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Tuesday 7 February 2023
KC Man Sentenced After Using Fake Gun in Foiled Independence Restaurant RobberyRead the Press Release
KANSAS CITY, Mo. – A Kansas City, Mo., man who attempted to rob an Independence, Mo., restaurant with a fake gun, but was thwarted when employees fought back, was sentenced in federal court today for the robbery.
Bryan C. Byers, 23, was sentenced by U.S. District Judge Roseann Ketchmark to six years and six months in federal prison without parole.
On July 13, 2022, Byers pleaded guilty to one count of robbery.
Byers robbed Lucky Buffet, 2931 S. Noland Road in Independence, on Feb. 21, 2022. Byers, armed with what appeared to be a Glock handgun, approached two restaurant employees who were working near the sushi station in the restaurant. Investigators later learned the upper portion of the apparent handgun was an actual Glock, but the lower portion was from an airsoft pistol and was not designed to fire.
Byers pointed the apparent handgun at the two employees, who later told officers they feared for their lives, and told them they had five seconds to give him the cash from the cash register or he would kill them. The employees opened the register drawer and Byers began taking money from the register. One of the employees grabbed the apparent handgun from Byers and both employees began fighting with Byers. Byers attempted to get away but was restrained until police arrived. During the physical altercation, restaurant employees threw plates of food at Byers and repeatedly hit him with a chair to keep him from getting away.
Byers, who was on the floor of the restaurant when officers arrived, was arrested and transported to a local hospital for medical treatment. Police officers found approximately $873 scattered on the floor of the restaurant.
This case was prosecuted by Assistant U.S. Attorney David A. Barnes. It was investigated by the Independence, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Project Safe Neighborhoods
This case is part of Project Safe Neighborhoods (PSN), 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.
KC Man Indicted for Drug Trafficking, Illegal Machine Gun Following Police Chase Through Back Yard in IndependenceRead the Press Release
KANSAS CITY, Mo. – A Kansas City, Mo., man was indicted by a federal grand jury today for drug trafficking and illegally possessing a machine gun following the police chase of a stolen car driven through the back yard of an Independence, Mo., residence.
Jermel D. McCray, 28, was charged in a six-count indictment returned by a federal grand jury in Kansas City, Mo. Today’s indictment replaces a federal criminal complaint that was filed against McCray on Jan. 23, 2023, and includes additional charges.
The federal indictment charges McCray with one count of possessing fentanyl with the intent to distribute, one count of possessing methamphetamine with the intent to distribute, one count of possessing cocaine with the intent to distribute, one count of possessing firearms, including a machine gun, in furtherance of a drug-trafficking crime, one count of illegally possessing a machine gun, and one count of being a felon in possession of firearms.
According to an affidavit filed in support of the original criminal complaint, Independence, Mo., police officers attempted to stop a black 2021 Audi Q5, which had been reported stolen, on Jan. 22, 2023. The officers pursued the vehicle when it didn’t stop after they activated the lights and siren on their marked patrol car. The Audi, driving at a high rate of speed, drove into a yard in the 2800 block of S. Baker Road. The vehicle pulled into the east side yard and continued driving toward the rear of the yard before going into a small stream in the back yard. Officers got out of their vehicle and ran toward the Audi.
One of the officers pursued an unidentified suspect, who was eventually taken into custody, while a second officer pursued McCray. The officer chased McCray on foot across E. Berry Lane and into the wooded area to the south. During the pursuit, the affidavit says, the officer saw McCray throw two guns down on the ground. McCray slipped in the snow and fell to the ground as the officer caught up to him. McCray resisted, pulling his hands away and attempting to stand up. The officer was able to put handcuffs on him, but when the officer stood him up, McCray began running again. The officer chased him and was able to push him to the ground and hold him down until another officer could help take him into custody.
The officer then went back into the wooded area and found the two firearms McCray had thrown on the ground, the affidavit says. One was a loaded Glock 9mm pistol with a 33-round extended magazine, which had been modified to be fully automatic, and other was a loaded Glock .40-caliber pistol with a 22-round extended magazine.
Officers searched McCray during his arrest and found the fentanyl, methamphetamine and cocaine inside his jacket pocket. McCray had $5,620 in the same jacket pocket, $74 in his front pants pocket, and $529 was found on the ground nearby.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. McCray has a prior felony conviction for second degree murder.
The charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Brad K. Kavanaugh. It was investigated by the Independence, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Project Safe Neighborhoods
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.
Janesville Man Sentenced to 3 Years for Illegal Gun PossessionRead the Press Release
MADISON, WIS. – Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin, announced that Alfonso Randall, 40, Janesville, Wisconsin was sentenced today by U.S. District Judge William M. Conley to three years in prison for being a felon in possession of a firearm. Randall pleaded guilty to this charge on October 20, 2022.
On February 20, 2021, Randall interfered with Janesville police officers while they were conducting a lawful traffic stop of another person. Officers later found video that Randall had posted of his activities following the traffic stop, including him making threatening statements toward law enforcement and brandishing a handgun toward the camera. Officers also found video that Randall posted of himself shooting a handgun at a gun range.
Randall is a convicted felon and prohibited from possessing firearms. He was convicted of state drug trafficking offenses in 2001 and 2002. In 2009, he was convicted in federal court of distributing crack cocaine and sentenced to 100 months in prison.
At sentencing Judge Conley acknowledged Randall’s claim that he was trying to hold police accountable but said that when the officers told him to stop interfering, he needed to respect those directions. Judge Conley also said that if Randall wants to hold other people to being law abiding, he needed to obey the law himself. Instead, Randall was presenting reckless video images, and when officers searched his residence, they found guns hidden about the house that were accessible to teenagers that were living there. The court found that Randall was endangering others by promoting dangerous gun behavior. Randall agreed with that assessment.
The charge against Randall was the result of an investigation conducted by the Janesville Police Department and Bureau of Alcohol, Tobacco, Firearms and Explosives. The prosecution of the case has been handled by Assistant U.S. Attorney Corey Stephan.
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.
Insurance Executives Plead Guilty to Conspiracy in Multi-Million Dollar Ponzi SchemeRead the Press Release
RALEIGH, N.C. – Joseph W. Floyd, IV, and William F. Floyd, Jr., brothers from Whiteville, North Carolina, each pleaded guilty yesterday before U.S. District Judge Terrence W. Boyle for conspiracy to sell and deliver unregistered securities in connection with a multi-year, multi-million dollar Ponzi scheme operated under the guise of a purported investment program. At sentencing, the Floyds each face a statutory maximum of 60 months’ imprisonment, a $250,000 fine, and three years of supervised release. The Floyds will also be required to make restitution to the victims of the offense.
“The Floyd brothers used their family insurance business to fleece dozens of Eastern North Carolina families of millions by promising low-risk investments with outsized returns,” stated U.S. Attorney Michael Easley. “The U.S. Attorney’s Office is turning up the heat on white collar conmen who use Ponzi schemes and securities fraud to defraud hardworking North Carolina families.”
"The level of greed the Floyd brothers exhibited is difficult to comprehend. Not only did they prey on members of their own community for profit, even relatives were also not off limits. While their guilty pleas won't reimburse those who lost money, we hope federal prison sentences will repay their victims in some way," said Acting FBI Special Agent in Charge Michael C. Scherck.
According to court documents and other information presented in court, the Floyds owned and operated Floyd’s Insurance Agency (FIA), an insurance business based in Whiteville, North Carolina. The Floyds, through FIA, also offered a “loan program” in which more than 150 individuals and businesses in Southeastern North Carolina and elsewhere invested funds in exchange for interest-bearing promissory notes. The promissory notes were securities as defined by law and therefore required to be registered with the Securities Exchange Commission (SEC). As part of the registration process, the SEC requires businesses to provide important financial information that allows investors to make informed investment decisions. The Floyds never registered their investment offering with the SEC at any time.
The loan program offering was portrayed as a safe and conservative investment, comparable to a traditional money market account or certificate of deposit (CD) but offering higher interest rates that varied from six percent to 10 percent. The promissory notes, which were personally guaranteed by the Floyds, stated that investor principal was repayable within one year. The Floyds initially used the borrowed funds to extend credit to Monthly Payment Plan (MPP), a company they co-owned in Chapel Hill, North Carolina, that was in the business of financing insurance premiums for consumers.
Investors were led to believe that FIA was earning sufficient profits from which to pay the promised rate of return and fund redemptions of principal upon demand. In truth, by 2012, FIA had borrowed more than $20 million from investors and did not have the means to service the debt through any legitimate business source. In order to forestall bankruptcy, the Floyds operated the Loan Program as a Ponzi scheme in which principal and profits were paid to existing investors with funds raised from more recent investors. Investors were never advised of this fact. Instead, the Floyds concealed FIA’s insolvency from investors and continued to accept additional investments. In May 2020, FIA filed for Chapter 11 bankruptcy protection. In August 2020, the Floyds each filed for personal bankruptcy.
Michael Easley, United States Attorney for the Eastern District of North Carolina, made the announcement after the arraignments were concluded. The Federal Bureau of Investigation, Charlotte Field Office, investigated the case. The Securities Exchange Commission, Atlanta Field Office, also provided valuable assistance. Assistant U.S. Attorney Adam F. Hulbig prosecuted the case for the government.
A copy of this press release is located on our website. Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No.7:23-CR-1-BO.
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Home healthcare company pays $9 million for submitting false claims relating to the Energy Employees Occupational Illness Compensation Program ActRead the Press Release
CINCINNATI– A home healthcare company providing services in several states, including Ohio, to U.S. Department of Energy employees and contractors, among others, who were injured or became ill on the job has paid $9 million to resolve alleged violations of the False Claims Act.
United Energy Workers Healthcare, Corp. and related entities paid $9 million to resolve allegations that they submitted false claims for payment to the U.S. Department of Labor for healthcare services to beneficiaries of the Energy Employees Occupational Illness Compensation Program Act (EEOICPA).
This settlement resolves allegations that, between January 2013 and March 2021, defendants submitted claims for payment for in-home healthcare services that were never provided or were medically unnecessary, in violation of the False Claims Act. Such violations included billing for case management services not actually provided, instructing caregivers to charge for more time than actually spent with patients, providing and billing for services to beneficiaries that were not covered by the EEOICPA program, and providing services without possessing required licensures.
“The EEOICPA program provides important benefits, and companies that provide in-home healthcare to EEOICPA beneficiaries must ensure that they do so in accordance with the program’s regulations and seek payment appropriately,” said U.S. Attorney Kenneth L. Parker for the Southern District of Ohio. “This settlement shows that the United States will ensure that taxpayers do not overpay companies that bill the United States for improper or excessive claims.”
“The U.S. Department of Labor, Office of Inspector General is dedicated to investigating allegations involving OWCP and ensuring tax dollars are protected from fraud, waste, and abuse,” said Irene Lindow, Special Agent-in-Charge, Chicago Region, DOL-OIG. “We applaud the relators for coming forward regarding these issues.”
The civil settlement includes the resolution of claims brought by multiple individuals, on behalf of the United States, under the qui tam (commonly known as “whistleblower”) provisions of the False Claims Act. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery if the government takes over the case and obtains judgment against or reaches a monetary agreement with the defendant.
The resolutions obtained in this matter were the result of a coordinated effort between the U.S. Attorney’s Office for the Southern District of Ohio and the U.S. Department of Labor’s Office of Inspector General.
For the U.S. Attorney’s Office, the matter was investigated by Deputy Civil Chief Brandi Stewart and Assistant United States Attorneys Matthew Horwitz and Bill King.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
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Garden City Man Sentenced to 15 Years for Attempted Sexual Exploitation of ChildrenRead the Press Release
DETROIT – A Garden City, Michigan man was sentenced yesterday to 15 years in federal prison for attempted sexual exploitation of children based on his request to an undercover federal agent to create child pornography, announced United States Attorney Dawn N. Ison.
Ison was joined in the announcement by James A. Tarasca, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation.
Collin Patrick Valenti, 25, was sentenced by United States District Judge Victoria A. Roberts. Valenti pleaded guilty to asking a person who he believed was a parent of a young child—but in reality was an undercover law enforcement officer—to create and send a video of the parent performing a sex act on that individual’s minor child.
In addition to the attempt offense that he pleaded guilty to committing, Valenti engaged in the hands-on abuse of a small child. He also pretended to be a teenage girl online to obtain sexually explicit photographs of a minor teenage boy. Valenti admitted that on approximately 50 other occasions he sought sexually explicit images of children from individuals he believed to be the parents of the children.
“This offender requested that another individual create a horrific image of sexual abuse. We can only be thankful that he was communicating with an undercover law enforcement officer and not another abuser so that he could not cause harm to another minor. This office will continue to work with law enforcement agencies as they proactively work to find and stop those who seek to exploit and abuse children.” U.S. Attorney Ison stated.
This case was investigated by the Northeast Michigan Trafficking and Exploitation Crimes Task Force of the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorney Christopher Rawsthorne.
Four Oklahoma Men Indicted After Officers Seize $1 Million Worth of Cocaine in I-70 Traffic StopRead the Press Release
KANSAS CITY, Mo. – Four Oklahoma men were indicted by a federal grand jury today after law enforcement officers seized more than $1 million worth of cocaine from a rental truck that was stopped on Interstate 70 in Lafayette County, Mo.
Wilmer Antony Mendoza-Perez, 23, a citizen of Honduras, Luis Gerardo Nieto-Acosta, 35, a citizen of Mexico, and Miguel Angel Anguiano-Viera, 26, all of Oklahoma City, and Jose Eduardo Acosta-Bermejo, 28, a citizen of Mexico, of Bethany, Okla., were charged in a three-count indictment returned by a federal grand jury in Kansas City, Mo.
Today’s indictment replaces a federal criminal complaint that was filed against the four men on Jan. 25, 2023, with additional charges.
The federal indictment alleges that all four defendants participated in a conspiracy to distribute cocaine from Sept. 1, 2022, to Jan. 25, 2023. All four defendants are also charged with possessing cocaine with the intent to distribute.
Nieto-Acosta and Acosta-Bermejo are also charged together in one count of possessing firearms in furtherance of a drug-trafficking crime. They allegedly possessed two Taurus 9mm semi-automatic handguns, with four magazines and 9mm ammunition.
According to an affidavit filed in support of the original criminal complaint, an officer with the Missouri State Highway Patrol stopped Mendoza-Perez on Jan. 24, 2023, as he was driving a Penske rental truck eastbound on Interstate 70 in Lafayette County. A Toyota Highlander, later determined to be occupied by Nieto-Acosta and Acosta-Bermejo, attempted to prevent the officer from getting behind the Penske truck to initiate a stop.
The officer searched the truck and found two boxes that allegedly contained a total of 34 kilograms of cocaine. According to the affidavit, the current average street price in the Kansas City metropolitan area for a kilogram of cocaine is approximately $30,000, which would make 34 kilograms of cocaine worth approximately $1,020,000.
Mendoza-Perez was arrested. The Toyota Highlander was found abandoned at the Pilot truck stop a few miles away. Investigators later searched the Highlander and found the two handguns. One of the handguns was found in a suitcase behind the front passenger seat, which also contained a receipt that showed Acosta-Bermejo as the purchaser.
Investigators reviewed surveillance video at the truck stop, which showed a third vehicle, a Honda Pilot occupied by Anguiano-Viera and a juvenile female, arrived at the truck stop and picked up Nieto-Acosta and Acosta-Bermejo. A short time later, this vehicle was located, and the occupants arrested.
The charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorneys Bruce Rhoades and Robert Smith. It was investigated by the Missouri State Highway Patrol, the Lafayette County Sherriff’s Office and Drug Task Force, and the Drug Enforcement Administration.
Four More from Methamphetamine Wiretap Investigation Plead Guilty in Federal CourtRead the Press Release
Four men who were caught in a federal wiretap investigation into methamphetamine trafficking between California and Iowa pled guilty last week in federal court in Cedar Rapids.
Robert Lee Michael Bates, age 30, from Marion, Iowa, Phillip Lanell Rogers, age 48, from Cedar Rapids, Iowa, and Anton Tarrice Whitney, Jr., age 32, from Cedar Rapids, Iowa, were each convicted of conspiracy to distribute methamphetamine. Timothy Michael Webber, age 45, from Waterloo, Iowa, pled guilty to one count of possession with intent to distribute methamphetamine.
Evidence at prior hearings in the case showed that David Belton, a/k/a “Blood,” and others orchestrated shipments of between 30 to 60 pounds of ice methamphetamine between Los Angeles, California, and Cedar Rapids, Iowa, between 2017 and March 2022. Belton paid other individuals to transport the ice methamphetamine, typically in a vehicle that contained a specially made hidden compartment. Once the ice methamphetamine arrived in Cedar Rapids, Belton or his associate would retrieve the methamphetamine and distribute it to other members of the organization for sale to customers.
In late 2021, the Cedar Rapids DEA conducted a wiretap investigation into Belton’s drug organization. In February 2022, intercepted communications indicated that a shipment of 60 pounds of ice methamphetamine was going to be coming from California to Iowa. Investigators tracked a courier driving a rental truck from Los Angeles to Nebraska, where the truck was stopped. During a search of the cargo area of the truck, officers found a plastic tote containing 60 pounds of ice methamphetamine.
Evidence at prior hearings showed that Bates was intercepted over the wiretap ordering pounds of ice methamphetamine from the Belton drug organization.
In a plea agreement, Rogers admitted that he was also involved in the ice methamphetamine conspiracy. He also admitted that he sold ice methamphetamine to a cooperating individual on three occasions in 2021, and on another occasion in 2022. During a search of Rogers’s residence in March 2022, investigators seized digital scales, ammunition, marijuana, and a small amount of methamphetamine.
In a plea agreement, Whitney admitted that his role in the conspiracy was to collect cash proceeds of the ice methamphetamine sales for Belton and one of his associates. He also admitted that in addition to collecting drug debts for Belton’s organization, he sold ecstasy pills. During a search of Whitney’s residence in March 2022, investigators seized over 60 grams of purported ecstasy pills that were later determined to contain methamphetamine. Investigators also seized a handgun, several rounds of ammunition, two semiautomatic handgun conversion kits, a 31‑round magazine, and a 60-round drum magazine. Whitney admitted that, at the time he possessed the firearm and ammunition, he was prohibited from possessing firearms because he was an unlawful user of marijuana.
Evidence at a prior hearing showed that Webber was intercepted over the wiretap ordering pounds of methamphetamine from the Belton drug organization. In his plea agreement, Webber admitted that in April 2022, state investigators searched his residence in Waterloo and seized over 380 grams of ice methamphetamine and $25,550 in cash proceeds of prior ice methamphetamine sales.
Sentencing before United States District Court Judge C.J. Williams will be set after presentence reports are prepared. Each man remains in custody of the United States Marshal pending sentencing. Each faces a mandatory minimum sentence of 10 years’ imprisonment and a possible maximum sentence of life imprisonment, a $10,000,000 fine, and a lifetime of supervised release following any imprisonment.
The case was investigated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program of the United States Department of Justice through a cooperative effort of the DEA Task Force in Cedar Rapids and the Federal Bureau of Investigation. The DEA Task Force in Cedar Rapids consists of the DEA; the Linn County Sheriff's Office; the Cedar Rapids Police Department; the Marion Police Department; and the Iowa Division of Narcotics Enforcement. The case is being prosecuted by Assistant United States Attorney Dan Chatham.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 22‑CR‑39‑CJW‑MAR.
Follow us on Twitter @USAO_NDIA.
Fort Wayne Man Sentenced to 102 Months in PrisonRead the Press Release
FORT WAYNE – Henry Underwood, 29 years old, of Fort Wayne, Indiana, was sentenced by United States District Court Judge Holly A. Brady after being found guilty of being a felon in possession of a firearm and ammunition, announced United States Attorney Clifford D. Johnson.
Underwood was sentenced to 102 months in prison followed by 3 years of supervised release.
According to documents in this case, in September 2022, Underwood was found guilty of the gun crime following a three-day jury trial. This conviction stems from a vandalism-by-gunfire complaint to which the Fort Wayne Police responded in December 2019. Shortly after the shooting, police stopped a vehicle and located Underwood inside. In this vehicle, police found a 9mm pistol loaded with live ammunition and an extended magazine. In a social media video posted earlier in the day, Underwood was seen handling a loaded, extended firearm magazine similar to the one recovered from the vehicle, and Underwood was wearing the same clothes from the traffic stop. Underwood has multiple prior felony convictions which prohibit him from possessing the firearm or ammunition.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives with the assistance of the Fort Wayne Police Department and the Indiana State Police laboratory. This case was prosecuted by Assistant United States Attorneys Stacey R. Speith and Anthony W. Geller.
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.
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Former Jefferson County Municipal Prosecutor Sentenced to 18 Months in Prison for Sexual Contact with DefendantRead the Press Release
ST. LOUIS – U.S. District Judge Stephen R. Clark on Tuesday sentenced the former municipal prosecuting attorney for Jefferson County, Missouri to 18 months for having coerced sexual contact with a court defendant and lying about it to the FBI.
Judge Clark also ordered James Isaac “Ike” Crabtree to pay the costs of any counseling for the victim.
“James Crabtree repeatedly coerced a woman into sexual activity by offering to help her with pending criminal cases and making her think she risked jail and the loss of her children if she refused,” said U.S. Attorney Sayler Fleming. “The sentence he received today should send a message to officials about the consequences of betraying the public’s trust and violating the rights of vulnerable victims.”
After spotting the victim and chatting with her and her boyfriend on March 8, 2021, Crabtree summoned the woman to his office in the courthouse after hours by offering to help her with pending court cases. Crabtree let her in through a side door. The building was dark and they were alone.
Crabtree offered her liquor and prescription drugs. He then referenced two of the victim’s cases that he was prosecuting, and told her that he could help get cases in other courts dismissed, according to a recording that the victim made of the encounter. Crabtree said, “…I can be a very valuable friend,” and unsolicited, gave the victim $300, according to a sentencing memorandum filed by Assistant U.S. Attorney Hal Goldsmith.
After the victim told Crabtree that she was not going to have sex with him and was not a prostitute, Crabtree mentioned her two children, which she interpreted as a threat that she could be jailed and lose her children, the memo says.
Judge Clark said she went along with Crabtree “out of fear.”
Crabtree kissed and groped her, took off her shirt, asked her to take off more clothing and masturbated, ejaculating on the floor in front of her.
A week later, Crabtree asked the victim to meet him behind a Dollar General, where he kissed her and had her sit on her lap. He then asked her to meet him at a bed and breakfast and did it again. At a restaurant, he kissed and groped her, asked her to send him nude pictures so he could masturbate in his office and asked if she would get a room with him, Judge Clark said.
In court, the victim said, “Honestly, this has taken everything from me,” adding that she’d lost her home and her two young children due to the Crabtree’s crimes. She also said Crabtree had stalked her and shown up at her workplace.
In a written statement, she said, “When I showed up to the courthouse and his office, I trusted him. Instead of an officer of the court and a true prosecutor, I found out that I encountered a monster and a person not deserving of the titles and office bestowed upon him. He horribly abused my trust in him. He violated me. He sexually assaulted me.”
“In the moments leading up to it and after the assaults, he preyed upon my vulnerabilities and weaknesses,” she continued. “He then continued to use those vulnerabilities and weaknesses to exercise his control over me and manipulate me. He threatened to interfere in my other legal matters and talked about how powerful he was and how he knew the attorneys or judges involved and could easily contact them. To this date, I still do not know whether he contacted them or how many.”
Under questioning by FBI agents about the incident on March 3, 2022, Crabtree repeatedly lied when he denied kissing and touching the victim, telling her to undress and masturbating in his office.
"James Crabtree is even worse than other sexual predators because he used his official authority to abuse a victim, which makes his sexual assault a civil rights violation," said Special Agent in Charge Jay Greenberg of the FBI St. Louis Division. "The FBI prioritizes investigating any government employee who misuses his or her official position."
Crabtree, 40, pleaded guilty in U.S. District Court in St. Louis in August to a misdemeanor charge of deprivation of rights under color of law, namely the woman’s right to bodily integrity, and a felony charge of making false statements to the FBI. The guidelines for the crimes recommended by the U.S. Sentencing Commission were 12 to 18 months in prison.
The FBI investigated the case. Assistant U.S. Attorney Hal Goldsmith is prosecuting the case.
Former Durango Restaurant Owners Sentenced on Felony Tax Evasion ConvictionsRead the Press Release
Durango – The United States Attorney’s Office for the District of Colorado announces that Kenneth and Suzanne Fusco, of Durango, Colorado were each sentenced to six months of house arrest, 150 hours of community service, a $25,000 fine, more than $160,000 of restitution, and five years of probation supervision after pleading guilty to tax evasion.
According to the plea agreement, public filings, and evidence presented at the sentencing hearing, the Fuscos operated a restaurant called Ken & Sue’s on Main Street Durango for twenty-two years. When the Fuscos put their restaurant up for sale in February 2020, an investigation was initiated and the Fuscos were found to have overstated their business expenses to reduce their tax liability from 2014-2019. During the course of the investigation Suzanne Fusco stated, “we’re masters at,” and then Kenneth Fusco finished the sentence with the word “disguising.” The codefendants then proceeded to explain that they hid various personal expenses as business expenses to lessen their tax liability. Based on that information, the IRS executed a search warrant on the premises of the restaurant on August 26, 2020.
IRS Criminal Investigation special agents showed that the defendants intentionally categorized nearly a million dollars of their personal expenses as business expenses, resulting in underpaid taxes of over $160,000.
Senior Judge Robert E. Blackburn sentenced the defendants on February 7, 2023.
“This sentence will justly restrict the defendants' liberty for five years, require significant community service, and ensure full repayment to the American taxpayers. This serious crime would not have been detected and prosecuted but for the great work of our partners at the IRS-CI,” said United States Attorney Cole Finegan.
“The U.S. tax system is critical to funding vital government services for our citizens and we protect the integrity of our system by ensuring everyone pays their fair share,” said Andy Tsui, Special Agent in Charge, IRS-CI Denver Field Office. Today’s sentencing demonstrates our commitment to identifying and investigating business owners who attempt to evade their tax obligations and serves as an example that violators will not go unpunished.”
The investigation was conducted by the Internal Revenue Service, Criminal Investigation Division, in Durango, Colorado. Prosecution was handled by Assistant United States Attorneys Jeffrey K. Graves and Nicole C. Cassidy.
Case Number: 22-cr-00311
Former Coinbase Insider Pleads Guilty in First-Ever Cryptocurrency Insider Trading CaseRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that ISHAN WAHI, a former product manager at Coinbase Global, Inc. (“Coinbase”), pled guilty to two counts of conspiracy to commit wire fraud in connection with a scheme to commit insider trading in cryptocurrency assets by using confidential Coinbase information about which crypto assets were scheduled to be listed on Coinbase’s exchanges. WAHI was arrested and charged in July 2022 and pled guilty earlier today before U.S. District Judge Loretta A. Preska.
U.S. Attorney Damian Williams said: “Ishan Wahi – a former Coinbase product manager – admitted in court today that he tipped others regarding Coinbase’s planned token listings so that they could trade in crypto assets for a profit. Wahi is the first insider to admit guilt in an insider trading case involving the cryptocurrency markets. Whether it occurs in the equity markets or the crypto markets, stealing confidential business information for your own personal profit or the profit of others is a serious federal crime. The Southern District of New York has decades of experience pursuing insider trading cases, and we will continue to use our expertise to prosecute this crime no matter what form it takes and where it occurs.”
According to the allegations in the Indictment and statements made in public court proceedings:
At all relevant times, Coinbase was one of the largest cryptocurrency exchanges in the world. Coinbase users could acquire, exchange, and sell various crypto assets through online user accounts with Coinbase. Periodically, Coinbase added new crypto assets to those that could be traded through its exchange, and the market value of crypto assets typically significantly increased after Coinbase announced that it would be listing a particular crypto asset. Accordingly, Coinbase kept such information strictly confidential and prohibited its employees from sharing that information with others, including by providing a “tip” to any person who might trade based on that information.
Beginning in approximately October 2020, ISHAN WAHI worked at Coinbase as a product manager assigned to a Coinbase asset listing team. In that role, WAHI was involved in the highly confidential process of listing crypto assets on Coinbase’s exchanges and had detailed and advanced knowledge of which crypto assets Coinbase was planning to list and the timing of public announcements about those crypto asset listings.
On multiple occasions between June 2021 and April 2022, WAHI violated his duties of trust and confidence to Coinbase by providing confidential business information that he learned in connection with his employment at Coinbase to Nikhil Wahi and Sameer Ramani so that they could secretly engage in profitable trades around public announcements by Coinbase that it would be listing certain crypto assets on Coinbase’s exchanges. Following Coinbase’s public listing announcements, on multiple occasions, Nikhil Wahi and Ramani sold the crypto assets for a profit.
On April 12, 2022, a Twitter account that is well known in the crypto community tweeted regarding an Ethereum blockchain wallet “that bought hundreds of thousands of dollars of tokens exclusively featured in the Coinbase Asset Listing post about 24 hours before it was published.” The trading activity referenced in the April 12 tweet was trading previously conducted by Ramani based on tips provided by WAHI. Coinbase thereafter publicly replied on Twitter, noting that it had already begun investigating the matter and, a few weeks later, stated in a public blog post that any Coinbase employee who leaked confidential company information would be “immediately terminated and referred to relevant authorities (potentially for criminal prosecution).” On May 11, 2022, Coinbase’s director of security operations emailed WAHI to inform him that he should appear for an in-person meeting relating to Coinbase’s asset listing process at Coinbase’s Seattle, Washington, office on May 16, 2022. WAHI confirmed he would attend the meeting.
On the evening of May 15, 2022, WAHI purchased a one-way flight to India that was scheduled to depart the next day shortly before WAHI was supposed to be interviewed by Coinbase. In the hours between booking the flight and his scheduled departure, WAHI called and texted Nikhil Wahi and Ramani about Coinbase’s investigation and sent both of them a photograph of the messages he had received on May 11, 2022, from Coinbase’s director of security operations. Prior to boarding the May 16, 2022, flight to India, WAHI was stopped by law enforcement and prevented from leaving the country.
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ISHAN WAHI, 32, of Seattle, Washington, pled guilty to two counts of conspiracy to commit wire fraud, which each carry, respectively, a maximum sentence of 20 years in prison.
The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. WAHI is scheduled to be sentenced by Judge Preska on May 10, 2023, at 12:00 p.m.
Mr. Williams praised the investigative work of the Federal Bureau of Investigation. He also acknowledged the assistance of the Justice Department’s National Cryptocurrency Enforcement Team, as well as that of the Securities and Exchange Commission, which separately initiated civil proceedings against WAHI.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Noah Solowiejczyk and Nicolas Roos are in charge of the prosecution.
Former Assistant City Clerk Admits Stealing $160,000 from Small North St. Louis County MunicipalityRead the Press Release
ST. LOUIS – The former assistant city clerk of Flordell Hills, Missouri on Monday admitted stealing $159,903 from the small, struggling city.
The guilty plea of Donna Thompson, 76, to one mail fraud and one wire fraud charge follows by one day the plea of the former city clerk, Maureen Thompson, 68, to the same charges.
Both women admitted writing about 614 city checks to themselves from roughly February 2016 to April 2022 without the authority or knowledge of the mayor, the treasurer or the board of aldermen. They forged the signature of the mayor and/or the treasurer on the checks.
Thompson admitted that roughly 246 checks were written to her.
Woodson and Thompson cashed some checks and deposited some into their personal bank accounts. They used the money for personal expenses and to gamble both in person and online.
They also used city checks or wire transfers of city funds to directly pay the rent for their shared home in Florissant as well as for entertainment, federal taxes and bills at restaurants and stores.
Thompson admitted fraudulently receiving $159,903 and Woodson admitted obtaining $487,673.
Thompson is scheduled to be sentenced May 17 by U.S. District Judge Rodney W. Sippel in U.S. District Court in St. Louis. Each charge carries a penalty of up to 20 years in prison, a $250,000 fine, or both. She will also be ordered to repay the money.
Woodson was hired in 2010 and Thompson in 2012. Both women were terminated in May of 2022.
Flordell Hills is roughly six blocks square, has an annual budget of about $400,000 and a population of about 800. Approximately 53.9% of those residents live below the poverty line, according to the U.S. Census Bureau.
The FBI investigated the case. Assistant U.S. Attorney Hal Goldsmith is prosecuting the case.
Former Alabama Department of Corrections Lieutenant Charged with Federal Civil Rights Crimes for Using Excessive Force on Inmates and with Obstruction OffensesRead the Press Release
A federal grand jury returned a four-count indictment charging a former Alabama Department of Corrections (ADOC) lieutenant with use of excessive force and two obstruction offenses.
According to the indictment, Lieutenant Mohammad Shahid Jenkins used excessive force on two inmates – V.R. and D.H. – at ADOC’s Donaldson Correctional Facility. The indictment further charges Jenkins with two obstruction offenses related to his alleged excessive force on one of the inmates.
Specifically, count one of the indictment alleges that on Feb. 16, 2022, Jenkins willfully deprived inmate V.R. of his right to be free from excessive force by kicking him, hitting him, spraying him with chemical spray, striking him with a can of chemical spray and striking him with a shoe. Count two of the indictment alleges that, on Nov. 29, 2021, Jenkins willfully deprived inmate D.H. of his right to be free from excessive force by spraying him with chemical spray multiple times, striking him with a can of chemical spray and hitting him. Counts one and two further allege that inmates V.R. and D.H. each suffered bodily injury as a result of Jenkins’s actions, and that Jenkins used dangerous weapons — chemical spray and the chemical spray can — in both assaults.
Count three alleges that, following the Feb. 16, 2022, assault, Jenkins knowingly falsified an ADOC incident report about the event. Finally, count four alleges that, when ADOC and FBI agents later interviewed Jenkins about his use of force on V.R., Jenkins engaged in misleading conduct toward the agents.
If convicted, Jenkins faces a maximum sentence of 10 years in prison on each excessive force charge and 20 years in prison on each obstruction charge. He also faces up to three years of supervised release and a fine of up to $250,000.
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, U.S. Attorney Prim F. Escalona for the Northern District of Alabama and Special Agent in Charge Carlton L. Peeples of the FBI Birmingham Field Office made the announcement.
The FBI Birmingham Field Office investigated the case with the assistance of ADOC’s Law Enforcement Services Division.
Assistant U.S. Attorney George Martin for the Northern District of Alabama and Trial Attorneys Anna Gotfryd and David Reese of the Civil Rights Division’s Criminal Section are prosecuting the case.
An indictment is merely an allegation. The defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Final Defendants Convicted in Complex, 20 Person Federal Fentanyl and Methamphetamine Trafficking ConspiracyRead the Press Release
INDIANAPOLIS- A federal jury has found Rick Coley, 36, of Indianapolis, Indiana and David Duggar, 40, of Greenwood, Indiana guilty on all counts following an eight-day trial. Coley was convicted of conspiracy to distribute controlled substances, possession of fentanyl with intent to distribute, possession of a firearm by a convicted felon, and receipt of a firearm by a person under indictment for a felony. Duggar was convicted of conspiracy to distribute controlled substances, distribution of methamphetamine, and possession of a firearm by a convicted felon.
“These convictions further demonstrate the U.S. Attorney’s Office’s efforts to systematically target, investigate, and prosecute those responsible for pumping the most dangerous drugs into our communities,” said Zachary A. Myers, United States Attorney for the Southern District of Indiana. “I commend the work of all agencies involved in dismantling this operation to hold criminals accountable when they seek to exploit substance use disorder with no regard for those who are harmed or killed.”
“This sentencing is an example of a successful partnership between the U.S. Postal Inspection Service, and other local, state, and federal law enforcement agencies to protect the mail system from being used for criminal purposes, such as drug transportation and trafficking”, said Detroit Division Inspector in Charge Rodney M. Hopkins.
According to court documents and evidence introduced at trial, between January and July 2021, Rick Coley and David Duggar, among other co-conspirators, distributed large quantities of methamphetamine and fentanyl in Indianapolis for the ringleader of the operation, Jason Betts. The methamphetamine and fentanyl had been transported to Indianapolis from a source in California.
In July of 2021, federal agents and officers from various law enforcement agencies executed a large-scale takedown operation that led to the arrest of 17 individuals, with 2 individuals being fugitives. During the investigation, approximately 35 firearms, $70,000 in currency, 1.75 kilograms of fentanyl, 14 pounds of methamphetamine, 6 ounces of cocaine, and 30 pounds of marijuana were seized.
As of today, the other 18 defendants have been charged and pled guilty. 10 of the total 20 defendants are awaiting sentencing.
The case was investigated by the Federal Bureau of Investigation, Indianapolis Metropolitan Police Department, Drug Enforcement Administration, U.S. Postal Inspection Service, Indiana State Police, and the Marion County Sheriff’s Office.
U.S. Attorney Myers thanked Assistant United States Attorneys, Bradley A. Blackington and Kelsey L. Massa, who prosecuted this case.
U.S. District Court Judge James P. Hanlon presided over the trial. Coley and Duggar will be sentenced at a later date. Both face up to life in federal prison. Actual sentences are determined by a federal district court judge and are typically less than the maximum penalties.
This case was part of an Organized Crime Drug Enforcement Task Force (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.
See related release here.
Federal Jury Finds Maple Grove Felon Guilty of Fentanyl Trafficking, Possession of a MachinegunRead the Press Release
MINNEAPOLIS – A Maple Grove man has been found guilty by a federal jury of trafficking fentanyl pills, possessing a machinegun, and other federal firearms violations, announced United States Attorney Andrew M. Luger.
Following a two-day trial before Senior U.S. District Judge Joan N. Ericksen, Derrick Maurice Scott 34, was convicted on one count of possession with intent to distribute fentanyl, one count of carrying a machinegun during and in relation to a drug trafficking crime, one count of possession of a machinegun, and one count of possessing a firearm as a felon. Under the federal sentencing guidelines, Scott is subject to a 30-year mandatory minimum prison sentence. A sentencing hearing will be scheduled at a later date.
“Mr. Scott has a long and violent criminal history, including possessing a machine gun, domestic assaults, and fentanyl dealing,” said U.S. Attorney Andrew Luger. “When Mr. Scott was arrested on federal charges, he told law enforcement that when he gets released from prison, he will ‘still be the king and he will get another switch,’ but Mr. Scott’s bravado was badly misplaced, as he is now subject to a mandatory 30-year prison sentence.”
“Derrick Scott’s bad acts caused significant harm in our communities. His disregard for human life required swift and significant consequences. I am thankful for all our law enforcement partners who aided in this investigation,” said Minneapolis Police Chief Brian O’Hara.
“Today Derrick Scott was found guilty not only for selling highly-lethal drugs but also protecting his illegal trade with a machine gun,” said ATF Special Agent in Charge William McCrary, of the St. Paul Field Division. “Drug dealers utilizing auto-sears are doing severe damage to the people in our communities, and it must stop. Today’s conviction is a case where a criminal who is clearly willing to do violence using these devices has been held accountable and will be removed from society for a very long time. I am grateful for the jury’s decision, and deeply appreciate the hard work of our agents, our law enforcement partners and the U.S. Attorney’s Office for this successful prosecution.”
As proven at trial, on June 4, 2022, officers with the Minneapolis Police Department received a complaint that Scott had threatened a man at a convenience store while brandishing a firearm. Two days later, officers located Scott and conducted a traffic stop of a vehicle in which Scott was a passenger. Following a search of the vehicle, officers recovered 355 fentanyl pills and a Glock 41, .45 caliber pistol equipped with an auto-sear or “switch” (a device that makes a firearm function as a fully automatic machinegun) and a high-capacity magazine.
This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Minneapolis Police Department.
Assistant U.S. Attorneys Thomas M. Hollenhorst and Chelsea A. Walcker tried the case.
Federal Grand Jury Indicts Louisville Man for Gun ChargeRead the Press Release
Louisville, KY – A federal grand jury in Louisville, Kentucky, returned an indictment today charging a local man with being a convicted felon in possession of a firearm.
U.S. Attorney Michael A. Bennett of the Western District of Kentucky, Special Agent in Charge R. Shawn Morrow of the ATF Louisville Field Division, and Chief Jacquelyn Gwinn-Villaroel of the Louisville Metro Police Department made the announcement.
According to the indictment, on February 8, 2022, Joseph Edward Starling, 53, a convicted felon, possessed a Taurus, Model Raging Judge Magnum, 45/410 caliber revolver after having previously been convicted of the following felony offenses. On December 3, 2018, in Jefferson Circuit Court, Starling was convicted of manslaughter II, kidnapping (no death/injury), criminal syndication: engaging in organized crime, and tampering with physical evidence. On September 26, 2006, in Jefferson Circuit Court, Starling was convicted of illegal possession of a controlled substance and tampering with physical evidence. On May 6, 2004, in Jefferson Circuit Court, Starling was convicted of possession of a firearm by a convicted felon. On August 30, 1989, in Jefferson Circuit Court, Starling was convicted of two counts of burglary II, five counts of theft by unlawful taking over $100, and three counts of burglary III. On August 30, 1989, in a separate Jefferson Circuit Court case, Starling was convicted of burglary III and theft by unlawful taking over $100.
Starling will make his initial court appearance before a United State Magistrate Judge in the Western District of Kentucky on a later date. If convicted, Starling faces a minimum sentence of 15 years and a maximum sentence of life in prison. A federal district court judge will determine any sentence after considering the sentencing guidelines and other statutory factors. There is no parole in the federal system.
This case is being investigated by the ATF and Louisville Metro Police Department.
Assistant U.S. Attorney Frank Dahl is prosecuting this 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.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Federal Grand Jury Indicts Louisville Man and Woman for Firearms OffensesRead the Press Release
Louisville, KY – A federal grand jury in Louisville, Kentucky, returned an indictment today charging a local man and woman with violations of federal firearms laws.
U.S. Attorney Michael A. Bennett of the Western District of Kentucky, Special Agent in Charge R. Shawn Morrow of the ATF Louisville Field Division, and Chief Jacquelyn Gwinn-Villaroel of the Louisville Metro Police Department made the announcement.
According to the indictment, between April 12, 2022, and June 17, 2022, George Verner, 28, a convicted felon, aided and abetted by Monique Pruitt Verner, 28, possessed a Taurus, Model G2C, 9-millimeter pistol after having previously been convicted of the following felony offenses. On August 9, 2013, in Jefferson Circuit Court, George Verner was convicted of possession of a handgun by a convicted felon, receiving stolen firearms, and illegal possession of a controlled substance, schedule I hallucinogen, marijuana, while in possession of a firearm. On April 26, 2010, in Jefferson Circuit Court, George Verner was convicted of robbery in the first degree and tampering with physical evidence.
Also, according to the indictment, between April 12, 2022, and June 17, 2022, Monique Pruitt Verner transferred a firearm to George Verner, while having reasonable cause to believe he had been convicted of a felony.
Both defendants will make their initial court appearances before a United States Magistrate Judge in the Western District of Kentucky on a later date. If convicted, George Verner faces a maximum sentence of 10 years in prison, and Monique Pruitt Verner faces a maximum sentence of 20 years in prison. A federal district court judge will determine any sentence after considering the sentencing guidelines and other statutory factors. There is no parole in the federal system.
This case is being investigated by the ATF and Louisville Metro Police Department.
Assistant U.S. Attorney Frank Dahl is prosecuting this 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.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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False Claims Act Settlements and Judgments Exceed $2 Billion in Fiscal Year 2022Read the Press Release
Settlements and judgments under the False Claims Act exceeded $2.2 billion in the fiscal year ending Sept. 30, 2022, Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, announced today. The government and whistleblowers were party to 351 settlements and judgments, the second-highest number of settlements and judgments in a single year. Recoveries since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $72 billion.
“Protecting taxpayer dollars by preventing fraud and abuse is a critical priority for the Department of Justice,” said Principal Deputy Assistant Attorney General Boynton. “The large number of settlements and judgments this past year demonstrates that the False Claims Act remains one of the most important tools for ensuring that public funds are spent properly and advance the public interest.”
The False Claims Act imposes treble damages and penalties on those who knowingly and falsely claim money from the United States or knowingly fail to pay money owed to the United States. The False Claims Act thus serves to safeguard government programs and operations that provide access to medical care, support our military and first responders, protect American businesses and workers, help build and repair infrastructure, offer disaster and other emergency relief, and provide many other critical services and benefits.
Of the more than $2.2 billion in False Claims Act settlements and judgments reported by the Department of Justice this past fiscal year, over $1.7 billion related to matters that involved the health care industry, including drug and medical device manufacturers, durable medical equipment, home health and managed care providers, hospitals, pharmacies, hospice organizations, and physicians. The amounts included in the $1.7 billion reflect recoveries arising only from federal losses, and, in many of these cases, the department was instrumental in recovering additional amounts for state Medicaid programs. The recoveries in fiscal year 2022 also reflected the department’s focus on new enforcement priorities, including fraud in pandemic relief programs and alleged violations of cybersecurity requirements in government contracts and grants.
In 1986, Congress strengthened the False Claims Act by increasing incentives for whistleblowers to file lawsuits alleging false claims on behalf of the government. These whistleblower, or qui tam, actions comprise a significant percentage of the False Claims Act cases that are filed. Qui tam cases may be pursued by the government or the whistleblower, and this past year significant recoveries were obtained by both. When a qui tam action is successful, the whistleblower, also known as the relator, typically receives a portion of the recovery ranging between 15% and 30%. Whistleblowers filed 652 qui tam suits in fiscal year 2022, and this past year the department reported settlements and judgments exceeding $1.9 billion in these and earlier-filed suits.
HEALTH CARE FRAUD
In fiscal year 2022, health care fraud remained a leading source of False Claims Act settlements and judgments. These recoveries restore funds to federal programs such as Medicare, Medicaid, and TRICARE, the health care program for service members and their families. But just as important, enforcement of the False Claims Act deters others who might try to cheat the system for their own gain, and in many cases, also protects patients from medically unnecessary or potentially harmful actions. As in years past, the act was used to pursue matters involving a wide array of health care providers, goods, and services.
Fraud and Abuse in the Medicaid Program
The Medicaid program affords health care coverage to millions of Americans, including some of the nation’s most vulnerable populations, such as eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities. The program is funded jointly by states and the federal government.
Mallinckrodt ARD LLC, previously Questcor Pharmaceuticals Inc., paid $260 million to resolve separate allegations relating to its drug H.P. Acthar Gel, which is approved to treat, among other things, acute exacerbations of multiple sclerosis and infantile spasms. The government alleged that the company knowingly underpaid rebates to the Medicaid program by improperly designating Acthar as a “new drug” as of 2013, as opposed to a preexisting drug for which Mallinckrodt had significantly raised the price in years prior. The government separately alleged that, from 2010 through 2014, Mallinckrodt knowingly used a foundation as a conduit to pay illegal kickbacks in the form of copay subsidies so that it could market Acthar as “free” to doctors and patients while increasing its price significantly.
Gold Coast Health Plan, a county-organized health system in California and three of its providers, Ventura County, Dignity Health, and Clinicas Del Camino Real, Inc., paid a combined total of $70.7 million to resolve claims that they knowingly submitted or caused the submission of false claims to California’s Medicaid program in connection with the “Adult Expansion” population that was created by the Patient Protection and Affordable Care Act. The United States alleged that the payments were not for “allowed medical expenses” under Gold Coast’s contract with the state, were pre-determined amounts that did not reflect fair market value, were duplicative of services already required to be rendered, and were unlawful gifts of public funds in violation of the state constitution.
Unnecessary Services and Substandard Care
The department also pursued and resolved matters in which providers billed federal health care programs for medically unnecessary services. The provision of unnecessary medical services not only wastes taxpayer funds but also can expose patients to harmful procedures and treatments or cause them to forego other potentially more effective treatments.
The department filed claims under the False Claims Act against American Health Foundation (AHF), its affiliate management corporation, and three affiliated nursing homes — Cheltenham Nursing & Rehabilitation Center (Cheltenham), The Sanctuary at Wilmington Place (Wilmington Place), and Samaritan Care Center and Villa (Samaritan) — for providing grossly substandard skilled nursing services between 2016 and 2018. In its complaint, the United States alleged the three AHF nursing homes provided grossly substandard services that failed to meet required standards of care in various ways, including by failing to follow appropriate infection control protocols and not maintaining adequate staffing levels.
Providence Health & Services Washington (Providence), a health care and hospital system operating in seven western U.S. states, paid $22.7 million to resolve allegations that it billed federal health care programs for medically unnecessary neurosurgeries. At one hospital in Washington state, neurosurgeons were paid based on a productivity metric that provided a financial incentive to perform more surgeries of greater complexity. As part of the settlement agreement, Providence admitted that its medical personnel expressed concerns that two neurosurgeons were endangering patient safety, creating an excessive level of complications and negative outcomes, performing surgery on candidates who were not appropriate for surgery, and failing to properly document their procedures and outcomes.
Eargo Inc., a company that sells and dispenses hearing aid devices directly to customers nationwide, paid $34.37 million to resolve False Claims Act and common law allegations that it submitted or caused to be submitted claims containing unsupported hearing loss-related diagnosis codes to the Federal Employees Health Benefits Program for the reimbursement of its hearing aid devices.
Carrefour Associates LLC and its related companies, which operate under the name Crossroads Hospice, paid $5.5 million to resolve allegations that Crossroads Hospice knowingly submitted false claims to Medicare for hospice services for patients who were not terminally ill.
Signature Home Health Services of Florida LLC and its related entities (collectively, SignatureHomeNow) paid $2.1 million to resolve allegations that SignatureHomeNow improperly admitted and provided services to Medicare beneficiaries who: (i) were not homebound; (ii) did not require certain skilled care; (iii) did not have valid or otherwise appropriate plans of care in place; and/or (iv) did not have appropriate face-to-face encounters needed to be appropriately certified to receive home health services.
Hayat Pharmacy paid $2.05 million to resolve allegations that it submitted false claims to Medicare and Medicaid for prescription medications that the pharmacy had switched from lower cost medications to higher cost medications without any medical need and/or a valid prescription.
The department also resolved several matters in which providers billed federal health care programs for unnecessary drug testing. Physician Partners of America LLC (PPOA), its founder, its former chief medical officer, and certain of its affiliated entities paid $24.5 million to resolve allegations that they billed federal health care programs for unnecessary urine drug, psychological, and genetic testing. The United States alleged that PPOA required its physician-employees to order multiple urine drug tests at the same time without determining whether any testing was reasonable and necessary, or even reviewing the results of initial testing to determine whether additional testing was warranted. Similarly, the United States alleged that PPOA instructed physicians to automatically order psychological and genetic testing that it did not use or intend to use, and that PPOA instructed physicians to schedule bi-weekly telehealth appointments for the sole purpose of increasing revenue during the pandemic. Finally, the United States alleged that, at the time PPOA was engaged in this conduct, it obtained a loan under the Paycheck Protection Program while certifying that it was not engaged in illicit activity. This settlement resolved allegations under the False Claims Act, the Physician Self-Referral Law (Stark Law), and the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA).
MD Spine Solutions LLC dba MD Labs Inc. and two of its owners agreed to pay up to $16 million to resolve allegations that MD Labs submitted claims for medically unnecessary urine drug tests.
Finally, Radeas LLC paid $11.6 million to resolve allegations that it billed Medicare for medically unnecessary urine drug testing by performing presumptive and confirmatory tests on the same urine sample at the same time.
Medicare Advantage Matters
The department pursued cases alleging that organizations participating in the Medicare Advantage (or Medicare Part C) program knowingly submitted or caused the submission of inaccurate information or knowingly failed to correct inaccurate information about the health status of beneficiaries enrolled in their plans to increase reimbursement. This past year, the department intervened in one case against Cigna Corp and continued to litigate a number of other cases, including actions against UnitedHealth Group, Independent Health Corporation, Elevance Health (formerly Anthem), and the Kaiser Permanente consortium.
Drug Pricing
The department filed suit to protect TRICARE, the federal health care program providing insurance for active-duty military personnel, military retirees, and military dependents. The department sued Professional Compounding Centers of America Inc. (PCCA), a company that sells active pharmaceutical ingredients and other products and services to compounding pharmacies. The complaint alleges that PCCA reported fraudulent and inflated Average Wholesale Prices for its ingredients that bore no relationship to the actual prices at which it sold those ingredients to its pharmacy customers, thereby causing those pharmacies to submit inflated compound prescription claims to TRICARE.
Unlawful Kickbacks
Kickbacks paid or received by health care providers undermine the integrity of federal health care programs by tainting medical decision-making, increasing health care costs, and adversely affecting competition. Federal law prohibits the willful solicitation or payment of illegal remuneration to induce the purchase of a good or service paid for by a federal health care program.
The department intervened and pursued claims under the False Claims Act in several qui tam actions alleging kickback violations. For example, the department filed a complaint against two laboratory CEOs, a hospital CEO, six physicians, and other individuals and entities, alleging False Claims Act violations based on patient referrals in violation of the Anti-Kickback Statute (AKS) and the Stark Law, as well as alleging that defendants caused claims to be improperly billed to federal health care programs for medically unnecessary laboratory testing.
The department also filed suit against a chiropractor, 15 office-based labs primarily owned by the chiropractor, and five affiliated companies owned by the chiropractor, alleging that the defendants offered physicians the opportunity to invest in the labs to induce them to refer their Medicare and TRICARE patients to the labs for the treatment of peripheral arterial disease.
Fiscal year 2022 also saw the resolution of numerous matters involving kickback violations. In a case pursued by a whistleblower, the pharmaceutical company Biogen Inc. paid $843.8 million to resolve allegations that the company offered and paid kickbacks, including in the form of speaker honoraria, speaker training fees, consulting fees, and meals, to physicians who spoke at or attended Biogen programs in connection with Biogen’s multiple sclerosis drugs Avonex, Tysabri, and Tecfidera. The relator alleged that this conduct occurred between 2009 and 2014.
Durable medical equipment manufacturer Philips RS North America, LLC, formerly Respironics, Inc., paid $24.75 million to resolve allegations that it knowingly provided unlawful kickbacks to DME suppliers to induce them to select Respironics’ respiratory equipment. The inducements allegedly came in the form of physician prescribing data that Respironics provided free of charge yet knew was valuable in assisting DME suppliers’ marketing efforts to physicians.
Flower Mound Hospital Partners LLC, a partially physician-owned hospital, paid $18.2 million to resolve allegations that it knowingly submitted claims to federal health care programs that arose from violations of the Stark Law and the AKS. The government alleged that the hospital repurchased shares from physician-owners aged 63 or older and then resold those shares to younger physicians, impermissibly taking into account the volume or value of physician referrals when selecting the physicians to whom the shares would be resold and determining the number of shares each physician would receive.
Kaléo Inc. paid the United States $12.7 million for alleged false claims for the drug Evzio, used to reverse opioid overdoses, for providing illegal remuneration to prescribing physicians and their office staff, and for directing physicians to send Evzio prescriptions to certain preferred pharmacies that, in turn, submitted false prior authorization requests to insurers. In addition, the United States obtained a $1.3 million settlement from pharmacy Solera Specialty for submitting false and misleading prior authorizations for the drug.
The United States obtained settlements from 32 Texas doctors totaling more than $5 million to resolve allegations that these doctors violated the AKS and the Stark Law in a scheme to receive improper remuneration from management service organizations (MSOs) in exchange for ordering laboratory tests from designated entities, including a $582,522 settlement with Dr. Mitchell Finnie. The remuneration was allegedly disguised as investment returns but in fact was based on, and offered in exchange for, the doctors’ referrals. The United States also obtained settlements with two health care executives in connection with the scheme.
Other recoveries relating to kickback violations involved clinical laboratories (Metric Lab Services, LLC), medical device companies (Arthrex, Inc.), and physician practice groups (Ambulatory Anesthesia of Atlanta, LLC and Northside Anesthesiology Consultants LLC).
PROTECTING SERVICEMEMBERS AND FIRST-RESPONDERS
The government continued its pursuit of fraud matters involving the purchase of goods and services in connection with military and similar programs. Fraud in these programs not only squanders government funds, but also potentially puts servicemembers and first responders at risk.
As part of a global resolution of criminal and civil liability, Balfour Beatty Communities (BBC) entered into a $35.2 million civil settlement with the United States in December 2021. BBC operates dozens of privatized military housing communities at military installations across the country and earned fees for management and maintenance of the communities. The settlement resolved allegations that BBC fraudulently induced each of the service branches to pay performance incentive fees for military housing management and maintenance that it did not earn. The government alleged that BBC obscured its performance failures by altering or manipulating data in its property management software and destroying or falsifying resident comments cards. The government further alleged that BBC’s conduct resulted in lengthy and unnecessary delays in resolving maintenance issues — to the detriment of servicemembers and their families — and that the service branches were provided an inaccurate assessment of the condition of BBC-operated miliary housing communities and were thereby unable to assess, and potentially correct, BBC’s performance.
Kellogg Brown & Root Services, Inc. paid $13.67 million to resolve allegations relating to its provision of logistics support to U.S. Army forces in Operation Iraqi Freedom under the Logistics Civil Augmentation Program III contract. The United States alleged that certain KBR employees responsible for awarding subcontracts rigged the bidding process in favor of certain local companies, and that those KBR employees received kickbacks from local companies in exchange for award of the subcontracts. The government also alleged that these subcontract prices were inflated, and that KBR sought reimbursement of these inflated subcontracts through vouchers submitted to the Army. This resolution came on the eve of trial and after the United States litigated this matter for many years.
Honeywell International, Inc., paid $3.35 million to resolve allegations that it sold defective material for bullet proof vests used by law enforcement officers. This settlement concluded the department’s investigation and litigation of the body armor industry’s use of defective Zylon, which yielded total recoveries of over $136 million from 17 different entities and individuals.
COVID-RELATED FRAUD
In response to the COVID-19 crisis, Congress authorized historic levels of emergency funding for federal agencies to provide direct financial assistance to individuals, businesses, and state, local, and Tribal governments.
The department’s efforts in this area have included the pursuit of cases involving improper payments under the Paycheck Protection Program (PPP), which was enacted to provide loans guaranteed by the U.S. Small Business Administration (SBA) to eligible small businesses for payroll, rent, utility payments, and other business-related costs. The department has pursued borrowers that improperly received duplicate or inflated PPP loans or were otherwise not eligible to receive any PPP loan. Over the last year, the department has resolved 35 False Claims Act matters, recovering over $6.8 million and avoiding more than $1.5 million in losses for SBA tied to federal guarantees on improper loans.
The department also pursues lenders who improperly disburse PPP funds. This year, the department obtained its first-ever False Claims Act settlement with a bank that allegedly made a PPP loan to a customer it knew was ineligible because its sole owner was facing criminal charges at the time of the loan. Prosperity Bank, a regional bank in Texas and Oklahoma, paid $18,673 to resolve these allegations.
The department also pursued those who sought to misuse other pandemic-related resources. MorseLife Health System Inc. (MorseLife), a Florida-entity that oversees a nursing home and an assisted living facility, paid the United States $1.75 million to resolve allegations that it facilitated COVID-19 vaccinations for hundreds of individuals ineligible to participate in the Centers for Disease Control and Prevention’s Pharmacy Partnership for Long-Term Care Program (LTC PPP). Although that program was specifically designed to vaccinate long term care residents when doses of the COVID-19 vaccine were in limited supply, MorseLife was alleged to have arranged vaccines for members of MorseLife’s Board of Directors and individuals whom MorseLife targeted for donations to its private foundation.
CYBERSECURITY INITIATIVE
Malicious cyber activity threatens the health and safety of the American people, and the national and economic security of our country. In October 2021, the department announced its Civil Cyber-Fraud Initiative, which is dedicated to using the False Claims Act to combat new and emerging cyber threats.
This year marked the department’s first settlement under this initiative. Comprehensive Health Services, LLC, (CHS) located in Cape Canaveral, Florida, paid $930,000 to resolve allegations that it falsely represented to the State Department and the Air Force that it had complied with contract requirements relating to the provision of medical services at State Department and Air Force facilities in Iraq and Afghanistan. The allegations included that CHS submitted claims to the State Department for the cost of a secure electronic medical record system to store all patients’ medical records, including confidential identifying information of U.S. service members, diplomats, officials, and contractors working and receiving medical care in Iraq. The government alleged that CHS failed to disclose that it had not consistently stored patients’ medical records on a secure system, and instead put copies of some records on an internal, unsecured, network drive.
OTHER FRAUD RECOVERIES
The judgments, settlements, and lawsuits announced during fiscal year 2022 reflect the diversity of fraud recoveries and enforcement efforts arising under the False Claims Act. For example:
Various air carriers entered into settlement agreements resolving allegations that, in connection with contracts with the U.S. Postal Service for the carriage of mail internationally, they falsely reported that mail receptacles were delivered to specified destinations or the time of such deliveries. This year, Air France and KLM Airlines paid $3.9 million to resolve such claims, and Delta Airlines Inc. paid $10.5 million. To date, the United States has recovered more than $84 million as a result of its investigation of such misconduct.
TriMark USA, LLC paid $48.5 million to resolve allegations that its subsidiaries improperly manipulated federal small business set-aside contracts. TriMark used a subsidiary, rather than the awardee, to perform substantially all the work, while the awardee small business only served as the face of the contract, billed the government, and used its small business status to obtain the contract. The settlement amount constitutes the largest False Claims Act recovery based on allegations of small business contracting fraud.
TracFone Wireless paid $13.4 million to settle allegations under the False Claims Act and the common law that it improperly signed up more than 175,000 ineligible customers in connection with the Federal Communications Commission’s Lifeline Program. Third-party agents exploited a glitch in TracFone’s software, but TracFone failed to adequately review applications and investigate reports of clearly ineligible customers. The Lifeline Program provides nearly $2 billion each year to assist low-income consumers with their telecommunication needs, including mostly free monthly cell phone service.
HOLDING INDIVIDUALS ACCOUNTABLE
The department continued its commitment to use the False Claims Act to deter and redress fraud by individuals as well as corporations. Such efforts deter future fraud, incentivize changes in both corporate and individual behaviors, ensure that the proper parties are held responsible, and promote the public’s confidence in our justice system. As noted above, the PPOA, MD Spine Solutions, STF, Modern Vascular, and MSO cases were all resolutions or lawsuits that included claims against individuals. The following are additional examples of recoveries involving individuals.
Dr. Minas Kochumian, from Los Angeles, California, paid $9.5 million to resolve allegations that he submitted false claims to Medicare and Medi-Cal for procedures and tests never performed, including injections of medication designed to treat osteoarthritis and osteoporosis, drainage of cysts, and removal and destruction of various growths.
Dr. Harry Doyle and his wife and office assistant Sonya Doyle, of Philadelphia, paid $3 million to resolve allegations of submitting false claims to the U.S. Department of Labor’s Office of Worker’s Compensation Program (OWCP) for psychiatric services that were not provided, as well as upcoding and double-billing patient claims. This is the largest recovery against a single psychiatrist in the history of the OWCP. Dr. Doyle also agreed to voluntary exclusion from federal health care programs for 25 years.
In addition, the United States obtained a $1 million settlement with pharmacist Riad Zahr and two specialty pharmacies Zahr owned and operated – Plymouth Towne Care Pharmacy doing business as People’s Drug Store and Shaska Pharmacy LLC doing business as Ray’s Drugs – for submitting false and misleading prior authorization requests for Evzio.
RECOVERIES IN WHISTLEBLOWER SUITS
Of the $2.2 billion in settlements and judgments reported by the government in fiscal year 2022, over $1.9 billion arose from lawsuits that were filed under the qui tam provisions of the False Claims Act and pursued by either the government or whistleblowers. During the same period, the government paid out over $488 million to the individuals who exposed fraud and false claims by filing these actions.
The number of lawsuits filed under the qui tam provisions of the act has grown significantly since 1986, with 652 qui tams filed this past year – an average of more than 12 new cases every week.
“We are grateful for the hard work and courage of those private citizens who bring evidence of fraud to the Department’s attention, often putting at risk their careers and reputations,” said Principal Deputy Assistant Attorney General Boynton. “Our ability to protect citizens and taxpayer funds continues to benefit greatly from their actions.”
In 1986, Senator Charles Grassley and Representative Howard Berman led the successful efforts in Congress to amend the False Claims Act to, among other things, encourage whistleblowers to come forward with allegations of fraud. In 2009 and 2010, further improvements were made to the False Claims Act and its whistleblower provisions.
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On behalf of the Civil Division, Principal Deputy Assistant Attorney General Boynton also expressed appreciation for the dedication and work over the past year by the many public servants who supported the department’s efforts to protect the public. “As ever, we are indebted to all those who work tirelessly to protect the public fisc from fraud: those in the Fraud Section of the Civil Division, the U.S. Attorneys’ Offices, the agency Offices of Inspector General and Offices of General Counsel, and the many other federal and state agencies that support this important work.”
Except where indicated, the government’s claims in the matters described above are allegations only and there has been no determination of liability. The numbers contained in this press release may differ slightly from the original press releases due to accrued interest.
El Paso ICE Officer Sentenced in Bribery CaseRead the Press Release
EL PASO, Texas – A former Immigration and Customs Enforcement officer stationed in El Paso was sentenced Monday to eight months in jail plus three years of supervised release for receiving a bribe by a public official.
According to court documents, Roberto Padilla, 51, was persuaded to reveal law enforcement sensitive information in exchange for a $500 payment to satisfy his drug debt. Padilla was arrested Aug. 6, 2021 and released on bond Aug. 13, 2021. He was immediately placed on administrative leave by ICE following his arrest and eventually relieved of employment entirely on Aug. 23, 2021. Padilla pleaded guilty to the charge Nov. 10, 2022.
“This former agent jeopardized his law enforcement career, his life and the reputation of his agency,” said U.S. Attorney Jaime Esparza of the Western District of Texas. “We will always vigorously prosecute public officials who abuse their authority, especially law enforcement officers who corruptly sell access to sensitive law enforcement databases.”
“Roberto Padilla engaged in conduct that betrayed the oath he took to faithfully serve the citizens of the United States of America,” said Special Agent in Charge Jeffrey R. Downey of the FBI El Paso Field Office. “His behavior should not take away from the outstanding work done each day by the vast majority of law enforcement professionals at U.S. Immigration and Customs Enforcement. The FBI encourages the public to continue to support our active and ongoing efforts to root out public corruption by reporting corrupt activity to the FBI El Paso Field Office at (915) 832-5000.”
The FBI, Department of Homeland Security Office of Inspector General, and Immigration and Customs Enforcement Office of Professional Responsibility investigated the case.
Assistant U.S. Attorney Michael Osterberg prosecuted the case.
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Disaster Relief Consultant Pleads Guilty to Fraud in Connection with New York City’s Hurricane Sandy Recovery EffortsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Jocelyn E. Strauber, the Commissioner of the New York City Department of Investigation ("DOI"), announced that MARK O’MARA, a disaster relief consultant, pled guilty to fraud in connection with his work for an Illinois-based consulting firm (“Company-1”) that provided Hurricane Sandy-related recovery services to the City of New York. O’MARA surrendered today and pled guilty before U.S. District Judge Richard M. Berman in federal court in Manhattan. O’MARA is the second Company-1 employee to plead guilty in recent months to fraud related to Hurricane Sandy relief work, as WALTER MELNICK previously pled guilty in a separate case assigned to U.S. District Judge Victor Marrero.
U.S. Attorney Damian Williams said: “Instead of helping New York City recover from the devastation of Hurricane Sandy, Mark O’Mara helped himself by fraudulently obtaining housing benefits to which he was not entitled. I commend the Department of Investigation and this Office for holding to account those who conspire to defraud invaluable federal programs.”
DOI Commissioner Jocelyn E. Strauber said: “This defendant used Hurricane Sandy as an opportunity for personal profit, through a scheme to pocket federal relief funds intended to help New Yorkers rebuild from this disaster. Today, he takes responsibility for that conduct, pleading guilty to federal offenses, including destroying evidence, and agreeing to repay the City nearly $225,000, forfeit over a quarter-million dollars, and pay any past-due taxes. DOI and our law enforcement partners in the U.S. Attorney’s Office for the Southern District of New York are committed to stopping frauds that drain public resources and holding accountable those who participate.”
According to the allegations in the Information, court filings, and statements made in court:
Beginning in or about 2013, in the aftermath of Hurricane Sandy, the City of New York (the “City”) received billions of dollars in federal money to fund Hurricane Sandy-related recovery efforts. The City used certain of these funds to hire Company-1 to assist with Hurricane Sandy relief (the “Sandy Project”). Company-1 hired O’MARA to work on the Sandy Project.
Between at least in or about 2013 and in or about 2019, while working for Company-1, O’MARA submitted fraudulent information and documents, including a fraudulent lease agreement, to the New York City Office of Management and Budget (“NYC-OMB”) via Company-1 in order to obtain lodging reimbursements from the City to which he knew he was not entitled. Between in or about 2017 and in or about 2019, O’MARA also conspired with others – including another consultant at Company-1, WALTER MELNICK – to defraud the City by falsely claiming that he was residing in an apartment purchased by an individual at MELNICK’s direction. O’MARA fraudulently obtained more than approximately $250,000 from the City via Company-1 as a result of these schemes.
Additionally, in or about February 2020, when the City began raising concerns about Company-1’s travel reimbursements, O’MARA destroyed relevant emails and other communications to cover up the fraud.
MELNICK previously pled guilty in a separate case to conspiring to commit federal program fraud while working for Company-1 on the Sandy Project for fraudulently obtaining housing reimbursements based on a fake lease and other fraudulent documentation. MELNICK agreed to pay $387,749 in forfeiture and restitution. MELNICK is scheduled to be sentenced by Judge Marrero on February 24, 2023.
O’MARA is cooperating with the Government.
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MARK O’MARA, 41, of New York, New York, pled guilty to one count of federal program fraud, which carries a maximum sentence of 10 years in prison; one count of wire fraud in connection with a presidentially-declared major disaster, which carries a maximum sentence of 30 years in prison; one count of conspiracy to commit federal program fraud and wire fraud, which carries a maximum sentence of five years in prison; and one count of destruction of evidence, which carries a maximum sentence of 20 years in prison. Under the terms of his plea agreement, O’MARA agreed to forfeit $258,900 and to pay restitution to NYC-OMB in the amount of $224,687.26.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by a judge.
Mr. Williams praised the outstanding investigative work of DOI.
This matter is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Jane Kim and Catherine Ghosh are in charge of the prosecution.
Department of Justice Releases Roadmap for Implementation for Columbus, Ohio, Division of PoliceRead the Press Release
The Department of Justice’s Office of Community Oriented Policing Services (COPS Office) today announced the completion of a Roadmap for Implementation for the Columbus Division of Police (CDP), the result of targeted technical assistance that was provided to CDP at the request of the city of Columbus, Ohio. The report is a summary of that technical assistance and is designed to be a roadmap to build a foundation for reform.
The areas of examination covered in the Roadmap represent the scope of work as agreed to by the Department of Justice and the city, and includes policy reviews and associated training, recruitment, technology, staffing and leadership training. Specifically, the technical assistance team reviewed the organizational structure of several units within the division; examined the division’s technology, including how the division’s IT infrastructure relates to other city systems; and offered specific ideas on how to enhance CDP’s engagement with the community it serves.
Upon receiving the Roadmap, city and CDP officials initiated a request for an independent review of CDP’s use of force policies and practices, and based on recommendations in the report, a technology assessment and assistance with the design and development of pro-active problem-solving strategies. The COPS Office has agreed to undertake such a review and that work will begin immediately.
“The Justice Department, through our COPS Office, is proud to work with police departments seeking to improve and learn from best practices in the field,” said Associate Attorney General Vanita Gupta. “The city’s request to expand its engagement with COPS to review additional areas, including CDP’s use of force policies, is an important step that will benefit both CDP and the community.”
“The roadmap we have shared with CDP and the assistance we have provided will help the department in its collaborative efforts to enhance public safety. We commend the CDP for reaching out to the Department of Justice and for working diligently alongside the COPS Office in this process,” said Hugh T. Clements, Jr., Director of the COPS Office. “We look forward to continuing to partner with CDP as we begin the additional assistance that has been requested, and we know that both the department and the community will be well-served by all of this work in the months and years ahead.”
The COPS Office is the federal component of the Department of Justice responsible for advancing community policing nationwide. The only department of Justice agency with policing in its name, the COPS Office was established in 1994 and has been the cornerstone of the nation’s crime fighting strategy with grants, a variety of knowledge resource products, and training and technical assistance. Through the years, the COPS Office has become the go-to organization for law enforcement agencies across the country and continues to listen to the field and provide the resources that are needed to reduce crime and build trust between law enforcement and the communities served. The COPS Office has been appropriated more than $20 billion to advance community policing, including grants awarded to over 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of more than 136,000 officers.
Defendants Connected to Southwest Georgia Armed Drug Trafficking Ring Sentenced to PrisonRead the Press Release
ALBANY, Ga. – Two individuals associated with an 18-defendant armed drug trafficking network centered in Tifton, Georgia, were sentenced to prison for their crimes recently resulting from an Organized Crime Drug Enforcement Task Force (OCDETF) operation.
Juanjava Boggerty, aka “Jay,” 49, of Tifton, was sentenced to serve 235 months in prison to be followed by five years of supervised release after he pleaded guilty to conspiracy to possess with intent to distribute controlled substances on Oct. 12, 2022. Co-defendant Darrell Mack, 33, of Tifton, was sentenced to serve 78 months in prison to be followed by four years of supervised release after he pleaded guilty to distribution of methamphetamine on Oct. 13, 2022. U.S. District Judge Louis Sands handed down the sentences on Feb. 2.
“The Organized Crime Drug Enforcement Task Force has shut down another armed trafficking network in the Middle District of Georgia, this time in the Tifton community,” said U.S. Attorney Peter D. Leary. “There is more work to be done as law enforcement at every level continues to identify and stop weaponized criminal groups from causing further harm in our region.”
“We removed more methamphetamine traffickers from the streets,” said Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Field Division. “These offenders can no longer distribute this dangerous drug as they now face serious time behind bars for both their drug crimes and violent criminal conduct. This investigation was a success because of the great working relationship between DEA and its law enforcement partners.”
“There is no initiative more critical to ATF than increasing the safety of our communities. Cases which result in the arrests and prosecution of armed drug traffickers are fundamental to continuing this initiative while simultaneously showing criminals that ATF and its law enforcement partners will not falter in this mission,” said ATF Special Agent in Charge Beau Kolodka. “We will pursue violent drug traffickers such as these wherever they may operate and they will be prosecuted to the fullest extent of the law.”
“The lengthy sentences handed down to these defendants send a clear message that drug dealing in our communities will not be tolerated. Georgians deserve to work, live and play in a safe environment. We will never stop protecting our neighborhoods from dangerous and illegal drugs,” said GBI Director Michael Register.
“Our fight against drug traffickers and this armed trafficking ring is yet another step in stemming the flow of meth into Tifton and Tift County. With the help of our community and our law enforcement allies, we will continue to make this a safer place to work and live,” said Tift County Sheriff Gene Scarbrough.
“It’s great to have these defendants, the drugs and the firearms off the streets of Tifton. We are appreciative of the coordination between agencies involved in this investigation,” said Tifton Police Department Chief Steve Hyman. “Their work in this case makes a difference in the lives of our citizens who fall victim to drugs in our community.”
The following co-defendants have pleaded guilty and been sentenced:
Tevin Parker, aka “Tay,” 28, of Tifton, pleaded guilty to distribution of methamphetamine on July 26, 2022, and was sentenced to serve 262 months in prison to be followed by five years of supervised release on Nov. 3, 2022;
Courtney Taylor, 39, of Tifton, pleaded guilty to possession of methamphetamine with intent to distribute on Oct. 4, 2022, and was sentenced to serve 235 months in prison to be followed by five years of supervised release to be served concurrently to a sentence imposed in Tift County, Georgia, Superior Court and any sentence which may be imposed in Ben Hill County, Georgia, Superior Court for probation violation on Jan. 25.;
Brian Foster, aka “Joe,” aka “FOS,” 30, of Tifton, pleaded guilty to possession of methamphetamine with intent to distribute on Sept. 27, 2022, and was sentenced to serve 136 months in prison to be followed by five years of supervised release on Dec. 30, 2022;
Bradrick Boston aka “Big Baby,” 34, of Tifton, pleaded guilty to distribution of methamphetamine on July 20, 2022, and was sentenced to serve 108 months in prison to be followed by four years of supervised release to be served concurrently to a sentence imposed in Tift County, Georgia, Superior Court for probation violation on Nov. 3, 2022;
Clenton Davis, 33, of Ashburn, Georgia, pleaded guilty to managing drug premises on Aug. 2, 2022, and was sentenced to serve 96 months in prison to be followed by three years of supervised release on Nov. 20, 2022;
Keyuntran Taylor, 23, of Ashburn, pleaded guilty to possession of methamphetamine with intent to distribute on Oct. 5, 2022, and was sentenced to serve 70 months in prison to be followed by four years of supervised release on Jan. 26.;
Dmya Norris, 25, of Tifton, pleaded guilty to possession of methamphetamine with intent to distribute on Oct. 5, 2022, and was sentenced to serve 60 months in prison to be followed by four years of supervised release on Jan. 26.;
Dante Hille, 29, of Ashburn, pleaded guilty to distribution of methamphetamine on June 14, 2022, and was sentenced to serve 51 months in prison to be followed by three years of supervised release on Sept. 15, 2022;
Vontesha Dixon, 32, of Tifton, pleaded guilty to conspiracy to possess with intent to distribute methamphetamine on Oct. 4, 2022, and was sentenced to serve 36 months in prison to be followed by three years of supervised release on Jan. 19.;
Keilaysha Dixon, 23, of Tifton, pleaded guilty to use of a communication facility in furtherance of a drug trafficking crime on Sept. 22, 2022, and was sentenced to serve 30 months in prison to be followed by one year of supervised release on Dec. 30, 2022; and
Jala Taylor, 24, of Tifton, pleaded guilty to distribution of methamphetamine on Oct. 11, 2022, and was sentenced to serve 24 months in prison to be followed by three years of supervised release on Jan. 27.
The following co-defendants have pleaded guilty in this case and are awaiting sentencing:
Rafon Carithers, aka “Tweed,” 34, of Tifton, pleaded guilty to conspiracy to possess with intent to distribute methamphetamine on May 19, 2022, and faces a maximum sentence of 40 years of imprisonment to be followed by at least four years of supervised release and a $5,000,000 fine;
Jehmeil Carmichael, 35, of Tifton, pleaded guilty to possession of methamphetamine with intent to distribute and faces a maximum sentence of 20 years of imprisonment to be followed by at least three years of supervised release and a $1,000,000 fine;
McKevor Mulkey aka “Chevy,” 32, of Tifton, pleaded guilty to conspiracy to possess with intent to distribute controlled substances on April 19, 2022, and faces a maximum sentence of life imprisonment to be followed by at least five years of supervised release and a $10,000,000 fine;
Rishaun Richardson, 26, of Tifton, pleaded guilty to possession of methamphetamine with intent to distribute on Aug. 23, 2022, and faces a maximum sentence of 20 years of imprisonment to be followed by at least three years of supervised release and a $1,000,000 fine; and
Damarius Williams, 25, of Tifton, pleaded guilty to possession of methamphetamine with intent to distribute on Oct. 18, 2022, and faces a maximum sentence of 20 years of imprisonment to be followed by at least three years of supervised release and a $1,000,000 fine.
According to court documents, GBI agents—working with a confidential informant (CI)—began investigating a Tifton methamphetamine supplier known as “Jay” in May 2019, who was later determined to be Boggerty. Under surveillance, the CI made six controlled buys of methamphetamine between May and Dec. 2019, including purchases at Foster’s residence on Poplar Street and involving other named defendants in this case. A search warrant was executed at Foster’s residence in June 2019, where agents recovered methamphetamine and other controlled substances and drug paraphernalia along with a .40 caliber pistol loaded with 15 rounds of ammunition and a sawed-off 20-gauge shotgun.
Agents made more controlled purchases of methamphetamine from Boggerty after the search, including a purchase with co-defendant Taylor. A search warrant was executed at Boggerty’s residence at 152 Branch Road in Tifton in Dec. 2019; agents found 107 grams of methamphetamine along with digital scales, baggies and other items associated with drug trafficking. In all, Boggerty’s drug trafficking operation is being held responsible for distributing between 1.5 and 4.5 kilograms of methamphetamine in the Tifton community.
This effort is part of an Organized Crime Drug Enforcement Task Force (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 about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The case was investigated by DEA, ATF, GBI, Mid-South Narcotics Task Force, Tifton Police Department, Tift County Sheriff’s Office, Turner County Sheriff’s Office, Crisp County Sheriff’s Office, Georgia Department of Corrections, Georgia State Patrol and Georgia Department of Community Supervision.
The case is being prosecuted by Assistant U.S. Attorney Melody Ellis and Criminal Chief Leah McEwen.
Convicted Murderer Found Guilty of Assaulting Federal Correctional Officers and Possessing A ShankRead the Press Release
Ocala, FL – United States Attorney Roger B. Handberg announces that a federal jury today found Lester Lee Nash (47) guilty of two counts of forcibly assaulting a federal officer causing bodily injury, and one count of possessing a prohibited object (shank) while incarcerated in a federal prison. Nash faces a maximum penalty of 50 years in federal prison. His sentencing hearing is scheduled for May 17, 2023. Nash was indicted on August 31, 2021.
According to testimony and evidence presented at trial, Nash was incarcerated at the Coleman Federal Correctional Complex in Sumter County, serving a life sentence for murder. On June 11, 2021, Nash attacked one of the correctional officers in his cell block, striking him from behind and causing severe injuries. He then charged another nearby correctional officer and struck him repeatedly. After Nash was subdued and searched, prison staff found a shank made from a sharpened toothbrush handle hidden in his underwear.
This case was investigated by the Federal Bureau of Investigation and the Federal Bureau of Prisons. It is being prosecuted by Assistant United States Attorneys William S. Hamilton and Sarah J. Swartzberg.
Chiropractor Sentenced to 30 Months in Prison for Defrauding the NBA Players’ Health and Welfare Benefit Plan of $1,300,000Read the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that PATRICK KHAZIRAN, a/k/a “Dr. Pat,” was sentenced to 30 months in prison for his role in a scheme to defraud the National Basketball Association (“NBA”) Players’ Health and Welfare Benefit Plan (the “Plan”). U.S. District Judge Valerie E. Caproni imposed the sentence.
U.S. Attorney Damian Williams said: “As a medical provider, Patrick Khaziran had a responsibility not to abuse his position of trust. Instead, Khaziran used his role as a licensed chiropractor to generate dozens of fraudulent invoices for at least 22 former NBA players. He did this to enrich himself and his co-conspirators at the expense of the NBA Players’ Health and Welfare Benefit Plan. Today’s sentence sends a clear message that those who engage in health care fraud schemes, particularly medical providers, will face stringent penalties.”
According to the Information, public court filings, and statements made in court:
The Plan is a health care plan providing benefits to eligible active and former players of the NBA. KHAZIRAN is a chiropractor licensed in the State of California who owns and operates a chiropractic and rehabilitation office in Los Angeles, California (“Chiropractic Office-1”). Chiropractic Office-1 serves the general public and also provides rehabilitation services to professional athletes.
From at least in or about 2016, up to and including at least in or about 2019, KHAZIRAN participated in a scheme with several other former NBA players, including Terrence Williams and Keyon Dooling, to defraud the Plan.[1] KHAZIRAN’s role in the scheme was to provide false documentation showing that former NBA players received certain medical services when, in truth and in fact, the medical services were never provided.
KHAZIRAN accomplished his role in the scheme in two ways. First, beginning in 2016, KHAZIRAN created, and caused others to create, fraudulent invoices for former NBA players. The former NBA players that received fraudulent invoices, in turn, submitted the fraudulent invoices to the Plan to request reimbursements to which they were not entitled. Second, KHAZIRAN charged, and caused others to charge, the Plan-issued debit cards of former NBA players. The Plan-issued debit cards were intended to be used by Plan participants to pay for eligible medical services at the point of service. However, KHAZIRAN charged the Plan-issued debit cards of former NBA players for medical services that were never actually provided. In total, KHAZIRAN’s fraudulent invoices and fraudulent debit card charges resulted in approximately $1.3 million in losses to the Plan. In return for his participation in the scheme, KHAZIRAN received approximately 33% of that amount, i.e., approximately $439,000. The remaining fraud proceeds were kept by the former NBA players with whom KHAZIRAN conspired.
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In addition to his prison term, KHAZIRAN, 40, of Los Angeles, California, was ordered to forfeit $439,000 and pay restitution of $1,300,000.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Ryan B. Finkel and Daniel G. Nessim are in charge of the prosecution.
[1] Williams and Dooling have plead guilty and await sentencing.
Costa Rican Men Charged with Smuggling over 4,000 Pounds of MarijuanaRead the Press Release
St. Croix, VI – United States Attorney Delia L. Smith announced today that Luis Orellana-Orellano, 48, and Keyran Coto-Lopez, 27, appeared before U.S. Magistrate Judge Emile Henderson, III, for their initial appearance hearing after being charged with conspiracy to possess with intent to distribute marijuana on board a vessel subject to jurisdiction of the United States.
According to court documents, on November 7, 2022, while conducting routine patrol in international waters in the Eastern Pacific, at approximately 65 nautical miles South of Boca Chica, Panama, the United States Coast Guard Cutter Campbell encountered a go-fast vessel with three individuals on board. The vessel had the name “Agamenon” painted on the hull, but had no physical flag flown, no registration documents nor registration number. Bales of suspected contraband were also visible on the deck of the vessel. The master of the vessel claimed Colombian nationality, but Colombia could not confirm the origin of the vessel. The vessel was therefore treated as one without nationality, subjecting it to the jurisdiction of the United States. Along with Orellana-Orellana and Coto-Lopez, a third individual, Alonso Hernandez-Hernandez, 38, was also charged in the drug smuggling operation. A search of the vessel revealed approximately 57 bales of suspected marijuana weighing 4,104 pounds. Two NIK field tests were conducted on the suspected substance which both yielded positive results for marijuana. If convicted, both face a minimum of 10 years and maximum of life in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
This case is being investigated jointly by U.S. Coast Guard and the Drug Enforcement Administration and Assistant United States Attorney Melissa P. Ortiz is prosecuting the case. 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.
United States Attorney Delia L. Smith reminds the public that a criminal Indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
CEO of Security Company Sentenced to Five Years in Prison for International Boiler Room Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that ROGER RALSTON, the CEO of DirectView Holdings, Inc. (“DirectView”), a Florida-based video surveillance and security company, was sentenced to five years in prison for defrauding elderly victims in connection with an international telemarketing scheme that caused losses of nearly $16 million. RALSTON previously pled guilty before U.S. District Judge Jed S. Rakoff, who imposed the sentence. Co-defendants Christopher Wright and Steven Hooper previously pled guilty and were sentenced to 52 months in prison and 42 months in prison, respectively, for their roles in the fraud.
According to the allegations in the Indictment, court filings, and statements made in Court:
Between approximately 2009 and 2015, RALSTON and other co-conspirators engaged in a scheme to defraud victims in the United Kingdom of nearly $16 million through the sale of false, fraudulent, and materially misleading investments, and to launder the proceeds of the fraud through bank accounts in multiple foreign jurisdictions. RALSTON and his co-conspirators used the services of telemarketing call centers to identify and cold-call potential victims, who were primarily elderly or retired individuals residing in the United Kingdom. Over a series of telephone calls, the telemarketers persuaded victims to invest money under various false and misleading pretenses, including the promise of short-term, high-yield, no-risk returns, when in fact the investments were high-risk, illiquid, and in some instances, entirely fictitious. Many victims were persuaded to make additional investments under the false pretense that they would be permitted to sell their holdings if (and only if) they purchased more. In reliance on the false representations and promises, the victims wired funds to various bank accounts in the United States, including in the Southern District of New York, in the names of corporate entities controlled by RALSTON. RALSTON then mailed and emailed documents related to the fraudulent investments, including purchase contracts and investment certificates, to the victims. Victims who tried to sell their investments found that they were unable to do so. The victims never received a refund on their principal or any return on their investments.
In order to conceal the nature, location, source, ownership, and control of the proceeds of the fraudulent scheme, RALSTON regularly transferred a substantial portion of the fraud proceeds from bank accounts in the United States, including in the Southern District of New York, to overseas bank accounts, including accounts in Cyprus, Switzerland, and the United Kingdom, in the names of various shell companies controlled by RALSTON’s co-conspirators.
The nature of the particular fraudulent investment vehicles being marketed to the victims changed over time. From in or about 2009 until in or about 2011, RALSTON and his co-conspirators sold DirectView stock to the victims based on telemarketers’ false representations and promises that the shares were a no-risk, short-term investment in a debt-free company and that the shares were likely to increase over 100% in value in a short period of time. In contrast to what RALSTON represented to victims, DirectView’s annual report filed with the United States Securities and Exchange Commission for the year ending December 31, 2010, contained dire warnings about the poor fiscal health of DirectView and the risk attendant in purchasing stock, including that the company “may be forced to cease operations” due to losses and cash flow problems, and purchasers “may find it extremely difficult or impossible to resell our shares.”
From in or about 2011 until in or about 2015, RALSTON and his co-conspirators engaged in the sale of fraudulent carbon credits and offsets. The boiler room callers appealed to victims by claiming that the investments would be environmentally friendly and help address the climate crisis. The victims were falsely promised that the carbon-related investments they purchased could be easily sold, carried no risk, and would yield a significant, short-term return. In fact, the carbon credits and offsets that were sold to the victims were fake and did not represent any actual carbon credits or offsets. RALSTON caused fraudulent carbon certificates to be created and sent to the victims.
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In addition to the prison term, RALSTON, 54, of Riviera Beach, Florida, was sentenced to three years of supervised released and ordered to pay restitution in the amount of $15,714,859 and forfeiture in the amount of $15,713,621.20.
Mr. Williams praised the outstanding investigative work of Internal Revenue Service-Criminal Investigation in this case.
This case is being prosecuted by the Office’s Money Laundering and Transnational Criminal Enterprises and Complex Frauds and Cybercrime Units. Assistant U.S. Attorneys Jessica Feinstein, Olga I. Zverovich, and David Felton are in charge of the prosecution.
Boulder Man Sentenced to Prison for Covid FraudRead the Press Release
DENVER – The United States Attorney’s Office for the District of Colorado announces Russell Bryant Lester, age 41, of Boulder, was sentenced to 30 months in prison for taking money from pandemic relief funds by filing false applications. Lester was also ordered to pay restitution in the amount of $584,851.75.
On March 27, 2020, the President of the United States signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which provided emergency assistance, administered by the United States Small Business Administration (SBA), to small business owners affected by the Coronavirus (COVID-19) pandemic. The two primary sources of funding for small businesses were the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program.
On November 15, 2020, Lester pleaded guilty to one count of wire fraud. According to the plea agreement, from March 2020, through August 2020, Lester made false statements to obtain EIDL and PPP loans. During the same period, Lester also made false statements to the Colorado Department of Labor and Employment about not being employed in any capacity in order to collect pandemic unemployment benefits from the state. The SBA funded four EIDLs for a total of $217,400, awarded three grants through the EIDL program totaling $16,000, and funded two PPP applications in an amount totaling $317,975. A third PPP loan application—requesting a loan of $297,200—was not funded. In April 2020, Lester applied for pandemic unemployment benefits from the Colorado Department of Labor and Employment. In his application for unemployment benefits, he stated that he was not currently working or receiving pay as a result of the COVID-19 pandemic, and that he had not received pay since January 15, 2020. Subsequently, between April and October 2020, Lester completed weekly certifications wherein he falsely stated he did not work or receive any money or payments from an employer. As a result of these false certifications, he collected $17,578 in pandemic unemployment benefits from the state of Colorado. Lester knew these certifications to be false: in reality, he received $551,175 in COVID-relief funds in this period, some of which he used to pay himself. Lester spent portions of EIDL and PPP loan proceeds for non-eligible expenses, including paying old debts unrelated to the businesses receiving the loans and extending high-interest loans to other individuals.
Judge Daniel D. Domenico sentenced the defendant on February 7, 2023. He also ordered the defendant to serve a term of three years on supervised release.
“This defendant took funds intended as a lifeline for struggling businesses and used them for his personal piggy bank. In the process, he concocted a whole set of lies and brought others into his crime,” said United States Attorney Cole Finegan. “We thank our partners at the FBI and SBA for their continuing work to hold accountable criminals who try to cheat the system.”
“The amount of pandemic program fraud we have seen is staggering. This was intended to be a financial safety net to help struggling families, support small businesses and keep the economy afloat -- not a way for criminals to fund their lifestyles, like this one who stole hundreds of thousands of dollars,” said FBI Denver Special Agent in Charge Mark Michalek. “FBI Denver will continue to rigorously investigate those who defraud the taxpayer-funded pandemic relief program.”
This case was investigated by the Federal Bureau of Investigations (FBI) Denver Division, with assistance from the Small Business Administration (SBA). The prosecution is being handled by Assistant United States Attorneys Craig Fansler, Sarah Weiss, and Rebecca Weber.
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 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.
CASE NUMBER: 21-cr-00230
Blaine, Washington, auto broker settles allegations it undervalued light trucks from Canada to avoid higher import dutiesRead the Press Release
Seattle – A Blaine, Washington, auto broker and the U.S. Department of Justice have settled litigation alleging the auto broker lied about the value of vehicles it imported, in order to pay significantly less import duties, announced U.S. Attorney Nick Brown. By reporting a lower value for the trucks than what it paid at auction, BidBuy avoided paying significantly higher import duties. BidBuy Auctions, LLC, owned by Whitney McElroy, agrees to pay $430,000 to settle allegations it undervalued light trucks purchased in Canada when importing them into the U.S. for sale.
“This conduct doesn’t just cheat the government out of revenue, it gives the business an advantage not enjoyed by other auto brokers who report their vehicle values honestly,” said U.S. Attorney Nick Brown. “This is an expensive lesson for BidBuy – one that could have been avoided if it followed the rules.”
“U.S. Customs and Border Protection trade specialists at the Automotive and Aerospace Center of Excellence and Expertise worked diligently with CBP’s Office of Chief Counsel and the U.S. Attorney’s Office for the Western District of Washington to identify the loss of revenue to the United States Government associated with the undervaluation of these imported light trucks,” said Director of Field Operations Christopher Perry, who oversees CBP’s Automotive and Aerospace Center, headquartered in Detroit. “The men and women of CBP are committed to facilitating legitimate trade by enforcing the law, which levels the playing field for American businesses and protects our economy,” Director Perry added.
According to the settlement agreement, the discrepancy between what BidBuy paid for vehicles at auction in Canada, and what it reported to U.S. tax authorities, was first brought to the government’s attention by a qui tam lawsuit filed by a former employee.
Under the qui tam statute, the person who brings the fraud to the attention of the government collects a portion of the settlement, in this case 23% of the $430,000.
According to the qui tam litigation, the duties on imported foreign-made light trucks jumped substantially in 2020, when the U.S. exited the North American Free Trade Agreement (NAFTA) and entered into the United States Mexico Canada Agreement (USMCA). Effective July 1, 2020, the duty on such vehicles jumped to 25% of their value at the time of import. In one example cited in the litigation, BidBuy purchased a 2011 Dodge Ram truck at auction in Canada for the equivalent of $22,494 in U.S. dollars but told U.S. Customs and Border Protection (CBP) that the value of the truck was only $9,638. By underreporting the value of the truck, BidBuy saved approximately $3,214 in owed duties. The former employee claimed that more than 80 vehicles were similarly undervalued.
Under the terms of the settlement BidBuy does not admit any wrongdoing. The settlement allows the company to make the payments over a five-year period. The amount of the settlement was determined after an analysis of the company’s ability to pay.
The U.S. Attorney’s Office and the U.S. Customs and Border Protection Automotive and Aerospace Center of Excellence and Expertise jointly investigated the matter. The settlement was negotiated by Assistant United States Attorney Nickolas Bohl.
Black Hawk Man Sentenced to 17 ½ Years in Federal Prison for Sex CrimesRead the Press Release
RAPID CITY - United States Attorney Alison J. Ramsdell announced today that U.S. District Judge Jeffrey L. Viken has sentenced a Black Hawk, South Dakota, man convicted of Attempted Sexual Exploitation of a Minor, Attempted Enticement of a Minor Using the Internet, and Attempted Receipt of Child Pornography. The sentencing took place on February 6, 2023.
Stephen Fontenot, Jr., 40, was sentenced to 17 ½ years in federal prison, followed by five years of supervised release for Attempted Sexual Exploitation of a Minor. Additionally, Fontenot was sentenced to 10 years in federal prison, followed by five years of supervised release, for Attempted Enticement of a Minor Using the Internet, and five years in federal prison, followed by five years of supervised release, for Attempted Receipt of Child Pornography. Fontenot’s sentences will run concurrently. Fontenot was also ordered to pay a $300 special assessment to the Federal Crime Victims Fund and will be required to register as a sex offender under the Sex Offender Registration and Notification Act.
Fontenot was indicted by a federal grand jury in August of 2021. He was found guilty at trial on November 3, 2022.
Fontenot was arrested and federally indicted as a result of an undercover sex trafficking operation conducted during the 2021 Sturgis Motorcycle Rally, targeting internet predators. Following multiple sexually explicit chats and text messages with a person Fontenot believed to be a 12-year-old girl, but who was in fact an undercover agent, Fontenot proceeded to negotiate a time and place he would meet the minor to engage in unlawful sex acts. When Fontenot went to the pre-determined location to meet the minor, he was instead met by law enforcement agents and placed under arrest.
This case was investigated by the South Dakota Division of Criminal Investigation, South Dakota Internet Crimes Against Children Taskforce, Homeland Security Investigations, Rapid City Police Department, and the Pennington County Sheriff’s Office. Assistant U.S. Attorney Sarah B. Collins prosecuted the case.
Fontenot was immediately remanded to the custody of the U.S. Marshals Service.
Bixby Man Pleads Guilty to Fraudulently Acquiring Almost $28,000 Worth of Commercial Products from a California CompanyRead the Press Release
A man who attempted to fraudulently acquire more than $92,000 worth of commercial products from a California-based company pleaded guilty in federal court, announced U.S. Attorney Clint Johnson.
By the time the fraudulent activity was discovered, the defendant had obtained products valued at $27,991.01 without paying for them.
On Tuesday, Wayne Allen Baker, 53, of Bixby, pleaded guilty to wire fraud.
According to court documents, Baker admitted that he devised and carried out a scheme to defraud the national commercial products distributor, which sells plumbing supplies, waterworks and fire and fabrication products.
As part of his scheme, Baker told the company that he was acting on behalf of a corporation based out of Dallas, abbreviated in court documents as EMI. Baker altered EMI’s name by inserting a hyphen, thus making it appear legitimate. Baker then set up online accounts with the California company where he falsely represented that he was acting on behalf of EMI as their chief executive officer. Using the fraudulently created EMI accounts, Baker ordered products from the California company worth a total of $92,098.25 and directed the goods to be delivered to his residence in Bixby and to a separate location in Tulsa. Between April 14 and April 28, 2020, Baker submitted approximately 59 internet orders for the equipment items. Baker initially made the orders appear legitimate, in part, by making bogus partial online payments to the company. Ultimately, Baker only received a portion of the products that he fraudulently ordered.
The FBI, U.S. Secret Service, and Bixby Police Department conducted the investigation. Assistant U.S. Attorney Richard M. Cella is prosecuting the case.
Birmingham Man Sentenced to More than Twelve Years in Prison for Robbery and Gun ChargesRead the Press Release
BIRMINGHAM, Ala. – Today, a federal judge sentenced a Birmingham man for robbery and gun charges, announced U.S. Attorney Prim F. Escalona and Federal Bureau of Investigation Special Agent in Charge Carlton L. Peeples.
U.S. District Court Judge Anna Manasco sentenced Henry Sirnard Russell, 43, to 155 months in prison for interference with commerce by robbery, being a felon in possession of a firearm and brandishing a firearm during and in relation to a crime of violence. Russell pleaded guilty in July 2022.
According to the Plea Agreement, on October 12, 2021, Hoover Police responded to the Chevron convenience store in Hoover. The clerk of the store reported an armed male stole an undisclosed amount of money. The clerk saw the suspect leave in a grey SUV, and the police issued a BOLO to surrounding agencies. Vestavia Hills officers saw a vehicle matching the BOLO and conducted a traffic stop on the vehicle. Henry Sirnard Russell was the sole occupant of the vehicle and appeared very nervous and was shaking. Russell was asked to exit his vehicle, but he refused and drove away. A short pursuit ensued, and Russell stopped his vehicle and fled on foot. Various law enforcement agencies arrived on scene, set up a perimeter, used a drone, a K-9, and a helicopter to assist in locating Russell. The search continued throughout the night until a Hoover Police Officer notified dispatch that he observed Russell on the northbound side of I-65 toward Hoover from Homewood. Officers immediately converged on the area and Russell fled into the wood line where he was arrested.
Russell has prior felony convictions for Domestic Violence, Assault (Second Degree), and Robbery (First and Second Degree).
FBI investigated the case along with the Jefferson County Sheriff’s Office, Homewood Police Department, Hoover Police Department, and the Vestavia Hills Police Department. Assistant United States Attorney Darius Greene prosecuted the case.
Billings felon admits illegal possession of firearmRead the Press Release
BILLINGS — A Billings felon who was arrested by Billings police officers while searching for two escaped jail inmates admitted today to illegally possessing a firearm, U.S. Attorney Jesse Laslovich said.
Jeffrey Wayne Follet, 34, pleaded guilty to prohibited person in possession of a firearm as charged in an indictment. Follett faces a maximum of 15 years in prison, a $250,000 fine and at least three years of supervised release
U.S. Magistrate Judge Timothy J. Cavan presided. A sentencing date will be set before U.S. District Judge Susan P. Watters. The court will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Follett was detained pending further proceedings.
The government alleged in court documents that on Sept. 12, 2022, Billings Police Department officers were looking for two escaped inmates from the Yellowstone County Detention Facility and received information that the inmates were hiding at an apartment building on South 27th Street. A passenger car approached the east side of the apartment complex, and four persons left the apartment and got into the car. Two of the persons matched the description of the escapees. Police attempted a traffic stop on the car, but it fled. Officers performed a maneuver in which they pinned the car near an intersection. Follet was in the rear passenger side of the car and got out holding a pistol. Officers ordered Follet to drop the gun. Officers saw Follet drop the gun behind his back and run north on the sidewalk. Officers chased and arrested Follet. Follet was on Montana state supervision for a felony conviction and was prohibited from possessing firearms. The firearm was a loaded, 9mm pistol.
Assistant U.S. Attorney Thomas K. Godfrey is prosecuting the case, which was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and Billings 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. 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.
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Berks County Man Convicted for Conspiring to Distribute Controlled Substances Resulting in Death and Serious Bodily InjuryRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Miguel Eduardo Rosario, a/k/a “Deuce,” age 36, of Reading, Pennsylvania, was convicted on February 2, 2023, for conspiracy to distribute controlled substances resulting in death and serious bodily injury following a 7-day trial before United States District Court Judge Robert D. Mariani.
According to United States Attorney Gerard M. Karam, Rosario was a large-scale drug dealer operating out of Reading. While on state parole for a prior drug conviction, Rosario continued to sell fentanyl, heroin, cocaine, methamphetamine, oxycodone, and Xanax in the Berks and Schuylkill County areas between January 2017 and November 2019. Rosario was found guilty on all counts of the indictment, including counts relating to an individual who first overdosed from heroin and fentanyl distributed to him by Rosario, and then suffered death approximately six months later from heroin and fentanyl again distributed to him by Rosario. Rosario was also convicted of firearm charges related to his distribution of methamphetamine in exchange for firearms.
During the seven-day trial, prosecutors from the U.S. Attorney’s Office presented the testimony from approximately 35 witnesses, including expert witness testimony from a forensic pathologist, multiple forensic toxicologists, a medical toxicologist, and a forensic cell phone examiner.
The charges stem from a joint investigation involving the Federal Bureau of Investigation (FBI) in Scranton, the Pennsylvania State Police, the West Reading Police Department, and the Monroe County District Attorney’s Office. The case was prosecuted by Assistant United States Attorneys Michelle Olshefski and Brian Gallagher.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin and fentanyl. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
This case is also 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.
In this case, the maximum penalty under the federal statute for drug distribution resulting in death is life imprisonment. 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.
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Associate of Sanctioned Oligarch Indicted for Sanctions Evasion and Money LaunderingRead the Press Release
A federal court in New York unsealed an indictment today charging a citizen of the Russian Federation and legal permanent resident of the United States with participating in a scheme to make over $4 million in U.S. dollar payments to maintain four real properties in the United States that were owned by Viktor Vekselberg, a sanctioned oligarch, as well as to attempt to sell two of those properties.
According to court documents, Vladimir Voronchenko, aka Vladimir Vorontchenko, 70, of Moscow, Russia; New York, New York; Southampton, New York; and Fisher Island, Florida, is additionally charged with contempt of court in connection with his flight from the United States following receipt of a grand jury subpoena requiring his personal appearance and testimony.
According to allegations in the indictment, Voronchenko, who resided at various times in New York, Florida, and Russia, held himself out as a successful businessman, art collector, and art dealer, and as a close friend and business associate of Vekselberg.
On April 6, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Viktor Vekselberg as a Specially Designated National (SDN) in connection with its finding that the actions of the Government of the Russian Federation in Ukraine constituted an unusual and extraordinary threat to the national security and foreign policy of the United States. On or about March 11, 2022, OFAC redesignated Vekselberg as an SDN and blocked Vekselberg’s yacht and private airplane.
Prior to his designation by OFAC, between in or about 2008 and in or about 2017, Vekselberg, through a series of shell companies, acquired real properties in the United States, specifically, (a) an apartment on Park Avenue in New York, New York, (b) an estate in Southampton, New York, (c) an apartment on Fisher Island, Florida, and (d) a penthouse apartment also on Fisher Island, Florida (collectively, the Properties). As of the date of the indictment, the Properties were worth approximately $75 million.
Voronchenko retained an attorney (the Attorney), who practiced in New York, New York, in connection with the acquisition of the Properties. The Attorney also managed the finances of the Properties, including by paying common charges, property taxes, insurance premiums, and other fees associated with the Properties in U.S. dollar transactions from the Attorney’s interest on lawyer’s trust account (IOLTA account).
Prior to Vekselberg’s designation as an SDN, between approximately February 2009 and March 2018, shell companies owned by Vekselberg sent approximately 90 wire transfers totaling approximately $18.5 million to the IOLTA account. At the direction of Voronchenko and his family member who lived in Russia, the Attorney used these funds to make various U.S. dollar payments to maintain and service the Properties.
Immediately after Vekselberg’s designation as an SDN, the source of the funds used to maintain and service the Properties changed. The IOLTA Account began to receive wires from a bank account in the Bahamas held in the name of a shell company controlled by Voronchenko, “Smile Holding Ltd.,” and from a Russian bank account held in the name of a Russian national who was related to Voronchenko. Between approximately June 2018 and March 2022, approximately 25 wire transfers totaling approximately $4 million were sent to the IOLTA account. Although the source of the payments changed, the management of the payments remained the same as before: Voronchenko and his family member directed the Attorney to use these funds to make various U.S. dollar payments to maintain and service the Properties. Additionally, after Vekselberg was sanctioned in 2018, Voronchenko and others tried to sell both the Park Avenue apartment and Southampton estate. No licenses from OFAC were applied for or issued for these payments or attempted transfers.
On or about May 13, 2022, federal agents served Voronchenko on Fisher Island with a Grand Jury subpoena, which called for his personal appearance for testimony and his production of documents. Approximately nine days later, on or about May 22, 2022, Voronchenko took a flight from Miami, Florida to Dubai, United Arab Emirates, and then went to Moscow, Russia. Voronchenko failed to appear before the grand jury and has not returned to the United States.
Voronchenko charged with conspiring to violate and evade U.S. sanctions, in violation of the International Emergency Economic Powers Act (IEEPA); violating IEEPA; conspiring to commit international money laundering; and international money laundering, each of which carries a maximum sentence of 20 years in prison. Voronchenko was also charge with contempt of court, which carries a maximum sentence within the discretion of the court. The indictment also provides notice of the United States’ intention to forfeit from Voronchenko the proceeds of his offenses, including the Properties.
U.S. Attorney Damian Williams for the Southern District of New York, Task Force KleptoCapture Director Andrew C. Adams, Special Agent in Charge Ivan J. Arvelo of Homeland Security Investigations (HSI) New York Field Office, and Acting Special Agent in Charge Maged Behnam of the FBI Miami Field Office made the announcement.
The FBI and HSI are investigating the case with valuable assistance provided by the Justice Department’s National Security Division and Office of International Affairs, and OFAC.
Assistant U.S. Attorneys Jessica Greenwood, Joshua A. Naftalis, and Sheb Swett for the Southern District of New York are prosecuting the case.
This case was coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls and economic countermeasures that the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2, 2022 and under the leadership of the Office of the Deputy Attorney General, the task force will continue to leverage all of the department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Associate of Sanctioned Oligarch Indicted for Sanctions Evasion and Money LaunderingRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Andrew C. Adams, the Director of Task Force KleptoCapture, Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Maged Behnam, Acting Special Agent in Charge of the Miami Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging VLADIMIR VORONCHENKO, a/k/a “Vladimir Vorontchenko,” a citizen of the Russian Federation and legal permanent resident of the United States, with participating in a scheme to make over $4 million in U.S. dollar payments to maintain four real properties in the United States that were owned by Viktor Vekselberg, a sanctioned oligarch, as well as to attempt to sell two of those properties. The Indictment also charged VORONCHENKO with contempt of court in connection with his flight from the United States following receipt of a Grand Jury subpoena requiring his personal appearance and testimony.
U.S. Attorney Damian Williams said: “The indictment unsealed today signals the United States’ continued commitment to holding individuals who violate sanctions to account. Vladimir Voronchenko and others illegally funneled millions of dollars into the United States to maintain luxury U.S. residences owned by Russian oligarch Viktor Vekselberg. With these charges, the United States sends a strong message that it will continue to vigorously enforce economic sanctions, including those imposed in response to Russia’s illegal and unjustified aggression in Ukraine.”
Director of Task Force KleptoCapture Andrew C. Adams said: “Shell companies, strawmen, and professional money launderers did not shield Voronchenko or the illicit transactions charged today from the investigative persistence of HSI, FBI, and the attorneys of the Southern District of New York. Today’s indictment is yet another reminder of the priority that the Department of Justice places on uncovering the proceeds of kleptocracy and sanctions evasion and on prosecuting those who would take a paycheck in exchange for facilitating money laundering and sanctions evasion.”
HSI Special Agent in Charge Ivan J. Arvelo said: “Russian illicit finance is a threat to U.S. national and homeland security, one that expands fissures of vulnerability in our financial system. With the advent of the Ukrainian invasion, such global threats were made increasingly more domestic, as Putin’s enablers were revealed to have sequestered billions in illicit wealth in U.S. based real property and luxury assets. HSI will not allow the American financial system to unknowingly facilitate dark money transfers, and today we have charged another oligarch facilitator for his alleged actions in support of the corrupt regime.”
According to the allegations in the Indictment unsealed in Manhattan federal court today:[1]
VORONCHENKO, who resided at various times in New York, New York, Southampton, New York, Fisher Island, Florida, and Russia, held himself out as a successful businessman, art collector, and art dealer, and as a close friend and business associate of Viktor Vekselberg.
On April 6, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated Vekselberg as a Specially Designated National (“SDN”) in connection with its finding that the actions of the Government of the Russian Federation in Ukraine constituted an unusual and extraordinary threat to the national security and foreign policy of the United States. On or about March 11, 2022, OFAC redesignated Vekselberg as an SDN and blocked Vekselberg’s yacht and private airplane.
Prior to his designation by OFAC, between in or about 2008 and in or about 2017, Vekselberg, through a series of shell companies, acquired real properties in the United States, specifically, (i) an apartment on Park Avenue in New York, New York, (ii) an estate in Southampton, New York, (iii) an apartment on Fisher Island, Florida, and (iv) a penthouse apartment also on Fisher Island, Florida (collectively, “the Properties”). As of the date of this Indictment, the Properties were worth approximately $75 million.
VORONCHENKO retained an attorney (the “Attorney”), who practiced in New York, New York, in connection with the acquisition of the Properties. The Attorney also managed the finances of the Properties, including by paying common charges, property taxes, insurance premiums, and other fees associated with the Properties in U.S. dollar transactions from the Attorney’s interest on lawyer’s trust account (“IOLTA account”).
Prior to Vekselberg’s designation as an SDN, between approximately February 2009 and March 2018, shell companies owned by Vekselberg sent approximately 90 wire transfers totaling approximately $18.5 million to the IOLTA account. At the direction of VORONCHENKO and his family member who lived in Russia, the Attorney used these funds to make various U.S. dollar payments to maintain and service the Properties.
Immediately after Vekselberg’s designation as an SDN, the source of the funds used to maintain and service the Properties changed. The IOLTA Account began to receive wires from a bank account in the Bahamas held in the name of a shell company controlled by VOROCHENKO, “Smile Holding Ltd.,” and from a Russian bank account held in the name of a Russian national who was related to VORONCHENKO. Between approximately June 2018 and March 2022, approximately 25 wire transfers totaling approximately $4 million were sent to the IOLTA account. Although the source of the payments changed, the management of the payments remained the same as before: VORONCHENKO and his family member directed the Attorney to use these funds to make various U.S. dollar payments to maintain and service the Properties. Additionally, after Vekselberg was sanctioned in 2018, VORONCHENKO and others tried to sell both the Park Avenue apartment and the Southampton estate. No licenses from OFAC were applied for or issued for these payments or attempted transfers.
On or about May 13, 2022, federal agents served VORONCHENKO on Fisher Island with a Grand Jury subpoena, which called for his personal appearance for testimony and his production of documents. Approximately nine days later, on or about May 22, 2022, VORONCHENKO took a flight from Miami, Florida, to Dubai, United Arab Emirates, and then went to Moscow, Russia. VORONCHENKO failed to appear before the Grand Jury and has not returned to the United States.
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VORONCHENKO, 70, of Moscow, Russia, New York, New York, Southampton, New York, and Fisher Island, Florida, was charged with conspiring to violate and evade U.S. sanctions, in violation of the International Emergency Economic Powers Act (“IEEPA”); violating the IEEPA; conspiring to commit international money laundering; and international money laundering, each of which carries a maximum sentence of 20 years in prison. VORONCHENKO was also charged with contempt of court, which carries a maximum sentence within the discretion of the Court. The Indictment also provides notice of the United States’ intention to forfeit from VORONCHENKO the proceeds of his offenses, including the Properties.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the outstanding work of HSI and FBI. Mr. Williams further thanked the Department of Justice’s National Security Division and Office of International Affairs and OFAC for their assistance and cooperation in this investigation.
On March 2, 2022, the Attorney General announced the launch of Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions, and economic countermeasures that the United States has imposed, along with allies and partners, in response to Russia’s unprovoked military invasion of Ukraine. The Task Force will leverage all the Department’s tools and authorities against efforts to evade or undermine the economic actions taken by the U.S. government in response to Russian military aggression.
This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorneys Jessica Greenwood, Joshua A. Naftalis, and Sheb Swett are in charge of the prosecution.
The allegations in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
American Citizen Convicted of Providing Material Support to ISIS that Resulted in DeathRead the Press Release
Today, a federal jury in Brooklyn convicted Ruslan Maratovich Asainov, a U.S. citizen and former resident of Bay Ridge, New York, of all five counts of an indictment charging him with conspiracy to provide material support to ISIS; providing material support to ISIS in the form of personnel, training, expert advice and assistance; receipt of military-type training from ISIS; and obstruction of justice. The jury also found that the defendant’s provision of material support to ISIS resulted in the death of one or more persons. The verdict followed a two-week trial before United States District Judge Nicholas G. Garaufis. When sentenced, Asainov faces up to life in prison.
Breon Peace, United States Attorney for the Eastern District of New York; Matthew G. Olsen, Assistant Attorney General for the Justice Department’s National Security Division; Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Keechant L. Sewell, Commissioner, New York City Police Department (NYPD), announced the verdict.
“As proven at trial, Asainov was a member of ISIS, a violent foreign terrorist organization, which has committed numerous acts resulting in the deaths of many U.S. citizens and others,” stated United States Attorney Peace. “The defendant committed to the terrorist organization’s evil cause and made an extraordinary journey to the battlefield in Syria, where he became a lethal sniper for ISIS and trained many other ISIS members to kill. Even after being captured, he still pledged his allegiance to ISIS. Today’s verdict in an American courtroom is a victory for our system of justice, and against ISIS and those like the defendant who are committed to murdering innocent people here in the United States and abroad.”
“With today’s guilty verdict, Asainov now faces the possibility of spending the rest of his life in prison for providing material support to ISIS which resulted in death. Combatting terrorism worldwide remains the FBI’s top priority, and the dedicated personnel assigned to our New York Joint Terrorism Task force will continue to work tirelessly to bring to justice all those who seek to commit acts of terror against the United States and our citizens,” stated FBI Assistant Director-in-Charge Driscoll.
“Asainov is a naturalized U.S. citizen who forsook the country that took him in – as well as his family in New York City – to instead pledge allegiance to ISIS and actively promote that terrorist group’s violent objectives,” stated NYPD Commissioner Keechant L. Sewell. “Today’s verdict serves as a warning to anyone who intends to support or conduct attacks on behalf of such a despicable organization: You will be brought to justice. The threat of ISIS-inspired murder and chaos remains very real, however, and the members of our FBI-NYPD Joint Terrorism Task Force – in close partnership with our law enforcement colleagues across the globe – will never cease working to identify those who so clearly consider our country their sworn enemy.”
As proven at trial, between December 2013 and March 2019, Asainov provided and conspired to provide material support and resources in the form of personnel, including himself, training, and expert advice and assistance, to a foreign terrorist organization, namely ISIS, knowing that ISIS was a designated foreign terrorist organization that had engaged in terrorist activity and terrorism. Asainov also received military-type training from ISIS, in violation of federal law.
Asainov converted to Islam in 2009 and subsequently became increasingly interested in Islamic extremism. By the fall of 2013, he was consuming radical Islamic content online. He abruptly dropped out of classes at the Borough of Manhattan Community College in September 2013, and began preparing to travel to Syria to wage violent jihad.
On December 24, 2013, Asainov abandoned his wife and daughter in Brooklyn, and traveled on a one-way ticket from New York to Istanbul, Turkey, to obtain entry into Syria.
Over the course of approximately five years fighting on behalf of ISIS, Asainov fought in numerous battles against ISIS enemies, including engagements at Kobani; Tabqa; Raqqa; Dayr Az Zawr; and ISIS’s last stand in Syria at Baghouz, in March 2019. Asainov received training in how to use automatic rifles, machine guns and rocket-propelled grenades. In Tabqa, in mid-2014, he volunteered to train as a sniper. Over time, Asainov became a sniper trainer or “emir” on behalf of ISIS, estimating that he taught nearly 100 students. A former U.S. Navy SEAL scout sniper testified that the defendant’s sniper training course was consistent with what the former SEAL would expect to be taught in a sniper training program.
From Syria, the defendant attempted to recruit another individual to travel from the United States to Syria to fight for ISIS, and sought to obtain funds to purchase a scope for his rifle from the same person. The defendant also told his estranged wife that he was fighting on behalf of ISIS, described by him in a recorded January 2015 voicemail as “the most atrocious terrorist organization in the world that ever existed.” Asainov’s wife testified that he sent her a photograph of three dead fighters, one of whom was wearing a patch that stated, “Islamic State of Iraq and al-Sham,” i.e., ISIS, in Arabic script.
Asainov was captured in Syria after ISIS’s last stand at Baghouz, near the Syria-Iraq border. Just before his capture, Asainov discarded his rifle and destroyed his cell phone.
Asainov admitted to agents from the FBI’s Joint Terrorism Task Force that he had fought in numerous battles on behalf of ISIS as a warrior and sniper, serving in several different katibas or ISIS fighting brigades. In recorded phone calls to his mother from facilities operated by the Bureau of Prisons, the defendant told her that he was carrying out Allah’s orders when he waged jihad and killed for ISIS, that he intended to return to waging jihad if released, and that he would fight until he “meet[s] Allah,” i.e., until his death. In September 2020, staff at a BOP facility confiscated a makeshift ISIS flag affixed to Asainov’s cell wall. The defendant had filled in an 8.5” x 11” sheet of paper with black ink and Arabic writing in the design of the ISIS flag.
The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Douglas M. Pravda, J. Matthew Haggans, Nicholas J. Moscow, and Nina C. Gupta are in charge of the prosecution, with assistance provided by Assistant United States Attorney Saritha Komatireddy, Trial Attorney Jenny Levy of the Counterterrorism Section of the National Security Division of the Department of Justice and Paralegal Specialists Wayne Colon and Mary Clare McMahon.
The Justice Department’s Office of International Affairs, the FBI’s Legal Attachés abroad, and foreign authorities in multiple countries on multiple continents provided critical assistance in this case. The Bosnian and Herzegovinian authorities, and the FBI Legal Attaché Office in Sarajevo provided extraordinary assistance in the investigation and prosecution. The Ministry of Justice for the Republic of Finland, the Stuttgart Police Department and Federal Office of Justice in the Federal Republic of Germany, the Department of Justice & Constitutional Development in the Republic of South Africa, and the Prosecutor General’s Office in Ukraine, and the FBI’s Legal Attaché Offices in or responsible for those countries provided valuable assistance in the investigation.
The Defendant:
RUSLAN MARATOVICH ASAINOV (also known as “Suleiman Al-Amriki” and “Suleiman Al-Kazakhi)
Age: 46
Syria and Bay Ridge, BrooklynE.D.N.Y. Docket No. 19-CR-402 (NGG)
Monday 6 February 2023
“Shots Fired” Calls Result in Oklahoma City Man Sentenced to Serve 18 Years in Federal PrisonRead the Press Release
OKLAHOMA CITY – Last week, DARVIS DEAN ARNETT, JR., 25, of Oklahoma City, was sentenced to serve 216 months in federal prison for being a convicted felon in illegal possession of firearms, announced United States Attorney Robert J. Troester.
On December 14, 2021, a federal grand jury returned a one-count indictment against Arnett charging him with being a prior convicted felon illegally in possession of a firearm. On February 15, 2022, a federal grand jury returned a superseding indictment charging Arnett with three counts of being a felon in possession of a firearm. On April 8, 2022, Arnett pleaded guilty to the three-count superseding indictment.
Public records reflect that on March 14, 2021, the Oklahoma City Police Department (OCPD) responded to a shots-fired call at a Hampton Inn. During a verbal altercation between Arnett, his two female accomplices, and unknown individuals, Arnett retrieved a handgun from a vehicle, fired one round into the air and two more rounds toward the male with whom he was fighting. Arnett was arrested during a traffic stop a short while later along with his two female accomplices. The firearm was discovered in the trunk of the vehicle.
Additionally, on May 3, 2021, the Edmond Police Department responded to a shots-fired call in a residential neighborhood. Arnett was seen on surveillance video firing more than 30 rounds of ammunition from a firearm fitted with a high-capacity drum magazine. Pursuant to a search warrant, police located the gun in a clothes hamper in Arnett’s parent’s bedroom.
Lastly, on November 11, 2021, Arnett’s ex-girlfriend came home and discovered her front door had been kicked in. Soon after she called 911 to report the burglary, Arnett showed up and tried to force his way into her apartment. She and one of her female friends were able to hold the door shut and she again called 911. When he could not get into the apartment, Arnett went to the parking lot where he fired the gun three times into the air. OCPD officers responding to this call heard three gunshots from the area of the apartment complex. Arnett was later arrested at his parent’s home in Edmond. Prior to Arnett’s arrest, his father gave police the firearm Arnett had hidden in the attic.
Federal law prohibits prior convicted felons from possessing firearms or ammunition. Prior to his arrest, Arnett had been convicted of at least three felonies out of Oklahoma County, including instances of robbery with a firearm and burglary in the first degree in CF-2015-2755, CF-2015-5969, and CF-2015-8233.
On Monday, January 30, 2023, U.S. District Judge Stephen P. Friot sentenced Arnett to serve a total of 216 months in federal prison, followed by three years of supervised release. In announcing the sentence, Judge Friot noted the nature and circumstances of the offense, including Arnett’s criminal history.
This case is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms & Explosives, the Oklahoma City Police Department, and the Edmond Police Department, with assistance from the Oklahoma County District Attorney’s Office. Prosecuted by Assistant U.S. Attorney David R. Nichols, Jr., the case is part of Project Safe Neighborhoods, a Department of Justice program to reduce violent crime. In October 2017, the Department announced the reinvigoration of Project Safe Neighborhoods and directed U.S. Attorney’s Offices to develop crime-reduction strategies that incorporate lessons federal law enforcement has learned since the program’s launch in 2001.
This case is also part of "Operation 922" and "Operation Shots Fired." "Operation 922" is the Western District of Oklahoma’s implementation of Project Safe Neighborhoods, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. "Operation 922" prioritizes prosecution of federal crimes connected to domestic violence. "Operation Shots Fired" targets cases involving individuals who discharge firearms as part of their criminal activity, such as drive-by shootings or when shots are fired during robberies, domestic disputes, or other incidents. For more information about Project Safe Neighborhoods, please visit https://justice.gov/psn and https://justice.gov/usao-wdok.
Reference is made to court filings for further information.
Yuba County Man Pleads Guilty to Possessing a Firearm in Furtherance of Opioid TraffickingRead the Press Release
SACRAMENTO, Calif. — Rick Glenn Vardell, 60, of Olivehurst, pleaded guilty today to possession of a firearm in furtherance of a drug trafficking offense, U.S. Attorney Phillip A. Talbert announced.
According to court documents, on three occasions in 2018, Vardell sold a total of 1,989 Vicodin pharmaceutical pills containing hydrocodone to a confidential source. When law enforcement officers searched Vardell’s residence, they found a hidden safe containing an additional 1,000 hydrocodone pills for sale and $98,0000 in cash. Under the pillow on the bed by the safe was a loaded Smith and Wesson handgun.
This case is the product of an investigation by the Drug Enforcement Administration. Assistant U.S. Attorney Cameron L. Desmond is prosecuting the case.
Vardell is scheduled to be sentenced by U.S. District Judge Kimberly J. Mueller on April 24, 2023. Vardell faces a mandatory minimum of five years in prison and up to life in prison and a fine of $250,000. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Wentworth Man Sentenced for Receipt and Distribution of Child PornographyRead the Press Release
SIOUX FALLS - United States Attorney Alison J. Ramsdell announced today that U.S. District Judge Karen E. Schreier has sentenced a Wentworth, South Dakota, man convicted of Receipt and Distribution of Child Pornography. The sentencing took place on February 3, 2023.
Jordan Charles Opdahl, age 30, was sentenced to 12.5 years in federal prison, five years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $5,100.
Opdahl was indicted by a federal grand jury in November of 2021. He pleaded guilty on November 14, 2022.
The conviction stemmed from an incident on October 20, 2020, when Opdahl used his Kik account to access and receive file containing child pornography from other Kik users. Opdahl downloaded the files containing child pornography from the internet and other Kik users to his cellular phone. Opdahl also distributed the files depicting child pornography to other Kik users.
This case was investigated by the South Dakota Division of Criminal Investigation Internet Crimes Against Children Task Force and Homeland Security Investigations. Assistant U.S. Attorney Jeffrey C. Clapper prosecuted the case.
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 the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
Opdahl was immediately remanded to the custody of the U.S. Marshals Service.
Waterbury Man Sentenced to 4 Years in Federal Prison for Gun OffenseRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, announced that DOUGLAS LARA, also known as “Spaz,” 25, of Waterbury, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 48 months of imprisonment, followed by three years of supervised release, for illegally possessing a firearm.
According to court documents and statements made in court, this matter stems from an ongoing investigation into gangs, drug trafficking and the illegal possession of firearms in Waterbury. On May 6, 2021, Mashantucket Pequot Tribal Police attempted to apprehend Lara after he had driven a stolen 2021 Mercedes Benz SUV to a garage at the Foxwoods Resort Casino. As Lara ran from police, he discarded a loaded 9mm handgun with an obliterated serial number, keys to the stolen SUV, and a backpack that contained 9mm ammunition. Officers arrested Lara and subsequently seized the items he discarded.
Lara’s criminal history includes felony state convictions, including multiple larceny convictions related to the theft of vehicles, and a conviction related to a shooting incident. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
Lara has been detained since his arrest. On October 27, 2022, he pleaded guilty to unlawful possession of a firearm by a felon.
This investigation is being conducted by the Federal Bureau of Investigation’s Northern Connecticut Gang Task Force; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Connecticut State Police; the Mashantucket Pequot Tribal Police; the Waterbury Police Department; the Wolcott Police Department; and the Connecticut Department of Correction. The case is being prosecuted by Assistant U.S. Attorneys Natasha M. Freismuth and John T. Pierpont, Jr.
U.S. Attorney Avery thanked the State’s Attorney’s Office for the Judicial District of Waterbury for its close cooperation in investigating and prosecuting this matter.
The prosecution 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 Justice 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.
Wanblee Woman Sentenced for False StatementsRead the Press Release
RAPID CITY - United States Attorney Alison J. Ramsdell announced today that U.S. District Judge Jeffrey L. Viken has sentenced a Wanblee, South Dakota, woman convicted of False Statements. The sentencing took place on January 30, 2023.
Talana Francine Standing Bear, a/k/a Talana Francine Sitting Up, 40, was sentenced to time already served, 2 years of supervised release, ordered to pay a $100 special assessment to the Federal Crime Victims Fund, and $14,241.65 in restitution.
Standing Bear was indicted for False Statements by a federal grand jury in February of 2021. She pleaded guilty on July 20, 2022.
The charge related to Standing Bear making materially false statements on documentation relating to her minor child’s Social Security disability income. Standing Bear received $13,695.65 in Title XVI Supplemental Security Income and $546 under the Supplemental Nutrition Assistance Program because of these false statements and put those funds to use for her own benefit, rather than her minor child’s benefit.
This case was investigated by the Office of the Inspector General – Social Security Administration. Assistant U.S. Attorney Heather Sazama prosecuted the case.
U.S. Attorney Thompson to Honor Summersville Police Officers for Life-Saving ActionsRead the Press Release
CHARLESTON, W.Va. – United States Attorney Will Thompson will hold an event on Monday, February 6, 2023, at 2 p.m. to honor officers from the Summersville Police Department who saved the life of a suspect after he ingested fentanyl.
WHAT: Recognition of Summersville Police Officers
WHEN: Monday, February 6, 2023, at 2 p.m.
WHERE: Robert C. Byrd United States Courthouse, 300 Virginia Street East, Charleston
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia.
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Two Anchorage Women Indicted for Stealing Identities from over 200 Alaskans and Defrauding Elderly Victims and Habitat for HumanityRead the Press Release
ANCHORAGE – The Department of Justice on Friday unsealed a January indictment charging two Anchorage women with conspiracy, fraud, aggravated identity theft, and money laundering for perpetrating a lengthy scheme to steal identities and defraud elderly victims and Habitat for Humanity.
According to court documents, Valerie Calip and Jennifer Haydu are accused of defrauding banks and individuals in Alaska, obtaining at least $150,000 through their illegal scheme. The pair stole mail, checkbooks, and identity documents from victims and used the information to create false identification documents. They signed up for credit cards and bank accounts under the victims' names and intercepted their mail, using the fake ID to access their bank accounts. Calip and Haydu also used cash transfer apps to conceal the source of the stolen funds by transferring money to third-party accounts.
Calip and Haydu stole more than 200 identity documents and thousands of dollars from victims, including over $100,000 from an elderly victim with dementia and thousands from a Habitat for Humanity bank account.
If convicted, each defendant faces a maximum penalty of 30 years in prison on the most serious indictment counts and a mandatory sentence of two years in prison for each count of aggravated identity theft. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The United States Postal Inspection Service is investigating this case and has received invaluable assistance from the Anchorage Police Department.
Assistant U.S. Attorney Ryan Tansey for the District of Alaska is prosecuting the case.
Anyone who believes they may be a victim of this scheme and entitled to restitution may contact the United States Attorney’s Office at 907-271-3661.
The Justice Department has established a National Elder Fraud Hotline to provide services to seniors who may be victims of financial fraud. The Hotline is staffed by experienced case managers who can provide personalized support to callers. Case managers assist callers with reporting the suspected fraud to relevant agencies and by providing resources and referrals to other appropriate services as needed. When applicable, case managers will complete a complaint form with the Federal Bureau of Investigation Internet Crime Complaint Center (IC3) for Internet-facilitated crimes and submit a consumer complaint to the Federal Trade Commission on behalf of the caller. The Hotline’s toll-free number is 833-FRAUD-11 (833-372-8311).
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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usao/ak/23-05Tucson Man Sentenced to 60 Months for Possession of a Firearm During a Drug Trafficking OffenseRead the Press Release
TUCSON, Ariz. – Ramon Otero Jr., 39, of Tucson, was sentenced on January 27, 2023, by United States District Judge Jennifer G. Zipps to 60 months in prison. Otero Jr. pleaded guilty to Possession of a Firearm in Furtherance of a Drug Trafficking Offense.
In April 2021, Otero Jr. was stopped by federal agents at an immigration checkpoint in Arizona. At the time of the stop, Otero Jr. was in possession of fentanyl and two loaded firearms. He told agents that he intended to distribute the fentanyl to another individual and that the firearms were for his protection in furtherance of his drug trafficking activities.
The investigation in this case was conducted by the Organized Crime and Drug Enforcement Task Force (OCDETF), which is comprised of agents and investigators from the Drug Enforcement Administration, Homeland Security Investigations, and the FBI. Assistant U.S. Attorneys Ashley Culver and David Petermann, District of Arizona, Tucson, handled the prosecution.
CASE NUMBER: CR-21-2360-JGZ-BGM
RELEASE NUMBER: 2023-012_Otero Jr.# # #
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.
Toledo Man Sentenced to More Than 16 Years in Prison for Armed Bank Robbery, Carjacking, and EscapeRead the Press Release
TOLEDO – Don Woodson Ellis, 32, of Toledo, Ohio, was sentenced to more than 16 years in prison – or 201 months – by U.S. District Judge Jeffrey J. Helmick on Thursday, Feb. 2, 2023, after he pleaded guilty to using a firearm to steal a vehicle, rob a bank, possessing a firearm as a felon, and escape from jail.
According to court documents, on Aug. 13, 2018, Ellis used a firearm to steal a vehicle from a victim in the parking lot of a Toledo-area gas station. Later that day, court documents say Ellis entered a Fifth Third Bank on Glendale Ave in Toledo, demanded money from a bank employee, and fled the area in a vehicle.
Toledo police later located and arrested Ellis. Police identified the vehicle Ellis was driving as the vehicle stolen from the victim earlier in the day and located stolen money from the bank and a handgun inside.
Ellis is prohibited from possessing a firearm due to a previous felony conviction of bank robbery in Monroe County Michigan.
While incarcerated at the Lucas County Corrections Center, court documents state that Ellis convinced another inmate to switch identities with him and was released within days of his arrest due to the deception. Court records show that Ellis was apprehended by law enforcement days later in Michigan.
This case was investigated by the Cleveland FBI, Toledo Resident Agency and the Toledo Police Department. This case was prosecuted by Assistant U.S. Attorney Matthew Simko.
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Three Northeast Ohio Men Plead Guilty to Armed Carjacking SpreeRead the Press Release
CLEVELAND – Three Northeast Ohio men pleaded guilty on Friday, Feb. 3, 2023, to three separate armed carjacking incidents that occurred in a single day on Aug. 9, 2022.
Donteze Congress 18, of Maple Heights, Ohio, pleaded guilty to three counts of carjacking and two counts of possession of a firearm in furtherance of a crime of violence.
Thomas J.D. Williams, 18, of Maple Heights, Ohio, pleaded guilty to three counts of carjacking and two counts of possession of a firearm in furtherance of a crime of violence.
Kenneth Franklin, 19, of Akron, Ohio, pleaded guilty to three counts of carjacking and two counts of aiding and abetting possession of a firearm in furtherance of a crime of violence.
According to court documents, on three separate occasions on August 9, 2022, defendants Congress, Williams, Franklin, and a minor co-conspirator used firearms and threats of violence to steal a vehicle. During two of the armed carjacking incidents, court documents say that the defendants, riding together in a vehicle, intentionally crashed their vehicle into the rear of a victim vehicle to cause a minor traffic incident. In the third incident, the defendants followed the victim’s vehicle to a shopping center parking lot.
Court documents state that on each occasion, as the victim exited their vehicle, they were confronted by one or two of the defendants brandishing firearms, threatening violence, and demanding the keys to the vehicle. During each incident, the defendants stole the vehicle and fled the scene.
Later that day, court documents state that officers with the Solon Police Department, along with assistance from other jurisdictions, located Williams driving in one of the stolen vehicles. Williams was later arrested and found to be in possession of a victim credit card and a loaded pistol.
Defendant Williams is scheduled to be sentenced on May 8, 2023. Defendant Congress is scheduled to be sentenced on May 9, 2023. Defendant Franklin is scheduled to be sentenced on May 22, 2023.
This case was investigated by the Cleveland FBI, Solon Police Department, Cuyahoga Falls Police Department, Streetsboro Police Department, and the Garfield Heights Police Department.
This case is being prosecuted by Assistant United States Attorneys Peter E. Daly and Christopher J. Joyce.
Three More Defendants Indicted in Northwest MO Fentanyl ConspiracyRead the Press Release
KANSAS CITY, Mo. – Three more defendants have been indicted in a 10-person conspiracy to distribute fentanyl in northwest Missouri.
Kaden Bernard, 22, of St. Joseph, Mo., Raymundo Felix-Perez, 31, a citizen of Mexico who resided in Bethany, Mo., and Joshua Stramel, 26, of Kansas City, Kan., were charged in a 13-count second superseding indictment returned by a federal grand jury in Kansas City, Mo., on Jan. 24, 2023.
That indictment replaced a previous indictment and retained seven co-defendants who previously had been charged: Craig Austin Troester, 24, and Cassidie Bumgarner, 21, both of Spickard, Mo., Troy Lee Palmer, 24, of Trenton, Mo., Dallas Hughs, 27, of St. Joseph, Jessica Nicole Moody, 30, of Bethany, Dakota Morris, 25, of Liberty, Mo., and Lucas Ryan Coltrain, 23, of Newtown, Mo.
The federal indictment alleges that Troester and Felix-Perez led the conspiracy to distribute fentanyl, for which all 10 defendants are charged, beginning on Oct. 27, 2020.
In addition to the drug-trafficking conspiracy, Troester, Felix-Perez, Bumgarner, Coltrain, and Moody are charged together in one count of conspiracy to commit money laundering from March 1, 2021, through Jan. 31, 2022. They allegedly collected proceeds of the drug-trafficking conspiracy and wired the money to Sinaloa, Mexico.
Bernard is also charged with two counts of possessing fentanyl with the intent to distribute, two count of distributing fentanyl, and one count of possessing firearms in furtherance of a drug-trafficking crime. Bernard allegedly was in possession of an FNH .45-caliber pistol, an FNH 9mm pistol, and a Century Arms 7.62x39 pistol on March 17, 2022.
Palmer is also charged with one count of possessing fentanyl with the intent to distribute and one count of possessing firearms in furtherance of a drug-trafficking crime. Palmer allegedly was in possession of a Cricket .22-caliber bolt-action rifle, a Rossi .22-caliber rifle, a Rossi .410-gauge shotgun, a Ruger .410-gauge shotgun, a Hiawatha 12-gauge shotgun, and a Ruger .223-caliber rifle on Dec. 8, 2020.
Hughs is also charged with three counts of distributing fentanyl.
Stramel is also charged with one count of possessing fentanyl with the intent to distribute.
The charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Maureen Brackett. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Grundy County, Mo., Sheriff’s Department, the Trenton, Mo., Police Department, the Northwest Missouri Drug Task Force, the Drug Enforcement Administration, the Buchanan County Drug Strike Force, the U.S. Postal Inspection Service, the Mercer County, Mo., Sheriff’s Department, the Grundy County, Mo., Prosecuting Attorney’s Office, and IRS-Criminal Investigation.
Texas Man Pleads Guilty to Tulare County Drug Distribution Conspiracy and Federal Gun ChargesRead the Press Release
FRESNO, Calif. — Malachai Serrano, 31 of San Antonio, Texas, pleaded guilty today to conspiring to distribute and possess with intent to distribute methamphetamine and marijuana and using a firearm during and in relation to a drug trafficking crime, U.S. Attorney Phillip A. Talbert announced.
According to court documents, the charges arose from a long-term investigation that uncovered evidence of a scheme involving the trade of illegal drugs sourced in Mexico and California for firearms sourced in Texas. In 2021, a team of local, state, and federal law enforcement officers partnered in an investigation into a group of Tulare County Surenos street gang members. Part of the investigation focused on Serrano and his associates, who were involved in shipping illegal drugs and firearms across state lines.
Between April 6, 2021, and Dec. 17, 2021, Serrano’s associates, including Jonathan Gallegos, 32, of Ivanhoe, shipped kilograms of marijuana and methamphetamine from post offices in Central California to residences in San Antonio, Texas. Serrano and his associates shipped firearms back to Gallegos and his associates in California as payment for the narcotics they had received. Serrano is a felon who cannot lawfully possess firearms.
This case was the product of an investigation by the Federal Bureau of Investigation, the U.S. Postal Inspection Service, the Tulare County Sheriff’s Office, the Tulare County Area Regencies Gun Enforcement Team, the Visalia Police Department, the California Department of Justice’s Bureau of Investigation, the California Highway Patrol’s Special Operations Unit, and the Tulare County District Attorney’s Office. Assistant U.S. Attorneys Justin J. Gilio and Antonio J. Pataca are prosecuting the case.
On Oct. 11, 2022, Gallegos pleaded guilty; he is scheduled to be sentenced on March 13, 2023.
Serrano is scheduled to be sentenced May 15, 2023, before U.S. District Judge Ana de Alba. Serrano faces a mandatory minimum sentence of 15 years in prison and up to life in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
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 about the OCDETF Program can be found at www.justice.gov/OCDETF.
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 U.S. 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.
Telemarketing Fraudsters Sentenced in Absentia to 9 Years in Prison for $2.1 Million Family-Run Scheme that Conned Job SeekersRead the Press Release
LOS ANGELES – Two members of a $2.1 million Riverside County-based, family-run telemarketing scam each were sentenced in absentia today to 108 months in federal prison for their roles in a scheme that defrauded more than 4,000 job seekers by tricking them into paying fees in exchange for employment opportunities that turned out to be nonexistent.
Lisa Kay Camp, 61, and Barry Lee Biddle, 48, both formerly of Lake Elsinore, were sentenced by United States District Judge Stephen V. Wilson, who also ordered them to pay $2,181,316 in restitution to their victims, which they must pay jointly and severally with three previously sentenced co-conspirators.
Camp and Biddle pleaded guilty in September 2019 and October 2019, respectively, to one count of conspiracy to commit wire fraud. They fled together from pretrial supervision in August 2020 before their sentencing hearings, which were scheduled for October 2020. They remain at large.
From May 2009 to July 2013, Camp, with the help of Biddle and her adult children, operated a fraudulent telemarketing business that went by various fictitious names, including “Contractor Management,” “Commercial Crews,” “US Tradepros,” and “IPower Marketing.” The defendants used auto-dialer services and multiple websites to lure prospective job seekers to pay for background checks that were never performed and to receive job leads that never existed.
Camp controlled nearly two dozen bank accounts in various company names through which she projected the appearance of legitimacy and the co-schemers received money from victims. Biddle set up, maintained, and operated the computer workstations, phone network, and websites used by the fraudulent telemarketing business.
The aggregated amount of loss to job seekers over the four-year period of the scheme was approximately $2,181,316 with at least 4,183 victims defrauded.
Three other defendants – all of whom are children of Camp – have been sentenced in this case after each pleading guilty to one count of conspiracy to commit wire fraud:
- Andrea Maureen Aviles, 41, of Lake Elsinore, who was sentenced to 18 months in federal prison;
- Gerald James Camp, 42, of Lake Elsinore, who was sentenced to one year and one day in federal prison; and
- Allisa Lynn Vasquez, 39, of Sun City, who was sentenced to 18 months in federal prison.
The FBI investigated this matter.
Assistant United States Attorney Julius J. Nam of the Public Corruption and Civil Rights Section is prosecuting this case.
Anyone with information about Lisa Camp and Barry Biddle’s whereabouts is encouraged to contact the FBI’s Los Angeles Field Office at (310) 477-6565 or the United States Marshals Service at 1-877-WANTED-2 or (877) 926-8332.