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3 March 2023
Forest City Man Sentenced for a Child Pornography OffenseRead the Press Release
COUNCIL BLUFFS, IA – A Forest City man was sentenced on February 28, 2023, to 120 months in prison following his plea of guilty to possession of child pornography.
According to court documents, on April 28, 2021, an Iowa State Trooper pulled over Gerald Lawrence Von Ruden, age 53. Von Ruden had an outstanding arrest warrant. Based on the nature of the warrant, the Trooper seized Van Ruden’s electronic devices. A forensic analysis of those devices revealed that Von Ruden received and possessed numerous images and videos of child pornography.
United States Attorney Richard D. Westphal of the Southern District of Iowa made the announcement. The Iowa State Patrol and the Federal Bureau of Investigation investigated the case.
This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa as part of the U.S. Department of Justice’s “Project Safe Childhood” initiative, which was started in 2006 as a nationwide effort to combine law enforcement investigations and prosecutions, community action, and public awareness in order to reduce the incidence of sexual exploitation of children. For more information about Internet safety education, please visit https://www.justice.gov/psc and click on the resources tab.
Florida’s Lakeland Regional Medical Center Agrees to Pay $4 Million to Settle Common Law Allegations for Impermissible Medicaid DonationsRead the Press Release
Lakeland Regional Medical Center (LRMC) in Lakeland, Florida, has agreed to pay the United States $4 million to resolve allegations that it made donations to a local unit of government to improperly fund the state’s share of Medicaid payments to LRMC.
The Florida Medicaid program provides medical assistance to low-income individuals and individuals with disabilities, and is jointly funded by the federal and state governments. Under federal law, Florida’s share of Medicaid payments must consist of state or local government funds, and may not come from “non-bona fide donations” from private health care providers, such as hospitals. A non-bona fide donation is a payment — in cash or in kind — from a private provider to a governmental entity that is then returned to the private provider through a payment by Medicaid. Because Medicaid services are reimbursed jointly by the federal and state governments, a non-bona fide donation causes federal expenditures to increase without any corresponding increase in state expenditures, since the state share of the Medicaid payments to the provider comes from and is returned to the provider. The prohibition of this practice ensures that states are in fact paying a share of Medicaid payments and thus have an incentive to curb Medicaid costs and prevent unnecessary services.
The United States alleged that, between October 2014 and September 2015, LRMC made improper, non-bona fide donations to Polk County, Florida by assuming and paying certain of Polk County’s financial obligations to other healthcare providers. These donations were designed to increase Medicaid payments received by LRMC, by freeing up funds for the County to make payments to the State as the state share of Medicaid payments to LRMC. This state share was “matched” by the federal government before being returned to LRMC as Medicaid payments. The Medicaid payments LRMC received were thus funded by the federal government and LRMC’s own donations, in violation of the prohibition on non-bona fide donations.
“When private parties make improper donations to fund the state share of Medicaid, they undermine a key safeguard for ensuring the integrity of the Medicaid program,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Medicaid expenditures should be determined by beneficiaries’ medical needs rather than by donations by private hospitals to local units of government.”
“Protecting the Medicaid program is crucial, as millions of Floridians rely on it for their medical care and related services,” said U.S. Attorney Roger B. Handberg for the Middle District of Florida. “We are committed to ensuring that government funds are used for their intended purposes and are not improperly obtained.”
The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Middle District of Florida, with assistance from the U.S. Department of Health and Human Services Office of Inspector General.
The matter was handled by Fraud Section Attorneys Alison B. Rousseau and Jonathan T. Thrope and Assistant U.S. Attorney Carolyn B. Tapie.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Florida Woman Pleads Guilty to Mail Fraud and Wire Fraud ConspiracyRead the Press Release
PEORIA, Ill. – An Orlando, Florida woman, Jasmine Bradley, 37, of the 4000 block of Miramar Road, pleaded guilty on February 27, 2023, to one count of conspiracy to commit mail fraud and wire fraud, two counts of mail fraud, five counts of wire fraud, and two counts of aggravated identity theft. Sentencing for Bradley has been scheduled for June 29, 2023, at the U.S. Courthouse in Peoria, Illinois.
In court before U.S. District Judge James Shadid, Bradley admitted that she had participated in a scheme to steal people’s identities, obtain their credit cards, and use those stolen credit cards to obtain pre-paid debt cards that were then used by Bradley and others involved in the scheme. This scheme victimized, among others, a Galesburg woman, which brought the defendant’s scheme into the jurisdiction of the Central District of Illinois. The Government has identified more than ten additional victims of Bradley’s.
Bradley is currently in the custody of the U.S. Marshals Service pending sentencing.
Bradley faces statutory penalties of up to 20 years imprisonment and 5 years of supervised release for the conspiracy count and for each of the mail fraud counts, up to 20 years imprisonment and 3 years of supervised release for each of the wire fraud counts, and a mandatory consecutive 2 years imprisonment and 1 year of supervised release for each of the identity theft charges.
Bradley also faces charges in a separate state case in Florida.
The investigation was conducted by the United States Postal Inspection Service. Assistant U.S. Attorneys Douglas F. McMeyer and Joel Brakken represented the government in the prosecution.
Fitchburg Man Pleads Guilty to Wide-Ranging Cocaine ConspiracyRead the Press Release
BOSTON – A Fitchburg man pleaded guilty today in federal court in Worcester to his role in a wide-ranging fentanyl, heroin, crack and cocaine trafficking conspiracy.
Jonathan Villot, 31 pleaded guilty to one count of conspiracy to distribute and possess with intent to distribute 280 grams or more of cocaine base (commonly known as crack cocaine), and 500 grams or more of cocaine. U.S. Senior District Court Judge Timothy S. Hillman scheduled sentencing for June 15, 2023. Villot was indicted in July 2020 along with 17 others, including his brother and alleged co-conspirator Pedro Villot-Santiago.
According to court documents, following a fatal fentanyl overdose in September 2018, an investigation began into a drug trafficking organization (DTO) in the Fitchburg area. Beginning in July 2019, controlled purchases and intercepted electronic communications between members of the DTO and its suppliers identified Villot as a cocaine distributor.
Over the course of the investigation, over 1.8 kilograms of a heroin and fentanyl mixture, over 3.6 kilograms of cocaine and over 50 grams of crack cocaine, as well as a stolen, loaded handgun, drug manufacturing equipment and over $376,000 was seized.
Villot is the 15th defendant to be convicted in the case – either by guilty plea or jury conviction following trial.
United States Attorney Rachael S. Rollins; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Commissioner Carol Mici of the Massachusetts Department of Correction; and John E. Mawn Jr., Interim Colonel of the Massachusetts State Police made the announcement today. The Fitchburg and Lunenburg Police Departments and U.S. Postal Inspection Service provided valuable assistance. Assistant U.S. Attorney Alathea Porter of Rollins’ Narcotics & Money Laundering Unit prosecuted the case.
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 https://www.justice.gov/OCDETF.
The details contained in the indictment are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law
Felon Pleads Guilty to Federal Gun ChargeRead the Press Release
NEW ORLEANS, LA – TIMREK ANDREWS, age 53, of New Orleans, Louisiana, pleaded guilty on March 2, 2023 to a violation of the Federal Gun Control Act pursuant to Title 18, United States Code, Sections 922(g)(1) and 924(a)(2) announced United States Attorney Duane A. Evans.
The indictment charged ANDREWS in a single count with being a convicted felon in possession of a firearm. Court documents reveal that ANDREWS and a co-defendant were under surveillance by federal agents. When agents approached ANDREWS, they found a firearm on the floorboard of the driver’s seat where he had been previously sitting. ANDREWS is prohibited from possessing a firearm since he had been previously convicted in federal court of being a convicted felon in possession of a firearm.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
The case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Charles Strauss of the Violent Crimes Unit.
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Federal Jury Convicts O’Fallon Man of Enticing a MinorRead the Press Release
BENTON, Ill. – In a U.S. District courtroom on Wednesday, a federal jury returned a guilty verdict after a three-day trial for an O’Fallon man charged with enticing a minor.
Eric Richardson, 40, was convicted of using his cellphone to persuade a minor to engage in sexual activity.
“We have a civic duty to protect children from sexual predators, and I’m reassured by the jury’s decision to convict the defendant of trying to persuade a minor into sexual acts with him,” said U.S. Attorney Rachelle Aud Crowe. “I appreciate the involved officers with the O’Fallon Police Department for their efforts to apprehend this offender.”
According to evidence presented at trial, Richardson used his cellphone to persuade a minor to engage in sexual activity upon his return from a trip to Florida in October 2019.
The term of imprisonment is a mandatory minimum of 10 years and up to life. Richardson’s sentencing is scheduled for 9:30 a.m. on June 15, 2023.
Officers Nicholas Schmidt, Nicholas Stewart and Adam Krack with the O’Fallon Police Department led the investigation with assistance from the U.S. Secret Service. Assistant U.S. Attorneys Karelia Rajagopal and Tom Leggans prosecuted the case.
Federal Jury Convicts Fort McCoy Man of Attempting to Entice A 12-Year-Old Child to Engage in Sexual ActivityRead the Press Release
Ocala, Florida – U.S. Attorney Roger B. Handberg announces that a federal jury has found Jorge Mojocoa (69, Fort McCoy) guilty of attempted enticement of a minor to engage in sex. Mojocoa faces a minimum mandatory penalty of 10 years, up to life, in federal prison. His sentencing is set for June 8, 2023, before Senior United States District Judge Gregory A. Presnell.
According to evidence presented at trial, on March 30, 2022, Mojocoa responded to a social media posting offering a minor child for sexual services in return for cash. The post had been made by an undercover law enforcement officer. The fictional child purportedly suffered from many physical disabilities, including paralysis and autism. Over the span of two days, Mojocoa spoke to an undercover officer about engaging in sex with the 12-year-old girl. After settling on a price, Mojocoa drove to an agreed-upon location to engage in sex with the child. Once arrested, law enforcement recovered lubricant and candy in Mojocoa’s possession. During the negotiations, Mojocoa had agreed to bring those particular items for his encounter with the child.
This case was investigated by Homeland Security Investigations (HSI), the United States Secret Service, the Marion County Sheriff’s Office, the Ocala Police Department, the Citrus County Sheriff’s Office, and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorneys Tyrie K. Boyer and Belkis H. Crockett.
This is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Fayetteville Man Sentenced to More Than 19 Years After Undercover Operation Reveals Sexual Video Chats with Young GirlsRead the Press Release
NEW BERN, N.C. – David Leon Autry, III, of Fayetteville was sentenced Wednesday to 235 months in prison for production of child pornography. Autry, 34, pled guilty to the charge on October 20, 2021.
According to court documents and other information presented in court, on February 16, 2020, an undercover FBI agent operating out of Albany, New York, was investigating child exploitation activity on the Kik cellphone messaging application. The undercover joined a Kik group that was known to be frequented by people who have a sexual interest in children and created a post about a fictitious nine-year-old daughter. Shortly thereafter, a user later identified as Autry sent a private message to the undercover asking, “Any pics vids.” Autry proceeded to explain that his favorite age range was 6-13 years old and that he watched a large amount of child pornography. Autry also sent the undercover multiple videos in which adult males sexually abused infants. At the undercover agent’s request, Autry provided a photograph of himself as well as an email address and other social media information. FBI then identified Autry through administrative subpoenas.
On March 18, 2020, FBI agents located Autry at his place of work in Fayetteville to execute a search warrant on his cell phone. Autry denied having a cell phone on him. He then said that he needed to use the restroom, and when he turned to leave, agents spotted a black cell phone in his back pocket. Agents seized the phone, and Autry attempted to wrestle it from them before being brought to the ground and handcuffed.
A forensic analyst uncovered over 100 files of child sexual abuse material on the phone, including 45 unique videos. Investigators discovered that Autry himself had created numerous files by taking screenshots of his activity on an anonymous video chat application. In these images, Autry video chats with girls who appear to be as young as 11, as they display their genitals and engage in other sexual activity.
Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge Louise W. Flanagan. The Federal Bureau of Investigation investigated the case, which Assistant U.S. Attorney Jake D. Pugh prosecuted.
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. 5:21-cr-0030-FL.
Fairbanks U.S. Fish and Wildlife Service Employee Charged with Fraud, Embezzlement for Falsifying Bank Records and Stealing over $100,000Read the Press Release
FAIRBANKS – A federal grand jury in Alaska returned an indictment charging a Fairbanks U.S. Fish and Wildlife Service employee with wire fraud and embezzlement of public funds for perpetrating a years-long scheme to steal money from her employer.
According to court documents, Kimberly C. Robinson was employed with the U.S. Fish and Wildlife Service since 2003, and in 2020 was promoted to the role of Budget Analyst in charge of reconciling the budgets for each USFWS regional office. To perform her duties the federal government issued Robinson multiple credit cards to pay for official government expenses and travel.
As set out in court filings, from at least 2018 through June 2021, Robinson engaged in a scheme to defraud the U.S. Fish and Wildlife Service by using her government issued credit cards for unauthorized personal purchases and expenses. She then deleted and altered the unauthorized transactions on the credit card statements submitted to her supervisor for reconciliation to conceal the scheme and to cause USFWS to disburse public funds to pay the credit card balances. According to statements at court proceedings, Robinson embezzled over $100,000 through this scheme.
On February 28, 2023, Robinson was arraigned before the U.S. Magistrate Judge Scott A. Oravec in Fairbanks federal court. If convicted, she faces a maximum penalty of up to 20-years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The United States Department of the Interior, Office of Inspector General is investigating this case. Assistant U.S. Attorney Ryan Tansey for the District of Alaska is prosecuting the case.
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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Essex County Man Charged with Stealing Federal Benefits Meant for Missing Girlfriend’s Disabled SonRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man was charged with embezzling federal benefits meant for the disabled child of his former girlfriend shortly after she went missing, U.S. Attorney Philip R. Sellinger announced.
Asmar Earp, 37, of Newark, is charged by indictment with two counts of wire fraud and two counts of aggravated identity theft. He appeared today before U.S. Magistrate Judge James B. Clark III and was detained.
According to documents filed in this case and statements made in court:
Earp was in a romantic relationship and shared a house with a woman in Newark. Through a program administered by the Social Security Administration, the woman received monthly payments on behalf of her disabled minor son, who was not capable of managing these benefits on his own. On Dec. 24, 2017, the woman went missing and her whereabouts remain unknown. Six days after her disappearance, Earp fraudulently gained control of the victim’s benefits by changing the PIN code on the debit card used to access those funds. In March and April 2018, Earp also fraudulently used the woman’s name, date of birth, and Social Security number to receive a replacement debit card to continue accessing and using the victim’s benefits. From December 2017 through February 2020, Earp and others acting at his direction repeatedly and fraudulently took the money intended to help the victim.
Each count of wire fraud is punishable by a maximum penalty of 20 years in prison and a maximum $250,000 fine. Each count of aggravated identity theft is punishable by a sentence of two years in prison, at least one of which must be served consecutive to any other term imposed, and a maximum of $250,000.
U.S. Attorney Sellinger credited special agents of the Social Security Administration, Office of the Inspector General, Boston New York Field Division, under the direction of Special Agent-in-Charge Sharon MacDermott, and the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Jessica R. Ecker of the General Crimes Unit in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
earp.indictment.pdfEmmett Man Sentenced to 6 ½ Years in Federal Prison for Possessing Child PornographyRead the Press Release
BOISE – Rex Lanham III, 54, of Emmett, was sentenced to 78 months in federal prison for possession of child pornography, U.S. Attorney Josh Hurwit announced today.
According to court records, the Federal Bureau of Investigation (FBI) determined that Lanham was a member and administer of social media groups where child pornography was being shared. As an administrator, Lanham had the ability to add or remove members from the group. The FBI obtained a federal search warrant for the contents of an online account belonging to Lanham and located child pornography. The FBI subsequently obtained a federal search warrant for Lanham’s residence in Emmett to search for evidence of the possession of child pornography. The FBI seized electronic devices belonging to Lanham and located additional files of child pornography on the devices.
Senior U.S. District Judge B. Lynn Winmill also ordered Lanham to serve 15 years of supervised release following his prison sentence and to pay $6,000 in restitution to victims in the images he possessed. Judge Winmill also ordered Lanham to forfeit the electronic devices that were used to commit the offense. As a result of the conviction, Lanham will be required to register as a sex offender.
U.S. Attorney Hurwit credited the cooperative efforts of the Federal Bureau of Investigation and the Gem County Sheriff’s Office, which led to the charges.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
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Dover Man Pleads Guilty to Distribution of Fentanyl and Possession with Intent to Distribute FentanylRead the Press Release
CONCORD – Tyler Ward, 36, of Dover, pleaded guilty in federal court today to two counts of distributing fentanyl and one count of possessing fentanyl with intent to distribute it, United States Attorney Jane E. Young announced.
According to court documents and statements made in court, Mr. Ward distributed five grams of fentanyl in each of two separate hand-to-hand controlled transactions conducted at Mr. Ward’s apartment in Dover on February 2, 2022 and February 11, 2022. On March 3, 2022, law enforcement executed a search warrant of Mr. Ward’s apartment and arrested Mr. Ward, who had approximately eight grams of fentanyl on his person at the time. A search of the apartment revealed an additional 625 grams of fentanyl. Mr. Ward subsequently admitted to law enforcement in a post-arrest interview that he had intended to sell the fentanyl recovered from his apartment.
Ward is scheduled to be sentenced on June 13, 2023.
This matter was investigated by the FBI in conjunction with the Strafford County Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Aaron Gingrande.
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Cumberland County Woman Sentenced to 30 Months’ Imprisonment for False Statements Concerning Her Adoptive Daughter’s Medical CareRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Shelley Noreika, age 49, of Dillsburg, PA, was sentenced to 30 months’ incarceration by United States District Judge Sylvia H. Rambo for making False Statements Relating to Health Care Matters.
According to United States Attorney Gerard M. Karam, Noreika fabricated serious illnesses and made fraudulent statements to healthcare providers in connection with her 5-year-old adoptive daughter. As result of Noreika’s false statements, the minor child was subjected to unnecessary medical treatment and the downstream insurers incurred monetary losses in the six-figures. In particular, and as admitted by Noreika to federal investigators, Noreika told her daughter to pretend and fake having a seizure while Noreika videotaped her. Noreika then emailed the video clip of the fake seizure to her daughter’s pediatric neurologist, along with false statements concerning the minor child’s medical condition. On multiple other occasions, Noreika likewise falsely reported to medical providers that her daughter experienced seizures, when in fact no such seizures occurred. In fact, at no point did Noreika ever witness her daughter have an actual seizure.
As recognized by both the government and defense, Noreika’s conduct is consistent with factitious disorder imposed on another, formerly known as munchausen syndrome by proxy, a mental illness in which a caregiver makes up or causes an illness or injury to a person under their care, to gain attention and sympathy for themselves. However, the government pointed out to the Court there was also a clear financial motive – Noreika received enhanced Medicare and adoption subsidiaries for taking care of a medically ill child, and she promoted the minor child’s purported conditions to seek donations from local organizations and through online fundraising efforts.
“Today’s sentencing sends a strong message that protecting children is a top priority,” said Special Agent in Charge Maureen R. Dixon of the Health and Human Services, Office of Inspector General (HHS-OIG) Philadelphia Regional Office. “HHS-OIG will continue to work closely with our law enforcement partners to thoroughly investigate allegations of abuse against children and ensure claims submitted to federal and state programs by caregivers are truthful and accurate. We would like to thank the Pennsylvania State Police and the U.S. Attorney’s Office for their partnership and commitment in this investigation.”
In addition to the 30-month prison sentence, the Court ordered Shelley Noreika to serve three years of supervised release following incarceration, and to pay a fine of $500 and restitution of $137,710.86 to the victims of the offense. Noreika is no longer in care of the minor child, and she also faces related state charges which are pending.
The case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General (OIG) Harrisburg Field Office, and the Pennsylvania State Police. Assistant U.S. Attorney Samuel S. Dalke prosecuted the case.
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Covington Man Sentenced to 36 Months for Federal Gun ChargesRead the Press Release
NEW ORLEANS, LA –JESSY AVILA-VENEGAS, age 28, of Covington, Louisiana, was sentenced on March 1, 2023 for five counts of violating the Federal Gun Control Act pursuant to Title 18, United States Code, Sections 922(a)(6) and 924(a)(2). AVILA-VENEGAS was sentenced to 36 months of imprisonment, three years of supervised release, and a total of $500.00 in mandatory special assessment fees, announced United States Attorney Duane A. Evans.
The sentence is pursuant to AVILA-VENEGAS’s federal conviction for making false statements in connection with the acquisition of firearms. On five separate occasions, he falsely represented that he was the true purchaser of the firearm(s) on the required Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) Form 4473. However, he was not the true purchaser and made the transactions on behalf of another person he knew was not eligible to receive a firearm.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
The case was investigated by ATF and is being prosecuted by Assistant U.S. Attorney Charles D. Strauss of the Violent Crimes Unit.
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Court Sentences Colombian Drug Smuggler Caught with Nearly Five and a Half Tons of CocaineRead the Press Release
On March 2, 2023, United States District Court Chief Judge Terry F. Moorer sentenced Fernando Preciado, a Colombian national, to 210 months imprisonment for smuggling 4,951 kilograms of cocaine in the Eastern Pacific Ocean. Preciado had previously pled guilty to the offense.
Documents filed with the Court established that on December 13, 2021, while on routine patrol, in the Eastern Pacific Ocean, a Marine Patrol Aircraft detected a suspicious low profile go-fast vessel west of Malpelo, Colombia. US Coast Guard Cutter JAMES (JAM) diverted to intercept. JAM launched their intercept vessel and helicopter and requested that their command authorize a boarding of a vessel suspected of illicit maritime activity. The approach to the vessel revealed 4 persons on board, to include the defendant. The vessel had four Suzuki 250 horsepower outboard engines.
There was no flag flown for the vessel, no vessel registration, and no claim of nationality for the vessel. No crewmembers claimed to be the Master or person in charge of the vessel. The vessel was properly deemed to be a “Vessel Without Nationality” in that it was a vessel aboard which any master or individual in charge failed, on request of an officer of the United States authorized to enforce applicable provisions of United States law, to make a claim of nationality or registry for that vessel under Title 46 § 70503.
The USCG boarding of the vessel revealed approximately 4951 kilograms of cocaine on board the vessel. The USCG also found an AK-47 assault rifle underneath the bales of cocaine with 20 rounds of 7.62mm ammunition.
Preciado later admitted that he was hired as the navigator for the drug smuggling trip. The other drug smugglers on the boat, Nestor Javier Salazar Montano, Alonzo Escobar-Valenzuela, and Henry Hernandez Garcia, all plead guilty and were previously sentenced by Judge Moorer.
In Title 46 of the United States Code, Congress found and declared that (1) trafficking in controlled substances aboard vessels is a serious international problem, is universally condemned, and presents a specific threat to the security and societal well-being of the United States and (2) operating or embarking in a submersible vessel or semi-submersible vessel without nationality and on an international voyage is a serious international problem, facilitates transnational crime, including drug trafficking, and terrorism, and presents a specific threat to the safety of maritime navigation and the security of the United States. Title 46 further provides that such offenses may be prosecuted in any United States federal district court.
United States Attorney Sean P. Costello praised the exemplary work and dedication of the United States Coast Guard and federal investigators in interdicting and bringing these international drug smugglers to justice, noting “The wholesale value of the massive load of cocaine seized in this case is conservatively valued at approximately 140 million dollars.” Costello added that this is by far the largest seizure his office has prosecuted under Title 46 and represents a significant loss to the drug cartel.
The case was investigated by the United States Coast Guard and the Department of Homeland Security, Homeland Security Investigations. The case was prosecuted by Assistant United States Attorney George F. May.
Couple Sentenced for Conspiracy, Wire Fraud, and Major Fraud Against the United StatesRead the Press Release
CHATTANOOGA, Tenn. – Today, Ricky and Katrina Lanier, 55 and 49, both of LaGrange, N.C., were sentenced by the Honorable Travis McDonough, Chief United States District Court Judge for the Eastern District of Tennessee at Chattanooga, to serve federal prison terms of 48 months and 24 months, respectively, for conspiracy to commit wire fraud, wire fraud, and major fraud against the United States. Following their incarceration, the Laniers will each be on supervised release for a period of one year. Chief Judge McDonough ordered forfeiture of the couple’s bank accounts and deferred a ruling on a money judgement until a later date.
The couple were found guilty of these offenses, in violation of 18 U.S.C. §§ 1349, 1343, and 1031 on July 29, 2022, following a two-week jury trial in U.S. District Court. According to evidence presented at trial, the Laniers conspired from 2005 to 2013 to defraud the United States government through a scheme to fraudulently obtain federal contracts intended to be awarded to businesses lawfully participating in the Department of Veterans Affairs’ (VA) Service-Disabled Veteran-Owned Small Business (SDVOSB) program and the Small Business Administration’s (SBA) 8(a) Business Development program. They falsely represented that JMR Investments and Kylee Construction were eligible for these programs. Their actions also deprived legitimate service-disabled veteran and minority-owned businesses from obtaining government contracts on which they were eligible to bid.
Ricky Lanier, who had previously owned and operated an 8(a) business receiving government contracts, became ineligible to participate in the 8(a) program after that business graduated from that program in 2008. Lanier used a long-time friend and service-disabled veteran as the purported owner of Kylee Construction, falsely representing that the friend was involved in the daily management of the business, even while the friend was working for a government contractor in Afghanistan. The Laniers used a minority-owned business run by Ricky Lanier’s college roommate, JMR Investments, as a front to obtain construction contracts from the National Park Service and other federal agencies under the 8(a) program, misrepresenting the friend’s involvement in the management and operation of the business. The scheme also involved sub-contracting most of the work on the contracts in violation of program requirements. As part of the scheme, the Laniers opened and controlled bank accounts into which government money was deposited, and they used those accounts to pay for extravagant vacations; monthly payments on a personal private airplane; a Mercedes Benz; mortgage payments for their personal residence; purchases of additional real estate; and purchases of personal property such as shoes, clothing, food, and souvenirs while on vacation.
The Laniers also defrauded the National Park Service in connection with a contract to replace a wastewater treatment facility at the Tremont Institute in the Great Smoky Mountains National Park, falsely representing subcontractor costs by over $400,000, resulting in the award of a $1.1 million contract for work on the project that was actually performed by a subcontractor for only $550,000. The Laniers further fraudulently obtained a $1.3 million construction contract at the James H. Quillen VA Medical Center, which had been set aside for service-disabled veteran owned businesses.
As a result of the false representations, Kylee Construction was awarded over $5 million in government contracts and JMR Investments was awarded over $9 million in government contracts. The Laniers received almost $3 million in financial benefit from the scheme.“The defendants’ conduct was especially egregious,” said United States Attorney Francis M. Hamilton III. “Of course, the dollar value of the government contracts was quite high, and the defendants obtained enormous personal gains to maintain a lavish lifestyle. More importantly, not only did the defendants steal from the United States, they stole opportunities from scores of honest deserving entities such as legitimate service-disabled veteran-owned businesses who are trying to making a living in the civilian sector after having served the nation honorably.”
“Conspiring to fraudulently obtain millions of dollars in government contracts from programs designed to benefit service-disabled veteran business owners steals opportunities from the deserving and lines the pockets of the greedy. The VA OIG remains committed to diligently pursuing these cases in an effort to maintain the integrity of VA programs,” said Special Agent in Charge Kim R. Lampkins of the VA Office of Inspector General’s Mid-Atlantic Field Office. “The VA OIG thanks the US Attorney’s Office and our law enforcement partners for their joint efforts to achieve justice in this case.”
“Illegally obtaining federal contracts steals taxpayer dollars and opportunities from the nation’s small business community,” said SBA OIG’s Eastern Region Special Agent in Charge Amaleka McCall-Brathwaite. “OIG is committed to rooting out bad actors and protecting the integrity of SBA programs. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”
Special Agent in Charge Katherine Balestra, U.S. Department of Interior OIG, recognized the efforts of the investigative team in protecting the Service-Disabled Veteran Owned Small Business program. "These investigations are so important to ensure that these federal contracts go to the individuals for whom they are intended," Balestra said.
Law enforcement agencies participating in the joint investigation which led to indictment and subsequent conviction of Ricky and Katrina Lanier included the Veterans Affairs Office of Inspector General (VA OIG), Department of the Interior Office of Inspector General (DOI OIG), and Small Business Administration’s Office of Inspector General (SBA OIG), with assistance from the U.S. Secret Service.
Assistant U.S. Attorneys Steven S. Neff, Perry H. Piper, and Anne-Marie Svolto represented the United States.
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Convicted Felon Indicted for Possession of A Firearm and AmmunitionRead the Press Release
Tampa, FL - United States Attorney Roger B. Handberg announces the return of an indictment charging Martez Manning (26, St. Petersburg) with one count of possession of a firearm and ammunition by a convicted felon. If convicted, Manning faces up to 15 years in federal prison. The indictment notifies the defendant that the government intends to forfeit the firearm and ammunition traceable to the offense.
According to the indictment, on January 2, 2023, Manning possessed a Beretta model 21A Bobcat semiautomatic pistol and two rounds of CCI .22 caliber long rifle ammunition. Manning has seven prior felony convictions including possession of cocaine; tampering with physical evidence; and multiple convictions for either the sale or delivery of cocaine. As a previously convicted felon, Manning is prohibited from possessing a firearm or ammunition under federal law.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the St. Petersburg Police Department. It will be prosecuted by Assistant United States Attorney Samantha Newman. The forfeiture is being handled by Assistant United States Attorney Suzanne Nebesky.
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.
Colorado Springs Man Convicted of Drug TraffickingRead the Press Release
DENVER – The United States Attorney’s Office for the District of Colorado announces a federal jury found Thomas O’Hara II, age 56, of Colorado Springs, guilty of conspiracy to distribute methamphetamine and possession of methamphetamine with the intent to distribute it.
According to facts presented at trial, on June 1, 2021, the Denver Division of the Federal Bureau of Investigations (FBI), the Rocky Mountain Division of the Drug Enforcement Administration (DEA), and the Colorado Springs Police Department executed several search warrants in the Colorado Springs area. At O’Hara’s residence, investigators recovered one-and-a-half pounds of methamphetamine, one pound of heroin, approximately 800 fentanyl pills, two loaded handguns, and drug trafficking paraphernalia. At O’Hara’s wife’s apartment, investigators found and seized $112,027 in cash and additional drug trafficking paraphernalia. Finally, at a third residence associated with O’Hara, investigators located six-and-a-half pounds of methamphetamine.
Judge William J. Martinez presided over the 6-day trial, which ended on March 1, 2023. The defendant will be sentenced on October 25, 2023. Each count of which the defendant was convicted carries a sentence of no less than 10 years and up to life in prison. The jury found the defendant not guilty of possessing heroin and fentanyl with the intent to distribute them.
The investigation was conducted by the FBI Denver Division, DEA Rocky Mountain Division, and the Colorado Springs Police Department. The prosecution is being handled by Assistant United States Attorneys Peter McNeilly and Alexander Duncan.
This prosecution is a result of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles high-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten communities throughout the United States. OCDETF uses a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
CASE NUMBER: 21-cr-190-WJM-1
Coats Drug Dealer Sentenced to More Than 12 Years in PrisonRead the Press Release
RALEIGH, N.C. – A Coats man was sentenced today to 150 months in prison for dealing crystal methamphetamine in 2021. On October 6, 2022, Richard Gordon Frame, 35, pled guilty to the charges.
According to court documents and other information presented in court, a multi-agency investigation identified that Frame and co-defendant Christopher McNeill (charged separately) were trafficking large quantities of methamphetamine in Harnett County. The Bureau of Alcohol, Tobacco, Firearms and Explosives made multiple controlled purchases of 100% pure crystal methamphetamine from Frame who was supplied by McNeill. A total of 194.9 grams of the substance was purchased.
Frame was previously convicted of assault with a deadly weapon, larceny, trespassing, and additional drug possession charges. Details of McNeill’s sentencing in this case and prior conviction information can be found here.
Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge James C. Dever III. The Bureau of Alcohol, Tobacco and Firearms, Coats Police Department, Dunn Police Department, Harnett County Sherriff’s Department, and the State Bureau of Investigation investigated the case and Assistant U.S. Attorney Casey L. Peaden prosecuted the case.
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. 5:22-cr-00174-D-BM.
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Cedar Rapids Man Sentenced to Federal Prison for Child Pornography ChargeRead the Press Release
DAVENPORT, IA – A Cedar Rapids man was sentenced on February 28, 2023, to 108 months in prison for receipt of child pornography.
According to court documents, the investigation of Justin Richard Mezera, 34, began following a cybertip that Mezera had child pornography-related discussions using his Kik account. Law enforcement executed search warrants at Mezera’s known residences in Cedar Rapids and Iowa City and located multiple devices containing depictions of child pornography, including those depicting masochistic conduct and depicting infants or toddlers. Mezera admitted to possessing, accessing, and receiving child pornography. Following his prison term, Mezera was ordered to serve five years of supervised release and pay $21,000 in restitution.
United States Attorney Richard D. Westphal of the Southern District of Iowa made the announcement. Homeland Security Investigations investigated the case.
This case was brought as part of Project Safe Childhood (PSC). In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorney’s Offices and the Department of Justice’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 www.projectsafechildhood.gov.
Boston Man Sentenced for Cambridge Bank RobberyRead the Press Release
BOSTON – A Boston man has been sentenced for robbing a TD Bank branch in Cambridge.
Jamall Copeland, 49, was sentenced on March 1, 2023 by U.S. District Court Judge Allison D. Burroughs to 28 months in prison and three years of supervised release. In December 2022, Copeland pleaded guilty to one count of bank robbery.
On April 27, 2022, an unknown male – later identified as Copeland – entered the TD Bank located at 1270 Massachusetts Avenue in Cambridge at approximately 1:45 p.m. and handed the teller a demand note that stated, “Give up all Hundreds! AN 50's Robbery!” Copeland obtained $1,455 in cash and fled the scene. Following the robbery, law enforcement recovered a fingerprint from the demand note that matched the known fingerprint of Copeland.
United States Attorney Rachael S. Rollins; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; and Cambridge Police Chief Christine Elow made the announcement today. Assistant U.S. Attorney David G. Tobin of Rollins’ Major Crimes Unit prosecuted the case.
Battle Creek Woman Charged in $3,500,000 Computer ScamRead the Press Release
Lavonne Kemp alleged to be cash clearinghouse for nationwide “mistaken refund” fraud
GRAND RAPIDS – U.S. Attorney for the Western District of Michigan Mark Totten today announced that Lavonne Kemp, 67, of Battle Creek was charged in federal court for participating in a conspiracy to commit fraud using the mail.
“These allegations are extremely concerning involving an alleged scheme to prey upon unsuspecting victims,” said U.S. Attorney Mark Totten. “I implore the public to remain vigilant, wary, cautious, and to always verify suspicious claims or claims that seem ‘too good to be true’ to help protect yourself from falling victim to potential scams or fraud.”
According to court documents, Kemp participated in a fraud scheme targeting home computer users across the United States, known as a “mistaken refund” scam. People became victims of the scam when they were deceived by an email message falsely claiming that a bank withdrawal had been made from their bank account to allegedly pay for the installation of computer security software. The message invited anyone disagreeing with the charge to call a “customer service” number. Those who called this number spoke with a person who agreed to immediately reverse the “charge.” During this refund process, the “customer service” co-conspirator indicated that he had mistakenly deposited thousands of dollars into the victim’s account because of a keystroke error. The victim was then induced to rectify this “error” by mailing cash to Kemp’s address in Battle Creek. Between January 2021 and September 2022, Kemp allegedly received approximately $3,500,000 traceable to this fraudulent scheme.
Kemp is charged with mail fraud conspiracy, in violation of Title 18, United States Code, Section 1349. This offense carries a maximum penalty of 20 years in prison, a fine of twice the gross gain or loss caused by the fraud, three years of supervised release following prison, and forfeiture of property. No other members of the conspiracy have yet been charged.
“Our agents remain committed to investigating allegations of fraud wherever they may be,” said HSI Detroit Special Agent in Charge Angie M. Salazar. “Working with our local partners and the U.S. Attorney’s Office, we can help keep hard-working Americans safe from schemes and hold those behind them to account for their actions.”
Kemp had her initial court appearance today in Grand Rapids. Further proceedings will be handled by U.S. District Judge Paul Maloney. Prosecution of the case has been assigned to Assistant United States Attorney Timothy VerHey.
The Department of Homeland Security and Battle Creek Police Department are investigating the case.
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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Baltimore Man Sentenced to Two Years in Federal Prison for Illegal Possession of a Firearm in a School ZoneRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell, III sentenced Malcolm Goods, age 31, of Baltimore, Maryland, today to two years in federal prison, followed by three years of supervised release, for illegal possession of a firearm within a school zone.
The sentence was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Toni M. Crosby of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; and Commissioner Michael Harrison of the Baltimore Police Department.
According to Goods’ guilty plea, on September 12, 2021, Baltimore Police officers received a call for an armed person at the intersection of Pennsylvania and Cumberland Avenues in Baltimore. The person was carrying a gun, wearing a white construction hat and orange safety vest, and riding a bicycle. An officer monitoring a closed-circuit television camera located an individual, later identified as Goods, matching that description in the 600 block of Cumberland Avenue.
When officers arrived on scene, Goods got on a bicycle and rode on the sidewalk for a few blocks. Near the 1600 block of N. Carey Street, officers pulled over next to Goods told Goods to stop in an area about one block away from Sandtown-Winchester Achievement Academy, a Baltimore public elementary and middle school. Goods initially agreed to stop, then rode away on the bicycle.
After briefly losing sight of Goods, officers found him knocking on someone’s front door and placed him into custody. An officer saw the grip of a firearm in Goods’ waistband and recovered a.40 caliber pistol with an obliterated serial number, loaded with 15 rounds of ammunition. During his arrest, including after he was read his Miranda rights, Goods made several statements which indicated that he was aware that he possessed a firearm. Goods agreed that he knew or had reasonable cause to believe that he was within 1,000 feet of the grounds of the Sandtown-Winchester Achievement Academy.
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.
United States Attorney Erek L. Barron commended the ATF and the Baltimore Police Department for their work in the investigation. Mr. Barron thanked Assistant U.S. Attorney Brandon Moore and Special Assistant U.S. Attorney Sarah Simpkins, who prosecuted the case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit https://www.justice.gov/usao-md/project-safe-neighborhoods-psnexile and https://www.justice.gov/usao-md/community-outreach.
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Army Servicemember Stationed at Fort Bragg Indicted in Connection with Romance Scams and COVID-19 Assistance FraudRead the Press Release
RALEIGH, N.C. – Sanda G. Frimpong, 33, was arrested Wednesday upon the unsealing of a 19-count indictment that included charges of Money Laundering, Fraud, Conspiracy, Aggravated Identity Theft, and Access Device Fraud in connection with multiple interstate and international fraud and money-laundering scams. Frimpong, an active duty servicemember stationed at Fort Bragg in Fayetteville, faces between up to ten and up to twenty years in prison per count, and potential fines.
“Online romance scams are increasingly targeting lonely, vulnerable, and often elderly victims,” stated US Attorney Michael Easley. “Our office is committed to seeking justice for fraud victims just as we are to prosecuting those who took advantage of programs intended to help unemployed and underemployed folks who struggled through the COVID-19 pandemic.”
According to the indictment, Frimpong and other conspirators, engaged in elaborate scams, impersonating romantic love interests, diplomats, customs personnel, military personnel, and other fictitious personas for the purpose of ensnaring their victims by earning their confidence, including promises of romance, sharing of an inheritance or other riches, or other scenarios intended to fraudulently induce the victims to provide money or property to the conspirators. Frimpong allegedly laundered hundreds of thousands of dollars in proceeds of these frauds through his various bank accounts across state lines and through contacts in Ghana.
Additionally, in a separate scam, according to the indictment, Frimpong and other conspirators fraudulently applied for unemployment assistance in various states, using stolen identities. This fraud included allegedly obtaining over $100,000 in funds intended for those struggling through the COVID-19 pandemic and made available via the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).
Frimpong was indicted on three counts of money laundering; seven counts of wire fraud; three counts of mail fraud; one count of conspiracy to commit mail and wire fraud; three counts of aggravated identity theft; and two counts of access device fraud. Arraignment before United States District Judge James C. Dever III is scheduled to occur later this year.
Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after United States Magistrate Judge James E. Gates presided over Frimpong’s Initial Appearance. Defense Criminal Investigative Service is leading the investigation with the assistance of the Department of Labor, Office of the Inspector General, and Assistant U.S. Attorney David G. Beraka is prosecuting the case.
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. 5-23-CR-35-D.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty.
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Army Reservist Pleads Guilty to Conspiracy to Commit Theft of Government FundsRead the Press Release
NEW ORLEANS – U.S. Attorney Duane A. Evans announced today that on March 2, 2023 former United States Army reservist LYNEA SANDERS has pled guilty to conspiracy to commit theft of government funds, having stolen $21,780.18 from the United States Department of the Army by claiming reimbursement for the performance of military funeral honors ceremonies that never happened.
The National Defense Authorization Act of 2000 authorizes military funeral honors for active-duty soldiers, retirees, and veterans. At a family’s request, eligible persons can receive military funeral honors, including the folding and presenting of the United States flag and the playing of “Taps.”
By pleading guilty to conspiracy to commit theft of government funds, in violation of Title 18, United States Code, Section 371, SANDERS faces a maximum penalty of five (5) years imprisonment, followed by up to three (3) years of supervised release, a fine of up to $250,000.00, and a mandatory $100 special assessment fee. SANDERS has repaid the Department of the Army for the $21,780.18 in stolen funds.
U.S. Attorney Evans praised the work of the United States Army Criminal Investigation Command, including Special Agents Dustin Stevens, John Hiniker, Jeffrey Riedeman, and Denny Richter. Assistant United States Attorney Andre J. Lagarde of the Public Integrity Unit is in charge of the prosecution.
Army Reservist Pleads Guilty to Conspiracy to Commit Theft of Government FundsRead the Press Release
NEW ORLEANS – U.S. Attorney Duane A. Evans announced today that Army reservist CHANTELLE DAVIS has pled guilty to conspiracy to commit theft of government funds, having stolen $8,399.65 from the United States Department of the Army by claiming reimbursement for the performance of military funeral honors ceremonies that never happened.
The National Defense Authorization Act of 2000 authorizes military funeral honors for active-duty soldiers, retirees, and veterans. At a family’s request, eligible persons can receive military funeral honors, including the folding and presenting of the United States flag and the playing of “Taps.”
By pleading guilty to conspiracy to commit theft of government funds, in violation of Title 18, United States Code, Section 371, DAVIS faces a maximum penalty of five (5) years imprisonment, followed by up to three (3) years of supervised release, a fine of up to $250,000.00, and a mandatory $100 special assessment fee. DAVIS has repaid the Department of the Army for the $8,399.65 in stolen funds.
U.S. Attorney Evans praised the work of the United States Army Criminal Investigation Command, including Special Agents Dustin Stevens, John Hiniker, Jeffrey Riedeman, and Denny Richter. Assistant United States Attorney Andre J. Lagarde of the Public Integrity Unit is in charge of the prosecution.
Armed Career Criminal Sentenced to 16 Years in Federal Prison for Illegal Gun Possession After Shooting of his WifeRead the Press Release
INDIANAPOLIS- Michael Ryan Mack, 41, of Indianapolis was sentenced to 16 years in federal prison after pleading guilty to illegally possessing a firearm.
According to court documents, on November 13, 2020, Indianapolis Metropolitan Police Department (IMPD) officers were dispatched to an Indianapolis residence on reports of a person shot. When officers arrived, they learned that Michael Mack’s wife had been shot in the right arm during an altercation with Mack.
During a search of the residence, officers located a 9mm handgun with a spent shell casing still inside the barrel, and 11 live rounds in the magazine. Mack was located later that day at a hotel in Greenwood, Indiana, where officers found another 9mm handgun in the room.
Mack is prohibited from possessing a firearm and is considered an armed career criminal under federal law due to his previous felony convictions including Armed Robbery, Dealing in a Controlled Substance, and three convictions for Burglary.
Zachary A. Myers, U.S. Attorney for the Southern District of Indiana, Indianapolis Metropolitan Police Chief Randal Taylor, and Daryl S. McCormick, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Columbus Field Division made the announcement.
“We have prioritized federal prosecution of armed domestic abusers because of the extreme danger they pose to those in their homes and the public at large,” said Zachary A. Myers, United States Attorney for the Southern District of Indiana. “The victim in this case will be protected from her abuser for many years, because of the excellent work of IMPD, the ATF, and our federal prosecutor. This sentence should serve as a warning anyone who is involved in domestic violence and illegally armed: get rid of the guns or risk a long term in federal prison.”
The Bureau of Alcohol, Tobacco, Firearms, and Explosives investigated this case, with valuable assistance provided by IMPD. The sentence was imposed by U.S. District Court Judge Sarah Evans Barker. Judge Barker also ordered that Mack be supervised by the U.S. Probation Office for 3 years following his release from federal prison.
U.S. Attorney Myers thanked Assistant United States Attorney Pamela S. Domash, who prosecuted 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.
This case was brought as part of the LEATH Initiative (Law Enforcement Action to Halt Domestic Violence), named in honor of Indianapolis Metropolitan Police Department (IMPD) Officer Breann Leath, who was killed in the line of duty while responding to a domestic disturbance call. A partnership among the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the IMPD, and the U.S. Attorney’s Office for the Southern District of Indiana, the LEATH Initiative focuses federal, state, and local law enforcement resources on domestic violence offenders who illegally possess firearms.
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Alleged Fentanyl Trafficker Who Advertised to Carrollton Kids Federally ChargedRead the Press Release
A Carrollton drug dealer who allegedly capitalized on the arrest of two prominent fentanyl traffickers to entice young buyers has been charged with a federal drug crime, announced U.S. Attorney for the Northern District of Texas Leigha Simonton.
Donovan Jude Andrews, 20, was arrested in Carrollton on Wednesday, charged via criminal complaint with conspiracy to possess with intent to distribute a controlled substance. He made his initial appearance before U.S. Magistrate Judge Rebecca Rutherford Friday morning and was ordered detained pending trial.
According to court documents, in early February 2023, Mr. Andrews allegedly commented on an Instagram post announcing the arrest of Luis Navarrete and Magaly Cano, the pair allegedly tied to at least ten juvenile overdoses in the Carrollton Farmers Branch School District.
Posting under the handle “deegetbandz_3x,” Mr. Andrews noted that Navarrete and Cano “took all the ATTENTION” from law enforcement and divulged that he was selling M/30 pills for $10 apiece. He later shared an Instagram post announcing the overdose deaths of three kids tied to Navarrete and Cano with the caption “F**k em come get em.”
Shortly thereafter, a 14-year-old girl suffering from an apparent fentanyl overdose told police that she purchased five M/30 pills from the individual using the “deegetbandz_3x” Instagram account. She said she paid the individual via cash app and he dropped the pills in her mailbox. Home surveillance video confirmed the delivery.
Law enforcement surveilled Mr. Andrews’ home and observed him allegedly conducting hand-to-hand transactions on the street outside. They also located an 18-year-old girl, a student at Hebron High School, who admitted to buying pills from a man named “Donovan” who used the “deegetbandz_3x” Instagram handle.
In early March, law enforcement conducted a traffic stop on a Toyota Camry linked to Mr. Andrews. Mr. Andrews, who had a baggie of pills stashed inside in his sock, sat in the passenger seat next to a 17-year-old driver. The 17-year-old, a student at Hebron High School, told law enforcement that he drove Mr. Andrews around in return for M30 fentanyl pills.
Mr. Andrews allegedly admitted to law enforcement that he sold M/30 pills using the Instagram handle “deegetbandz_3x.” He further confirmed he delivered pills to the 14-year-old girl’s mailbox and gave the 17-year-old pills in return for his driving services.
According to the complaint, law enforcement concluded that Mr. Andrews allegedly dealt fentanyl to minors knowing fully well that counterfeit M/30 pills like the ones he was distributing were responsible for multiple overdoses and deaths.
“Most of us recoiled in horror when we heard that nine Carrollton children suffered ten fentanyl overdoses in the span of just six months. Mr. Andrews, on the other hand, allegedly seized on the situation as a marketing opportunity. Knowing full well that fentanyl was killing our kids, he allegedly attempted to convert survivors into customers,” said U.S. Attorney Leigha Simonton. “The Justice Department works tirelessly to investigate and prosecute fentanyl traffickers. But when we arrest one dealer, another inevitably pops up to take his place. We need the community’s help to educate our kids about the danger of fentanyl. One pill – or even half or a quarter of one pill – can kill.”
“The arrest of Mr. Andrews serves as notice to those who participate in any aspect of drug trafficking: DEA Dallas will continue to partner with our communities to educate and prevent these drugs from reaching our homes and will most importantly, hold those accountable who choose to distribute and profit from this poison,” said Eduardo A. Chavez, Special Agent in Charge of the DEA Dallas Field Division.
A criminal complaint is merely an allegation of criminal conduct, not evidence. Mr. Andrews is presumed innocent until proven guilty in a court of law, as are Luis Navarrete and Magaly Cano.
If convicted, Mr. Andrews faces up to 20 years in federal prison.
The Drug Enforcement Administration’s Dallas Field Division and the Carrollton Police Department conducted the investigation. Assistant U.S. Attorneys Rick Calvert and Phelesa Guy are prosecuting the case.
Note: Illicitly produced, fentanyl-laced pills often look similar to legitimate prescription pills like Oxycontin or Percocet, but can pose significantly more danger. On the street, these pills are often referred to as “M30s” (a reference to the markings on some of the pills), “blues,” “perks,” “yerks,” “china girls,” or “TNT.” DEA research shows that six out of ten pills laced with fentanyl contain a potentially lethal dose. One pill can kill. For resources, visit https://www.dea.gov/onepill.
2 March 2023
Woman Pleads Guilty to Threatening Election OfficialRead the Press Release
A New Hampshire woman pleaded guilty today to sending multiple threatening communications to a Michigan election official in the wake of the 2020 election.
According to court documents, Katelyn Jones, 25, of Epping, made multiple threats in November 2020 to the chair of the Wayne County Board of Canvassers, which oversees elections in Wayne County, Michigan. First, on Nov. 18, 2020, Jones sent a series of text messages to the official’s personal cell phone containing threats to injure the official and the official’s minor child. Jones’s text messages to the official included graphic photographs of a bloody, deceased, nude, mutilated woman lying on the ground as well as a photograph of the official’s minor child. Second, also on Nov. 18, 2020, Jones made posts to an Instagram account associated with the official that also contained threats to injure the official and the official’s minor child. For example, Jones posted on the official’s Instagram account that the official’s minor child was “beautiful” and that it would “be a shame if something happened to her.”
Jones pleaded guilty to making interstate threats. She is scheduled to be sentenced on July 11 and faces a maximum penalty of 10 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Dawn N. Ison for the Eastern District of Michigan, and Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division made the announcement.
The FBI Detroit Field Office investigated the case.
Assistant U.S. Attorney Diane N. Princ for the Eastern District of Michigan and Trial Attorney Jonathan E. Jacobson of the Criminal Division’s Public Integrity Section are prosecuting the case.
Wilsonville Man Who Orchestrated Violent Robberies Targeting Southern Oregon Marijuana Growers and Dealers Sentenced to Federal PrisonRead the Press Release
MEDFORD, Ore.—A Wilsonville, Oregon man who orchestrated multiple violent robberies targeting Southern Oregon marijuana growers and dealers was sentenced to federal prison today.
Shannon Christopher Harrop, 33, was sentenced to 162 months in federal prison and five years’ supervised release. Harrop was also ordered to pay $26,040 in restitution.
“This defendant choreographed multiple armed robberies in and around Medford that endangered dozens of lives,” said Nathan J. Lichvarcik, Chief of the U.S. Attorney’s Office Eugene and Medford Branch Offices. “Fortunately, law enforcement intervened to protect our community.”
“Mr. Harrop’s sentence is well justified,” said Jonathan T. McPherson, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Seattle Field Division. “Without the efforts of federal, state and local law enforcement his brazen criminal actions would have continued, further endangering the lives of community members.”
According to court documents, over a seven-month period beginning in September 2019, Harrop and multiple co-conspirators orchestrated four violent robberies targeting marijuana growers and dealers in and around Medford. The first robbery occurred on September 19, 2019, when two robbers handcuffed and robbed two victims at gunpoint in Medford, stealing $60,000 worth of a bulk narcotic individuals involved in the robbery claimed to be hemp. Law enforcement later determined that the robbery occurred during a drug deal brokered by Harrop. Harrop was contacted by investigators, but denied setting up the deal and having any knowledge of the robbery.
The second robbery occurred on November 2, 2019, in Eagle Point, Oregon at a residence located on a secluded marijuana grow. The robbers entered the residence pretending to be law enforcement officers executing a search warrant, handcuffed two individuals present at gun point, and stole several dozen pounds of marijuana, various personal items, and one of the victim’s vehicles. Law enforcement stopped a second vehicle traveling with the stolen vehicle and determined it was a rental car leased by Harrop who again denied involvement in the robbery. Inside the rented vehicle, officers located ski masks, zip ties, handcuffs, tactical vests, and two firearms.
The third robbery occurred on December 19, 2019, at a large marijuana grow in Applegate, Oregon. Several individuals pretended to be the U.S. Marshals Service executing a search warrant. The robbers handcuffed one individual at gun point and engaged in an armed standoff with another. This time the robbers got away with only five pounds of marijuana and $5,000 in cash. Law enforcement located several hundred plastic totes containing marijuana on the property they believed the robbers were targeting.
In the fourth and final robbery, on April 25, 2020, law enforcement responded to reports of shots fired in Josephine County, Oregon. They discovered the shots were the result of another robbery of a marijuana grow where multiple victims were restrained and robbed at gun point. Despite being fired on by one of the victims, the robbers got away with 71 pounds of processed marijuana and four jars of marijuana extract.
Over the next several months, through various recorded statements, investigators were able to connect Harrop and multiple associates to all four robberies. In one statement, Harrop admitted to visiting the location of the fourth robbery and seeing the processed marijuana, marijuana extract, and cash later targeted in the robbery.
Beginning in June 2020, Harrop tried to convince an undercover law enforcement agent to deliver forty kilograms of cocaine to Ohio on his behalf. In addition, Harrop attempted to orchestrate a fifth robbery with the undercover agent and multiple co-conspirators. On the day the robbery was supposed to occur, in July 2020, law enforcement officers arrested Harrop and his accomplices without incident.
On July 23, 2020, a federal grand jury in Medford returned an eight-count indictment charging Harrop and eight accomplices with conspiracy to interfere and interfering with commerce by robbery; conspiracy to possess with intent to distribute marijuana; using, carrying, and brandishing a firearm in furtherance of a drug trafficking crime; possessing firearms as convicted felons; and possessing firearms in furtherance of a drug trafficking crime.
On August 30, 2022, Harrop pleaded guilty to conspiring to interfere and interfering with commerce by robbery and using, carrying, and brandishing a firearm in furtherance of a drug trafficking crime.
Seven of Harrop’s accomplices have pleaded guilty. Six have been sentenced and one is pending sentencing. Harrop’s eighth accomplice is awaiting trial.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) with assistance from the U.S. Marshals Service, Oregon State Police, the Jackson and Josephine County Sheriff’s Offices, and Medford Police Department. It was prosecuted by Marco Boccato, Assistant U.S. Attorney for the District of Oregon.
Wichita Woman Sentenced to Prison for Bank FraudRead the Press Release
WICHITA, KAN. – A Kansas woman was sentenced today to 48 months in prison for bank fraud and tax fraud in connection to a scheme to defraud her former employers of millions of dollars.
In May 2022, Nancy Martin, 78, of Wichita pleaded guilty to one count of bank fraud and one count of aid or assist filing a false tax document. Martin defrauded Mid-Kansas Wound Specialists and Emergency Services P.A. for whom she worked as a bookkeeper, business manager, and chief operating officer. Between 2012 to 2017, Martin embezzled approximately $3.1 million by fraudulently obtaining money from her employers’ banks meanwhile falsifying accounting entries to disguise the embezzlement as payments or transferred funds between entities. Martin spent the stolen funds on personal expenses, travel, and investments.
From 2013 to 2016, Martin either filed tax returns or caused tax returns to be filed to the Internal Revenue Service that omitted income.
In addition to the 48 months in prison, a federal judge ordered Martin to pay more than $3.2 million in restitution to the victims and approximately $670,000 in restitution to the IRS.
“For years Nancy Martin abused her employment position and betrayed the trust of her employers to steal millions of dollars from them, and for that reason she is going to prison,” said U.S. Attorney Duston Slinkard. “The role of the prosecution was to seek justice and try to help victims recover their financial losses.”
“IRS Criminal Investigation was able to see through Ms. Martin’s sophisticated embezzlement scheme in order to bring justice to the victims involved,” said St. Louis Field Office Acting Special Agent in Charge Thomas Murdock. “Ms. Martin’s prison time sends a clear message that bank fraud and tax fraud have serious consequences.”
The IRS-Criminal Investigation investigated the case.
Assistant U.S. Attorney Aaron Smith prosecuted the case.
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Western North Carolina Dog Fighters Sentenced to Federal PrisonRead the Press Release
Two North Carolina men were sentenced today for violations of the Animal Welfare Act for engaging in dog fighting and related criminal conduct.
Laddie Dwayne McMillian, 47, will serve 16 months in prison and Derrick Twitty, 48, will serve six months in prison. Both defendants will serve two years of supervised release following the completion of their sentences and are prohibited from possessing any dogs during the term of supervision, including through a third party.
According to court documents, McMillian conspired to breed, train and fight dogs for nearly 15 years. He openly boasted of owning and operating “mass destruction kennels,” a fighting dog breeding operation. On Jan. 27, 2020, McMillian shared a video of his “yard,” showcasing 13 dogs. He also shared videos of his dogs engaged in fights. In one video, which lasts four minutes and 57 seconds, two dogs are seen fighting in a typical fighting pit. By the end of the video, the dogs’ faces and ears are bleeding and raw.
In early 2020, Twitty joined the fighting and breeding operations, and together, the two trained and bred dogs for dog fights, scheduled “roll” fights, and tended to their dog’s injuries. A “roll” is a fight between two dogs for a short period of time, testing the dogs’ fighting abilities and is an “animal fighting venture.”
“Slick Rick” was their prize fighter. Born in January 2018, McMillian trained and subjected Slick Rick to fights, over and over again. He died in January 2022, a few weeks after McMillian sponsored him in a dog fight.
“The life and death of this dog reflects the defendants’ extraordinary cruelty, abuse, and mistreatment of animals for entertainment – criminal conduct that our division has and will continue to aggressively prosecute,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division.
“The defendants in this case treated dogs like a commodity, bred and trained to fight, often to death, for the amusement of spectators taking part in this cruel activity,” said U.S. Attorney Dena J. King for the Western District of North Carolina. “Dogfighting is an illegal blood sport that subjects animals to incredible pain and suffering. It is also a federal crime and one that has the full attention of my office and our law enforcement counterparts.”
“The barbaric practice of pitting animals against each other in a fight to the death has no place in this country,” said Acting Special Agent in Charge Salina Walker of the Department of Agriculture Office of Inspector General (USDA-OIG). “The outstanding work of our federal, state, and local law enforcement partners who investigated this case and the prosecutors of the Department of Justice made it possible to bring this individual of a major animal fighting venture to justice. USDA-OIG has made animal fighting a high priority in order to demonstrate that these inhumane acts of cruelty to animals will not be tolerated.”
The USDA-OIG and North Carolina’s Polk County Sheriff’s Office investigated the case.
Senior Trial Attorney Banumathi Rangarajan and Trial Attorney William J. Shapiro of the Environment and Natural Resources Division’s Environmental Crimes Section and Deputy Criminal Chief Don Gast for the Western District of North Carolina prosecuted the case.
Western North Carolina Dog Fighters Sentenced to Federal PrisonRead the Press Release
ASHEVILLE, N.C. – Two North Carolina men were sentenced today for violations of the Animal Welfare Act for engaging in dog fighting and related criminal conduct, announced Dena J. King, U.S. Attorney for the Western District of North Carolina.
Laddie Dwayne McMillian, 47, will serve 16 months in prison and Derrick Twitty, 48, will serve six months in prison. Both defendants will serve two years of supervised release following the completion of their sentences and are prohibited from possessing any dogs during the term of supervision, including through a third party.
According to court documents, McMillian conspired to breed, train, and fight dogs for nearly 15 years. He openly boasted of owning and operating “mass destruction kennels,” a fighting dog breeding operation. On Jan. 27, 2020, McMillian shared a video of his “yard,” showcasing 13 dogs. He also shared videos of his dogs engaged in fights. In one video, which lasts four minutes and 57 seconds, two dogs are seen fighting in a typical fighting pit. By the end of the video, the dogs’ faces and ears are bleeding and raw.
In early 2020, Twitty joined the fighting and breeding operations, and together, the two trained and bred dogs for dog fights, scheduled “roll” fights, and tended to their dog’s injuries. A “roll” is a fight between two dogs for a short period of time, testing the dogs’ fighting abilities and is an “animal fighting venture.”
“Slick Rick” was their prize fighter. Born in January 2018, McMillian trained and subjected Slick Rick to fights, over and over again. He died in January 2022, a few weeks after McMillian sponsored him in a dog fight.
“The life and death of this dog reflects the defendants’ extraordinary cruelty, abuse, and mistreatment of animals for entertainment – criminal conduct that our division has and will continue to aggressively prosecute,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division.
“The defendants in this case treated dogs like a commodity, bred and trained to fight, often to death, for the amusement of spectators taking part in this cruel activity,” said U.S. Attorney King. “Dogfighting is an illegal blood sport that subjects animals to incredible pain and suffering. It is also a federal crime and one that has the full attention of my office and our law enforcement counterparts.”
“The barbaric practice of pitting animals against each other in a fight to the death has no place in this country,” said Acting Special Agent in Charge Salina Walker of the U.S. Department of Agriculture Office of Inspector General (USDA-OIG). “The outstanding work of our federal, state, and local law enforcement partners who investigated this case and the prosecutors of the Department of Justice made it possible to bring this individual of a major animal fighting venture to justice. USDA-OIG has made animal fighting a high priority in order to demonstrate that these inhumane acts of cruelty to animals will not be tolerated.”
The USDA-OIG and North Carolina’s Polk County Sheriff’s Office investigated the case.
Senior Trial Attorney Banumathi Rangarajan and Trial Attorney William J. Shapiro of the Environment and Natural Resources Division’s Environmental Crimes Section and Assistant U.S. Attorney Don Gast of the U.S. Attorney’s Office in Asheville prosecuted the case.
West Virginia Straw Purchaser Sentenced for Role in Beckley-to-Philadelphia Firearms Trafficking ConspiracyRead the Press Release
BECKLEY, W.Va. – Brandon Lawson, 33 of Oak Hill, was sentenced today to 18 months of incarceration, including nine months in prison and nine months on home detention with electronic monitoring, to be followed by three years of supervised release for transferring a firearm to an out-of-state resident. Lawson admitted to a role in a conspiracy to traffic over 140 firearms from the Beckley area to Philadelphia.
According to court documents and statements made in court, Lawson admitted to transferring a Ruger, Model LC9S, 9mm pistol to trafficking conspiracy ringleader Bisheem Jones, also known as “Bosh,” in Beckley on March 11, 2021. Lawson further admitted to aiding and abetting his spouse, Megan Bickford, 34, of Oak Hill, in the illegal purchase of firearms for the trafficking conspiracy during 2020 and 2021.
The trafficking conspirators recruited Bickford and other straw purchasers from within the Southern District of West Virginia. Jones or an intermediary told the straw purchasers which firearms to buy and provided the money for the purchases. Of the over 140 firearms trafficked by Jones and his co-conspirators between early 2020 and mid-2021, approximately 45 were recovered at crime scenes primarily in Philadelphia. These firearms have been connected to two homicides, crimes of domestic violence, and other violent offenses. Three firearms straw purchased by Lawson were recovered by Philadelphia police at crime scenes.
Lawson and Bickford are among 18 defendants who pleaded guilty in connection with the firearms trafficking. After five days of trial, a federal jury found Jones, 37, of Philadelphia, guilty on December 16, 2022, of conspiracy to travel interstate with the intent to deal in firearms without a license, conspiracy to commit money laundering, and interstate travel with the intent to deal in firearms without a license. Jones is scheduled to be sentenced on April 14, 2023, and faces a maximum penalty of 35 years in prison.
United States Attorney Will Thompson made the announcement and commended the investigative work of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Philadelphia Police Department.
United States District Judge Frank W. Volk imposed the sentence. Assistant United States Attorneys Negar M. Kordestani and Steve Loew prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
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. Related court documents and information can be found on PACER by searching for Case No. 5:22-cr-79.
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United States Attorneys' Offices Voluntary Self-Disclosure PolicyRead the Press Release
Introduction
The Deputy Attorney General’s September 15, 2022 memorandum, “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group,” instructed that each component of the Department of Justice (the “Department”) that prosecutes corporate crime should review its policies on corporate voluntary self-disclosure and, if there is no formal written policy to incentivize self-disclosure, it must draft and publicly share such a policy.
The Attorney General’s Advisory Committee (AGAC) requested that the White Collar Fraud Subcommittee of the AGAC, under the leadership of U.S. Attorney for the Eastern District of New York Breon Peace (Chair), recommend relevant policies and procedures for consideration. The below policy was prepared by a Corporate Criminal Enforcement Policy Working Group comprised of U.S. Attorneys from geographically diverse districts, including U.S. Attorney Peace, as well as U.S. Attorney for the Northern District of California Stephanie Hinds, U.S. Attorney for the District of Connecticut Vanessa Avery, U.S. Attorney for the District of Hawaii Clare Connors, U.S. Attorney for the District of New Jersey Philip Sellinger, U.S. Attorney for the Eastern District of North Carolina Michael F. Easley, Jr., U.S. Attorney for the Eastern District of Virginia Jessica Aber, and U.S. Attorney for the Western District of Virginia Christopher Kavanaugh. Mandy Riedel, White Collar Crimes Coordinator for the Executive Office for U.S. Attorneys, also participated in the development of this policy.
The Office of the Deputy Attorney General has reviewed and approved this policy. The policy shall apply to all United States Attorney’s Offices and is effective immediately.
Policy[1]
I. Voluntary Self-Disclosure Program
In circumstances where a company becomes aware of misconduct by employees or agents before that misconduct is publicly reported or otherwise known to the Department, companies may come to the United States Attorney’s Office (the “USAO”) and disclose that misconduct, enabling the government to investigate and hold wrongdoers accountable more quickly than would otherwise be the case.
In determining the appropriate form and substance of a criminal resolution for any company, prosecutors should consider whether the criminal conduct at issue came to light as a result of the company’s timely, voluntary self-disclosure and credit such disclosure appropriately. See Memorandum from Deputy Attorney General Lisa Monaco, “Further Revisions to Corporate Criminal Enforcement Policies Following Discussion with Corporate Crime Advisory Group,” Sept. 15, 2022 (referred to herein as the “Monaco Memo”).[2]
Crediting voluntary self-disclosure of misconduct by companies helps incentivize self-reporting and ensure individual accountability for misconduct. This policy sets forth the criteria the USAO uses in determining an appropriate resolution for an organization that makes a Voluntary Self-Disclosure (VSD) of misconduct to the USAO, the USAO’s expectations of what constitutes a VSD, and clear and predictable benefits for such VSDs. Companies that voluntarily self-disclose misconduct to the USAO pursuant to this policy will receive resolutions under more favorable terms than if the government had learned of the misconduct through other means.[3] (See Section II – Benefits of Meeting the Standards of Voluntary Self-Disclosure).
In cases where the company is being jointly prosecuted by a USAO and another Department office or component, or where the misconduct reported by the company falls within the scope of conduct covered by VSD policies administered by other Department offices or components,[4] the USAO will coordinate with, or, if necessary, obtain approval from, the Department component responsible for the VSD policy specific to the reported misconduct when considering a potential resolution and before finalizing any resolution. Consistent with relevant provisions of the Justice Manual and as allowable under alternate VSD policies, the USAO may choose to apply any provision of an alternate VSD policy in addition to, or in place of, any provision of this policy.
Even if companies believe the government may already be aware of the misconduct through other means, companies are encouraged to make disclosures to the Department. Prompt self-disclosures to the government will be considered favorably, even if they do not satisfy all the VSD criteria set forth below.[5]
A. Standards of Voluntary Self-Disclosure
Decisions about whether a disclosure constitutes a VSD will be made by the USAO based on a careful assessment of the circumstances of the disclosure on a case-by-case basis and at the sole discretion of the USAO. The USAO will require that a disclosure meet each of the following standards for it to constitute a VSD under this policy:
- Voluntary: VSDs only occur when the disclosure of misconduct is made voluntarily by the company. A disclosure will not be deemed a VSD under this policy where there is a preexisting obligation to disclose, such as pursuant to regulation, contract, or a prior Department resolution (e.g., non-prosecution agreement or deferred prosecution agreement).[6]
- Timing of the Disclosure: A disclosure will only be deemed a VSD when the disclosure is made to the USAO:
a. “prior to an imminent threat of disclosure or government investigation,” U.S.S.G. § 8C2.5(g)(1);
b. prior to the misconduct being publicly disclosed or otherwise known to the government; and
c. within a reasonably prompt time after the company becoming aware of the misconduct, with the burden being on the company to demonstrate timeliness.
- Substance of the Disclosure and Accompanying Actions: For a disclosure to be deemed a VSD under this policy, the disclosure must include all relevant facts concerning the misconduct that are known to the company at the time of the disclosure.
The USAO recognizes that a company may not be in a position to know all relevant facts at the time of a VSD because the company disclosed reasonably promptly after becoming aware of the misconduct. Therefore, a company should make clear that its disclosure is based upon a preliminary investigation or assessment of information, but it should nonetheless provide a fulsome disclosure of the relevant facts known to it at the time.
The USAO further expects that the company will move in a timely fashion to preserve, collect, and produce relevant documents and/or information, and provide timely factual updates to the USAO. Should the company conduct an internal investigation, the USAO expects appropriate factual updates as that investigation progresses. See JM § 9-28.700.
II. Benefits of Meeting the Standards for Voluntary Self-Disclosure
A. Credit for Voluntary Self-Disclosure, Full Cooperation, and Timely and Appropriate Remediation
Absent the presence of an aggravating factor, the USAO will not seek a guilty plea where a company has (a) voluntarily self-disclosed in accordance with the criteria set forth above, (b) fully cooperated, and (c) timely and appropriately remediated the criminal conduct.[7] Aggravating factors that may warrant the USAO seeking a guilty plea include, but are not limited to, misconduct that:
- poses a grave threat to national security, public health, or the environment;
- is deeply pervasive throughout the company; or
- involved current executive management of the company.
The presence of an aggravating factor does not necessarily mean that a guilty plea will be required. The USAO will assess the relevant facts and circumstances to determine the appropriate resolution.
To meet the standards of this VSD policy, appropriate remediation must include, but is not necessarily limited to, the company agreeing to pay all disgorgement, forfeiture, and restitution resulting from the misconduct at issue.
In addition, where a company fully meets the VSD policy, the USAO may choose not to impose a criminal penalty, and in any event will not impose a criminal penalty that is greater than 50% below the low end of the U.S. Sentencing Guidelines fine range.
If, due to the presence of an aggravating factor, a guilty plea is warranted for a company that has voluntarily self-disclosed, fully cooperated, and timely and appropriately remediated the criminal conduct, the USAO:
- will accord or recommend to a sentencing court, at least 50% and up to a 75% reduction off the low end of the U.S. Sentencing Guidelines fine range after any applicable reduction under U.S.S.G. § 8C2.5(g), or the penalty reduction benefit set forth in the alternate VSD policy specific to the misconduct at issue, if applicable; and
- will not require appointment of a monitor if the company has, at the time of resolution, demonstrated that it has implemented and tested an effective compliance program consistent with Subsection B below.
B. Effective Compliance and Independent Monitorship
The USAO will not require the imposition of an independent compliance monitor for a cooperating company that voluntarily self-discloses the relevant conduct and timely and appropriately remediates the criminal conduct, if the company demonstrates at the time of resolution that it has implemented and tested an effective compliance program. Decisions about the need for a monitor will be made on a case-by-case basis and at the sole discretion of the USAO.
In evaluating whether the company has implemented and tested an effective compliance program, the USAO will refer to the Monaco Memo. This evaluation shall consider resources developed by the Department of Justice’s Criminal Division to assist prosecutors in assessing the effectiveness of a company’s compliance program (see, e.g., Criminal Division, Evaluation of Corporate Compliance Programs (updated June 2020)) or guidance provided by other Department components as to specialized areas of corporate compliance.
[1] The contents of this memorandum provide internal guidance to prosecutors on legal issues. Nothing in it is intended to create any substantive or procedural rights, privileges, or benefits enforceable in any administrative, civil, or criminal matter by prospective or actual witnesses or parties.
[2] Consistent with the Monaco Memo, the terms corporation and company apply to all types of business organizations, including but not limited to partnerships, sole proprietorships, government entities, and unincorporated associations. See Justice Manual (“JM”) § 9-28.200.
[3] The policy applies to all companies, including those that have been the subject of prior resolutions. Department prosecutors will weigh and appropriately credit all VSDs on a case-by-case basis, pursuant to this policy and applicable Department guidance.
[4] See, e.g., Criminal Division Corporate Enforcement and Voluntary Self-Disclosure Policy (Criminal Division); Leniency Policy and Procedures (Antitrust Division); NSD Enforcement Policy for Business Organizations (National Security Division); Environmental Crimes Section Voluntary Self-Disclosure Policy (Environment and Natural Resources Division); Consumer Protection Branch Voluntary Self-Disclosure Policy for Business Organizations (Consumer Protection Branch); The Corporate Voluntary Self-Disclosure Policy of the Tax Division (Tax Division).
[5] Regardless of whether a disclosure meets the standards of a VSD, prosecutors will continue to consider the corporation’s pre-indictment conduct, e.g., voluntary disclosure or cooperation, in determining whether to seek an indictment. JM § 9-28.400. Separate from this formal VSD Program, the Department continues to encourage corporations, as part of their compliance programs, to conduct internal investigations and to disclose the relevant facts to the appropriate authorities. See JM § 9-28.900. A corporation’s timely and voluntary disclosure of wrongdoing is among the factors prosecutors should consider in reaching a decision as to the proper treatment of a corporate target in conducting an investigation, determining whether to bring charges, and negotiating plea or other agreements. See JM § 9-28.300. Prosecutors may also consider a corporation’s timely and voluntary disclosure, as an independent factor in evaluating the company’s overall cooperation and the adequacy of the corporation’s compliance program and its management’s commitment to the compliance program. See JM § 9-28.900.
[6] This policy also does not apply in situations where disclosure of a company’s misconduct to the USAO was made by whistleblowers, including those who have informed the Department of fraud and other misconduct in qui tam actions.
[7] In such cases, the resolution could include a declination, non-prosecution agreement, or deferred prosecution agreement. In evaluating whether a company has fully cooperated and timely and appropriately remediated the criminal conduct, the USAO will rely on operative provisions of the Justice Manual and Department policy. See, e.g., Monaco Memo; Memorandum from Deputy Attorney General Lisa O. Monaco, “Corporate Crime Advisory Group and Initial Revisions to Corporate Criminal Enforcement Policies,” Oct. 28, 2021.
- Voluntary: VSDs only occur when the disclosure of misconduct is made voluntarily by the company. A disclosure will not be deemed a VSD under this policy where there is a preexisting obligation to disclose, such as pursuant to regulation, contract, or a prior Department resolution (e.g., non-prosecution agreement or deferred prosecution agreement).[6]
United States Attorneys' Offices Monitor Selection for Corporate Criminal EnforcementRead the Press Release
Introduction
The Deputy Attorney General’s September 15, 2022 memorandum, “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group,” instructed that each component involved in corporate criminal resolutions that does not currently have a public monitor selection process must adopt an already existing Department process, or develop and publish its own process.
The Attorney General’s Advisory Committee (AGAC) requested that the White Collar Fraud Subcommittee of the AGAC, under the leadership of U.S. Attorney for the Eastern District of New York Breon Peace (Chair), recommend relevant policies and procedures for consideration. The below policy was prepared by a Corporate Criminal Enforcement Policy Working Group comprised of U.S. Attorneys from geographically diverse districts, including U.S. Attorney Peace, as well as U.S. Attorney for the Northern District of California Stephanie Hinds, U.S. Attorney for the District of Connecticut Vanessa Avery, U.S. Attorney for the District of Hawaii Clare Connors, U.S. Attorney for the District of New Jersey Philip Sellinger, U.S. Attorney for the Eastern District of North Carolina Michael F. Easley, Jr., U.S. Attorney for the Eastern District of Virginia Jessica Aber, and U.S. Attorney for the Western District of Virginia Christopher Kavanaugh. Assistant U.S. Attorney Mandy Riedel, White Collar Crimes Coordinator for the Executive Office for U.S. Attorneys, also participated in the development of this policy.
The Office of the Deputy Attorney General has reviewed and approved this policy. The policy shall apply to all United States Attorney’s Offices and is effective as of March 1, 2023.
Policy
The purpose of this memorandum is to establish standards, policy, and procedures for the selection of monitors in criminal matters being handled by United States Attorney’s Offices (“USAOs,” and each a “USAO”).1 This memorandum sets forth the public monitor selection process for all USAOs, the adoption of which was directed by the Memorandum from Deputy Attorney General Lisa O. Monaco, “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group,” dated September 15, 2022 (“Monaco Memo 2022”), and incorporates guidance from both Monaco Memo 2022 and the Memorandum from Deputy Attorney General Lisa O. Monaco, “Corporate Crime Advisory Group and Initial Revisions
1 The contents of this memorandum provide internal guidance to prosecutors on legal issues. Nothing in it is intended to create any substantive or procedural rights, privileges, or benefits enforceable in any administrative, civil, or criminal matter by prospective or actual witnesses or parties. This memorandum does not apply to cases involving court-appointed monitors, where prosecutors must give due regard to the appropriate role and procedures of the court.
to Corporate Criminal Enforcement Policies,” dated October 28, 2021 (“Monaco Memo 2021”).2 The standards, policy, and procedures contained in this memorandum shall apply to all determinations regarding whether a monitor is appropriate in specific criminal cases and to any deferred prosecution agreement (“DPA”), non-prosecution agreement (“NPA”), or plea agreement between the USAO and a company which requires the retention of a monitor.
I. Principles for Determining Whether a Monitor is Needed in Individual Cases
Independent corporate monitors can be an effective resource in assessing a company’s compliance with the terms of a corporate criminal resolution, whether a DPA, NPA, or plea agreement. Monitors can also be an effective means of reducing the risk of repeat misconduct and compliance lapses identified during a corporate criminal investigation.
Prosecutors should analyze and carefully assess the need for the imposition of a monitor on a case-by-case basis, using the following non-exhaustive list of factors when evaluating the necessity and potential benefits of a monitor:
1. Whether the company voluntarily self-disclosed the underlying misconduct in a manner that satisfies the USAO’s self-disclosure policy;
2. Whether, at the time of the resolution and after a thorough risk assessment, the company has implemented an effective compliance program and sufficient internal controls to detect and prevent similar misconduct in the future;
3. Whether, at the time of the resolution, the company has adequately tested its compliance program and internal controls to demonstrate that they would likely detect and prevent similar misconduct in the future;
4. Whether the underlying criminal conduct was long-lasting or pervasive across the company or was approved, facilitated, or ignored by senior management, executives, or directors (including by means of a corporate culture that tolerated risky behavior or misconduct, or did not encourage open discussion and reporting of possible risks and concerns);
5. Whether the underlying criminal conduct involved the exploitation of an inadequate compliance program or system of internal controls;
6. Whether the underlying criminal conduct involved active participation of compliance personnel or the failure of compliance personnel to appropriately escalate or respond to red flags;
2 The two Monaco memos incorporate and are consonant with prior memoranda on monitor selection that were applicable to the USAOs, including the Memorandum from Acting Deputy Attorney General Craig S. Morford, dated March 7, 2008.
7. Whether the company took adequate investigative or remedial measures to address the underlying criminal conduct, including, where appropriate, the termination of business relationships and practices that contributed to the criminal conduct, and discipline or termination of personnel involved, including with respect to those with supervisory, management, or oversight responsibilities for the misconduct;
8. Whether, at the time of the resolution, the company’s risk profile has substantially changed, such that the risk of recurrence of the misconduct is minimal or nonexistent;
9. Whether the company faces any unique risks or compliance challenges, including with respect to the particular region or business sector in which the corporation operates or the nature of the corporation's customers; and
10. Whether and to what extent the company is subject to oversight from industry regulators, or a monitor imposed by another domestic or foreign enforcement authority or regulator.
The factors listed above are intended to be illustrative of those that should be evaluated and are not an exhaustive list of potentially relevant considerations. Prosecutors should determine whether a monitor is required based on the facts and circumstances presented in each case.3
In general, a USAO should favor the imposition of a monitor where there is a demonstrated need for, and clear benefit to be derived from, a monitorship. Where a company’s compliance program and controls are untested, ineffective, inadequately resourced, or not fully implemented at the time of a resolution, prosecutors should consider imposing a monitorship. This is particularly true if the investigation reveals that a compliance program is deficient or inadequate in numerous or significant respects. Conversely, where a company’s compliance program and controls are demonstrated to be tested, effective, adequately resourced, and fully implemented at the time of a resolution, a monitor may not be necessary. Finally, at a minimum, the scope of any monitorship should be appropriately tailored to address the specific issues and concerns that created the need for the monitor.
II. Approval Requirement for Monitorship Agreements
Before agreeing to the imposition of a monitor in any case, the prosecutors handling the matter must first receive approval from their supervisors, and the United States Attorney (“USA”).
III. Terms of USAO Monitorship Agreements
As a preliminary matter, any DPA, NPA, or plea agreement between the USAO and a company which requires the retention of a monitor (hereinafter referred to as the “Agreement”), should contain the following:
- a description of the monitor’s required qualifications;
3 Monitors should not be imposed to further punitive goals.
2. a description of the monitor selection process;
3. a description of the process for replacing the monitor during the term of the monitorship, should it be necessary;
4. a statement that the parties will endeavor to complete the monitor selection process within sixty (60) days of the execution of the underlying agreement;
5. an explanation of the responsibilities of the monitor and the monitorship’s scope; and
6. the length of the monitorship.
IV. Standing Committee on the Selection of Monitors
Each USAO shall create a Standing Committee on the Selection of Monitors (the “Standing Committee”).
A. Composition of the Standing Committee
The Standing Committee shall be comprised of 3 to 5 senior prosecutors and must include the following individuals: (1) the USAO’s Criminal Division Chief; (2) the Chief of the section or unit entering into the Agreement; and (3) the USAO’s Ethics Advisor.4
The Criminal Division Chief shall serve as the Chair of the Standing Committee and shall be responsible for ensuring that the Standing Committee discharges its responsibilities. All USAO employees involved in the selection process, including Standing Committee Members, should be mindful of their obligations to comply with the conflict-of-interest guidelines set forth in 18 U.S.C. Section 208, 5 C.F.R. Part 2635 (financial interest), and 28 C.F.R. Part 45.2 (personal or political relationship), and shall provide written certification of such compliance to the Criminal Division Ethics Advisor as soon as practicable, but no later than the time of the submission of the Monitor Recommendation Memorandum to the USA.
B. Convening the Standing Committee
The Chief of the relevant section or unit handling the case should notify the Chair of the Standing Committee as soon as practicable that the Standing Committee will need to convene. Notice should be provided as soon as an agreement in principle has been reached between the government and the company that is the subject of the Agreement (hereinafter referred to as the “Company”), but not later than the date the Agreement is executed. The Chair will arrange to convene the Standing Committee meeting as soon as practicable after receiving the Monitor
4 Should any of these three individuals be recused from a particular case, the USA will appoint another senior prosecutor to fill that individual’s position on the Standing Committee. If the Ethics Advisor is recused, that position must be filled with another senior prosecutor with similar responsibilities, such as another or alternate Ethics Advisor, or a Professional Responsibility Advisor.
Recommendation Memorandum described below, identify the Standing Committee participants for that case, and ensure that there are no conflicts among the Standing Committee Members.
V. The Selection Process
A monitor must be selected based on the unique facts and circumstances of each matter and the merits of the individual candidate. Accordingly, the selection process should: (i) instill public confidence in the process; (ii) reflect the Department’s commitment to diversity, equity, inclusion, and accessibility; 5 and (iii) result in the selection of a highly qualified person or entity, free of any actual or potential conflict of interest or appearance of a potential or actual conflict of interest, and suitable for the assignment at hand.6 To meet those objectives, the USAO shall employ the following procedure7 in selecting a monitor, absent authorization from the Standing Committee to deviate from this process as described in Section VII below.
A. Nomination of Monitor Candidates
At the outset of the monitor selection process, counsel for the Company should be advised by the prosecutors handling the matter to recommend a pool of three qualified monitor candidates. Within at least (20) business days after the execution of the Agreement, the Company should submit a written proposal identifying the monitor candidates, providing the following:
- a description of each candidate’s qualifications and credentials in support of the evaluative considerations and factors listed below (and those of their team, where applicable);
- a written certification by the Company that it will not employ or be affiliated with the monitor, the monitor’s firm, or other professionals who are part of the monitorship team during the term of the monitorship, for a period of not less than three years from the date of the termination of the monitorship;8
- a written certification by each of the candidates that they have no conflict of interest that would prevent them from accepting the monitorship and is not a current or recent (i.e., within the prior two years) employee, agent, or representative of the Company and holds no interest in, and has no relationship with, the Company, its subsidiaries, affiliates or related entities, or its employees, officers, directors, or outside counsel retained in the matter at issue in the monitorship;
5 This includes with respect to the monitor, as well as the team supporting the monitor.
6 Any submission or selection of a monitor candidate by either the Company or the USAO shall be made without unlawful discrimination against any person or class of persons.
7 The selection process outlined in this Memorandum applies both to the selection of a monitor at the initiation of a monitorship and to the selection of a replacement monitor, where necessary.
8 A USA, with the agreement of the Ethics Advisor, may waive this requirement as to the monitor’s firm or professionals who are part of the monitorship team during the term of the monitorship; such a waiver decision ought to be accompanied by written justification stating the reasons as to why such a waiver is necessary.
4. a written certification by each of the candidates that they have notified any clients that the candidate represents in a matter involving the USAO, and that the candidate has either obtained a waiver from those clients or has withdrawn as counsel in the other matter(s); and
5. a statement identifying the monitor candidate that is the Company’s first choice to serve as the monitor.
B. Initial Review of Monitor Candidates
The prosecutors handling the matter, along with supervisors, should promptly interview each monitor candidate to assess their independence, qualifications, credentials and suitability for the assignment (and those of their team, where applicable) and, in conducting a review, should consider the following factors:
- each monitor candidate’s general background, education and training, professional experience, professional commendations and honors, licensing, reputation in the relevant professional community, and past experience as a monitor;
- each monitor candidate’s experience and expertise with the particular area(s) at issue in the case under consideration, and experience and expertise in applying the particular area(s) at issue in an organizational setting;
- each monitor candidate’s degree of objectivity and independence from the Company to ensure effective and impartial performance of the monitor's duties;
- the adequacy and sufficiency of each monitor candidate’s resources to discharge the monitor's responsibilities effectively; and
- any other factor determined by the prosecutors, based on the circumstances, to relate to the qualifications, competency, and independence of each monitor candidate as they may relate to the tasks required by the monitor agreement and nature of the business organization to be monitored.
If the prosecutors handling the matter and their supervisors decide that any or all of the three candidates lack the requisite qualifications, they should notify the Company and request that counsel for the Company propose another candidate or candidates within twenty (20) business days.9 Once the prosecutors handling the matter conclude that the Company has provided a slate of three qualified
9 A Company may be granted a reasonable extension of time to propose an additional candidate or candidates if circumstances warrant an extension. The prosecutors handling the matter should advise the Standing Committee of any such extension.
candidates, they should conduct a review of those candidates and confer with their supervisors to determine which of the monitor candidates should be recommended to the Standing Committee.10
C. Preparation of a Monitor Recommendation Memorandum
Once the prosecutors handling the matter and their supervisors recommend a candidate, the selection process should be referred to the Standing Committee. The prosecutors handling the matter should prepare a written memorandum to the Standing Committee, in the format attached hereto. The memorandum should contain the following information:
- a brief statement of the underlying case;
- a description of the proposed disposition of the case, including the charges filed (if any);
- an explanation as to why it was determined that a monitor is required in the case, based on the considerations set forth in this memorandum;
- a summary of the responsibilities of the monitor, and their term;
- a description of the process used to select the candidate;
- a description of the selected candidate’s qualifications (and those of their team, if applicable), and why the selected candidate is being recommended;
- a description of countervailing considerations, if any, in selecting the candidate;
- a description of the other candidates put forward for consideration by the Company; and
- a signed certification, on the form attached hereto, by each of the prosecutors involved in the monitor selection process that he/she has complied with the conflicts-of-interest guidelines set forth in 18 U.S.C Section 208, 5 C.F.R. Part 2635, and 28 C.F.R. Part 45 in the selection of the candidate.
D. Standing Committee Review of a Monitor Candidate
The Standing Committee shall review the recommendation set forth in the Monitor Recommendation Memorandum and vote whether to accept the recommendation. In the course of making its decision, the Standing Committee may, in its discretion, interview one or more of the candidates put forward for consideration by the Company.
10 If the prosecutors handling the matter, along with their supervisors, determine that the Company has not proposed and appears unwilling or unable to propose acceptable candidates, consistent with the guidance provided herein, and that the Company's delay in proposing candidates is negatively impacting the Agreement or the prospective monitorship, then the prosecutors may evaluate alternative candidates that they identify in consultation with the Standing Committee and provide a list of such candidates to the Company for consideration.
If the Standing Committee accepts the recommended candidate, it should note its acceptance of the recommendation in writing on the Monitor Recommendation Memorandum and forward the memorandum to the USA for approval and ultimate submission to the Office of the Deputy Attorney General (“ODAG”). In addition to noting its acceptance of the recommendation, the Standing Committee may also, where appropriate, revise the Memorandum. The Standing Committee's recommendation should also include a written certification by the USAO’s Ethics Advisor that the recommended candidate meets the ethical requirements for selection as a monitor, that the selection process utilized in approving the candidate was proper, and that the attorneys involved in the process acted in compliance with the conflict-of-interest guidelines set forth in 18 U.S.C. Section 208, 5
C.F.R. Part 2635, and 28 C.F.R. Part 45.
If the Standing Committee rejects the recommended candidate, it should so inform the prosecutors handling the matter and their supervisors of the rejection decision. In this instance, the prosecutors handling the matter, along with their supervisors, may either recommend an alternate candidate from the two remaining candidates proposed by the Company or, if necessary, obtain from the Company the names of additional qualified monitor candidates, as provided by Section V.C. above. If the Standing Committee rejects the recommended candidate, or the pool of remaining candidates, the prosecutors and their supervisors should notify the Company. The Standing Committee also should return the Monitor Recommendation Memorandum and all attachments to the prosecutors handling the matter.
If the Standing Committee is unable to reach a majority decision regarding the proposed monitor candidate, the Standing Committee should so indicate on the Monitor Recommendation Memorandum and forward the Memorandum and all attachments to the USA for his or her decision.
E. Approval by the USA
The USA must review and consider the recommendation of the Standing Committee set forth in the Monitor Recommendation Memorandum. In the course of doing so, the USA may request additional information from the Standing Committee or the prosecutors handling the matter and their supervisors. The USA may also elect to interview the candidate recommended by the Standing Committee.
Once a proposed candidate is approved by the USA, the USA should forward the Monitor Recommendation Memorandum to ODAG.
If the USA rejects the recommended candidate, they should so inform the Standing Committee, as well as the prosecutors handling the matter and their supervisors of the rejection decision in writing explaining the reasons behind the USA’s rejection. In this instance, the prosecutors handling the matter, along with their supervisors, may either recommend an alternate candidate from the two remaining candidates proposed by the Company or, if necessary, obtain from the Company the names of additional qualified monitor candidates, as provided by Section V.C. above. If the USA rejects the recommended candidate, or the pool of remaining candidates, the prosecutors and their supervisors should notify the Company.
F. Approval of ODAG
All monitor candidates selected pursuant to DPAs, NPAs, and plea agreements must be approved by ODAG. If ODAG does not approve the proposed monitor, the prosecutors handling the matter should notify the Company and request that the Company propose a new candidate or slate of candidates as provided by Section V.C. above. If ODAG approves the proposed monitor, the prosecutors handling the matter should notify the Company, which shall notify the three candidates of the decision, and the monitorship shall be executed according to the terms of the Agreement.
VI. Retention of Records Regarding Monitor Selection
It should be the responsibility of the prosecutors handling the matter to ensure that a copy of the Monitor Recommendation Memorandum, including attachments and documents reflecting the approval or disapproval of a candidate, is retained in the case file for the matter and that a second copy is provided to the Chair of the Standing Committee. The Chair of the Standing Committee should obtain and maintain an electronic copy of every agreement which provides for a monitor. The USA should also provide a copy of each agreement to the Assistant Attorney General for the Criminal Division at a reasonable time after it has been executed.
VII. Departure from Policy and Procedure
Given that each case presents unique facts and circumstances, the monitor selection process must be practical and flexible. When the prosecutors handling the case at issue conclude that the monitor selection process should be different from the process described herein, the departure should be discussed, approved, and documented by the Standing Committee.11 The Standing Committee can request additional information or a written request for a departure.12
VIII. Continued Review of Monitorship
In matters where an independent corporate monitor is imposed pursuant to a resolution with the USAO, prosecutors should ensure that the monitor’s responsibilities and scope of authority are well-defined and recorded in writing, and that a clear workplan is agreed upon between the monitor and the company – all to ensure agreement among the company, monitor, and USAO as to the proper scope of review.
11 Any substitute process that departs from the process set forth in this policy must incorporate and apply the same principles of transparency, predictability, and consistency, as set forth in the Monaco Memo 2022.
12 In cases where the company is being jointly prosecuted by a USAO and another Department component, the USAO and the Department component shall jointly determine whether to apply the monitor selection process of the USAO, the Department component, or an alternative selection process that combines elements of their respective policies and procedures, including, but not limited to, with respect to the composition of the Standing Committee.
For the term of the monitorship, prosecutors must remain apprised of the ongoing work conducted by the monitor.13 Continued review of the monitorship requires ongoing communication with both the monitor and the company.14
Prosecutors should receive regular updates from the monitor about the status of the monitorship and any issues presented. Monitors should promptly alert prosecutors if they are being denied access to information, resources, or corporate employees or agents necessary to execute their charge. Prosecutors should also regularly receive information about the work the monitor is doing to ensure that it remains tailored to the workplan and scope of the monitorship. In reviewing information relating to the monitor’s work, prosecutors should consider the reasonableness of the monitor’s review, including, where appropriate, issues relating to the cost of the monitor’s work. In certain cases, prosecutors may determine that the initial term of the monitorship is longer than necessary to address the concerns that created the need for the monitor, or that the scope of the monitorship is broader than necessary to accomplish the goals of the monitorship. For example, a company may demonstrate significant and faster-than-anticipated improvements to its compliance program, and this could reduce the need for continued monitoring. Conversely, prosecutors may determine that newly identified concerns require lengthening the term or amending the scope of the monitorship.
13 In cases of court-appointed monitors, the court may elect to oversee this inquiry.
14 Any agreement requiring a monitor should also explain what role the USAO could play in resolving disputes that may arise between the monitor and the company, given the facts and circumstances of the case.
United States Attorney Young Announces Implementation of New Voluntary Self-Disclosure PolicyRead the Press Release
Policy Sets National U.S. Attorney Office Standard for Circumstances Under Which Companies May Receive Credit for Voluntarily Self-Disclosing Criminal Conduct, and Benefits of Self-Disclosure
United States Attorney Jane E. Young announced that the U.S. Attorney’s Office for the District of New Hampshire has implemented the new United States Attorney’s Offices’ Voluntary Self-Disclosure Policy released earlier today. The policy, which is effective immediately, details the circumstances under which a company will be considered to have made a voluntary self-disclosure (VSD) of misconduct to a United States Attorney’s Office (USAO), and provides transparency and predictability to companies and the defense bar concerning the concrete benefits and potential outcomes in cases where companies voluntarily self-disclose misconduct, fully cooperate and timely and appropriately remediate.
The goal of the policy is to standardize how VSDs are defined and credited by USAOs nationwide, and to incentivize companies to maintain effective compliance programs capable of identifying misconduct, to expeditiously and voluntarily disclose and remediate misconduct, and to cooperate fully with the government in corporate criminal investigations. The policy was developed pursuant to the Deputy Attorney General’s September 15, 2022 memorandum, “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group” (Monaco Memo), which directed each Department of Justice (DOJ) component that prosecutes corporate crime to review its policies on corporate voluntary self-disclosure and, if there was no formal written policy to incentivize self-disclosure, draft and publicly share such a policy.
Under the new VSD policy, a company is considered to have made a VSD if it becomes aware of misconduct by employees or agents before that misconduct is publicly reported or otherwise known to the DOJ, and discloses all relevant facts known to the company about the misconduct to a USAO in a timely fashion prior to an imminent threat of disclosure or government investigation. A company that voluntarily self-discloses as defined in the policy and fully meets the other requirements of the policy, by—in the absence of any aggravating factor—fully cooperating and timely and appropriately remediating the criminal conduct (including agreeing to pay all disgorgement, forfeiture, and restitution resulting from the misconduct), will receive significant benefits, including that the USAO will not seek a guilty plea; may choose not to impose any criminal penalty, and in any event will not impose a criminal penalty that is greater than 50% below the low end of the United States Sentencing Guidelines (USSG) fine range; and will not seek the imposition of an independent compliance monitor if the company demonstrates that it has implemented and tested an effective compliance program.
The policy identifies three aggravating factors that may warrant a USAO seeking a guilty plea even if the other requirements of the VSD policy are met: (1) if the misconduct poses a grave threat to national security, public health, or the environment; (2) if the misconduct is deeply pervasive throughout the company; or (3) if the misconduct involved current executive management of the company. The presence of an aggravating factor does not necessarily mean that a guilty plea will be required; instead, the USAO will assess the relevant facts and circumstances to determine the appropriate resolution. If a guilty plea is ultimately required, the company will still receive the other benefits under the VSD policy, including that the USAO will recommend a criminal penalty of at least a 50% and up to a 75% reduction off the low end of the USSG fine range, and that the USAO will not require the appointment of a monitor if the company has implemented and tested an effective compliance program.
In cases where a company is being jointly prosecuted by a USAO and another DOJ component, or where the misconduct reported by the company falls within the scope of conduct covered by VSD policies administered by other DOJ components, the USAO will coordinate with, or, if necessary, obtain approval from, the DOJ component responsible for the VSD policy specific to the reported misconduct when considering a potential resolution. Consistent with relevant provisions of the Justice Manual and as allowable under alternate VSD policies, the USAO may choose to apply any provision of an alternate VSD policy in addition to, or in place of, any provision of its policy.
The Attorney General’s Advisory Committee (AGAC), under the leadership of United States Attorney for the Southern District of New York, Damian Williams, requested that the White Collar Fraud Subcommittee of the AGAC, under the leadership of United States Attorney for the Eastern District of New York Breon Peace, develop policies in response to the Deputy AG’s memo. The policy announced today was prepared by a Corporate Criminal Enforcement Policy Working Group comprised of U.S. Attorneys from geographically diverse districts, including U.S. Attorney Peace, as well as U.S. Attorney for the Eastern District of Virginia Jessica Aber, U.S. Attorney for the District of Connecticut Vanessa Avery, U.S. Attorney for the District of Hawaii Clare Connors, U.S. Attorney for the Eastern District of North Carolina Michael F. Easley, Jr., U.S. Attorney for the Northern District of California Stephanie Hinds, U.S. Attorney for the Western District of Virginia Christopher Kavanaugh, and U.S. Attorney for the District of New Jersey Philip Sellinger. Assistant U.S. Attorney Amanda Riedel, White Collar Crimes Coordinator for the Executive Office for U.S. Attorneys, also participated in the development of the policy.
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United States Attorney W. Stephen Muldrow Announces Implementation of New Voluntary Self-Disclosure Policy and New Monitor Selection for Corporate Criminal Enforcement PolicyRead the Press Release
United States Attorney W. Stephen Muldrow announced that the U.S. Attorney’s Office for the District of Puerto Rico has implemented the new United States Attorney’s Offices’ Voluntary Self-Disclosure Policy (the “VSD Policy”) and the United States Attorney’s Offices’ Monitor Selection for Corporate Criminal Enforcement Policy (the “MS-CCE Policy”) released earlier today, which are effective immediately.
The VSD Policy details the circumstances under which a company will be considered to have made a voluntary self-disclosure (VSD) of misconduct to a United States Attorney’s Office (USAO), and provides transparency and predictability to companies and the defense bar concerning the concrete benefits and potential outcomes in cases where companies voluntarily self-disclose misconduct, fully cooperate and timely and appropriately remediate. The goal of the VSD policy is to standardize how VSDs are defined and credited by USAOs nationwide, and to incentivize companies to maintain effective compliance programs capable of identifying misconduct, to expeditiously and voluntarily disclose and remediate misconduct, and to cooperate fully with the government in corporate criminal investigations.
The VSD policy was developed pursuant to the Deputy Attorney General’s September 15, 2022 memorandum, “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group” (Monaco Memo), which directed each Department of Justice (DOJ) component that prosecutes corporate crime to review its policies on corporate voluntary self-disclosure and, if there was no formal written policy to incentivize self-disclosure, draft and publicly share such a policy.
Under the new VSD Policy, a company is considered to have made a VSD if it becomes aware of misconduct by employees or agents before that misconduct is publicly reported or otherwise known to the DOJ, and discloses all relevant facts known to the company about the misconduct to a USAO in a timely fashion prior to an imminent threat of disclosure or government investigation. A company that voluntarily self-discloses as defined in the policy and fully meets the other requirements of the policy, by—in the absence of any aggravating factor—fully cooperating and timely and appropriately remediating the criminal conduct (including agreeing to pay all disgorgement, forfeiture, and restitution resulting from the misconduct), will receive significant benefits, including that the USAO will not seek a guilty plea; may choose not to impose any criminal penalty, and in any event will not impose a criminal penalty that is greater than 50% below the low end of the United States Sentencing Guidelines (USSG) fine range; and will not seek the imposition of an independent compliance monitor if the company demonstrates that it has implemented and tested an effective compliance program.
The VSD Policy identifies three aggravating factors that may warrant a USAO seeking a guilty plea even if the other requirements of the VSD policy are met: (1) if the misconduct poses a grave threat to national security, public health, or the environment; (2) if the misconduct is deeply pervasive throughout the company; or (3) if the misconduct involved current executive management of the company. The presence of an aggravating factor does not necessarily mean that a guilty plea will be required; instead, the USAO will assess the relevant facts and circumstances to determine the appropriate resolution. If a guilty plea is ultimately required, the company will still receive the other benefits under the VSD policy, including that the USAO will recommend a criminal penalty of at least a 50% and up to a 75% reduction off the low end of the USSG fine range, and that the USAO will not require the appointment of a monitor if the company has implemented and tested an effective compliance program.
In cases where a company is being jointly prosecuted by a USAO and another DOJ component, or where the misconduct reported by the company falls within the scope of conduct covered by VSD policies administered by other DOJ components, the USAO will coordinate with, or, if necessary, obtain approval from, the DOJ component responsible for the VSD Policy specific to the reported misconduct when considering a potential resolution. Consistent with relevant provisions of the Justice Manual and as allowable under alternate VSD policies, the USAO may choose to apply any provision of an alternate VSD policy in addition to, or in place of, any provision of its policy.
The Attorney General’s Advisory Committee (AGAC), under the leadership of United States Attorney for the Southern District of New York Damian Williams, requested that the White Collar Fraud Subcommittee of the AGAC, under the leadership of United States Attorney for the Eastern District of New York Breon Peace, develop policies in response to the Deputy AG’s memo. The VSD Policy announced today was prepared by a Corporate Criminal Enforcement Policy Working Group comprised of U.S. Attorneys from geographically diverse districts, including U.S. Attorney Peace, as well as U.S. Attorney for the Eastern District of Virginia Jessica Aber, U.S. Attorney for the District of Connecticut Vanessa Avery, U.S. Attorney for the District of Hawaii Clare Connors, U.S. Attorney for the Eastern District of North Carolina Michael F. Easley, Jr., U.S. Attorney for the Northern District of California Stephanie Hinds, U.S. Attorney for the Western District of Virginia Christopher Kavanaugh, and U.S. Attorney for the District of New Jersey Philip Sellinger. Assistant U.S. Attorney Amanda Riedel, White Collar Crimes Coordinator for the Executive Office for U.S. Attorneys, also participated in the development of the VSD Policy.
The MS-CCE Policy establishes the standards, policy, and procedures for the selection of monitors in criminal matters being handled by USAO-PR and apply to all determinations regarding whether a monitor is appropriate in specific criminal cases and to any deferred prosecution agreement (“DPA”), non-prosecution agreement (“NPA”), or plea agreement between the USAO and a company which requires the retention of a monitor. This policy provides a non-exhaustive list of factors to be evaluated by prosecutors in assessing the need for the imposition of a monitor on a case-by-cases basis. In general, the USAO should favor the imposition of a monitor where there is a demonstrated need for, and clear benefit to be derived from, a monitorship.
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United States Attorney Adair F. Boroughs Announces Implementation of New Voluntary Self -Disclosure PolicyRead the Press Release
COLUMBIA, SOUTH CAROLINA - The U.S. Attorney’s Office for the District of South Carolina has implemented the new United States Attorney’s Offices’ Voluntary Self-Disclosure Policy. The policy, which is effective immediately, details the circumstances under which a company will be considered to have made a voluntary self-disclosure (VSD) of misconduct to a United States Attorney’s Office (USAO). It provides transparency and predictability to companies and the defense bar concerning the concrete benefits and potential outcomes in cases where companies voluntarily self-disclose misconduct, fully cooperate, and timely and appropriately remediate.
“The Department’s Voluntary Self-Disclosure Policy creates specific incentives for corporate leaders to come forward with information about criminal wrongdoing within their companies,” said U.S. Attorney Adair F. Boroughs. “This is an important step forward for strengthening corporate citizenship and accountability. As with the individuals we prosecute, there are benefits for those companies who take responsibility for their actions and try to make things right.”
The goal of the policy is to standardize how VSDs are defined and credited by USAOs nationwide, and to incentivize companies to maintain effective compliance programs capable of identifying misconduct, to expeditiously and voluntarily disclose and remediate misconduct, and to cooperate fully with the government in corporate criminal investigations. The policy was developed pursuant to the Deputy Attorney General’s September 15, 2022 memorandum, “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group” (Monaco Memo), which directed each Department of Justice (DOJ) component that prosecutes corporate crime to review its policies on corporate voluntary self-disclosure and, if there was no formal written policy to incentivize self-disclosure, draft and publicly share such a policy.
Under the new VSD policy, a company is considered to have made a VSD if it becomes aware of misconduct by employees or agents before that misconduct is publicly reported or otherwise known to the DOJ, and discloses all relevant facts known to the company about the misconduct to a USAO in a timely fashion prior to an imminent threat of disclosure or government investigation. A company that voluntarily self-discloses as defined in the policy and fully meets the other requirements of the policy, by—in the absence of any aggravating factor—fully cooperating and timely and appropriately remediating the criminal conduct (including agreeing to pay all disgorgement, forfeiture, and restitution resulting from the misconduct), will receive significant benefits, including that the USAO will not seek a guilty plea; may choose not to impose any criminal penalty, and in any event will not impose a criminal penalty that is greater than 50% below the low end of the United States Sentencing Guidelines (USSG) fine range; and will not seek the imposition of an independent compliance monitor if the company demonstrates that it has implemented and tested an effective compliance program.
The policy identifies three aggravating factors that may warrant a USAO seeking a guilty plea even if the other requirements of the VSD policy are met: (1) the misconduct poses a grave threat to national security, public health, or the environment; (2) the misconduct is deeply pervasive throughout the company; or (3) the misconduct involved current executive management of the company. The presence of an aggravating factor does not necessarily mean that a guilty plea will be required; instead, the USAO will assess the relevant facts and circumstances to determine the appropriate resolution. If a guilty plea is ultimately required, the company will still receive the other benefits under the VSD policy, including that the USAO will recommend a criminal penalty of at least a 50% and up to a 75% reduction off the low end of the USSG fine range, and that the USAO will not require the appointment of a monitor if the company has implemented and tested an effective compliance program.
In cases where a company is being jointly prosecuted by a USAO and another DOJ component, or where the misconduct reported by the company falls within the scope of conduct covered by VSD policies administered by other DOJ components, the USAO will coordinate with, or, if necessary, obtain approval from, the DOJ component responsible for the VSD policy specific to the reported misconduct when considering a potential resolution. Consistent with relevant provisions of the Justice Manual and as allowable under alternate VSD policies, the USAO may choose to apply any provision of an alternate VSD policy in addition to, or in place of, any provision of its policy.
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U.S. Attorney Mark Totten Joining DOJ Delegation to Commemorate “Bloody Sunday” and Passage of Voting Rights Act of 1965Read the Press Release
Attorney General Advisory Committee’s Civil Rights Subcommittee meeting in Selma and Montgomery with Civil Rights leaders at Alabama’s historic memorials and museums
Grand Rapids – U.S. Attorney for the Western District of Michigan Mark Totten will join more than 30 other U.S. Attorneys from across the country as a delegation to commemorate the 58th Anniversary of “Bloody Sunday,” the March over Selma’s Edmund Pettus Bridge, and the passage of the Voting Rights Act of 1965. Totten has served as a member of the Attorney General Advisory Committee’s Civil Rights Subcommittee (AGAC) since taking office in May 2022.
“I’m honored to join colleagues from across the United States on this trip to Montgomery and Selma, home to some of the most important moments in the Civil Rights Movement,” said U.S. Attorney Mark Totten. “Our work protecting civil rights goes back more than 150 years. The Department of Justice was born in 1870 and tasked with dismantling the KKK, which was terrorizing African Americans across the South. That original charge of taking on hate and discrimination is still very much a part of our mission today. And my office and I are committed to using every power we have to protect these rights across the Western District of Michigan.”
From March 4-7, 2023, U.S. Attorneys from across the country will meet with community and civil rights leaders while exploring some of the significant and educational civil rights institutions in Alabama. U.S. Attorney for the Western District of Washington Nick Brown is hosting the delegation’s visit.
In addition to the Selma March scheduled for Sunday March 5, 2023, the U.S. Attorneys will meet with Assistant Attorney General Kristen Clarke of DOJ’s Civil Rights Division, as part of the subcommittee work supporting the AGAC.
Other meetings and visits during the trip will focus on both historic civil rights conflicts and issues that are still fresh today.
- The group will meet with distinguished jurist Myron Thompson, the first Black Assistant Attorney General for Alabama and the second Black Federal Judge in the state. As the former Chief Judge in the Middle District of Alabama, Judge Thompson was instrumental in preserving the Montgomery bus station where the Freedom Riders were attacked in 1961 and the establishment of the Freedom Rides Museum. Judge Thompson is a recipient of the Thurgood Marshall award for his “personal contributions and extraordinary commitment to the advancement of civil rights.”
- The group will also meet with Bryan Stevenson, Founder and Executive Director of the Equal Justice Initiative, a nonprofit organization that provides legal representation to people who have been illegally convicted, unfairly sentenced, or abused in state jails and prisons.
- The attorneys will visit The Johnson Institute in the Montgomery federal courthouse where many key civil rights cases were decided. The Johnson Institute demonstrates through its programming the importance of the U.S. Constitution and the independent judiciary.
- They will go to The Legacy Museum, which provides a comprehensive history on the legacy of slavery. Lynching, codified racial segregation, and the emergence of over-incarceration in the 20th century, are examined in depth and brought to life through film, images, and first-person narratives at the museum.
- At the Memorial for Peace and Justice the group will reflect on America’s History of racial injustice. Set on a six-acre site, the memorial uses sculpture, art, and design to contextualize racial terror. The site includes a memorial square with 800 six-foot monuments to symbolize thousands of racial terror lynching victims in the United States.
The U.S. Attorneys from the following districts are attending the Selma and Montgomery events: Massachusetts, Connecticut, New Jersey, South Carolina, New Hampshire, Maine, Colorado, Nevada, Idaho, Vermont, South Dakota, Kansas, Western and Middle Districts of Louisiana, Eastern Wisconsin, Eastern and Western Districts of Michigan, Middle District of Florida, Northern and Eastern Districts of California, Eastern and Middle Districts of Pennsylvania, Western District of Virginia, Western District of North Carolina, Southern District of Ohio, Western District of New York, and the Southern District of West Virginia. U.S. Attorney Brown and Civil Rights Subcommittee Vice-Chair Rachel Rollins are appreciative of the work done by the Middle District of Alabama to host the delegation.
The Attorney General’s Advisory Committee was established nearly 50 years ago by Attorney General Elliott Richardson. The Committee’s purpose is to give United States Attorneys a voice in Department policies and to advise the Attorney General of the United States.
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U.S. Attorney Announced Justice Department Settlement in Sexual Harassment Lawsuit Against Michigan LandlordRead the Press Release
GRAND RAPIDS – The Justice Department announced today that it has secured an agreement to resolve a lawsuit alleging that Muskegon, Michigan, landlord Darrell Jones violated the Fair Housing Act by sexually harassing female tenants. The settlement also resolves claims against Fatima Jones and Jones Investing, LLC, which, along with Jones, owned the properties where the harassment occurred.
“The sexual harassment of tenants is an intolerable abuse of power that violates federal civil rights laws,” said U.S. Attorney Mark A. Totten for the Western District of Michigan. “No one should have to endure harassment and discrimination, especially in their own homes. My office is committed to protecting the rights of vulnerable tenants and will continue to vigorously enforce the Fair Housing Act to combat discrimination and secure justice for victims.”
“The Fair Housing Act protects the rights of tenants to live in peace and security without the fear that their housing provider will sexually harass them,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department is committed to holding housing providers accountable for their unlawful behavior and seeking relief for survivors.”
Under the agreement, which still must be approved by the U.S. District Court for the Western District of Michigan, defendants are required to pay $155,000 to compensate individuals harmed by the harassment and pay a $10,000 civil penalty to the United States. The consent order also requires the defendants to:
- Retain an independent property manager to manage their rental properties for the duration of the order;
- Obtain fair housing training; and
- Implement non-discrimination policies and complaint procedures to prevent sexual harassment at their properties in the future.
“We admire the courageous women who spoke out to bring forth fair housing justice”, says Elizabeth Stoddard, Director of Advocacy of the Fair Housing Center of West Michigan. “In partnership with the Justice Department and the U.S. Attorney’s Office for the Western District of Michigan, we see you and we hear you. We believe you and we stand with you. A woman’s home should be her safe place.”
The lawsuit, filed in June 2020, alleged that since at least 2008, Jones subjected female tenants to harassment that included making repeated and unwelcome sexual comments, touching tenants’ bodies without their consent, demanding sexual activity in exchange for rent and housing-related benefits, and taking adverse actions against tenants who resisted his sexual advances or complained about the harassment.
This case was referred to the Justice Department by the Fair Housing Center of West Michigan and was litigated by attorneys in the department’s Civil Rights Division and the Civil Division of the U.S. Attorney’s Office for the Western District of Michigan.
The Justice Department’s Sexual Harassment in Housing Initiative is led by the Civil Rights Division, in coordination with U.S. Attorney’s Offices across the country. The goal of the department’s initiative is to address and raise awareness about sexual harassment by landlords, property managers, maintenance workers, loan officers, or other people who have control over housing. Since launching the initiative in October 2017, the Department of Justice has filed 28 lawsuits alleging sexual harassment in housing and recovered more than $9.8million for victims of such harassment.
The Justice Department’s Civil Rights Division enforces the Fair Housing Act, which prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt. Individuals may report sexual harassment or other forms of housing discrimination by calling the Justice Department’s Housing Discrimination Tip Line at 1-833-591-0291, or submitting a report online. Individuals may also report such discrimination by contacting HUD at 1-800-669-9777 or by filing a complaint online.
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Two U.S. Citizens Arrested for Illegally Exporting Technology to RussiaRead the Press Release
Two Kansas men were arrested today on charges related to a years-long scheme to circumvent U.S. export laws that included the illegal export of aviation-related technology to Russia after Russia’s unprovoked invasion of Ukraine on Feb. 24, 2022, and the imposition of stricter restrictions on exports to Russia.
According to the indictment, Cyril Gregory Buyanovsky, 59, of Lawrence, and Douglas Robertson, 55, of Olathe, owned and operated KanRus Trading Company, which supplied Western avionics equipment (i.e., electronics installed in aircraft) to Russian companies and provided repair services for equipment used in Russian-manufactured aircraft. Since 2020, the defendants conspired to evade U.S. export laws by concealing and misstating the true end users, value and end destinations of their exports and by transshipping items through third-party countries. For example, between November 2020 and February 2021, the defendants received avionics equipment, including a computer processor bearing a sticker identifying Russia’s Federal Security Services (FSB), from a Russian company for repair in the United States. The defendants concealed the true end user and end destination by providing a fraudulent invoice to the shipment company identifying the end destination as Germany.
As further alleged, on Feb. 28, 2022, the defendants attempted to export avionics to Russia. U.S. authorities detained the shipment, and the U.S. Department of Commerce informed the defendants that a license was required to export the equipment to Russia. In an April 2022 communication, Robertson expressed to a Russia-based customer that “things are complicated in the USA” and that “[t]his is NOT the right time for [more paperwork and visibility].” Subsequently, in May, June and July 2022, the defendants illegally transshipped avionics through Armenia and Cyprus to Russia without obtaining the required licenses.
The defendants are charged with conspiracy, exporting controlled goods without a license, falsifying and failing to file electronic export information, and smuggling goods contrary to U.S. law. If convicted, they face a maximum penalty of 20 years in prison for each count of exporting controlled goods without a license; up to 10 years in prison for each count of smuggling; and up to five years in prison for each count of conspiracy and falsifying export information. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Task Force KleptoCapture Director Andrew C. Adams, U.S. Attorney Duston J. Slinkard for the District of Kansas, Assistant Director Alan E. Kohler Jr. of the FBI Counterintelligence Division, Special Agent in Charge Charles Dayoub of the FBI Kansas City Field Office, and Special Agent in Charge Aaron Tambrini of the U.S. Department of Commerce Office of Export Enforcement, Chicago Field Office made the announcement.
The FBI and the U.S. Department of Commerce, Office of Export Enforcement are investigating the case.
Assistant U.S. Attorneys Scott Rask and Ryan Huschka for the District of Kansas and Trial Attorney Adam Barry of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.
The investigation 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, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Two Suburban Chicago Residents Charged with $742,000 COVID-Relief FraudRead the Press Release
CHICAGO — A federal grand jury in Chicago, Illinois, returned an indictment in February, which was unsealed on March 1, charging two suburban Chicago residents with a total of 15 counts of wire fraud for allegedly fraudulently obtaining at least $742,000 in small business loans and grants under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
According to the indictment, beginning around March 2020, and continuing until around March 2021, TE DORA BROWN, 43, of Palos Park, Illinois, and CHRISTOPHER SCOTT, 43, of Hazel Crest, Illinois, participated in a scheme to defraud the Small Business Administration’s (SBA) Economic Injury Disaster Loan (EIDL) program and the Paycheck Protection Program (PPP). Brown is charged with 13 counts of wire fraud, and Scott is charged with 9 counts.
As part of the scheme, the indictment alleges the defendants submitted to the SBA numerous applications for loans on behalf of businesses and entities purportedly owned by the defendants. The applications are alleged to have contained materially false statements and misrepresentations concerning, among other things, the purported entities’ number of employees, gross revenues, payroll, operating expenses, type of business, and existence as companies with ongoing operations. The indictment alleges that Brown and Scott knew at the time that the fictitious entities through which they applied had no employees or payroll, and that they intended to use the loan funds for their personal use and benefit.
Brown and Scott were arraigned in federal court in Chicago on March 1, 2023, before Magistrate Judge Jeffrey Cole.
The indictment is announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, and Douglas Zloto, Special Agent-in-Charge of the Chicago Field Office of the United States Secret Service. Substantial assistance was provided by the SBA-Office of Inspector General. The government is represented by Assistant U.S. Attorney Alejandro G. Ortega.
The public is reminded that an indictment contains only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. Each count of wire fraud is punishable by up to 20 years in federal prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
Anyone with information about attempted fraud involving COVID-19 is encouraged to report it to the Department of Justice by calling the National Center for Disaster Fraud Hotline at 866-720-5721 or filing an online complaint at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Two Men Sentenced in $30M Foreign Exchange Fraud SchemeRead the Press Release
A Massachusetts man and a Florida man were sentenced for their roles in perpetrating a foreign exchange trading scheme to steal $30 million from their investor victims.
Patrick Gallagher, 45, of Middleborough, Massachusetts, was sentenced to five years in prison on Feb. 21 and Michael Dion, 50, of Orlando, Florida, was sentenced to four years and seven months in prison today.
According to court documents, Gallagher and Dion devised a scheme in which they would solicit victims to invest in their foreign exchange company, Global Forex Management, by promising them large returns based on previous trading results that they had fabricated. They told the victims that their funds would be traded using an online trading platform provided by a co-conspirator’s company, IB Capital. Instead, Gallagher and Dion were working with other co-conspirators in the Netherlands to steal the victim investors’ money. In May 2012, Gallagher and Dion executed their scheme by intentionally creating losing trades for the investors and effectively stole approximately $30 million from their victims. After fabricating the massive trading loss, Gallagher and Dion routed the stolen money through shell companies they had set up all over the world.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division and Inspector in Charge Eric Shen of the U.S. Postal Inspection Service’s (USPIS) Criminal Investigations Group made the announcement.
The USPIS investigated the case.
Trial Attorneys Vasanth Sridharan, Tian Huang, and Brittain Shaw of the Criminal Division’s Fraud Section prosecuted the case.
The Fraud Section uses the Victim Notification System (VNS) to provide victims with case information and updates related to this case. Individuals or entities who believe they may be a victim in this case should contact the Fraud Section’s Victim Assistance Unit by calling the Victim Assistance phone line at 1-888-549-3945 or by emailing [email protected].
Two Louisville Men Sentenced to 32 Years and 11 Years in Federal Prison for Fentanyl Distribution, Drug Conspiracy, and Firearms OffensesRead the Press Release
Louisville, KY – Two local men, Khalid A. Raheem, II, age 26, and Frank Trammell, Jr., age 30, were sentenced this week on drug and firearms charges following a seven-day jury trial in October 2022.
U.S. Attorney Michael A. Bennett of the Western District of Kentucky, Special Agent in Charge Jodi Cohen of the FBI Louisville Field Office, Acting Special Agent in Charge Robert Maynard of the ATF Louisville Field Division, and Chief Jacquelyn Gwinn-Villaroel of the Louisville Metro Police Department made the announcement.
On February 28, 2023, Raheem was sentenced in U.S. District Court to 11 years in prison, followed by a three-year term of supervised release, for conspiracy to distribute heroin and 40 grams or more of fentanyl, for distribution of fentanyl, and for possession of a firearm by a convicted felon. During the sentencing hearing, the court heard testimony concerning witness intimidation and applied an enhancement to Raheem’s sentence for obstruction of justice.
On March 1, 2023, Trammell was sentenced to 32 years and 3 months years in prison, followed by an 8-year term of supervised release, for conspiracy to possess with the intent to distribute heroin and 40 grams or more of fentanyl, for distribution of fentanyl, for possession with the intent to distribute 40 grams or more of fentanyl, for possession of a firearm in furtherance of drug trafficking, and for possession of a firearm by a convicted felon.
According to court documents and evidence presented at trial, between December 7, 2017, and July 15, 2020, Trammell and Raheem conspired to distribute fentanyl and heroin in the Louisville area. Additionally, on ten occasions, Trammell, often assisted by Raheem or others, sold fentanyl to undercover informants at various locations in eastern and southern Jefferson County as well as in the downtown area. These fentanyl sales took place in parking lots of restaurants, gas stations, and grocery stores, and always involved two vehicles parking window to window while fentanyl and cash were tossed from vehicle to vehicle.
Pursuant to court authorized wiretaps, over 3,000 drug related phone calls and text messages were intercepted in a thirty-day period. During these intercepted calls, dozens of drug transactions on a nearly daily basis were arranged. Drug addicted customers, when unable to come up with cash, would sometimes trade packages of socks and underwear, firearms, or assorted prescription medications in exchange for what they believed to be heroin. However, DEA laboratory testing established that Trammell was almost always selling fentanyl to those seeking heroin. During one intercepted call, a drug user called Trammell and said that she believed he had sold her fentanyl and that he should warn his other customers to “be careful.”
Evidence presented at trial also included the results of several search warrants of premises and vehicles simultaneously executed on July 15, 2020. From locations related to Trammell and Raheem, law enforcement seized over 240 grams of fentanyl, $284,000 in cash, assorted ammunition, and eleven firearms, including at least one assault rifle and one stolen handgun.
“The sentences imposed by the Court send a robust message to those who brazenly place the lives of Louisville area residents at risk by peddling poison,” stated U.S. Attorney Bennett. “Individuals engaged in the drug trade should consider the consequences of their actions. Simply put, a federal prison cell is not the place to spend a significant portion of your adult life.”
“Raheem and Trammell, Jr. showed zero regard for human life by deceiving and profiting off of those grappling with addiction. Faced with decades in federal prison, they will no longer contribute to the opioid epidemic terrorizing many of our neighborhoods,” stated FBI Special Agent in Charge Cohen. “The FBI and our law enforcement partners will continue our collaborative efforts to identify and dismantle violent gangs found to be dealing in the deadly drug trade.”
“Drug dealers with guns are criminals who pose an increased threat to the safety of our communities,” said ATF Acting Special Agent in Charge Maynard. “This investigation is another great example of the collaborative work by law enforcement to hold drug traffickers accountable for the crimes they engage in and the destruction they bring to our families and communities.”
This case was investigated by the FBI, the ATF, and the Louisville Metro Police Department, with assistance from the DEA, the IRS Criminal Investigation, the U.S. Department of Homeland Security, Homeland Security Investigations, the U.S. Marshals Service, the Jefferson County Sheriff’s Office, the St. Matthews Police Department, the Jeffersontown Police Department, the Shepherdsville Police Department, the Kentucky State Police, and the Indiana State Police.
Assistant U.S. Attorneys Erin McKenzie and Frank E. Dahl, III prosecuted the case.
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.
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Two Charged with Permit and Driver's License Test Conspiracies at Brockton RMVRead the Press Release
BOSTON – Two individuals have been charged and have agreed to plead guilty in connection with separate conspiracies to knowingly issue passing test scores to individuals who did not actually pass tests at the Registry of Motor Vehicles (RMV) in Brockton.
Mia Cox-Johnson, 43, of Brockton, was charged with two counts of extortion under color of official right and one count of conspiring to commit extortion. Estevao Semedo, 61, also of Brockton, was charged with one count of conspiracy to commit honest services mail fraud. Plea hearings have not yet been scheduled by the court.
According to the charging documents, Cox-Johnson, a former manager of the RMV service center in Brockton, took money in exchange for giving passing scores on learner’s permit tests for both passenger vehicle driver’s licenses and Commercial Driver’s Licenses (CDLs). It is alleged that between December 2018 and October 2019, Cox-Johnson conspired to take money in exchange for agreeing to give customers passing scores on their multiple-choice learner’s permit tests even if they did not pass. These customers were allegedly told to request a paper test instead of taking the test on the RMV computer. Cox-Johnson scored these customers’ paper tests.
On Dec. 28, 2018, Cox-Johnson allegedly accepted $1,000 in cash – delivered from a friend on behalf of another individual – in exchange for giving a passing score to the individual’s relative who had failed the passenger vehicle learner’s permit test six times when taking it in their native language. It is further alleged that Cox-Johnson agreed to score the relative as having passed the permit test regardless of whether they had actually passed. Cox-Johnson did in fact pass the relative’s test, which was taken on paper in English.
On Oct. 21, 2019, a customer came to the Brockton RMV and took three multiple-choice tests they needed to pass in order to get a commercial learner’s permit – a prerequisite to taking the road test for a CDL. Cox-Johnson allegedly accepted $200 in cash from an individual to score the customer as having passed the tests even if they did not actually pass. In fact, the applicant failed one of the tests, but it is alleged that Cox-Johnson scored the applicant as having passed all three tests.
According to the charging documents, Semedo, the owner of a driving school, conspired to defraud the RMV into issuing driver’s licenses to applicants who did not pass the road test. Specifically, it is alleged that Semedo paid a road test examiner at the Brockton RMV service center to misrepresent to the RMV that certain driver’s license applicants had passed their road test when in fact they had not. Some of the applicants did not even show up to take the test. As a result of the fraud, the RMV mailed driver’s licenses to unqualified applicants.
The charges of extortion under color of official right and conspiracy to commit extortion each provide for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. The charge of conspiracy to commit honest services mail fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a $250,000 fine. The charging document also seeks a $17,000 forfeiture money judgment against Semedo. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
United States Attorney Rachael S. Rollins; Matthew B. Millhollin, Special Agent in Charge of Homeland Security Investigations in New England; and Christopher Scharf, Special Agent in Charge, U.S. Department of Transportation Office of Inspector General, Northeast Region, made the announcement today. The investigation was conducted by Homeland Security Investigation’s Document and Benefit Fraud Task Force (DBFTF). Valuable assistance was provided by the Mattapoisett Police Department. Assistant U.S. Attorneys Christine Wichers and Adam Deitch of Rollins’s Public Corruption & Special Prosecutions Unit; Assistant U.S. Attorney Eugenia M. Carris, Deputy Chief of Rollins’ Public Corruption & Special Prosecutions Unit; and Assistant U.S. Attorney Mackenzie Duane of Rollins’ Major Crimes Unit are prosecuting the case.
The details contained in the charging document are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Two California Men Sentenced to Prison for Conspiracy to Attack Democratic Headquarters in SacramentoRead the Press Release
SAN FRANCISCO – Today, Ian Benjamin Rogers was sentenced to 108 months in prison and Jarrod Copeland was sentenced to 54 months in prison for their respective roles in crimes including a conspiracy to destroy the Democratic Headquarters in Sacramento, announced United States Attorney Stephanie M. Hinds and FBI Special Agent in Charge Robert K. Tripp. The sentences were handed down by the Honorable Charles R. Breyer, Senior United States District Judge.
Rogers, 46, of Napa, and Copeland, 39, of Vallejo, pleaded guilty to their crimes on May 26, 2022, and November 16, 2021, respectively. Rogers was sentenced for conspiracy as well as multiple federal weapons violations while Copeland was sentenced for his role in the conspiracy and for obstruction of justice.
“The defendants in this case admitted that they intended to destroy the headquarters of a political organization by firebombing it,” said U.S. Attorney Hinds. “Their decision to ‘go to war’ was based on their thought that they would rather destroy their political opponents’ building than acknowledge they lost an election and rely on the political process to make change. Ian Rogers and Jarrod Copeland will now have plenty of time to reflect on the fact that resorting to violence is not an acceptable means of making political change in our democracy. Prosecution and imprisonment await those who attempt to supplant the political process with fear and violence.”
“Rogers and Copeland devised a plan of attack to put innocent lives in danger. Today's sentences make clear that those actions have serious consequences,” said FBI Special Agent in Charge Robert K. Tripp. “The FBI’s partnership with the Napa County Sheriff’s Office was critical in thwarting their plot. We will not stop our pursuit of extremists who advocate for violence over constitutionally protected discourse and imperil our communities."
Rogers and Copeland entered into separate plea agreements in which they admitted their role in the crimes. Both defendants admitted in their plea agreements that after the 2020 Presidential election they conspired together to destroy the John L. Burton Democratic Headquarters in Sacramento. They admitted that between November 2020 and January 2021 they discussed attacking the Democratic Headquarters building with cans of gasoline, including by throwing gas cans through the front windows of the building and igniting the gasoline to burn down the building. They also acknowledged that Rogers viewed the Democratic Headquarters building on the internet and sent a map of the location to Copeland, discussing the building’s proximity to a fire department and certain law enforcement in devising their plan, all to refine the method of attack to ensure they caused the greatest damage to the building while allowing their escape without detection. Rogers and Copeland also admitted discussing how they would wait until after the presidential inauguration on Jan. 20, 2021, before carrying out the attack.
Papers filed by the government describe how law enforcement officers seized a cache of weapons, including 45 to 50 firearms, thousands of rounds of ammunition, and five pipe bombs from Rogers’s home and business on Jan. 15, 2021. Just days earlier, Rogers wrote to Copeland, “after the 20th we go to war.” Rogers admitted in his plea agreement that he had constructed the pipe bombs and anticipated using them against the property of those whose political views differed from his, including the Democratic Headquarters building in Sacramento. He further admitted that he possessed at least three fully automatic machine guns and considered using one of them in the attack on the building.
At a hearing for the defendants’ sentencings, Judge Breyer described the defendants’ conduct as “an act of terrorism.” Judge Breyer stated, “this is a very serious offense . . .. But for the intervention of law enforcement, it's the Court's view that there was no impediment to the act of terrorism; and whether it was one or multiple, the evidence that was obtained certainly shows that there was a plan, a design, an opportunity and ability to carry out the firebombing of the Democratic Headquarters located in Sacramento, California, the John Burton Building.”
On July 7, 2021, a federal grand jury handed down an indictment charging Copeland with one count of conspiracy to destroy by fire or explosive a building used in or affecting interstate commerce, in violation of 18 U.S.C. § 844(i) and (n); and one count of obstruction of justice, in violation of 18 U.S.C. § 1512(c). The grand jury also charged Rogers with the conspiracy charge as well as one count of possession of unregistered destructive devices, in violation of 26 U.S.C.§ 5861(d), and three counts of possession of machine guns, in violation of 18 U.S.C. § 922(o). Copeland pleaded guilty to both charges pending against him. Rogers pleaded guilty to the conspiracy charge, one count of possession of unregistered destructive devices, and one count of possessing an illegal machine gun. At the sentencing, Judge Breyer dismissed the remaining charges with respect to Rogers.
In addition to the prison terms, Judge Breyer also ordered Rogers and Copeland to each serve three years of supervised release, to begin after they serve their prison terms. Rogers has remained in custody since his arrest in January 2021 and Copeland has been in federal custody since his arrest in July 2021. Both defendants will begin serving their prison sentences immediately.
The Special Prosecutions Section of the Northern District of California is prosecuting the case, with assistance from the National Security Division’s Counterterrorism Section. The FBI’s San Francisco Field Office investigated the case, with valuable assistance provided by the FBI Sacramento Field Office and Napa County Sheriff’s Department.
Top Lieutenant and Head of Security for Rafael Caro Quintero Extradited from Mexico to Face Narcotics Trafficking and Firearms ChargesRead the Press Release
Ismael Quintero Arellanes, also known as “Fierro,” was arraigned today before United States Magistrate Judge Sanket J. Bulsara at the federal courthouse in Brooklyn on an indictment charging him with participating in a large-scale narcotics distribution conspiracy and using one or more firearms in connection with narcotic offenses. The defendant, a Mexican citizen, was arrested in Mexico on a provisional arrest warrant issued from the Eastern District of New York and subsequently extradited from Mexico to the United States on March 1, 2023. Quintero Arellanes was ordered detained pending trial.
Breon Peace, United States Attorney for the Eastern District of New York, and Frank A. Tarentino III, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), announced the extradition and arraignment.
“As alleged, the defendant was a top lieutenant and head of security for Rafael Caro Quintero, an infamous drug lord whose violent organization has for decades sent thousands of kilograms of drugs to the United States,” stated United States Attorney Peace. “Dismantling the leadership of drug trafficking organizations that have wreaked havoc here and abroad is a top priority for our Office.”
Mr. Peace extended his appreciation to the DEA’s office in Mexico City, the United States Marshals Service, the Department of Justice’s Office of International Affairs, and the Government of Mexico.
“Quintero Arellanes was the executor for RCQ's narcotics empire responsible for distributing drugs, violence, and death throughout Mexico and the United States," said DEA Special Agent in Charge Frank Tarentino. "This extradition marks another victory for American rule of law in bringing to justice drug traffickers who have caused the most harm in our communities. I commend the men and women who spent tireless hours on this investigation in the pursuit of Justice.”
According to the indictment and court filings, the defendant was a high-ranking member of the Caro Quintero DTO, a violent Mexican drug trafficking organization that was led by Rafael Caro Quintero.
As the leader of the drug trafficking organization, Caro Quintero employed numerous individuals, each of whom played a role to ensure the success of the organization, including “sicarios” or hit men who carried out acts of violence in Mexico such as murder and kidnappings to silence potential witnesses and retaliate against anyone who provided information to law enforcement; security personnel for the leadership of the enterprise; “plaza bosses” who controlled the enterprise’s territories; transporters of narcotics; and money launderers. Quintero Arellanes served as Caro Quintero’s top lieutenant and head of security. In that role, Quintero Arellanes served as Caro Quintero’s personal bodyguard, relayed messages and orders between Caro Quintero and other members of the organization to facilitate drug trafficking activities, and protected Caro Quintero to enable him to avoid capture.
For his conduct, Quintero Arellanes is charged with participating in an international heroin, methamphetamine and cocaine distribution conspiracy from February 2015 through June 2018 and an international marijuana distribution conspiracy from January 1980 through June 2018, as well as using firearms in relation to his drug trafficking organization.
Caro Quintero was arrested in Mexico on July 15, 2022 and is pending extradition to the United States.
The prosecution of Quintero Arellanes is the result of an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) investigation led by the United States Attorney’s Office for the Eastern District of New York and the DEA. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking, weapons trafficking, and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply. OCDETF uses a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces up to life in prison.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Saritha Komatireddy, Francisco J. Navarro, Erin M. Reid, and Andrew D. Wang are in charge of the prosecution.
The investigation was led by the New York Strike Force, a crime-fighting unit comprising federal, state and local law enforcement agencies supported by the Organized Crime Drug Enforcement Task Force and the New York/New Jersey High Intensity Drug Trafficking Area. The Strike Force is based at the DEA’s New York Division and includes agents and officers of the DEA, New York City Police Department, New York State Police, Homeland Security Investigations, U.S. Internal Revenue Service Criminal Investigation Division, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Customs and Border Protection, U.S. Secret Service, United States Marshals Service, New York National Guard, Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department and New York State Department of Corrections and Community Supervision.
The Defendant:
ISMAEL QUINTERO ARELLANES
Age: 51
MexicoE.D.N.Y. Docket No. 15-CR-208 (S-3) (FB)
Three Plead Guilty to Healthcare Fraud in Schemes That Totaled $6.5 Million Dollars in Fraudulent ClaimsRead the Press Release
CHICAGO — A Chicago-area physical therapist, health care professional, and a personal trainer have pleaded guilty to one count of healthcare fraud each for scheming to defraud private insurers for payment of physical therapy and other services that were never rendered.
INESSA KATSNELSON, 55, of Glenview, also known as “Inessa Blinov,” “Inessa Danuchevsky” and “Inna,” a personal trainer and singer who worked out of a gym in Northbrook, participated in a scheme to defraud private health and auto insurers through multiple entities from 2006 to October 2018. Katsnelson provided names and insurance information for purported patients to those entities, knowing the entities would submit fraudulent claims to insurance companies for services never provided. In exchange for the use of their information, Katsnelson provided to some of the individuals she referred certain benefits, including free personal training sessions, massages, and the exhaustion of their annual health insurance deductibles, at no cost to them, through the fraudulent billing practices.
MAYA YAKUBOVICH, 56, of Arlington Heights, who worked as a medical claims biller for various health care facilities in Buffalo Grove, Northfield, Prospect Heights, Wheeling, Des Plaines, and Glenview, participated in the scheme with Katsnelson and others. From approximately 2006 to October 2018, Yakubovich knowingly prepared and submitted fraudulent claims, and at times created false medical records to support the claims. Yakubovich also provided names and insurance information for purported patients to one of the entities, and then submitted fraudulent claims to insurance companies for services never provided to the purported patients.
BEATTA KABBANI, 55, of Glenview, who was a licensed physical therapist, president, and secretary of a medical group located in Northfield and Glenview, pleaded guilty in a separate case based on her involvement in a related scheme. Between September 2011 and November 2016, Kabbani fraudulently submitted, and caused to be submitted, fraudulent claims to insurance companies. The claims falsely represented that certain healthcare services were provided to patients, when Kabbani knew that those services were not actually provided. The fraudulent claims identified Kabbani, a medical doctor, and another therapist as the service providers on dates when these three providers were not present at the healthcare facility. To substantiate the fraudulent claims Kabbani created, and caused the creation of, false medical records.
Katsnelson, Yakubovich, and Kabbani, along with their co-schemers, received a portion of the fraudulently obtained funds. In total, the indictment against Katsnelson, Yakubovich, and others alleges that nine insurance companies were defrauded out of approximately $6.5 million. Co-schemers whose charges are still pending are TETYANA VORONKINA, a medical claims biller, also known as “Tanya Voronkina,” 60, of Mundelein, and massage therapist VIKTOR DANCHUK, 62, of Roselle.
Sentencing for Katsnelson is scheduled for May 26, 2023 before U.S. District Judge Sharon Johnson Coleman. Yakubovich’s sentencing is scheduled for May 24, 2023 before U.S. District Judge Sharon Johnson Coleman. Kabbani’s sentencing has not yet been scheduled.
The plea agreements are announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Ruth M. Mendonça, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago; Irene Lindow, Special Agent-in-Charge of the Chicago Regional Office of the U.S. Department of Labor, Office of Inspector General; and Robert W. Wheeler, Jr., Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation. The government is represented by Assistant U.S. Attorneys Heidi Manschreck and Chester Choi.
Syracuse Man Sentenced to More Than Ten Years in Prison for Drug Trafficking Conspiracy and for Possessing a Firearm in Furtherance of Drug TraffickingRead the Press Release
SYRACUSE, NEW YORK – Omar Fuentes, age 26, of Syracuse, was sentenced yesterday to a total of 121 months in prison for his involvement in a conspiracy involving the distribution of heroin and cocaine, and for possessing a firearm in furtherance of that conspiracy.
The announcement was made by United States Attorney Carla B. Freedman and Frank A. Tarantino III, Special Agent in Charge of the U.S. Drug Enforcement Administration (DEA), New York Division, and Chief of Police Joseph Cecile, Syracuse Police Department.
As part of his previously entered guilty plea, Fuentes admitted that between May and September 2020, he conspired with others to distribute kilogram quantities of cocaine in the Syracuse area. The defendant also admitted that on September 16, 2020, he possessed a loaded semi-automatic handgun and a quantity of heroin he intended to distribute.
Fuentes was one of 13 defendants charged and convicted in connection with the investigation which revealed that these defendants were involved in bringing kilogram quantities of heroin and cocaine to Syracuse from New York and Puerto Rico and then redistributing the drugs throughout the Syracuse area. During the investigation, law enforcement seized multiple kilograms of cocaine as well as significant quantities of heroin, numerous firearms, and large sums of United States currency.
United States District Judge Glenn T. Suddaby also ordered Fuentes to serve a four-year term of supervised release following his release from prison.
The other defendants convicted in this and other related cases, and the sentences they received, are listed below:
Name
Prison Term
Jobany Tirado
135 months
Angel Negron-Collazo
120 months
Joel Franco-Ortiz
85 months
Rahfet Shehadeh
57 months
Samuel Matos
100 months
Luis Mendez
70 months
Helbert Calo-Birriel
70 months
Luis Resto
60 months
John Resto
60 months
Hector Santiago
24 months
Jose Medina
Time served (12 months)
Jikeya McBride
27 months
Jonathan Cornier
10 months
These cases were investigated by the by the United States Drug Enforcement Administration (DEA), the Syracuse Police Department, the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Investigators from the Onondaga County District Attorney’s Office, the United States Postal Inspection Service, the New York State Police, and the Onondaga County Sheriff’s Department. The case was prosecuted by Assistant United States Attorneys Nicolas Commandeur and Adrian LaRochelle, and former Assistant United States Attorney Sahar Amandolare.
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 https://www.justice.gov/OCDETF.