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.
Bullock is scheduled to make his next federal court appearance on July 18, 2023, for a preliminary hearing and arraignment.
Assistant U.S. Attorney Kenneth Chambers is prosecuting the case with the assistance of Jasmine Sanders. The prosecution is the result of an investigation by ATF, California Highway Patrol, the Oakland Police Department, and the Alameda County Sheriff’s Office.
New Orleans Man Sentenced in Armed Bank Robbery, Hobbs Act Robbery CaseRead the Press Release
NEW ORLEANS, LOUISIANA – On June 27, 2023, New Orleans resident, DEVIN CHANEY (“CHANEY”), age 33, was sentenced by United States District Judge Greg G. Guidry to 188 months in prison, followed by 4 years of supervised release, announced United States Attorney Duane A. Evans. CHANEY had previously pled guilty to one count of Armed Bank Robbery in violation of Title 18, United States Code, Section 2113(a) and (d) (Count 9); and one count of Hobbs Act Robbery, in violation of Title 18, United States Code, Section 1951(a) (Count 3). Judge Guidry also ordered CHANEY to pay restitution in the amount of $4,706.00, as well as a mandatory special assessment fee of $200.00.
CHANEY had been charged with committing five armed robberies in New Orleans during December 2021. He was also charged with possessing with intent to distribute cocaine. CHANEY admitted that on Christmas Eve 2021, he entered the Capital One Bank in New Orleans, presented a demand note to a teller and received money but was disappointed in the amount. CHANEY then approached a second teller, pointing a firearm, and received additional money before leaving the bank. In total, CHANEY robbed the Capital One Bank of approximately $2,506.00. Additionally, on December 12, 2021, CHANEY entered a Subway sandwich shop in New Orleans, pointed a firearm at the cashier, demanding money and received approximately $600.00.
U.S. Attorney Evans praised the work of the Federal Bureau of Investigation Violent Crimes Task Force and the New Orleans Police Department in investigating this matter. This case is being prosecuted by Assistant United States Attorney Brandon Long of the Financial Crimes Unit.
New London Man Sentenced to 40 Months in Federal Prison for Gun OffenseRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, today announced that SHAQUAN SAUNDERS, also known as “Sosa Da Billy,” 28, of Uncasville, was sentenced yesterday by U.S. District Judge Janet C. Hall in New Haven to 40 months of imprisonment, followed by three years of supervised release, for unlawful possession of a firearm.
According to court documents and statements made in court, on August 7, 2020, New London Police officers investigating a string of shootings conducted a court-authorized search of a car that Saunders had occupied and recovered a loaded .45 caliber semi-automatic pistol, a spent .45 caliber shell casing, and a live .380 caliber round. Subsequent forensic analysis of the handgun revealed the presence of Saunders’ DNA, and additional analysis of the firearm and recovered shell casing via the National Integrated Ballistic Information Network (NIBIN) connected them to a shooting incident that occurred on Blydenburg Avenue in New London on August 5, 2020.
Saunders’ criminal history includes multiple felony convictions.
Saunders has been detained since September 21, 2020. On April 4, 2023, he pleaded guilty to possession of a firearm by a felon.
This investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the New London Police Department. The case was prosecuted by Assistant U.S. Attorney Natasha M. Freismuth through the Justice’s Department’s Project Safe Neighborhoods (PSN) program
PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
National Enforcement Action Results in 78 Individuals Charged for $2.5B in Health Care FraudRead the Press Release
The Justice Department, together with federal and state law enforcement partners, announced today a strategically coordinated, two-week nationwide law enforcement action that resulted in criminal charges against 78 defendants for their alleged participation in health care fraud and opioid abuse schemes that included over $2.5 billion in alleged fraud.
The defendants allegedly defrauded programs entrusted for the care of the elderly and disabled, and, in some cases, used the proceeds of the schemes to purchase luxury items, including exotic automobiles, jewelry, and yachts. In connection with the enforcement action, the Department seized or restrained millions of dollars in cash, automobiles, and real estate.
“These enforcement actions, including against one of the largest health care fraud schemes ever prosecuted by the Justice Department, represent our intensified efforts to combat fraud and prosecute the individuals who profit from it,” said Attorney General Merrick B. Garland. “The Justice Department will find and bring to justice criminals who seek to defraud Americans and steal from taxpayer-funded programs.”
“This nationwide enforcement action demonstrates that the Criminal Division is committed to fighting health care fraud and opioid abuse by prosecuting those who allegedly exploit patients and health care benefit programs for personal gain,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Today’s announcement includes some of the largest and most complex cases that the Department has prosecuted, and demonstrates the Department’s commitment to seeking justice for those at all levels of the healthcare industry who put profits above patient care, from professionals in doctors’ offices to executives in corporate boardrooms.”
“Health care fraud is a complex and ever-evolving threat that negatively impacts the American people,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “Today’s nationwide coordinated law enforcement action is a testament to the tenacity of the FBI and our partners, as well as our combined efforts to pursue anyone who conspires to exploit our health care system for financial gain.”
“Patients trust federal health care programs to provide high quality care. When bad actors steal from these programs, they hurt patients,” said Inspector General Christi A. Grimm of the Department of Health and Human Services Office of the Inspector General (HHS-OIG). “HHS-OIG is dedicated to protecting federal health care programs and putting patients first. Thank you to our law enforcement partners, especially the Medicaid Fraud Control Units, that participated in this effort.”
“At the Drug Enforcement Administration (DEA), we are committed to protecting the safety and health of all Americans,” said DEA Administrator Anne Milgram. “When individuals divert addictive opioid medications for personal gain, they are knowingly putting Americans at risk, all too often causing harm and even death. DEA is committed to taking decisive action to hold accountable anyone who participates in these dangerous schemes.”
“The Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA) provides community health care to family members of our nation’s disabled or deceased veterans, and the defendants’ alleged criminal actions resulted in a multibillion-dollar fraud scheme that puts those benefits at risk and pilfers significant taxpayer funds,” said Inspector General Michael J. Missal of the Department of Veterans Affairs Office of Inspector General (VA-OIG). “The VA-OIG’s continued oversight of VA’s multiple healthcare programs, including CHAMPVA, is one of the agency’s highest priorities. We thank our outstanding law enforcement partners for their efforts in this investigation.”
Telemedicine Fraud
The enforcement action included charges against 11 defendants in connection with the submission of over $2 billion in fraudulent claims resulting from telemedicine schemes. In a case involving the alleged organizers of one of the largest health care fraud schemes ever prosecuted, an indictment in the Southern District of Florida alleges that the chief executive officer (CEO), former CEO, and Vice President of Business Development of purported software and services companies conspired to generate and sell templated doctors’ orders for orthotic braces and pain creams in exchange for kickbacks and bribes. The conspiracy allegedly resulted in the submission of $1.9 billion in false and fraudulent claims to Medicare and other government insurers for orthotic braces, prescription skin creams, and other items that were medically unnecessary and ineligible for Medicare reimbursement.
As part of the alleged conspiracy, individuals in a massive telemarketing operation, located in the United States and abroad, targeted the elderly and disabled with direct mail, television advertisements, and other forms of advertising to induce them to contact offshore boiler-rooms staffed by individuals who “up-sold” the elderly and disabled on unnecessary medical equipment and prescriptions. According to the indictment, the software platform that the defendants allegedly operated was actually a conduit for these telemarketers to coordinate the payment of illegal kickbacks and bribes to telemedicine companies to obtain doctors’ orders for Medicare beneficiaries. The defendants allegedly programmed the software platform to generate false and fraudulent orders for telemedicine practitioners to sign and obstruct Medicare investigations by concealing that the interactions with beneficiaries had occurred remotely using telemedicine. The program-generated orders falsified certifications that the telemedicine doctors had examined the beneficiaries in person, and falsified diagnostic testing that Medicare required for brace orders. After the original CEO sold the company in a corporate acquisition, the new corporate leadership allegedly chose to continue the pre-existing fraud scheme.
In another telemedicine fraud case, in the Eastern District of Washington, a licensed physician was charged for signing more than 2800 fraudulent orders for orthotic braces, including for patients whose limbs had already been amputated. As alleged, the physician took less than 40 seconds to review and sign each order.
The cases announced today build on earlier telemedicine enforcement actions involving over $10.1 billion in fraud. The April 2019 Operation Brace Yourself Telemedicine and Durable Medical Equipment Takedown alone resulted in an estimated cost avoidance of more than $1.9 billion in the amount Medicare paid for orthotic braces in the 20 months following that enforcement action, preserving the Medicare trust fund for necessary medical care.
Pharmaceutical Fraud
The enforcement action also included charges against 10 defendants in connection with the submission of over $370 million in fraudulent claims submitted in connection with prescription drugs. In one case announced today, the owner and corporate officer of a pharmaceutical wholesale distribution company was charged for an alleged $150 million fraud scheme in which the company purchased illegally diverted prescription HIV medication, and then marketed and resold the medication by falsely representing that the company acquired it through legitimate channels. The defendant allegedly purchased the diverted medication at a substantial discount from individuals who obtained the drugs primarily through illegal “buyback” schemes in which they paid HIV patients cash for their expensive HIV medication and repackaged those pills for resale. To cover up their scheme, the defendant and others falsified labeling and product tracing documentation to make it appear legitimate. Pharmacies purchased the misbranded medications, dispensed them to patients, and billed them to health care benefit programs, all while the defendants reaped substantial illegal profits.
In a related case, on June 15, an individual in the Southern District of Florida was sentenced to 15 years in prison for his role in this nationwide scheme. According to court documents, the defendant illegally acquired large quantities of prescription drugs from patients for whom the drugs had been prescribed but not yet consumed. The defendant and others then repackaged the drugs and sold them to wholesale companies. In some instances, the medication that the defendant sold contained the wrong medication, broken pills, and even pebbles, leading to complaints by pharmacies. The defendant used his share of the proceeds to purchase luxury goods, including a $280,000 Lamborghini, a $220,000 Mercedes, and three boats.
Opioid Distribution and Other Types of Health Care Fraud
The charges also targeted over $150 million in false billings submitted in connection with other types of health care fraud, including the illegal distribution of opioids and clinical laboratory testing fraud. Today’s enforcement action includes charges against 24 physicians and other licensed medical professionals who lined their own pockets, including doctors who allegedly put their patients at risk by illegally providing them with opioids they did not need. The charges also include cases where healthcare companies, physicians, and other providers paid cash kickbacks to patient recruiters and beneficiaries in return for patient information, so that the providers could submit fraudulent bills for Medicare reimbursement.
The Center for Program Integrity of the Centers for Medicare & Medicaid Services (CPI/CMS) separately announced today that it took adverse administrative actions in the last six months against 90 medical providers for their alleged involvement in health care fraud.
Principal Assistant Deputy Chief Jacob Foster and Acting Assistant Chief Rebecca Yuan of the National Rapid Response Strike Force of the Criminal Division’s Fraud Section led and coordinated today’s enforcement action. The Health Care Fraud Unit’s Strike Forces in Brooklyn, Dallas, Detroit, the Gulf Coast, Houston, Los Angeles, Miami, Newark, and Tampa; the Health Care Fraud Unit’s National Rapid Response Strike Force; the U.S. Attorneys’ Offices for the Middle District of Florida, Southern District of Florida, Southern District of Georgia, District of Idaho, Western District of Kentucky, Eastern District of Louisiana, Middle District of Louisiana, District of New Jersey, Eastern District of New York, Southern District of Ohio, District of South Carolina, Southern District of Texas, Eastern District of Washington, and Eastern District of Wisconsin; and the State Attorney Generals’ Offices for Indiana, New York, and Pennsylvania are prosecuting these cases, with assistance from the Health Care Fraud Unit’s Data Analytics Team. Descriptions of cases involved in today’s enforcement action are available on the Department’s website at www.justice.gov/criminal-fraud/health-care-fraud-unit/2023-national-hcf-case-summaries.
In addition to the FBI, HHS-OIG, DEA, and CMS/CPI, State Medicaid Fraud Control Units, HSI, FDA, IRS-CI, VA-OIG, USPS-OIG, FDIC-OIG, OPM-OIG, Amtrak-OIG, and other federal and state law enforcement agencies participated in the operation.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, comprised of 15 strike forces operating in 25 federal districts, has charged more than 5,000 defendants who collectively have billed federal health care programs and private insurers more than $24 billion. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.
The Fraud Section uses the Victim Notification System to provide victims with case information and updates related to this case. Victims with questions may contact the Fraud Section’s Victim Assistance Unit by calling the Victim Assistance phone line at 1-888-549-3945 or by emailing [email protected]. To learn more about victims’ rights, please visit www.justice.gov/criminal-vns/victim-rights-derechos-de-las-v-ctimas, and for further information for victims about new federal charges in connection with the HIV scheme, please visit www.justice.gov/criminal-vns/case/united-states-v-steven-diamantstein.
A complaint, information, or indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
National Enforcement Action Results in 78 Individuals Charged for $2.5B in Health Care FraudRead the Press Release
NEW ORLEANS – U.S. Attorney Duane A. Evans, the Department of Justice, together with federal and state law enforcement partners, today announced a strategically coordinated, two-week nationwide law enforcement action that resulted in criminal charges against 78 defendants for their alleged participation in health care fraud and opioid abuse schemes that included over $2.5 billion in alleged fraud.
The defendants allegedly defrauded programs entrusted for the care of the elderly and disabled, and, in some cases, used the proceeds of the schemes to purchase luxury items, including exotic automobiles, jewelry, and yachts. In connection with the enforcement action, the Department seized or restrained millions of dollars in cash, automobiles, and real estate.
“These enforcement actions, including against one of the largest health care fraud schemes ever prosecuted by the Justice Department, represent our intensified efforts to combat fraud and prosecute the individuals who profit from it,” said Attorney General Merrick B. Garland. “The Justice Department will find and bring to justice criminals who seek to defraud Americans and steal from taxpayer-funded programs.”
“This nationwide enforcement action demonstrates that the Criminal Division is committed to fighting health care fraud and opioid abuse by prosecuting those who allegedly exploit patients and health care benefit programs for personal gain,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Today’s announcement includes some of the largest and most complex cases that the Department has prosecuted, and demonstrates the Department’s commitment to seeking justice for those at all levels of the healthcare industry who put profits above patient care, from professionals in doctors’ offices to executives in corporate boardrooms.”
“Health care fraud is a complex and ever-evolving threat that negatively impacts the American people,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “Today’s nationwide coordinated law enforcement action is a testament to the tenacity of the FBI and our partners, as well as our combined efforts to pursue anyone who conspires to exploit our health care system for financial gain.”
In the Eastern District of Louisiana, Craig Lovelace, the owner and President of Advanced Medical Equipment Inc. (AME), a corporation doing business in Kenner, Louisiana, was charged on June 15, 2023 by bill of information with Health Care Fraud. AME operated as a durable medical equipment (DME) supply company that submitted claims to Medicare and Medicaid for DME supplied to beneficiaries. From approximately January 2016, and continuing through approximately 2022, Lovelace, through AME, allegedly executed a scheme to defraud Medicare and Medicaid by submitting, false and fraudulent claims for certain health care items purportedly supplied to beneficiaries. Such items, including DME, were alleged to be medically unnecessary, ineligible for Medicare reimbursement, or not provided as represented. Lovelace, in turn, used the fraudulent proceeds generated from this scheme for the benefit of himself and others.
Telemedicine Fraud
The enforcement action included charges against 11 defendants in connection with the submission of over $2 billion in fraudulent claims resulting from telemedicine schemes. In a case involving the alleged organizers of one of the largest health care fraud schemes ever prosecuted, an indictment in the Southern District of Florida alleges that the chief executive officer (CEO), former CEO, and Vice President of Business Development of purported software and services companies conspired to generate and sell templated doctors’ orders for orthotic braces and pain creams in exchange for kickbacks and bribes. The conspiracy allegedly resulted in the submission of $1.9 billion in false and fraudulent claims to Medicare and other government insurers for orthotic braces, prescription skin creams, and other items that were medically unnecessary and ineligible for Medicare reimbursement.
As part of the alleged conspiracy, individuals in a massive telemarketing operation, located in the United States and abroad, targeted the elderly and disabled with direct mail, television advertisements, and other forms of advertising to induce them to contact offshore boiler-rooms staffed by individuals who “up-sold” the elderly and disabled on unnecessary medical equipment and prescriptions. According to the indictment, the software platform that the defendants allegedly operated was actually a conduit for these telemarketers to coordinate the payment of illegal kickbacks and bribes to telemedicine companies to obtain doctors’ orders for Medicare beneficiaries. The defendants allegedly programmed the software platform to generate false and fraudulent orders for telemedicine practitioners to sign and obstruct Medicare investigations by concealing that the interactions with beneficiaries had occurred remotely using telemedicine. The program-generated orders falsified certifications that the telemedicine doctors had examined the beneficiaries in person, and falsified diagnostic testing that Medicare required for brace orders. After the original CEO sold the company in a corporate acquisition, the new corporate leadership allegedly chose to continue the pre-existing fraud scheme.
In another telemedicine fraud case, in the Eastern District of Washington, a licensed physician was charged for signing more than 2800 fraudulent orders for orthotic braces, including for patients whose limbs had already been amputated. As alleged, the physician took less than 40 seconds to review and sign each order.
The cases announced today build on earlier telemedicine enforcement actions involving over $10.1 billion in fraud. The April 2019 Operation Brace Yourself Telemedicine and Durable Medical Equipment Takedown alone resulted in an estimated cost avoidance of more than $1.9 billion in the amount Medicare paid for orthotic braces in the 20 months following that enforcement action, preserving the Medicare trust fund for necessary medical care.
“Patients trust federal health care programs to provide high quality care. When bad actors steal from these programs, they hurt patients,” said Inspector General Christi A. Grimm of the Department of Health and Human Services Office of the Inspector General (HHS-OIG). “HHS-OIG is dedicated to protecting federal health care programs and putting patients first. Thank you to our law enforcement partners, especially the Medicaid Fraud Control Units, that participated in this effort.”
Pharmaceutical Fraud
The enforcement action also included charges against 10 defendants in connection with the submission of over $370 million in fraudulent claims submitted in connection with prescription drugs. In one case announced today, the owner and corporate officer of a pharmaceutical wholesale distribution company was charged for an alleged $150 million fraud scheme in which the company purchased illegally diverted prescription HIV medication, and then marketed and resold the medication by falsely representing that the company acquired it through legitimate channels. The defendant allegedly purchased the diverted medication at a substantial discount from individuals who obtained the drugs primarily through illegal “buyback” schemes in which they paid HIV patients cash for their expensive HIV medication and repackaged those pills for resale. To cover up their scheme, the defendant and others falsified labeling and product tracing documentation to make it appear legitimate. Pharmacies purchased the misbranded medications, dispensed them to patients, and billed them to health care benefit programs, all while the defendants reaped substantial illegal profits.
In a related case, on June 15, an individual in the Southern District of Florida was sentenced to 15 years in prison for his role in this nationwide scheme. According to court documents, the defendant illegally acquired large quantities of prescription drugs from patients for whom the drugs had been prescribed but not yet consumed. The defendant and others then repackaged the drugs and sold them to wholesale companies. In some instances, the medication that the defendant sold contained the wrong medication, broken pills, and even pebbles, leading to complaints by pharmacies. The defendant used his share of the proceeds to purchase luxury goods, including a $280,000 Lamborghini, a $220,000 Mercedes, and three boats.
Opioid Distribution and Other Types of Health Care Fraud
The charges also targeted over $150 million in false billings submitted in connection with other types of health care fraud, including the illegal distribution of opioids and clinical laboratory testing fraud. Today’s enforcement action includes charges against 24 physicians and other licensed medical professionals who lined their own pockets, including doctors who allegedly put their patients at risk by illegally providing them with opioids they did not need. The charges also include cases where healthcare companies, physicians, and other providers paid cash kickbacks to patient recruiters and beneficiaries in return for patient information, so that the providers could submit fraudulent bills for Medicare reimbursement.
“At DEA, we are committed to protecting the safety and health of all Americans,” said DEA Administrator Anne Milgram. “When individuals divert addictive opioid medications for personal gain, they are knowingly putting Americans at risk, all too often causing harm and even death. DEA is committed to taking decisive action to hold accountable anyone who participates in these dangerous schemes.”
“CHAMPVA provides community health care to family members of our nation’s disabled or deceased veterans, and the defendants’ alleged criminal actions resulted in a multibillion-dollar fraud scheme that puts those benefits at risk and pilfers significant taxpayer funds,” said Inspector General Michael J. Missal of the Department of Veterans Affairs Office of Inspector General (VA-OIG). “The VA-OIG’s continued oversight of VA’s multiple healthcare programs, including CHAMPVA, is one of the agency’s highest priorities. We thank our outstanding law enforcement partners for their efforts in this investigation.”
The Center for Program Integrity of the Centers for Medicare & Medicaid Services (CPI/CMS) separately announced today that it took adverse administrative actions in the last six months against 90 medical providers for their alleged involvement in health care fraud.
Principal Assistant Deputy Chief Jacob Foster and Acting Assistant Chief Rebecca Yuan of the National Rapid Response Strike Force of the Criminal Division’s Fraud Section led and coordinated today’s enforcement action. The Health Care Fraud Unit’s Strike Forces in Brooklyn, Dallas, Detroit, the Gulf Coast, Houston, Los Angeles, Miami, Newark, and Tampa; the Health Care Fraud Unit’s National Rapid Response Strike Force; the U.S. Attorneys’ Offices for the Middle District of Florida, Southern District of Florida, Southern District of Georgia, District of Idaho, Western District of Kentucky, Eastern District of Louisiana, Middle District of Louisiana, District of New Jersey, Eastern District of New York, Southern District of Ohio, District of South Carolina, Southern District of Texas, Eastern District of Washington, and Eastern District of Wisconsin; and the State Attorney Generals’ Offices for Indiana, New York, and Pennsylvania are prosecuting these cases, with assistance from the Health Care Fraud Unit’s Data Analytics Team. Descriptions of cases involved in today’s enforcement action are available on the Department’s website at www.justice.gov/criminal-fraud/health-care-fraud-unit/2023-national-hcf-court-documents.
In addition to the FBI, HHS-OIG, DEA, and CMS/CPI, State Medicaid Fraud Control Units, HSI, FDA, IRS-CI, VA-OIG, USPS-OIG, FDIC-OIG, OPM-OIG, Amtrak-OIG, and other federal and state law enforcement agencies participated in the operation.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, comprised of 15 strike forces operating in 25 federal districts, has charged more than 5,000 defendants who collectively have billed federal health care programs and private insurers more than $24 billion. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.
The Fraud Section uses the Victim Notification System to provide victims with case information and updates related to this case. Victims with questions may contact the Fraud Section’s Victim Assistance Unit by calling the Victim Assistance phone line at 1-888-549-3945 or by emailing [email protected]. To learn more about victims’ rights, please visit www.justice.gov/criminal-vns/victim-rights-derechos-de-las-v-ctimas, and for further information for victims about new federal charges in connection with the HIV scheme, please visit www.justice.gov/criminal-vns/case/united-states-v-steven-diamantstein.
A complaint, information, or indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Missouri Man Sentenced to 12 ½ Years in Prison for National Forest Arsons, Assault of Forest Service EmployeeRead the Press Release
CAPE GIRARDEAU – U.S. District Judge Stephen N. Limbaugh Jr. on Wednesday sentenced a man who committed arsons in the Mark Twain National Forest in Missouri and assaulted a U.S. Forest Service law enforcement officer to 12 and one-half years in prison.
Judge Limbaugh also ordered Lucas G. Henson, 37, of Iron County, Missouri, to pay the U.S. Forest Service about $7,200 for the cost of fighting the fires he set.
Henson was out on bond after being charged with stealing and drug offenses when he stole a Ford van on Oct. 22, 2022 near Poplar Bluff, Missouri. Henson abandoned the van when it ran out of gas. Later that day, he broke into a camper and stole items from it. The next day, he stole a Dodge pickup truck, then burglarized someone’s home and stole a Ruger LC9 9mm handgun. He stole a crossbow from a workshop near the home.
When the truck’s owner found Henson, Henson pointed the pistol at the truck’s owner and drove away. Law enforcement officers then joined the chase.
Henson crashed the truck in Mark Twain National Forest, then started a fire and burned the handgun and the items that he’d stolen from the camper before fleeing into the forest.
Officers began tracking Henson with dogs. When they got close, he started a fire to prevent being captured. He started a second fire when they approached him again. Later, he pointed the crossbow at a U.S. Forest Service law enforcement officer, as well as other officers, before fleeing again. Henson was eventually caught near the Black River.
The fires burned a total of 7.61 acres of land. Due to the dry and windy conditions at the time, Henson’s fires kept leaping over fire lines established by fire fighters. Crews eventually had to construct “dozer lines” to contain the fire.
Henson pleaded guilty in March to assaulting a law enforcement officer, arson and being a felon in possession of a firearm.
The case was investigated by the U.S. Forest Service, the Butler County Sheriff’s Office, the Wayne County Sheriff’s Office and the Missouri State Highway Patrol. Assistant U.S. Attorney Christopher Shelton prosecuted the case.
Minneapolis Felon Pleads Guilty to Two Violent CarjackingsRead the Press Release
MINNEAPOLIS – A Minneapolis felon has pleaded guilty to two counts of carjacking and one count of brandishing a firearm during and relation to a crime of violence, announced U.S. Attorney Andrew M. Luger.
According to the defendant’s plea agreement and court documents, on January 30, 2023, in Little Canada, a Ramsey County Sheriff’s Deputy attempted to initiate a traffic stop on a Ford truck, which was later revealed to be stolen. The driver, Donovan Alan Goodman, 33, fled the deputy, driving in the wrong lanes of traffic, above posted speed limits, and evading stop sticks. Law enforcement officers ultimately disabled the vehicle. Goodman fled the vehicle and jumped over a barrier separating the east and west lanes on Interstate 694. He approached an uninvolved vehicle, which had stopped in the westbound lanes of Interstate 694, pointed a firearm at the vehicle and yelled, “Get the [expletive] out of the car.” Goodman then fled in the vehicle. The carjacked vehicle―which was subsequently recovered―had an installed dash camera that captured the entire incident.
On February 25, 2023, at approximately 4:23 a.m., officers with the Minneapolis Police Department attempted to conduct a traffic stop of a stolen vehicle parked in a parking lot. Goodman and another male, who were standing near the vehicle, immediately fled on foot and officers pursued. One officer deployed a taser to subdue Goodman, who initially fell to the ground, rolled over and then pointed a handgun with a red laser sight in the direction of the officer. The officer immediately took cover and Goodman escaped on foot.
Shortly thereafter, a carjacking victim flagged down responding law enforcement officers. He reported that he was an Uber driver who had just picked up two passengers in downtown Minneapolis when a man—later identified as Goodman—approached the vehicle and offered the occupants $100 to let him join the Uber ride. One of the occupants agreed and opened the door. Once inside the vehicle, Goodman pulled out the firearm with a red laser, pointed it at the back of the driver’s head, and ordered everyone out of the vehicle. The driver and the two occupants complied, and Goodman fled in the vehicle.
Later that day, after obtaining a search warrant for Goodman’s cell phone, law enforcement tracked Goodman to a residence in St. Paul. The St. Paul Police Department’s SWAT team executed a search warrant at the residence and, after law enforcement provided numerous loud commands for over an hour, Goodman exited the residence and was taken into custody.
Goodman pleaded guilty today, in U.S. District Court before Senior Judge Ann D. Montgomery to two counts of carjacking and one count of brandishing a firearm during and relation to a crime of violence. A sentencing hearing has not yet been scheduled.
This case is the result of an investigation conducted by the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Minneapolis Police Department, the St. Paul Police Department, the Ramsey County Sheriff’s Office, and the Minnesota Bureau of Criminal Apprehension.
Assistant U.S. Attorney Jordan L. Sing is prosecuting the case.
Mexican National Sentenced to Five Years in Federal Prison for Role in Drug Trafficking Conspiracy and Money LaunderingRead the Press Release
DENVER -- The U.S. Attorney’s Office for the District of Colorado announces that Carlos Quijano-Ruiz, age 54, of Mexico, was sentenced to five years in federal prison for his role in a drug trafficking conspiracy and money laundering.
According to the plea agreement, in 2019, the defendant went to a money remitter in Colorado and remitted, in two separate transactions, money that was from the sale of drugs to a fictitious name in Mexico. That money would ultimately go to a co-defendant and was transferred or distributed to disguise the nature of the proceeds of unlawful activity. Additionally, in furtherance of the conspiracy, the defendant placed a bag of narcotics in his car that was parked in front of his residence. On August 12, 2019, another co-defendant and an unindicted co-conspirator went to the defendant’s car, where they picked up a quarter pound of methamphetamine and left money in the car. The defendant’s residence was also used as a stash house for a time during the conspiracy.
“Our office prosecutes illegal narcotics trafficking, working investigations to their sources in other countries,” said U.S. Attorney Cole Finegan. “We commend the work of our law enforcement partners in advancing this and other important transnational narcotics investigations.”
“By targeting the transactions drug traffickers use to finance their illegal operations, IRS-CI Special Agents are able to disrupt and dismantle these organizations,” said Andy Tsui, Special Agent in Charge, IRS Criminal Investigation Denver Field Office. “We will continue to work with our law enforcement partners, and the United States Attorney’s Office to eliminate this threat to our communities. This sentence should send a clear message to others who engage in money laundering associated with narcotics, you will be caught and you will be prosecuted.”
“Drug traffickers value money and little else,” said DEA Acting Special Agent in Charge David Olesky of the Rocky Mountain Field Division. “In this case, investigators not only pursued the drugs but also followed the money. As a result of everyone’s efforts, Quijano-Ruiz is no longer distributing poison in our communities. We value our state, local and federal partners who were relentless in seeing this case through to the end. DEA will continue to target criminal networks at every level, and every angle, because we know American lives depend on it.”
United States District Court Judge Gordon P. Gallagher presided over the sentencing on June 27, 2023.
IRS-CI, the DEA, the Montrose Police Department, the Montrose County Sheriff’s Office, the Seventh Judicial District Drug Task Force, and the United States Marshals Service investigated this case. Assistant United States Attorneys Alexander Duncan, Susan (Zeke) Knox, and Zachary Phillips handled the prosecution.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Case Number 19-cr-535
Mexican Man Sentenced for Drug and Firearm ConspiracyRead the Press Release
United States Attorney Steven Russell announced that Jose Rumualdo-Gallardo, 31, of Mexico, was sentenced on June 26, 2023, in federal court in Omaha, Nebraska, for his involvement in a methamphetamine conspiracy and for possessing a firearm in furtherance of the drug conspiracy. United States District Judge Brian C. Buescher sentenced Rumualdo-Gallardo to 120 months’ imprisonment for the drug conspiracy and 60 months’ imprisonment for the firearm offense. The sentences are to run consecutive. Rumualdo-Gallardo also forfeited $2,527 in drug proceeds. There is no parole in the federal system. After his release from prison, Rumualdo-Gallardo will begin a five-year term of supervised release.
In February 2022, the Omaha Police Department arrested Michael Lee in possession of 44 grams of pure methamphetamine. Investigators were able to determine that the methamphetamine was obtained from Rumualdo-Gallardo. Investigators utilized a cooperating source and purchased 49 grams of pure methamphetamine on both February 22, 2022, and March 1, 2022. On March 8, 2022, a search warrant was executed on Rumualdo-Gallardo’s residence which resulted in the seizure of an additional 242 grams of methamphetamine, a Smith & Wesson 9mm handgun, and $2,527.
Michael Lee is set for sentencing on September 6, 2023.
This case was investigated primarily by the Omaha Police Department.
MediaMuv L.L.C. Principal Guilty of Stealing Millions in Music Royalties Sentenced to 70 MonthsRead the Press Release
PHOENIX, Ariz. – Jose Teran, 38, of Scottsdale, Arizona was sentenced on June 26, 2023, by United States District Judge Douglas L. Rayes to 70 months in prison for his part in one of the largest music-royalty frauds ever perpetrated.
Teran pleaded guilty to Conspiracy, Wire Fraud, and Transactional Money Laundering on February 3, 2023. Teran’s plea followed a November 6, 2021, indictment in which a federal grand jury charged him and his co-conspirator, Webster Batista, with 30 felony counts involving Conspiracy, Wire Fraud, Transactional Money Laundering, and Aggravated Identity Theft. In pleading guilty, Teran admitted to conspiring with Batista to monetize music on Y.T., which he had no lawful rights to monetize or otherwise control. Teran further admitted that he and Batista created the entity MediaMuv L.L.C. for the purpose of stealing royalty proceeds. In particular, Teran admitted that he and Batista falsely claimed to own, and thereby stole the royalty proceeds from, more than 50,000 song titles. In total, Teran and Batista received approximately $23,400,000 from their fraudulent scheme.
Batista pleaded guilty to Conspiracy and Wire Fraud in April 2022. He will be sentenced in August 2023.
Internal Revenue Service Criminal Investigation conducted the investigation in this case. Assistant United States Attorneys Raymond K. Woo and Seth T. Goertz, District of Arizona, Phoenix, are handling the prosecution.
If you believe you were defrauded by the defendants in this case, and would like further information, please visit: https://www.justice.gov/usao-az/programs/victim-notifications/US-v-Webster-Batista-Fernandez-et-al.
CASE NUMBER: CR-21-0955-PHX-DLR
RELEASE NUMBER: 2023-101_Teran# # #
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.