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Monday 9 January 2023
Justice Department and Meta Platforms Inc. Reach Key Agreement as They Implement Groundbreaking Resolution to Address Discriminatory Delivery of Housing AdvertisementsRead the Press Release
The Justice Department announced today that it has reached a key milestone in its settlement agreement with Meta Platforms Inc. (Meta), formerly known as Facebook Inc., requiring Meta to change its advertisement delivery system to prevent discriminatory advertising in violation of the Fair Housing Act (FHA). As required by the settlement entered on June 27, 2022, resolving a lawsuit filed in the U.S. District Court for the Southern District of New York, Meta has now built a new system to address algorithmic discrimination. Today, the parties informed the court that they have reached agreement on the system’s compliance targets. This development ensures that Meta will be subject to court oversight and regular review of its compliance with the settlement through June 27, 2026.
“This development marks a pivotal step in the Justice Department’s efforts to hold Meta accountable for unlawful algorithmic bias and discriminatory ad delivery on its platforms,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department will continue to hold Meta accountable by ensuring the Variance Reduction System addresses and eliminates discriminatory delivery of advertisements on its platforms. Federal monitoring of Meta should send a strong signal to other tech companies that they too will be held accountable for failing to address algorithmic discrimination that runs afoul of our civil rights laws.”
“This groundbreaking resolution sets a new standard for addressing discrimination through machine learning,” said U.S. Attorney Damian Williams for the Southern District of New York. “We appreciate that Meta agreed to work with us toward a resolution of this matter and applaud Meta for taking the first steps towards addressing algorithmic bias. We hope that other companies will follow Meta’s lead in addressing discrimination in their advertising platforms. We will continue to use all of the tools at our disposal to address violations of the Fair Housing Act.”
The United States’ complaint alleged, among other things, that Meta uses algorithms in determining which Meta users receive advertisements, including housing advertisements, and that those algorithms rely, in part, on characteristics protected under the FHA. Specifically, the United States alleged that Meta feeds troves of user information into its advertisement delivery system, including information related to users’ FHA-protected characteristics such as sex and race, and uses that information in its personalization algorithms to predict which advertisement is most relevant to which user. As the complaint alleged, Meta’s delivery algorithms introduce bias when delivering advertisements, resulting in a variance along sex and estimated race/ethnicity between the set of users who are eligible to see housing advertisements based on the advertiser’s targeted audience and the set of users who actually see the advertisement.
Pursuant to the settlement, Meta has developed a new system — the Variance Reduction System (VRS) — to reduce the variances between the eligible audiences and the actual audiences. The United States has concluded that the new system will substantially reduce the variances between the eligible and actual audiences along sex and estimated race/ethnicity in the delivery of housing advertisements. The VRS will operate on all housing advertisements across Meta platforms, and the agreement requires Meta to meet certain compliance metrics in stages. For example, by Dec. 31, for the vast majority of housing advertisements on Meta platforms, Meta will reduce variances to less than or equal to 10% for 91.7% of those advertisements for sex and less than or equal to 10% for 81.0% of those advertisements for estimated race/ethnicity. For more information on the operation of the VRS, read Meta’s technical paper.
The Justice Department and Meta have also selected an independent, third-party reviewer, Guidehouse Inc. (Guidehouse), to investigate and verify on an ongoing basis whether the VRS is meeting the compliance metrics agreed to by the parties. Under the agreement, Meta must provide Guidehouse and the United States with regular compliance reports and make available any information necessary to verify compliance with the agreed-upon metrics. The court will have ultimate authority to resolve any disputes over the information that Meta must provide.
Finally, as also required by the settlement agreement, Meta has ceased delivering housing advertisements using the Special Ad Audience tool (which delivered advertisements to users who “look like” other users), and Meta will not provide any targeting options for housing advertisers that directly describe or relate to FHA-protected characteristics.
This agreement marks the first time that Meta is subject to court oversight for its advertisement targeting and delivery system.
More information about the Civil Rights Division and the civil rights laws it enforces is available at www.justice.gov/crt. More information about the U.S. Attorney’s Office for the Southern District of New York is available at www.justice.gov/usao-sdny. Individuals who believe they have been victims of housing discrimination may submit a report to the U.S. Attorney’s Office for the Southern District of New York online at www.justice.gov/usao-sdny/civil-rights or by telephone at (212) 637-0840; may submit a report online to the Department of Justice at www.civilrights.justice.gov; or may contact the Department of Housing and Urban Development at 1-800-669-9777 or through its website at www.hud.gov.
Justice Department Secures Agreement with California Community Organization to Resolve Immigration-Related Discrimination ClaimsRead the Press Release
The Justice Department announced today that it has secured a settlement agreement with Youth UpRising, a community organization in Oakland, California, that provides youth services. The agreement resolves the department’s determination that Youth UpRising violated the Immigration and Nationality Act (INA) by discriminating against a non-U.S. citizen employee based on citizenship status and retaliating against a second employee who tried to stop the discrimination.
“Employers cannot discriminate against workers when verifying their permission to work based on their citizenship, immigration status or national origin,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Workers also should not face negative consequences when they raise concerns about such discrimination, and the Justice Department will steadfastly protect those who assert rights on behalf of themselves or others under this law.”
The department’s investigation, which was initiated based on two complaints, revealed that Youth UpRising unlawfully discriminated against a newly hired non-U.S. citizen by rejecting her valid documentation showing her permission to work, and requiring other documentation because of her citizenship. The employee was fired when she could not comply with the unnecessary document demand. The department also concluded that Youth UpRising fired a different employee in retaliation for investigating the incident and trying to stop the discrimination. Under the INA’s anti-discrimination provision, all employees have the right to choose the valid documentation they wish to present when demonstrating that they have permission to work in the United States, and to assert the rights protected under that provision without facing retaliation.
The settlement requires Youth UpRising to pay $10,360 in civil penalties – the maximum allowable in this instance. Because the former employees recovered their lost wages before the department completed its investigation, the settlement does not require any additional back pay. Under the agreement, the organization will also change its employment policies to comply with the anti-discrimination provision of the INA; train its board members and all employees who are responsible for verifying workers’ permission to work in the United States; and be subject to departmental monitoring for two years.
The Civil Rights Division’s Immigrant and Employee Rights Section (IER) is responsible for enforcing the anti-discrimination provision of the INA. The statute prohibits discrimination based on citizenship status and national origin in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; and retaliation and intimidation.
Find more information on how employers can avoid discrimination when verifying permission to work on IER’s website. Learn more about how IER protects workers’ rights in this video. For more information about protections against employment discrimination under immigration laws, call IER’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar; email [email protected]; or visit IER’s English and Spanish websites. Subscribe to GovDelivery to receive updates from IER.
View Spanish press release here.
Justice Department Files Statement of Interest in Fair Housing Act Case Alleging Unlawful Algorithm-Based Tenant Screening PracticesRead the Press Release
The Department of Justice and the Department of Housing and Urban Development (HUD) announced today that they filed a Statement of Interest to explain the Fair Housing Act’s (FHA) application to algorithm-based tenant screening systems. The Statement of Interest was filed in Louis et al. v. SafeRent et al., a lawsuit currently pending in the U.S. District Court for the District of Massachusetts alleging that defendants’ use of an algorithm-based scoring system to screen tenants discriminates against Black and Hispanic rental applicants in violation of the FHA.
“Housing providers and tenant screening companies that use algorithms and data to screen tenants are not absolved from liability when their practices disproportionately deny people of color access to fair housing opportunities,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This filing demonstrates the Justice Department’s commitment to ensuring that the Fair Housing Act is appropriately applied in cases involving algorithms and tenant screening software.”
“Algorithms are written by people. As such, they are susceptible to all of the biases, implicit or explicit, of the people that create them,” said U.S. Attorney Rachael S. Rollins for the District of Massachusetts. “As the housing industry and other professions adopt algorithms into their everyday decisions, there can be disparate impacts on certain protected communities. Stable and affordable housing provides a unique pathway to success, opportunity and safety. We must fiercely protect the rights and protections promulgated in the Fair Housing Act. Today’s filing recognizes that our 20th century civil rights laws apply to 21st century innovations.”
“Tenant screening policies are not exempt from the Fair Housing Act’s protections just because decisions are made by algorithm,” said HUD General Counsel Damon Smith. “Housing providers and tenant screening companies must ensure that all policies that exclude people from housing opportunities, whether based on algorithm or otherwise, do not have an unjustified disparate impact because of race, national origin or another protected characteristic.”
The Louis lawsuit was filed on behalf of two plaintiffs, Mary Louis and Monica Douglas, Black rental applicants who use housing vouchers to pay part of their rent. Plaintiffs applied for rental housing but allege they were denied due to their “SafeRent Score,” a score derived from Defendant SafeRent’s algorithm-based screening software. The plaintiffs allege that SafeRent scores result in disparate impact against Black and Hispanic rental applicants because the underlying algorithm relies on certain factors that disproportionately disadvantage Black and Hispanic applicants, such as credit history and non-tenancy related debts, while failing to consider one highly-relevant factor, that the use of housing vouchers funded by HUD makes such tenants more likely to pay their rents.
The defendants have moved to dismiss the case, and the plaintiffs have opposed the defendants’ motions. Through the Statement of Interest, the department seeks to assist the court by correcting two questions of law erroneously represented in the defendants’ motions to dismiss. First, the statement sets out the appropriate standard for pleading disparate impact claims under the FHA. Second, the statement clarifies that the FHA’s text and caselaw support the FHA’s application to companies providing residential screening services. The motions to dismiss are currently pending before the court.
The Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status (having one or more children under 18), nation origin, and disability. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.
Individuals who believe they have been victims of housing discrimination can submit a report online at www.civilrights.justice.gov. Such individuals also may contact the U.S. Department of Housing and Urban Development at 1-800-669-9977 or file a complaint online.
Inmate Pleads Guilty to Possessing Weapon at FCI McDowellRead the Press Release
BLUEFIELD, W.Va. – Ray Ramirez-Bueno, 59, a federal inmate, pleaded guilty today to possession of a weapon while an inmate at the Federal Correctional Institution (FCI) McDowell.
According to court documents and statements made in court, on June 10, 2021, a FCI McDowell staff member conducting a pat-down search of Ramirez-Bueno found a handcrafted weapon commonly known as a “shank” on his person. The object was a piece of metal approximately four inches long, sharpened to a point on one end. Ramirez-Bueno admitted to possessing the object and further admitted that it was designed and intended to be used as a weapon.
Ramirez-Bueno is scheduled to be sentenced on April 17, 2023, and faces a maximum penalty of five years in prison, three years of supervised release, and a $250,000 fine.
United States Attorney Will Thompson made the announcement and commended the investigative work of the Federal Bureau of Prisons.
Senior United States District Judge David A. Faber presided over the hearing. Assistant United States Attorney Timothy D. Boggess is prosecuting the case.
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. 1:21-cr-210.
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Herndon Man Charged with Production of Child PornographyRead the Press Release
ALEXANDRIA, Va. – A Herndon man made his first court appearance today on charges of production and attempted production of child sexual abuse material.
According to court documents, in and around May 2022, Vincent Joseph Sarikey, 34, allegedly repeatedly engaged in sexually explicit discussions with at least two persons who identified themselves as minors, each of whom he successfully persuaded to produce sexually explicit pictures of themselves and send to him. Sarikey is alleged to have then provided the images of at least one minor to another individual who shared his stated sexual interest in minors. These exchanges took place on several social media platforms, including Telegram, Twitter, and Discord under the monikers “John Lugne,” “@JLugne,” and “triadus#9325.” Charging documents also allege that Sarikey attempted to groom and entice the minors to record themselves engaging in sexually explicit activity and that he sent some of the minors sexually explicit images of himself. Moreover, Sarikey’s electronic devices contained hundreds of images and videos of child sexual abuse material.
The Federal Bureau of Investigation continues to attempt to identify additional victims. Anyone with information regarding these crimes is encouraged to call 1-800-CALLFBI or 1-800-225-5324.
Sarikey faces a mandatory minimum of 15 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, and Wayne A. Jacobs, Special Agent in Charge of the FBI’s Washington Field Office Criminal Division, made the announcement after Sarikey appeared in court.
Assistant U.S. Attorney Laura D. Withers is prosecuting the case.
This case was 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 U.S. Attorney’s Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc
In 2021, EDVA launched “UnMasked,” a community-based educational outreach and prevention program in Virginia dedicated to raising awareness and educating the community about the prevalence of online sexual exploitation involving children and young adults. UnMasked is a multi-disciplinary partnership of local, state, federal, and non-profit stakeholders. The core curriculum is provided by the National Center for Missing and Exploited Children’s (NCMEC) NetSmartz program. To report an incident involving online sexual exploitation, call 1-800-843-5678 or submit a report at report.cybertip.org. To request an UnMasked event at your school or organization, please contact EDVA’s Community Outreach Coordinator at [email protected].
This case was investigated by the FBI Washington Field Office’s Child Exploitation and Human Trafficking Task Force. The task force is composed of FBI agents, along with other federal agents and detectives from Northern Virginia and the District of Columbia. The task force is charged with investigating and bringing federal charges against individuals engaged in the exploitation of children and those engaged in human trafficking.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:22-cr-48.
Fort Stewart soldier sentenced to prison for prolific fraud scheme targeting COVID-19 relief programs, student loansRead the Press Release
SAVANNAH, GA: A U.S. Army soldier stationed at Fort Stewart has been sentenced to federal prison for leading a prolific fraud scheme in which she and others illegally raked in millions of dollars from COVID-19 relief programs and federal student loan forgiveness.
Dara Buck, a/k/a Dara Butler, 39, of Ladson, S.C., a U.S. Army Chief Warrant Officer 2 stationed at Fort Stewart, was sentenced to 42 months in prison after previously pleading guilty to Conspiracy to Commit an Offense Against the United States, said David H. Estes, U.S. Attorney for the Southern District of Georgia. U.S. District Court Judge R. Stan Baker also ordered Buck to pay restitution of $3,680,247 and to serve three years of supervised release at the completion of her prison term. There is no parole in the federal system.
“While serving in the U.S. Army, Dara Buck engaged in a massive scheme to defraud the taxpayers of the nation she was sworn to serve,” said U.S. Attorney Estes. “With our law enforcement partners, we are committed to identifying and holding accountable those who defraud COVID-19 relief programs to feed their self-serving greed.”
As described in court documents, from August 2017 through May 2021, Buck led a conspiracy to fraudulently obtain funding from the Coronavirus Aid, Relief, and Economic Security (CARES) Act’s Paycheck Protection Program (PPP), and to secure the fraudulent discharge of federal student loans using falsified disability claims.
Buck admitted submitting more than 150 fraudulent PPP loan applications to the Small Business Administrating for herself and others in the conspiracy, resulting in more than $3 million in fraudulent disbursements from banks to members of the conspiracy. Buck directly received fraudulently obtained PPP funding, or was paid by conspirators for submitting their fraudulent applications.
In addition, conspirators paid Buck to submit falsified U.S. Department of Veterans Affairs certifications for total and permanent disability to the U.S. Department of Education in order to fraudulently secure the discharge of more than a dozen student loans totaling more than $1 million.
“Individuals that conspire to defraud Small Business Administration programs will be brought to justice and face the consequences of their illicit activity,” said SBA Office of Inspector General’s Eastern Region Special Agent in Charge Amaleka McCall-Brathwaite. “I want to thank the U.S. Department of Justice and our law enforcement partners for their dedication and pursuit of justice.”
"This sentencing sends a clear message to those who defraud the U.S. Government and squander valuable taxpayer dollars,” stated Special Agent in Charge Darrin K. Jones, Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), Southeast Field Office. “I applaud the work of the U.S. Attorney’s Office and our investigative partners on this case.”
“This sentence holds the defendant accountable for her large scale fraud scheme that impacted multiple federal agencies and robbed the taxpayers of millions of dollars,” said Special Agent in Charge David Spilker with the Department of Veterans Affairs Office of Inspector General’s Southeast Field Office. “The VA OIG is committed to investigating anyone who would exploit VA’s programs and services to fraudulently enrich themselves. We will continue to work closely with our law enforcement partners to hold wrongdoers accountable.”
“We will continue to aggressively pursue those who defrauded the Paycheck Protection Program which was funded by taxpayers and designed to assist businesses during the pandemic,” said J. Russell George, Treasury Inspector General for Tax Administration. “We appreciate the efforts by our federal partners and the U.S. Attorney’s Office to hold these individuals to account.”
“Federal student aid exists so that individuals can make their dream of a higher education a reality. Ensuring that those who steal student aid through fraud or other means are stopped and held accountable for their criminal actions is a big part of our mission. Dara Buck willfully defrauded America’s taxpayers and students in a deliberate and methodical way, and her sentence should serve as a warning to anyone who intentionally steals or misappropriates Federal student aid dollars: you will be caught and held accountable for your unlawful actions,” said Reginald J. France, Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s Southeastern Regional Office. “I’m proud of the work of the Office of Inspector General and our law enforcement partners for their work in this case.”
The case was investigated by the Small Business Administration Office of Inspector General; the Defense Criminal Investigative Service; U.S. Army Criminal Investigation Division, the U.S. Department of Education Office of Inspector General; the Department of Veterans Affairs Office of Inspector General; and the U.S. Treasury Inspector General for Tax Administration; and prosecuted for the United States by Assistant U.S. Attorney Ryan C. Grover.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Former University Official Pleads Guilty to Wire FraudRead the Press Release
Tampa, Florida – United States Attorney Roger B. Handberg announces that Brian Carroll (46, Tennessee) has pleaded guilty to one count of wire fraud. He faces a maximum penalty of 20 years in federal prison. A sentencing date has not yet been set.
According to the plea agreement, Carroll was the Executive Vice President of Southeastern University, a university based in Lakeland, Florida. His responsibilities as Executive Vice President of Southeastern University included being the chief operating officer of the university, with responsibility for strategy, financial operations, and legal affairs.
Carroll was involved in a scheme to enrich himself and to defraud the university of funds in 2016. The scheme involved Carroll’s creation of a New Mexico corporation, which he secretly controlled, and the establishment of a bank account in the name of that corporation. He also created an email address for the company, which he used to further the scheme.
Around mid-2016, the leadership of Southeastern University was interested in rebranding the university and its web image. Carroll worked on the project and secretly “engaged” his New Mexico corporation to perform that project work. Over a six-month period, Carroll’s corporation generated a contract to do the work and a number of invoices for payment by Southeastern University for work purportedly performed. The total payment to the New Mexico corporation, for which Carroll sought and received payment from the university, was in excess of $180,000. Carroll kept his involvement with the New Mexico corporation a secret from any members of Southeastern University. In reality, Carroll’s New Mexico corporation did none of the work on this project. Instead, it had engaged a New York-based corporation to do the work on the project at the reduced cost of approximately $30,000.
During the course of the fraud scheme, Carroll, in his position at Southeastern University, approved a number of payments from university funds to his New Mexico corporation for its purported work on the project. Only after Southeastern University had spent over $180,000 on the project did it discover the involvement of Carroll in the New Mexico corporation and the real cost of the project. The Board of Directors suspended Carroll immediately and ultimately terminated his employment at the university soon thereafter in early 2017.
This case was investigated by the Federal Bureau of Investigation, with assistance from the Lakeland Police Department. It is being prosecuted by Assistant United States Attorney Jay L. Hoffer.
Former Portland Attorney Sentenced to More Than Eight Years in Federal Prison for Embezzling Client FundsRead the Press Release
PORTLAND, Ore.—A former Portland attorney was sentenced to federal prison today for defrauding more than one hundred clients out of millions of dollars in insurance proceeds and using the stolen money to bankroll a lavish lifestyle.
Lori E. Deveny, 57, was sentenced to 101 months in federal prison and three years’ supervised release. Deveny was also ordered to pay more than $4.5 million in restitution to her victims.
“It’s hard to overstate the extraordinary impact Ms. Deveny’s crimes had on the many innocent and vulnerable victims who trusted her. As a former attorney, she had a special responsibility to her clients and to the public, but she repeatedly abused this trust and prioritized her own needs. This is a just sentence for serious crimes,” said Ethan Knight, Chief of the Economic Crimes Unit for the U.S. Attorney’s Office.
“The cruelest thing of all is knowingly providing false hope. Having already suffered losses, Ms. Deveny’s clients deserved an attorney who represented their best interests. What they got instead was someone who inflicted more loss,” said Special Agent in Charge Bret Kressin, IRS Criminal Investigation (IRS-CI), Seattle Field Office. “Today, Ms. Deveny is receiving what she never provided her clients: a picture of reality that those who choose to defraud will face the consequences of their actions.”
“While serving as an attorney, Ms. Deveny brazenly stole money that should have gone to pay for health care for her clients for serious injuries and ailments. Instead, that money funded things like big game hunting trips to Africa and home remodeling. She took advantage of people who were physically and emotionally hurting by forging insurance checks, stealing the funds and lying to her clients about the payouts,” said Kieran L. Ramsey, Special Agent in Charge of the FBI Portland Field Office. “These actions not only got her disbarred but are now putting her behind bars. The FBI applauds our partners at IRS-CI and the U.S. Attorney’s Office, as we continue to bring to justice those who commit this kind of unconscionable financial fraud that harms the people in our shared community.”
According to court documents, between April 2011 and May 2019, Deveny used manipulation and deceit to systematically defraud at least 135 clients out of more than $3.8 million in insurance proceeds she held in trust on their behalf. To accomplish her scheme, Deveny stole her clients’ identities, forged insurance checks made payable to them, deposited client funds into her personal bank accounts, and continually lulled clients into a false sense of hope that they would receive compensation for their injuries. Many of Deveny’s victims were particularly vulnerable to her criminal behavior after sustaining serious brain and bodily injuries and never received the insurance payouts they were owed.
The Oregon State Bar Client Security Fund (CSF), Wells Fargo Bank, and the IRS also suffered losses as a result of Deveny’s scheme. The CSF made partial restitution payments to some of Deveny’s clients, resulting in a loss of more than $1.2 million. This is one of the largest losses in the Oregon State Bar’s history and resulted in the organization raising dues for all members for two years to cover the cost of the payments. Wells Fargo Bank lost more than $52,000 because Deveny stole and forged a check and the IRS sustained a tax loss of more than $621,000 when Deveny failed to report the money she stole from her clients on her personal income tax returns.
All told, Deveny’s crimes resulted in total losses to all victims of more than $4.5 million.
Deveny used the proceeds of her scheme to pay more than $150,000 on foreign and domestic airline tickets, more than $173,000 on African safari and big game hunting trips, $35,000 on taxidermy expenses, $125,000 on home renovations, $195,000 in mortgage payments, more than $220,000 in cigars and related expenses, $58,000 on pet boarding and veterinary costs, $41,000 on recreational vehicle expenses, $50,000 for a Cadillac luxury vehicle, and $60,000 on stays at a luxury nudist resort in Palm Springs, California.
On May 7, 2019, a federal grand jury in Portland returned a 24-count indictment charging Deveny with mail, bank, and wire fraud; aggravated identity theft; money laundering; and filing a false tax return.
On June 27, 2022, she pleaded guilty to one count each of mail, wire, and bank fraud; money laundering; and filing a false tax return; and two counts of aggravated identity theft.
This case was investigated by IRS-CI and the FBI with assistance from the Portland Police Bureau. It was prosecuted by Claire M. Fay, Assistant U.S. Attorney for the District of Oregon.
Former Marlow Band Director Sentenced to 18 Months in Federal Prison for Sex Offense Involving a StudentRead the Press Release
OKLAHOMA CITY – WILLIAM JOSEPH DANIEL, 46, of Stephens County, was sentenced last week to serve eighteen months in federal prison for sexual battery, announced United States Attorney Robert J. Troester.
On June 8, 2022, a federal grand jury returned a two-count indictment against Daniel for offenses he committed while employed with the Marlow Public School System. These incidents occurred between February 1, 2022, and May 12, 2022. Count 1 alleged Daniel touched the body and private parts of a student in a lewd and lascivious manner. Count 2 alleged Daniel digitally penetrated the private parts of the same student.
Daniel pled guilty to sexual battery on July 8, 2022, and was sentenced on January 6, 2023, to serve eighteen months in federal prison by U.S. District Judge David L. Russell. Judge Russell also ordered that upon release from prison, Daniel must serve three years of supervised release. Daniel was remanded to federal custody at the conclusion of the sentencing hearing. Upon his release from prison, Daniel will be required to register as a sex offender.
This case was prosecuted in federal court because the victim is a member of a federally recognized Indian tribe and the crime occurred within the boundaries of the Chickasaw Nation, and within the Western District of Oklahoma. This case is a result of an investigation by the FBI Oklahoma City Field Office and the Marlow Police Department. Assistant U.S. Attorney Tiffany Noble prosecuted the case.
Reference if made to the public record for additional information.
Former Amtrak Employee Sentenced for Wire FraudRead the Press Release
NEW ORLEANS – U.S. Attorney Duane A. Evans announced that KENYA BUTLER-SMALL was sentenced on January 5, 2023 for conduct alleged to have occurred while she was employed by Amtrak as an On-board Services Train Attendant.
U.S. District Judge Sarah S. Vance ordered BUTLER-SMALL to serve concurrent terms of six months of incarceration for each of the two wire count charges to which BUTLER-SMALL previously pleaded guilty. Judge Vance also ordered BUTLER-SMALL to serve two years of supervised release following her incarceration, the first six months of which will consist of home incarceration with location monitoring as well as a mandatory $100 special assessment fee for each count. Additionally, Judge Vance ordered that BUTLER-SMALL pay restitution to the victims.
BUTLER-SMALL recruited more than 40 victims to purchase spots on a purported trip from New Orleans to New York City. BUTLER-SMALL told the victims that she had booked roundtrip Amtrak train travel for the trip, as well as activities, such as shows and museum visits. In truth, BUTLER-SMALL had not booked the Amtrak travel or the activities. When the date of the trip approached, BUTLER-SMALL told the victims, from whom she had taken a total of approximately $23,000 to $26,000, that Amtrak had canceled the trip because an incident occurred in which one of the trip’s passengers assaulted an Amtrak employee and made a bomb threat. In truth, no such incident had occurred.
BUTLER-SMALL also submitted fraudulent sick benefit claims to the Railroad Retirement Board, a federal agency that provides benefits to Amtrak employees. BUTLER-SMALL claimed that she was too sick to work when, in truth, she was working another job. This caused the government to pay BUTLER-SMALL approximately $4,679 in sick benefits for days she falsely claimed to have been unable to work.
This case was investigated by the Amtrak Office of Inspector General and the Railroad Retirement Board Office of Inspector General. Assistant U.S. Attorney Chandra Menon was in charge of the prosecution.
Florida Doctor Sentenced for Substance Abuse Treatment Fraud SchemeRead the Press Release
MIAMI – A Florida doctor was sentenced today to 20 years in prison for engaging in a massive multi-year scheme to bill health care benefit programs for fraudulent tests and treatments for vulnerable patients seeking treatment for drug and/or alcohol addiction. This case was brought as part of the Department of Justice’s Sober Homes Initiative.
According to court documents, Michael J. Ligotti, D.O., 48, of Delray Beach, served as Medical Director or Authorizing Physician for over 50 sober homes, substance abuse treatment facilities, and clinical testing laboratories in the Palm Beach County area, often signing standing orders for expensive, medically unnecessary urine drug tests for patients at various addiction treatment facilities. These facilities routinely sent patients’ urine specimens to clinical testing laboratories, which then billed health care benefit programs for unnecessary urine drug tests, often thousands of dollars for a single test. In exchange for Ligotti’s authorization of these urine drug tests, the treatment centers required their patients to regularly visit Ligotti’s clinic, Whole Health LLC, for additional treatment and testing, or allowed Ligotti’s staff to come to their facilities to conduct tests and treatment there. This allowed Ligotti to profit by billing patients’ private health insurance plans for duplicative, medically unnecessary, and expensive urine drug tests, blood tests, and other addiction treatments. As a result of this conduct, which took place from 2011 to 2020, health care benefit programs were billed over $746 million and paid approximately $127 million for fraudulent urine drug tests and addiction treatments. Ligotti pleaded guilty to conspiracy to commit health care and wire fraud in the Southern District of Florida in October 2022 and was ordered today to surrender his medical license.
U.S. Attorney for the Southern District of Florida Markenzy Lapointe, Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, Acting Special Agent in Charge Chad Yarbrough of the FBI Miami Field Office and Special Agent in Charge Mike Waters of the Amtrak Office of Inspector General’s Eastern Field Office made the announcement.
The FBI Miami Division Palm Beach Resident Agency, with assistance from DEA West Palm Beach Diversion Group; IRS Criminal Investigation Miami Field Office; Amtrak Office of Inspector General; United States Department of Labor, Employee Benefits Security Administration (EBSA); Florida Department of Financial Services, Division of Investigative and Forensic Services; and Palm Beach County Office of the State Attorney investigated the case.
Assistant U.S. Attorney Alexandra Chase, Chief, Transnational, Trafficking & Cyber Crimes Unit for the Southern District of Florida and Senior Litigation Counsel James V. Hayes and Trial Attorney Ligia M. Markman of the Criminal Division’s Fraud Section prosecuted the case.
The National Rapid Response Strike Force, Los Angeles Strike Force, and Miami Strike Force of the Criminal Division, Fraud Section, and the U.S. Attorneys’ Offices for the Southern District of Florida and Central District of California lead the Department of Justice’s Sober Homes Initiative, which was initiated in September 2020 to prosecute defendants who exploit vulnerable patients seeking treatment for drug and/or alcohol addiction. Since its inception, the Sober Homes Initiative has resulted in charges and guilty pleas or convictions involving 28 criminal defendants in two judicial districts in connection with over $1 billion in alleged false billings for fraudulent tests and treatments for vulnerable patients seeking treatment for drug and/or alcohol addiction.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.
Florida Doctor Sentenced for Substance Abuse Treatment Fraud SchemeRead the Press Release
A Florida doctor was sentenced today to 20 years in prison for engaging in a massive multi-year scheme to bill health care benefit programs for fraudulent tests and treatments for vulnerable patients seeking treatment for drug and/or alcohol addiction. This case was brought as part of the Department of Justice’s Sober Homes Initiative.
“For nearly a decade, Michael Ligotti exploited vulnerable patients seeking addiction treatment, a reprehensible abuse of trust by a physician,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “This defendant will now serve many years in federal prison for using his medical license to authorize fraudulent tests and treatments for addicted patients at treatment centers and sober homes throughout South Florida. This marks the largest addiction fraud treatment case ever charged by the Department of Justice, demonstrating our continuing commitment to tackling health care fraud throughout the country.”
According to court documents, Michael J. Ligotti, D.O., 48, of Delray Beach, served as Medical Director or Authorizing Physician for over 50 sober homes, substance abuse treatment facilities, and clinical testing laboratories in the Palm Beach County area, often signing standing orders for expensive, medically unnecessary urine drug tests for patients at various addiction treatment facilities. These facilities routinely sent patients’ urine specimens to clinical testing laboratories, which then billed health care benefit programs for unnecessary urine drug tests, often thousands of dollars for a single test. In exchange for Ligotti’s authorization of these urine drug tests, the treatment centers required their patients to regularly visit Ligotti’s clinic, Whole Health LLC, for additional treatment and testing, or allowed Ligotti’s staff to come to their facilities to conduct tests and treatment there. This allowed Ligotti to profit by billing patients’ private health insurance plans for duplicative, medically unnecessary, and expensive urine drug tests, blood tests, and other addiction treatments. As a result of this conduct, which took place from 2011 to 2020, health care benefit programs were billed over $746 million and paid approximately $127 million for fraudulent urine drug tests and addiction treatments. Ligotti pleaded guilty to conspiracy to commit health care and wire fraud in the Southern District of Florida in October 2022 and was ordered today to surrender his medical license.
“The victims are real, and the losses are immense,” said Acting Special Agent in Charge Chad Yarbrough of the FBI Miami Field Office. “Instead of ensuring the proper treatment of the vulnerable patients under his care in over 50 sober homes, Michael J. Ligotti gamed the system for millions of dollars in ill-gotten gains. The investigators who unraveled this scam are to be commended for their diligence and commitment. The FBI and our partners will continue to pursue those individuals who use our health care system to prey on the vulnerable and steal from the taxpayers.”
“The results in this case reinforce our commitment and determination to pursue those who would defraud Amtrak’s health care programs and target vulnerable populations,” said Special Agent in Charge Mike Waters of the Amtrak Office of Inspector General’s Eastern Field Office. “Our agents will continue to work closely with the task force and partner agencies to hold perpetrators accountable and protect Amtrak’s resources, its employees, and their dependents.”
The FBI Miami Division Palm Beach Resident Agency, with assistance from DEA West Palm Beach Diversion Group; IRS Criminal Investigation Miami Field Office; Amtrak Office of Inspector General; Department of Labor Employee Benefits Security Administration; Florida Department of Financial Services, Division of Investigative and Forensic Services; and Palm Beach County Office of the State Attorney investigated the case.
Senior Litigation Counsel James V. Hayes and Trial Attorney Ligia M. Markman of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Alexandra Chase, Chief, Transnational, Trafficking & Cyber Crimes Unit for the Southern District of Florida prosecuted the case.
The National Rapid Response Strike Force, Los Angeles Strike Force, and Miami Strike Force of the Criminal Division, Fraud Section, and the U.S. Attorneys’ Offices for the Southern District of Florida and Central District of California lead the Department of Justice’s Sober Homes Initiative, which was initiated in September 2020 to prosecute defendants who exploit vulnerable patients seeking treatment for drug and/or alcohol addiction. Since its inception, the Sober Homes Initiative has resulted in charges and guilty pleas or convictions involving 28 criminal defendants in two judicial districts in connection with over $1 billion in alleged false billings for fraudulent tests and treatments for vulnerable patients seeking treatment for drug and/or alcohol addiction.
Father and Son Owners of Jacksonville Construction Firms Sentenced to Federal Prison for Conspiring to Defraud the IRSRead the Press Release
Jacksonville, Florida – U.S. District Judge Marcia Morales Howard today sentenced Jacksonville residents Raul Solis (52) and Raul Solis-Martinez (33) to 33 months and 21 months in federal prison, respectively, for conspiring to defraud the Internal Revenue Service (IRS) and to unlawfully employ workers who were neither lawfully admitted to, nor authorized to be employed in the United States. The court also ordered Solis and Solis-Martinez to pay $5,613,082.38 in restitution to the IRS. Solis-Martinez had pleaded guilty on July 27, 2022, and Solis had pleaded guilty on August 4, 2022.
According to court documents, Solis and Solis-Martinez owned and operated Solis Brothers Company, LLC and Duval Framing, LLC, which are construction subcontracting companies in Jacksonville. To illicitly lower labor costs, they conspired with each other, and Hugo Cruz-Medina, the owner of another subcontractor (H&S Framing, LLC) to pay their employees partially “off the books.” By paying employees with a mix of checks and cash, the conspirators avoided withholding the full amount of payroll taxes owed to the IRS. Between 2014 and 2019, their workers received approximately $22,186,096.35 in wages that were never reported to the IRS and from which no taxes were withheld. This practice led to a loss to the U.S. Treasury of approximately $5,613,082.38.
Further, by misrepresenting how much their employees were working, Solis and Solis-Martinez also defrauded the company that managed their payroll functions, as well as their workers’ compensation insurer, both of which relied on the conspirators’ false payroll reporting to calculate the cost of their services. In addition, Solis and Solis-Martinez knew that many of their employees had emigrated to the United States illegally or were otherwise not unauthorized to work here. Some workers had been previously deported from the United States, including Cruz-Medina, only to return and work for Solis and Solis-Martinez.
In a related case, on February 25, 2021, Hugo Cruz-Medina (35, Jacksonville), was sentenced to 41 months’ imprisonment for conspiring to defraud the IRS, conspiring to commit mail and wire fraud, and illegally reentering the United States after previously being deported.
“Employers have a responsibility to their employees to withhold the proper amount of taxes and pay those taxes over to the IRS,” said Ronald A. Loecker IRS-CI Acting Special Agent in Charge. “In this instance, greed drove the defendants to cheat their competitors and steal from both their employees and the American public. Today’s sentencing demonstrates that you can’t expect integrity and loyalty from an employer who would do anything for money.”
“This father and son criminal team profited financially by perpetrating fraud against the United States and private industry, while taking advantage of the country’s workforce,” said HSI Jacksonville Assistant Special Agent in Charge K. Jim Phillips. “In partnership with the Internal Revenue Service – Criminal Investigation and the Florida Department of Financial Services, we will continue to hold these criminals accountable for defrauding both the government and private industry.”
This case was investigated by the Internal Revenue Service – Criminal Investigation, Homeland Security Investigations (HSI), U.S. Department of Labor – Office of Inspector General, and the Florida Department of Financial Services. It was prosecuted by Assistant United States Attorney Michael J. Coolican.
El Salvadorian Citizen Convicted of Illegal Reentry after Aggravated FelonyRead the Press Release
ALEXANDRIA, Va. – A federal jury convicted an El Salvadorian citizen last week on charges of illegal reentry subsequent to an aggravated felony.
According to court records and evidence presented at trial, Jose Molina, 32, illegally reentered the United States after having been previously deported both in 2015 and in 2017. Molina was most recently deported in July 2017 after pleading guilty and serving a sentence in the Southern District of Texas. Molina was first found in Alexandria in February 2022 after an arrest by local law enforcement on unrelated charges. In a sworn affidavit upon his arrest by Immigrations and Customs Enforcement in October 2022, Molina admitted that he was a citizen of El Salvador, that he had been previously deported, that he reentered the United States in 2018, and that he did not have the permission of the Attorney General or the Secretary of Homeland Security to reapply for admission.
Molina faces a maximum penalty of 20 years in prison when sentenced on April 19. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia made the announcement after U.S. District Judge Rossie D. Alston accepted the verdict.
Special Assistant U.S. Attorney Christina Clark and Assistant U.S. Attorney Zachary Ray are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:22-cr-209.
El Departamento de Justicia llega a un acuerdo con una organización comunitaria con sede en California que resuelve unas acusaciones de discriminación relacionadas con la inmigraciónRead the Press Release
El Departamento de Justicia anunció hoy que ha llegado a un acuerdo conciliatorio con Youth UpRising, una organización comunitaria con sede en Oakland, California, que presta servicios para jóvenes. El acuerdo resuelve la determinación del Departamento que Youth UpRising vulneró la ley de Inmigración y Nacionalidad («INA», por sus siglas en inglés) al discriminar a un empleado no ciudadano de los EE. UU. con base en su estatus de ciudadanía y tomar represalias contra un segundo empleado que intentó detener la discriminación.
«Los empleadores no pueden discriminar a los trabajadores a la hora de verificar su permiso para trabajar con base en su ciudadanía, estatus migratorio o nacionalidad de origen», manifestó Kristen Clarke, la Fiscal General Auxiliar de la División de Derechos Civiles del Departamento de Justicia. «Los trabajadores tampoco deben enfrentar consecuencias negativas cuando plantean sus preocupaciones sobre tal discriminación, y el Departamento de Justicia protegerá firmemente a aquellos que hagan valer sus derechos en nombre propio o de otros en virtud de esta ley».
La investigación del Departamento, que se inició con base en dos quejas, reveló que Youth UpRising discriminó ilegalmente a una no ciudadana de los EE. UU. recién contratada al rechazar su documentación válida que demostraba su permiso para trabajar y requerir otra documentación, debido a su ciudadanía. La empleada fue despedida al no poder cumplir con la exigencia documental innecesaria. El Departamento también concluyó que Youth UpRising despidió a otro empleado como represalia por investigar el incidente e intentar detener la discriminación. En virtud de la disposición antidiscriminatoria de la INA, todo empleado tiene derecho a elegir la documentación válida que desea presentar para demostrar que tiene permiso para trabajar en los Estados Unidos, y a hacer valer los derechos protegidos en virtud de esa disposición sin enfrentar represalias.
Conforme al acuerdo, Youth UpRising pagará una sanción civil de $10,360 –el máximo permitido en esta instancia. Debido a que los exempleados recuperaron sus salarios perdidos antes de que el Departamento finalizara su investigación, el acuerdo no requiere ningún pago retroactivo adicional. En virtud del acuerdo, la organización también revisará sus políticas de empleo para cumplir con la disposición antidiscriminatoria de la INA; capacitará a los miembros del consejo directivo y a todos los empleados que son responsables de verificar el permiso de los trabajadores para trabajar en los Estados Unidos; y se someterá a supervisión del Departamento durante dos años.
La Sección de Derechos de Inmigrantes y Empleados de la División de Derechos Civiles es responsable de hacer cumplir la disposición antidiscriminatoria de la INA. La ley prohíbe la discriminación por motivos de estatus de ciudadanía y nacionalidad de origen en los procesos de contratación, despido o reclutamiento o recomendación por comisión; las prácticas documentales injustas; y las represalias y la intimidación.
Encuentre más información en el sitio web de la IER sobre cómo los empleadores pueden evitar la discriminación a la hora de verificar el permiso para trabajar. Aprenda más sobre cómo la IER protege los derechos de los trabajadores en este vídeo. Para más información sobre las protecciones contra la discriminación en virtud de las leyes de inmigración, llame a la línea directa de la IER para trabajadores al 1-800-255-7688 (1-800-237-2515, TTY para personas con discapacidades auditivas); llame a la línea directa de la IER para empleadores al 1-800-255-8155 (1-800-237-2515, TTY para personas con discapacidades auditivas); inscríbase en un seminario en línea gratuito; envié un correo electrónico a [email protected]; o visite los sitios web de la IER en inglés o español. Para recibir las últimas noticias de la IER, inscríbase a GovDelivery.
View English press release here.
Detroit Man Sentenced to More than 10 Years in Prison for Federal Drug CrimeRead the Press Release
HUNTINGTON, W.Va. – Virgil Montell-Denzel Watkins, 30, of Detroit, Michigan, was sentenced today to 10 years and eight months in prison, to be followed by four years of supervised release, for distributing 5 grams or more of methamphetamine.
According to court documents and statements made in court, Watkins admitted to selling approximately 1 ounce of methamphetamine to a confidential informant at a Marcum Terrace apartment in Huntington on February 3, 2022. Watkins further admitted to selling an additional 6 ounces of methamphetamine to the informant between February 17 and April 18, 2022.
On April 22, 2022, law enforcement officers arrested Watkins and executed a search warrant at the Marcum Terrace apartment. Watkins admitted that the officers found a Glock, Model 30, .45-caliber pistol and approximately 10 grams of fentanyl during the search.
United States Attorney Will Thompson made the announcement and commended the investigative work of the the Federal Bureau of Investigation (FBI).
United States District Judge Robert C. Chambers imposed the sentence. Assistant United States Attorney Joseph F. Adams prosecuted the case.
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. 3:22-cr-74.
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Conyers doctor pays $1,850,000 to resolve allegations that she performed and billed for medically unnecessary cataract surgeries and diagnostic testsRead the Press Release
ATLANTA –Aarti D. Pandya, M.D. and Aarti D. Pandya, M.D. P.C. (“Pandya Practice Group”) have agreed to pay approximately $1,850,000 to resolve allegations that they violated the False Claims Act by, among other things, billing the government for cataract surgeries and diagnostic tests that were not medically necessary, tests that were incomplete or of worthless value, and office visits that did not provide the level of service claimed.
“Physicians who perform procedures and tests without a legitimate medical need place profits ahead of patients and subject those patients to unnecessary risk,” said U.S. Attorney Ryan K. Buchanan “This settlement represents our office’s commitment to ensuring accountability for physicians who subject patients to unwarranted medical care and waste taxpayer funds.”
"We must assure patients and taxpayers that healthcare is dictated by clinical needs, not fiscal greed,” said Keri Farley, Special Agent in Charge of FBI Atlanta. “This settlement should serve as a reminder that the FBI will not tolerate healthcare providers who engage in schemes that defraud the industry and put innocent patients at risk.”
“Care coordination for beneficiaries should account, first and foremost, for the medical appropriateness of services that patients need to maintain their well-being,” stated Special Agent in Charge Tamala E. Miles with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Subjecting individuals to extraneous procedures just to bilk the health care programs on which they rely is the antithesis of proper medical care. HHS-OIG and our law enforcement partners are dedicated to investigating providers who allegedly threaten the safety of patients and the integrity of the federal health care system.”
“We are committed to fully investigating providers who falsely bill the Department of Defense (DoD) health care system to enrich themselves using funds intended for military members and their families,” stated Special Agent in Charge Darrin K. Jones, DoD Office of Inspector General, Defense Criminal Investigative Service (DCIS), Southeast Field Office. “We thank the U.S. Attorney’s Office and our investigative partners for their dedication to protecting America’s warfighters.”
This settlement resolves allegations that from January 1, 2011 to December 31, 2016, Pandya knowingly submitted false claims to federal healthcare programs for medically unnecessary cataract extraction surgeries and YAG laser capsulotomies. The government alleged that Pandya performed these procedures on patients that did not qualify for the procedure under accepted standards of medical practice and, in some cases, caused injury to her patients. Additionally, the government alleged that Pandya falsely diagnosed patients with glaucoma to justify unnecessary diagnostic testing and treatment that was billed to Medicare. The government alleged that many of the diagnostic tests that Pandya ordered were not properly performed, were performed on a broken machine, or were not interpreted in the medical record, as required by Medicare.
This settlement resolves allegations in a lawsuit filed by Laura Dildine, a former Pandya Practice Group employee, under the qui tam, or whistleblower, provisions of the False Claims Act (FCA). The FCA authorizes private parties to sue for false claims on behalf of the United States and share in the recovery. The lawsuit was filed in the Northern District of Georgia and is captioned United States ex rel. Dildine v. Aarti D. Pandya, M.D. et al., No. 1:13-CV-3336-LMM. The United States intervened in this lawsuit in 2018.
After the government intervened in the qui tam action, HHS imposed a payment suspension on the Pandya Practice Group that precluded it from receiving any reimbursement from Medicare for Part B claims. The payment suspension was imposed on October 23, 2019. Pandya and the Pandya Practice Group unsuccessfully challenged the payment suspension in district court. As part of the settlement of the government’s claims in this case, the Pandya Practice Group agreed to forfeit the suspension amount to the government. The payment suspension will also be lifted as part of the settlement.
To protect federal health care programs and beneficiaries going forward, Pandya and the Pandya Practice Group have entered into a detailed, multi-year Integrity Agreement and Conditional Exclusion Release (IA) with OIG that is more robust than OIG’s standard agreement. The IA includes training and reporting requirements and enhanced material breach provisions. The IA also requires that Pandya and the Pandya Practice Group hire an Independent Review Organization to conduct annual claims reviews to determine whether the items and services furnished were medically necessary and appropriately documented, and whether the claims were correctly coded, submitted, and reimbursed. OIG did not release its permissive exclusion authority and will provide such a release only after Pandya and the Pandya Practice Group have satisfied their obligations under the IA.
The investigation of this matter and the litigation against Aarti D. Pandya, M.D., and the Pandya Practice Group were handled by Assistant U.S. Attorneys David A. O’Neal, Austin M. Hall, and Akash Desai. The claims resolved by the settlement are allegations only, and there has been no determination of liability.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Columbus Man Sentenced to Prison for Trafficking Fentanyl, Methamphetamine, and Illegal Possession of a FirearmRead the Press Release
CLEVELAND – Patrick A. Anaya, 24, of Columbus, Ohio, was sentenced on Friday, January 6, 2023, to 12 ½ years in prison by U.S. District Judge Christopher A. Boyko after he pleaded guilty to possession with intent to distribute fentanyl, methamphetamine, and possession of a firearm during a drug trafficking crime.
"Law enforcement in this region and in Lorain County continue to fight against fentanyl dealers, drug traffickers, and violent criminals who intend to harm our communities,” said First Assistant U.S. Attorney Michelle M. Baeppler. “As we’ve shown time and time again, if you deal poison and illegally carry firearms in Lorain County or Northern Ohio, you may soon find yourself in prison.”
“Drug trafficking is one of the highest priorities of the FBI, nationally and across Northern Ohio,” said FBI Cleveland Special Agent in Charge, Gregory Nelsen. “We are committed to keeping our communities safe by finding, investigating, and dismantling drug trafficking organizations one person at a time. Today’s sentence represents the unwavering commitment by our federal, state, and local partners to see that nefarious criminals are off the streets and no longer a danger to the public.”
According to court documents, on January 11, 2022, law enforcement authorities arrested Anaya on an outstanding warrant while he was attempting to meet with a potential drug buyer. Authorities then searched Anaya and found that he possessed 1.4 kilograms of fentanyl and quantities of methamphetamine and cocaine. Authorities also found Anaya to be in possession of a handgun tucked into his waistband and a semiautomatic rifle in his vehicle.
This case was investigated as part of Operation Synthetic Opioid Surge (S.O.S.)., a joint law enforcement initiative that seeks to reduce the supply of deadly synthetic opioids and to identify wholesale distribution networks and international and domestic suppliers in Lorain County.
This case was investigated by the Elyria Police Department and the Cleveland Division of the FBI. This case was prosecuted by Assistant U.S. Attorney Robert J. Kolansky.
Cleveland Man Sentenced to 10 Years in Prison for Shipping Fentanyl Pills Through the U.S. MailRead the Press Release
CLEVELAND – Lance Tobias, 56, of Cleveland, Ohio, was sentenced on Thursday, January 5, 2023, to 10 years in prison and ordered to pay a $100,000 fine by U.S. District Judge John R. Adams after he pleaded guilty to his role in a conspiracy to ship fentanyl pills through the U.S. mail.
“Drug traffickers mistakenly believe that they can use the U.S. mail to move their deadly poison around the country and evade law enforcement,” said First Assistant U.S. Attorney Michelle M. Baeppler. “As this sentence demonstrates, using the mail system as a personal drug courier is a terrible idea, and it’s one that can land you in prison for a very long time.”
“Battling the distribution of synthetic opioids remains one of the U.S. Postal Inspection Services’ top priorities,” said Inspector in Charge Lesley Allison. “This sentencing should serve as a warning to anyone dealing in these dangerous and illegal substances that the U.S. Postal Inspection Service stands steadfast in our mission to protect the public and the Postal Service from this illegal and deadly activity.”
According to court documents, from March to May 2020, Tobias was part of a conspiracy that shipped fentanyl pills through the U.S. mail. On May 27, 2020, court documents state that Tobias knowingly shipped a box through the U.S. mail that contained nearly 300 grams of blue fentanyl pills with an “M30” marking from Culver City, California, to Cleveland, Ohio.
Tobias pleaded guilty to conspiracy to distribute and possess with intent to distribute fentanyl and distribution of fentanyl in July 2022.
This case was investigated by the United States Postal Inspection Service (USPIS) and was prosecuted by Assistant U.S. Attorney Margaret A. Sweeney.
California Agricultural Companies and Their Owner Agree to Pay $600,000 to Settle False Claims Act Allegations Relating to Improperly Inflated Paycheck Protection Program LoansRead the Press Release
Four California agricultural companies and their owner have agreed to settle allegations that they violated the False Claims Act (FCA) and the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) by knowingly submitting false information in support of Paycheck Protection Program (PPP) loan applications. Mendota Land Co., Sweetwood Farm Co. LLC, Sweetwood Farm Inc., Seasholtz Co. LLC, and their owner John Seasholtz (collectively, “Seasholtz”) are alleged to have improperly inflated the employee headcount on the companies’ PPP loan applications by impermissibly including non-employee contract workers who were, in fact, employed by other, unrelated entities. The settlement resolves allegations that the inclusion of non-employees caused Seasholtz to receive approximately $1.8 million in excess PPP funds. Seasholtz previously repaid the excess PPP loan funds to the lender, thereby relieving the U.S. Small Business Administration of liability for approximately $1.8 million in loan guarantees. As a part of the settlement announced today, Seasholtz agreed to pay approximately $400,000 in damages and penalties under the FCA and approximately $200,000 in civil penalties under FIRREA.
“PPP loans were intended to provide critical relief to small businesses,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to pursuing those who knowingly obtained PPP or other COVID-19 assistance funds to which they were not entitled.”
“Paycheck Protection Program funds have helped qualified businesses throughout the Central Valley that were negatively impacted by the pandemic,” said Phillip A. Talbert for the Eastern District of California. “The U.S. Attorney’s Office invested significant time and resources in this investigation and will continue to do so to ensure that PPP funds only go to those who are eligible.”
“Providing accurate information when applying for the SBA’s vital disaster relief programs is the individual responsibility of the applicant,” said Special Agent in Charge Weston King of Small Business Administration (SBA) Office of Inspector General (OIG)’s. “This settlement demonstrates that wrongdoing will find its way into the open, and those responsible will be held accountable. I want to thank the U.S. Attorney’s office and our law enforcement partners for their support and dedication to pursuing justice in this case.”
Congress created the PPP in March 2020, as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, to provide emergency financial support to the millions of Americans suffering economic hardship due to the COVID-19 pandemic. The CARES Act authorized billions of dollars in forgivable loans to small businesses struggling to pay employees and other business expenses. When applying for PPP loans, borrowers were required to certify the truthfulness and accuracy of all information provided in their loan applications, including their number of employees and average monthly payroll.
The settlement resolved a lawsuit filed under the qui tam or whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The qui tam lawsuit was filed by Bell Hill LLC and is captioned United States ex rel. Bell Hill, LLC v. John Seasholtz, et al., No. 1:20-cv-942 (E.D. Cal.). There has been no determination regarding the amount of the recovery to be paid to Bell Hill LLC.
The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the Eastern District of California, with assistance from the SBA’s Office of General Counsel and the SBA Office of the Inspector General.
This matter was handled by Trial Attorney Jared S. Wiesner of the Civil Division and Assistant U.S. Attorney Emilia P. E. Morris for the Eastern District of California.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The task force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Tips and complaints from all sources about potential fraud affecting COVID-19 government relief programs can be reported by visiting the webpage of the Civil Division’s Fraud Section, which can be found here. Anyone with information about allegations of attempted fraud involving COVID-19 can also report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
California Agricultural Companies and Their Owner Agree to Pay $600,000 to Settle False Claims Act Allegations Relating to Improperly Inflated Paycheck Protection Program Loan ApplicationsRead the Press Release
FRESNO, Calif. — Four California agricultural companies and their owner have agreed to settle allegations that they violated the False Claims Act (FCA) and the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) by knowingly submitting false information in support of Paycheck Protection Program (PPP) loan applications, U.S. Attorney Phillip A. Talbert announced.
The companies, which grow, harvest, process, pack, ship and sell processed and fresh tomatoes, among other crops, are Mendota Land Co., Sweetwood Farm Co. LLC, Sweetwood Farm Inc., Seasholtz Co. LLC. The companies and their owner John Seasholtz (collectively, “Seasholtz”) are alleged to have improperly inflated the employee headcount on PPP loan applications by impermissibly including non-employee contract workers who were, in fact, employed by other, unrelated entities. The settlement resolves allegations that the inclusion of non-employees caused Seasholtz to receive approximately $1.8 million in excess PPP funds. Seasholtz previously repaid the excess PPP loan funds to the lender, thereby relieving the U.S. Small Business Administration of liability for approximately $1.8 million in loan guarantees. As a part of the settlement announced today, Seasholtz agreed to pay approximately $400,000 in damages and penalties under the FCA and approximately $200,000 in civil penalties under FIRREA.
“PPP loans were intended to provide critical relief to small businesses,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to pursuing those who knowingly obtained PPP or other COVID‑19 assistance funds to which they were not entitled.”
“Paycheck Protection Program funds have helped qualified businesses throughout the Central Valley that were negatively impacted by the pandemic,” said U.S. Attorney Talbert. “The U.S. Attorney’s Office invested significant time and resources in this investigation and will continue to do so to ensure that PPP funds only go to those who are eligible.”
“Providing accurate information when applying for the SBA’s vital disaster relief programs is the individual responsibility of the applicant,” said Special Agent in Charge Weston King of SBA OIG’s Western Region. “This settlement demonstrates that wrongdoing will find its way into the open, and those responsible will be held accountable. I want to that the U.S. Attorney’s office and our law enforcement partners for their support and dedication to pursuing justice in this case.”
Congress created the PPP in March 2020, as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, to provide emergency financial support to the millions of Americans suffering economic hardship due to the COVID-19 pandemic. The CARES Act authorized billions of dollars in forgivable loans to small businesses struggling to pay employees and other business expenses. When applying for PPP loans, borrowers were required to certify the truthfulness and accuracy of all information provided in their loan applications, including their number of employees and average monthly payroll.
The settlement resolved a lawsuit filed under the qui tam or whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The qui tam lawsuit was filed by Bell Hill LLC and is captioned United States ex rel. Bell Hill, LLC v. John Seasholtz, et al., No. 1:20-cv-942 (E.D. Cal.). There has been no determination regarding the amount of the recovery to be paid to Bell Hill, LLC.
The resolution obtained in this matter was the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of California and the DOJ Civil Division’s Commercial Litigation Branch, Fraud Section, with assistance from the SBA’s Office of General Counsel and the SBA Office of Inspector General.
This matter was handled by Assistant U.S. Attorney Emilia P. E. Morris of the Eastern District of California and Trial Attorney Jared S. Wiesner of the Civil Division.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The task force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Tips and complaints from all sources about potential fraud affecting COVID-19 government relief programs can be reported by visiting the webpage of the Civil Division’s Fraud Section, which can be found here. Anyone with information about allegations of attempted fraud involving COVID-19 can also report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Bakersfield Man Sentenced to over 23 Years in Prison for Possessing Methamphetamine for Distribution and Possession of a Firearm in Furtherance of a Drug Trafficking CrimeRead the Press Release
FRESNO, Calif. — Troy Wayne Reiss, 60, of Bakersfield, was sentenced to 23 years and eight months in prison today for possession with intent to distribute methamphetamine and possession of a firearm in furtherance of a drug trafficking crime, U.S. Attorney Phillip A. Talbert announced.
According to court documents, on three separate occasions, Reiss possessed more than 6 pounds of methamphetamine. A search of his residence recovered ammunition, clear plastic bags, narcotics accounting ledgers, a digital scale, and a short-barreled shotgun. Reiss stored the shotgun near his methamphetamine supply to protect both himself and his narcotics distribution business.
This case was the product of an investigation by the Homeland Security Investigations and the Bakersfield Police Department. Assistant U.S. Attorney Antonio J. Pataca prosecuted the case.
69 Universal Aryan Brotherhood Gang Members and Associates Convicted During Multi-Year Investigation into Their Drug Trafficking of MethamphetamineRead the Press Release
Gang Directed Drug Trafficking Network Through Contraband Cell Phones from State Prison Cells
OKLAHOMA CITY - A multi-year investigation into a prison-based drug trafficking organization has resulted in 69 defendants being convicted across multiple state and federal cases. The wrap-up of this investigation and prosecution is announced by United States Attorney Robert J. Troester.
Last month, the investigation culminated in the sentencing of Chance Alan Wilson, a/k/a Wolfhead, who was the leader of the Universal Aryan Brotherhood (UAB), a violent criminal organization that is primarily run from inside Oklahoma prisons. Wilson, who was serving a state sentence of 15 years in the Oklahoma State Penitentiary for Murder was sentenced to serve an additional 360 months in federal prison in December after being found to be primarily responsible for the distribution of hundreds of kilograms of methamphetamine and other drugs over many years.
Wilson and other UAB members relied on a network of individuals operating outside of prison to handle the distribution of the methamphetamine. Over the course of this investigation, federal, state and local law enforcement identified and targeted these individuals and the drug houses they ran on Wilson’s behalf. Wilson ran the operation from inside prison using contraband cell phones.
In the end, 69 individuals associated with the UABs operations have been charged and convicted, in both state and federal court. Across those convictions, law enforcement seized 62 firearms, more than 300 pounds of methamphetamine and more than $400,000 in drug proceeds. Collectively, the individuals charged federally have been sentenced to 418 years in custody of the Federal Bureau of Prisons and 216 years of supervised release. Crimes for which the defendants were convicted include drug trafficking, drug conspiracy, money laundering, maintaining drug premises and illegal firearms possession.
"This is another wide-spread drug trafficking operation that was primarily directed and controlled by incarcerated gang members using contraband cell phones from their state prison cells," said United States Attorney Robert J. Troester. "I am grateful for the outstanding work by law enforcement and prosecutors who have held these defendants accountable, removed deadly poison from the streets, and taken guns out of the hands of criminals."
"Criminal gangs constitute a significant threat to public safety. Yet, even while incarcerated, criminal gang members like Chance Wilson and his cohorts continue their money laundering and drug trafficking schemes," said Robert Melton, Assistant Special Agent in Charge of the HSI Dallas - Oklahoma and Texas Panhandle Division. "This defendant’s lengthy prison sentence and indictments of 69 other co-conspirators exemplify Homeland Security Investigations and our partner agencies’ commitment to dismantling these criminal gangs and Transnational Criminal Organizations."
"This multi-agency investigation demonstrates the commitment of law enforcement at all levels to disrupting criminal enterprises operating behind prison walls," said FBI Oklahoma City Special Agent in Charge Edward J. Gray. "The citizens of Oklahoma are safer today because of the massive amount of methamphetamine, weapons, and drug proceeds removed from our communities."
"The financial expertise of IRS Criminal Investigation Special Agents are critical in detecting and tracing money laundering transactions of criminal organizations, exposing their profits," said Christopher J. Altemus Jr., IRS-CI special agent in charge of the Dallas Field Office. "In this case, CI special agents worked with federal and state agencies to expose the profits of the UAB and depriving them of the funds they needed to operate their criminal organization. This joint effort demonstrates our resolve to serving our communities by investigating criminal activities that negatively impact everyday Americans"
This investigation was spearheaded by the Homeland Security Investigations, with valuable assistance by numerous other law enforcement partners, including the Federal Bureau of Investigation Oklahoma City Field Office, IRS Criminal Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Oklahoma City Police Department, the Oklahoma Bureau of Narcotics, Oklahoma Highway Patrol, the Oklahoma County District Attorneys’ Office, District 2 Drug Task Force, District 6 Drug Task Force and the Oklahoma Department of Corrections.
Assistant U.S. Attorneys Thomas Snyder and Jason Harley prosecuted these cases, with assistance from Paralegal Linda Nixon and Supervisory Paralegal Jennifer Rowe.
These prosecutions were part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Reference is made to public filings for more information.
Saturday 7 January 2023
Defendant Extradited to the United States from Mexico to Face Sex Trafficking ChargesRead the Press Release
Leonardo Jimenez-Rodriguez was extradited to the United States yesterday and is scheduled to be arraigned today before United States Magistrate Judge Ramon E. Reyes, Jr., at the federal courthouse in Brooklyn on a six-count indictment charging him with sex trafficking conspiracy, sex trafficking, interstate prostitution, alien smuggling and related offenses. The defendant was arrested in May 2022 in Mexico following a joint investigation by Homeland Security Investigations (HSI) Mexico City, HSI New York and the Mexican Federal Police.
The defendant is charged in a superseding indictment together with his brother and co-defendant, Marcos Jimenez-Rodriguez, who was previously arrested in the United States. The defendant’s sister, Melisa Jimenez-Rodriguez, was also previously arrested in the United States and is awaiting sentencing on the charge of distributing proceeds of a prostitution business.
The extradition and charges were announced by Breon Peace, United States Attorney for the Eastern District of New York, and Ivan J. Arvelo, Special Agent-in-Charge, HSI New York.
“As alleged, using false promises of love and support, the defendant and his siblings brutally sex trafficked women between Mexico and the United States for over two decades,” stated United States Attorney Peace. “Stopping human trafficking and ensuring that traffickers face justice for the crimes against their victims remain priorities of this Office and our law enforcement partners.”
Mr. Peace commended HSI New York’s Trafficking in Persons Unit for leading the investigation of the Jimenez-Rodriguez Sex Trafficking Organization; thanked the HSI Mexico City Attaché Office, the Department of Justice’s Office of International Affairs, the State Department, Interpol, International Affairs Department of the Attorney General’s Office in Mexico, the Law Enforcement Unit of the State of Tlaxcala Attorney General’s Office, Interpol Mexico, and the New York City Police Department (NYPD) for their assistance; and praised the government of Mexico for its role in advancing bilateral anti-trafficking enforcement efforts. Mr. Peace also acknowledged the non-governmental victim service providers and advocates for their dedicated efforts to restore and improve the lives of survivors of trafficking and their families.
“Yesterday’s extradition is the result of years of extraordinary collaboration between law enforcement agencies spanning multiple countries and investigative jurisdictions. Leonardo Jimenez-Rodriguez is alleged to have been a part of his family’s transnational human trafficking organization which offered the chance at a better life to young women and girls before cruelly ensnaring them in forced sex work with no way to return home,” stated HSI Special Agent-in-Charge Arvelo. “HSI is grateful to our colleagues with the HSI Mexico City Attaché Office and to our many partners in the United States and the Government of Mexico whose collaboration and teamwork make investigations like this possible.”
As alleged in the superseding indictment and other court filings, between 1997 and May 2018, Leonardo Jimenez-Rodriguez was a member of a family organization based in New York and Tenancingo, Mexico, that used force, fraud and coercion to cause young women in Mexico to engage in prostitution in the United States (the “Jimenez-Rodriguez Trafficking Organization”). Leonardo Jimenez-Rodriguez, together with other relatives, lured victims into romantic relationships through false promises of love and support and pressured the victims to travel to the United States with promises of a better life. After Leonardo Jimenez-Rodriguez and other members of the Jimenez-Rodriguez Trafficking Organization illegally smuggled young women from Mexico into the United States, they employed brutal physical beatings, intimidation, psychological abuse, and threats to force or attempt to force the women to work as prostitutes in New York City and elsewhere. The defendant is also charged with distributing the illicit proceeds of the sex-trafficking and prostitution enterprise.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted of the sex-trafficking related charges, the defendant faces a mandatory minimum sentence of 15 years’ incarceration and a maximum sentence of life in prison.
The investigation, prosecution, bilateral enforcement action and extradition of the defendants apprehended in Mexico were coordinated through the U.S.-Mexico Bilateral Human Trafficking Enforcement Initiative. Since 2009, the Departments of Justice and Homeland Security have collaborated with Mexican law enforcement counterparts in a Bilateral Human Trafficking Enforcement Initiative to more effectively dismantle human trafficking networks operating across the U.S.-Mexico border, bring human traffickers to justice, restore the rights and dignity of human trafficking victims and reunite victims with their children. These efforts have resulted in successful prosecutions in both Mexico and the United States, including U.S. federal prosecutions of over 175 defendants in multiple cases in Georgia, New York, Florida and Texas, in addition to numerous Mexican federal and state prosecutions of associated sex traffickers. The extradition in this case is also the latest development in the Eastern District of New York’s comprehensive anti-trafficking program, which has to date indicted more than 100 defendants for sex trafficking; assisted nearly 200 victims, including over 50 minors, reunited 19 victims’ children with their mothers, and secured restitution orders of over $4 million on behalf of trafficking victims.
The government’s case is being handled by the Office’s Civil Rights Unit. Assistant United States Attorneys Erin M. Reid, Gillian Kassner, Tara B. McGrath, and Lauren Bowman are in charge of the prosecution, with assistance from Paralegal Specialist Ryan Costley.
The New Defendant:
LEONARDO JIMENEZ-RODRIGUEZ
Age: 39
MexicoDefendant Previously Arrested:
MARCOS JIMENEZ-RODRIGUEZ
Age: 46
Queens, New YorkMELISA JIMENEZ-RODRIGUEZ
Age: 41
Queens, New YorkE.D.N.Y. Docket No. 21-CR-11 (S-1) (EK)
Friday 6 January 2023
Woodbridge Man Pleads Guilty to Distributing Narcotics to 14-Year-OldRead the Press Release
ALEXANDRIA, Va. – A Woodbridge man pleaded guilty yesterday to distributing a Schedule II controlled substance to a person under age twenty-one.
According to court documents, in April of 2022, Latae'veion Woods, 21, sold pills purporting to be Percocet to a 14-year-old, who died of a fentanyl overdose approximately five days after the distribution. Following the overdose death, officers found a clear plastic baggie containing four blue pills with markings consistent with 30 milligram Percocet pills in the juvenile’s pants. Analysis later showed that the pills actually contained fentanyl. Police also discovered text messages on the 14-year-old’s phone which revealed that Woods distributed pills to the juvenile on multiple occasions during March and April 2022. The messages further established that Woods instructed the juvenile how to redistribute the pills and directed him to resell the pills for a specific amount of money. No other messages were located on the juvenile’s phone to suggest he had any other source of supply for Percocet.
Messages also demonstrated that Woods offered to sell the juvenile a firearm, specifically, a Glock 19 or Glock 48 semiautomatic handgun. During a search warrant of Woods’ residence, law enforcement seized a Glock 48 handgun and a Glock-style semi-automatic “ghost” gun, both of which Woods admitted belonged to him.
Woods is scheduled to be sentenced on April 14. He faces a mandatory minimum term of imprisonment of one year and a maximum penalty of 40 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Jarod Forget, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Division; and Peter Newsham, Chief of Prince William County Police, made the announcement after Senior U.S. District Judge T.S. Ellis, III accepted the plea.
Special Assistant U.S. Attorney Lauren Hahn is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:22-cr-226.
Windsor Mill Couple Facing Federal Charges for Allegedly Obtaining and Attempting to Obtain Multiple Fraudulent COVID-19 Cares Act Loans and Fraudulent Unemployment Insurance BenefitsRead the Press Release
Baltimore, Maryland – A federal criminal complaint has been filed charging Tomeka Glenn, age 46, and Kevin Davis, age 42, both of Windsor Mill, Maryland, for conspiracy to commit wire fraud, relating to the submission of fraudulent COVID-19 CARES Act Paycheck Protection Program and Economic Injury Disaster Loan applications and their receipt of over $300,000 in fraudulently obtained funds. The complaint was filed December 16, 2022, and unsealed today upon the arrests of the defendants.
The defendants are expected to have an initial appearance in U.S. District Court in Baltimore beginning at 2:00 p.m. this afternoon.
The charges were announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office; and Interim Chief Dennis J. Delp of the Baltimore County Police Department.
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was a federal law enacted in March 2020 to provide emergency financial assistance to Americans suffering from the economic effects caused by the COVID-19 pandemic, including forgivable loans to small businesses for job retention and certain other expenses, through the Paycheck Protection Program, administered through the Small Business Administration (SBA). The SBA also offered an Economic Injury Disaster Loan (EIDL) and/or an EIDL advance to help businesses meet their financial obligations. An EIDL advance did not have to be repaid, and small businesses could receive an advance, even if they were not approved for an EIDL loan. The maximum advance amount was $10,000.
According to the affidavit filed in support of the criminal complaint, in September 2020, a Baltimore County Police Department detective investigating fraudulent PPP loans associated with targets of a criminal investigation identified several other individuals, including Glenn, who applied for and received PPP loans and EIDLs, using false and fraudulent information. As detailed in the affidavit, a review of the PPP and EIDL applications submitted by Glenn for businesses that she owns and/or controls were found to contain false statements and misrepresentations as to the legitimacy of the business; the number of employees; the financial earnings and payroll expenses of the businesses; and the income taxes withheld by the businesses. The affidavit alleges that how Glenn spent the loan proceeds was inconsistent with payroll and other business expenses allowable under the loan program.
For example, on June 19, 2020, Glenn allegedly filed an EIDL application for “Kdonsvanity décor.” An entity call K’Dons Vanity Décor was formed in Maryland on December 17, 2019. Glenn was listed as the registered agent for the entity with her home address as the address of the company. The application claimed that the business had gross revenues of $175,000 and had 10 employees. IRS records indicate that there were no business tax filings for K’Don’s Vanity Décor LLC for tax years 2019 or 2020. Glenn also responded “no’ to the question as to whether she had been convicted for any felony within the last five years. In fact, Glenn had been convicted of felonious credit card fraud in Fairfax County, Virginia in 2016 and of access device fraud in York County, Pennsylvania. Glenn received a $10,000 EIDL advance as a result of the application, but the larger EIDL loan sought in the application was ultimately declined by the SBA due to “unsatisfactory credit history.”
The affidavit alleges that Glenn submitted a similar fraudulent application for a PPP loan on behalf of K’Dons Vanity Décor and on August 8, 2020, received loan proceeds of $70,357.50. A review of Glenn’s bank accounts reveals that shortly after receiving the PPP loan funds, Glenn made purchases inconsistent with those allowable under the PPP loan program. For instance, Glenn purchased luxury goods, including multiple pairs of Christian Louboutin brand shoes, and resort travel with Davis. On July 19, 2021, Glenn submitted an application for loan forgiveness, claiming that $67,390 of the PPP loan had been spent on payroll costs, and the loan was forgiven.
During the course of the investigation, law enforcement discovered multiple other business entities (or purported business entities) associated with Glenn that applied for EIDL or PPP loans, including TD Innovative Consulting, referenced above, and Epoxy By S.H.E. LLC, in addition to “Kaydon Vanity Décor.” As detailed in the affidavit, the loan applications contained similar false statements as to the legitimacy of the businesses, number of employees, and financial condition of the entities and the loans were ultimately denied.
The affidavit further alleges that Glenn engaged in a scheme to assist Davis, with whom she is in a romantic relationship, to submit and receive fraudulent PPP and EIDL loans. Specifically, Davis allegedly submitted a fraudulent PPP loan application on behalf of For Keepsake Investment Realty, which included false statements as to the number of employees and amount of payroll, as well as including a fraudulent bank statement and IRS Form 940—Employer’s Annual Federal Unemployment Tax Return for 2019—in support of the application. Davis also responded “no’ to the question as to whether he had been placed on any form of parole or probation within the last five years, when in fact, on March 24, 2017, Davis began four years of supervised release for a 2013 federal conviction in Arizona for conspiracy to distribute marijuana. On March 18, 2021, Davis received PPP loan proceeds of $145,369 on behalf of For Keepsake Investment Realty.
Further, a fraudulent EIDL loan application on behalf of For Keepsake Investment Realty, listing Davis as the owner of the business, was submitted on June 30, 2020, which claimed, among other things, that the business had gross revenues of $250,000 and employed 10 employees. On July 2, 2020, and July 15, 2020, Davis received an EIDL advance of $10,000 and EIDL loan proceeds of $64,900, respectively, on behalf of For Keepsake Realty.
As detailed in the affidavit, in the months following the disbursement of the EIDL loans, Davis purchased multiple airline tickets, luxury goods, and paid for vacations. Moreover, on December 7, 2021, For Keepsake Realty sent $7,000 via a teller transfer to KDons Vanity Décor LLC’s bank account, which was controlled by Glenn.
In addition to the fraudulent PPP and EIDL loans obtained by Glenn and Davis, the affidavit alleges that Glenn received approximately $21,000 and Davis received approximately $13,000 in unemployment compensation based on fraudulent applications they submitted.
If convicted, Glenn and Davis each face a maximum sentence of 20 years in federal prison for the wire fraud conspiracy. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
A criminal complaint is not a finding of guilt. An individual charged by criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings.
The District of Maryland Strike Force is one of three strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud, including fraud relating to the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The CARES Act was designed to provide emergency financial assistance to Americans suffering the economic effects caused by the COVID-19 pandemic. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.
For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus. Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
United States Attorney Erek L. Barron commended the FBI and the Baltimore County Policed Department for their work in the investigation. Mr. Barron thanked Assistant U.S. Attorney Paul A. Riley, who is prosecuting the case. He also recognized the assistance of the Maryland COVID-19 Strike Force Paralegal Specialist Joanna B.N. Huber.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao/md.
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West Los Angeles Man Pleads Guilty to Federal Charges for Using Snapchat to Entice Child into Producing Sexually Explicit VideosRead the Press Release
LOS ANGELES – A resident of the Westside of Los Angeles pleaded guilty today to federal criminal charges for using websites and apps such as Snapchat to meet and entice children to engage in sexually explicit conduct via video-chat then take screen shot images and videos of them.
Mark David Wallin, 42, of the Del Rey neighborhood of Los Angeles, pleaded guilty to one of production of child pornography and one count of enticement of a minor to engage in criminal sexual activity. Wallin has been in federal custody since his arrest in this case in July 2022.
According to his plea agreement, from 2019 to August 2021, Wallin used the internet to “meet” pre-teen boys and girls – both abroad and in the United States – then develop romantic relationships with them online, with the intent to obtain sexually explicit images and videos from the children. Wallin also persuaded the victims to engage in sexually explicit conduct via video-chat, which allowed him to take screen shot images and videos, according to court documents.
After his victims sent him sexually explicit content, Wallin would demand additional sexually explicit images and videos from them.
For example, in February and March of 2020, Wallin enticed a victim, who was approximately 9-10 years old at the time, to engage in sexually explicit conduct to be displayed to him via Snapchat, a multimedia instant messaging application.
Wallin admitted to knowingly causing at least four additional victims – ranging in age from 12 to 16 years old – to create or participate in the creation of multiple files of sexually explicit material featuring themselves.
Wallin further admitted to possessing on a smartphone approximately 200 sexually explicit videos featuring children in August 2021.
United States District Judge Maame Ewusi-Mensah Frimpong scheduled an April 21 sentencing hearing, at which time Wallin will face a mandatory minimum sentence of 15 years in federal prison and a statutory maximum sentence of life imprisonment.
Homeland Security Investigations investigated this matter, with the Los Angeles County Sheriff’s Department providing assistance.
Assistant United States Attorney Damaris Diaz of the Violent and Organized Crime Section is prosecuting this case.
Waterbury Man Who Escaped from Bloomfield Halfway House is SentencedRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, announced that VICTOR RAMOS, 41, of Waterbury, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 12 months and one day of imprisonment, followed by three years of supervised release, for escaping from a halfway house in Bloomfield.
According to court documents and statements made in court, on January 27, 2014, Ramos was sentenced in Hartford federal court to 102 months of imprisonment for robbing banks in Waterbury and New Britain. In March 2021, Ramos was transferred to the Drapelick Center, a Residential Reentry Center (“halfway house”), in Bloomfield to complete his prison term. On June 5, 2021, with approximately one month left on his prison term, Ramos left the facility without permission and did not return. He remained at large for 13 months before being arrested by the Waterbury Police Department in July 2022 on unrelated misdemeanor state charges.
Ramos has been detained since his arrest. On October 14, 2022, he pleaded guilty to escape from the custody of the Attorney General.
This matter was investigated by the U.S. Marshals Service and was prosecuted by Assistant U.S. Attorney Konstantin Lantsman.
Unlicensed Vancouver, Washington, Investment Advisor sentenced to 6+ years in prison for Ponzi SchemeRead the Press Release
Tacoma – An unlicensed “investment advisor” from Vancouver, Washington, was sentenced today in U.S. District Court in Tacoma to 75 months in prison for mail fraud in connection with his scheme to defraud investors, including friends and family members, out of more than $4 million, announced U.S. Attorney Nick Brown. Charles Richard Burgess, 67, originally tried to blame the COVID-19 pandemic for the loss of victim funds. But in fact, Burgess had lost the bulk of investors’ money many years earlier and had concealed the losses from them. At the sentencing hearing Chief U.S. District Judge David Estudillo noted the “long-lasting effects of the crime on the victims.” Chief Judge Estudillo told Burgess, “To lie, to cheat, to steal seem to be the values you were living by.”
“It is heartbreaking to read the victim statements describing how their lives have been dramatically altered – no retirement, no funds to care for disabled children, in one instance a victim’s home placed at risk of foreclosure,” said U.S. Attorney Nick Brown. “From the mid-1990s until 2021, Mr. Burgess led his victims – mostly friends and family members -- to believe that he was successfully investing their funds for retirement. He sent fake statements showing significant gains. In truth, since at least 2013, the investment fund was insolvent and losing value, and Mr. Burgess took more than $1 million in fees for his own benefit.”
According to records filed in the case, in the mid-1990s Burgess began selling investments in an unregistered investment vehicle that Burgess called “the pool.” Burgess never became a registered or licensed investment advisor. But between January 1995 and April 2021, he convinced 64 people to invest $13.4 million in “the pool.” He sought investments from friends, family members, and others with whom he had a trusting relationship. Burgess did nothing to screen the investors to see what type of risk they could tolerate, and often did not provide them with written materials about the nature of the investments.
Burgess told investors he would collect fees only if the fund made money and told some he would personally absorb any trading losses. Burgess provided the investors with statements indicating their account balances had grown substantially over time. However, those statements were false. For example, in 2016 Burgess sent investors statements indicating their investments had grown about 10 percent that year. In fact, the investments lost money.
As early as 2013, Burgess was not able to repay all the investors’ principal, let alone the profits he was falsely telling them they had earned. In December 2013, Burgess told investors that the value of the investor accounts exceeded $4.2 million. In fact, at that time the pool’s assets were only about $711,000. By the end of December 2015, it was even worse: Burgess told investors their accounts totaled over $5.2 million, when the true value was only about $365,000. By the end of 2020, Burgess represented in year-end statements that the collective value of victims’ accounts exceeded $10.3 million. In fact, the Pool’s assets totaled only $113,000.
As the financial picture worsened, Burgess paid off earlier investors with money from new investors –a classic Ponzi scheme.
Speaking in court today, one victim said Burgess is a “pathological liar.” Another wrote to the court “He is a con, nothing more than that in my eyes.” A 91-year-old victim wrote “He needs to be held accountable for the many lives he has shattered.”
In all, 32 investors lost $4.3 million in principal payments that they had made to Burgess. Burgess was ordered to pay $4,383,617 to the victim investors.
While I’m glad Mr. Burgess accepted responsibility for his actions, the amount stolen from his victims warrants a lengthy sentence,” said Richard A. Collodi, Special Agent in Charge of the FBI’s Seattle field office. “Crimes like these traumatize victims who lose their entire life’s savings. I applaud the work of our investigators and partners with the state who worked to bring this scheme to an end.”
The case was investigated by the FBI and the Washington State Department of Financial Institutions (DFI).
The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.
University City Business Owner Sentenced to 30 Months in Prison for Pandemic, Bank FraudRead the Press Release
ST. LOUIS – U.S. District Judge Stephen R. Clark on Friday sentenced a University City, Missouri business owner to 30 months in prison and ordered him to repay $650,000 that he reaped from bank and pandemic-related fraud.
Le Mell Harlston, 36, used the Social Security number assigned to a minor from the Kansas City, Missouri area and a number that had not been assigned to anyone to apply for loans and lines of credit at credit unions and banks.
After Harlston’s indictment in January of 2021, investigators learned that he had applied for a series of Paycheck Protection Program and Economic Injury Disaster Loans offered under the CARES Act. Those loans were intended to help business owners negatively affected by the COVID-19 pandemic. Harlston applied for EIDL funding for four companies registered to him in July 2020 but used another minor’s Social Security number on the application.
Harlston, using his own Social Security number, also received multiple PPP loans in February 2021 after certifying that he was only applying for one loan. He applied for two PPP loans after being arraigned in federal court and lied when asked on the applications whether he was under indictment.
In all, Harlston caused a loss of $653,332, including $551,830 in CARES Act funds.
Harlston pleaded guilty in U.S. District Court in August to five counts of bank fraud and nine counts of misuse of a Social Security number.
“The sentence holds Mr. Harlston accountable for his criminal acts of misusing multiple Social Security numbers to defraud several financial institutions and creditors, as well as to fraudulently obtain CARES Act funds. My office will continue working with our law enforcement partners to protect the integrity of Social Security numbers,” said Gail S. Ennis, Inspector General for the Social Security Administration.
U.S. Attorney Sayler Fleming said, “This case is one of almost four dozen pandemic fraud-related cases that are being handled by the U.S. Attorney’s office. We are continuing to aggressively prosecute these cases. Anyone with information about pandemic fraud should call the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or report via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.”
The Social Security Administration Office of the Inspector General and Small Business Administration Office of the Inspector General investigated this case. Assistant U.S. Attorney Diane Klocke prosecuted the case.
U.S. Attorney Announces Fraud and Money Laundering Charges Against Additional Cryptocurrency Ponzi Scheme PromotersRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced the arrest in Spain of NESTOR NUÑEZ, a/k/a “Salvador Molina,” on December 28, 2022, on fraud charges and the surrender of RAMON PEREZ on January 6, 2023, on fraud and money laundering charges. The Government is seeking NUÑEZ’s extradition from Spain. PEREZ was presented earlier today before United States Magistrate Judge Sarah Netburn. On December 14, 2022, U.S. Attorney Damian Williams announced criminal charges against FRANCISLEY DA SILVA, JUAN TACURI, and ANTONIA PEREZ HERNANDEZ in United States v. Francisley da Silva, et al., 22 Cr. 622 (AT). Along with PEREZ and NUÑEZ, all of these defendants were promoters of the cryptocurrency Ponzi scheme known as Forcount. The Silva matter has been assigned to United States District Judge Analisa Torres.
As alleged in the unsealed S2 Superseding Indictment and the unsealed S3 Superseding Indictment:[1]
PEREZ defrauded Forcount’s victim-investors (“Victims”) and then sought to conceal his fraud by laundering Victim funds through shell companies and by making large personal expenditures, including on real estate.
In or about 2018, at the direction of SILVA, NUÑEZ began presenting himself as Forcount’s CEO under the alias “Salvador Molina.” In reality, NUÑEZ was an actor paid by SILVA to promote Forcount.
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PEREZ, 40, of Orlando, Florida, is charged with one count of conspiracy to commit wire fraud, one count of wire fraud, and one count of conspiracy to commit money laundering, each of which carry a maximum sentence of 20 years in prison.
NUÑEZ, 64, of Madrid, Spain, is charged with one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carry a maximum sentence of 20 years in prison.
The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by a judge.
Mr. Williams praised the outstanding investigative work of HSI New York, HSI Madrid, the New York City Police Department, the New York City Sheriff’s Office, the Florida Department of Financial Services, and the Florida Office of Financial Regulation. Mr. Williams also thanked the Securities and Exchange Commission, the Brazilian Federal Police, and the Spanish Guardia Civil for their assistance.
The case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorney Benjamin A. Gianforti is in charge of this prosecution.
The charges contained in the Indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The United States Attorney’s Office for the Southern District of New York is committed to protecting the rights of crime victims. If you believe you are a victim of the Forcount scheme, our Victim/Witness Unit can make sure that you are notified of important stages of these cases to help you exercise your rights. In addition, our Victim/Witness Unit is available to answer questions you might have about these cases and can refer you to available resources.
Wendy Olsen Clancy
Victim/Witness Coordinator
United States Attorney’s Office
One St. Andrew’s Plaza
New York, New York 10007
(866) 874-8900
[1] As the introductory phrase signifies, the entirety of the text of the Indictments and the description of the Indictments set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Two Denver Men Arrested for Fentanyl DistributionRead the Press Release
DENVER – The United States Attorney’s Office for the District of Colorado announces the arrests of Santos Lopez Avalos, 22, of Denver, and Jesus Enrique Astorga-Castillo, 41, of Denver, for allegations of distribution and possession with intent to distribute more than 400 grams of fentanyl.
According to the complaints against the defendants, on January 4, 2023, Denver police officers conducted a traffic stop of Lopez Avalos that led to the discovery of a duffel bag containing 75 clear plastic bags of suspected fentanyl pills. Each bag contained between 500 to 1,000 pills. The officers’ investigation led them to an apartment on Dartmouth Avenue in Denver. On January 4, 2023, Denver police officers searched that apartment, belonging to Astorga-Castillo, and found 11 more clear plastic bags of suspected fentanyl pills. Each bag contained between 500 to 1,000 pills.
The two defendants made their initial appearances before United States Magistrate Judge S. Kato Crews on January 6, 2023.
This investigation is being conducted by the Denver Police Department, the Department of Homeland Security, U.S. Immigration and Customs Enforcement, the Drug Enforcement Administration (DEA) Rocky Mountain Division and the HIDTA Front Range Task Force. Assistant United States Attorney Cyrus Y. Chung is handling the prosecution.
The charges contained in the complaints are allegations and the defendants are presumed innocent unless and until proven guilty.
CASE NUMBER: 23-mj-00003, 23 -mj-00004
Troy Felon Pleads Guilty to Firearm and Drug ChargesRead the Press Release
ALBANY, NEW YORK – Frankie Rios, age 42, of Troy, New York, pled guilty today to illegally possessing a firearm as a convicted felon, and possession with intent to distribute cocaine and cocaine base, announced United States Attorney Carla B. Freedman and John B. DeVito, Special Agent in Charge of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
Rios, a convicted felon, admitted that he possessed a .25 caliber Mauser handgun with six rounds of ammunition on March 30, 2019. The handgun was recovered from Rios by Troy Police Officers responding to a stabbing at a bar on 4th Street in Troy. Rios also admitted that on February 17, 2021, he possessed over 100 grams of cocaine and cocaine base with intent to distribute those substances, in Troy.
Rios faces a maximum sentence of 20 years in prison, a fine of up to $1 million, and a term of post-imprisonment supervised release of at least 3 years when he is sentenced before U.S. District Judge Mae A. D’Agostino on May 11, 2023. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case is being investigated by ATF and the Troy Police Department, and is being prosecuted by Assistant U.S. Attorney Benjamin S. Clark.
Tampa Man Sentenced to 72 Months in Prison for Bank Fraud ConspiracyRead the Press Release
TAMPA – A Tampa man was sentenced Thursday in a U.S. District Court to 72 months in prison and a $25,000 fine for his involvement in a bank fraud conspiracy.
According to court documents, Jaykumar Patel, 33, worked in Florida moving criminal proceeds for an India-based fraud conspiracy targeting elderly, vulnerable victims in the United States.
“Those who prey on the most susceptible victims through these kind of scare tactics and phone scams must be punished to the full extent of the law,” said U.S. Attorney Rachelle Aud Crowe. “Defendants both in the United States and overseas need to know that we will protect and defend vulnerable Americans.”
“Elder fraud is a growing problem as the country’s population gets older,” said FBI Springfield Field Office Special Agent in Charge David Nanz. “Illinois ranks ninth highest in total number of victims over age 60, according to the FBI’s Internet Crime Complaint Center 2021 Elder Fraud Report. The FBI takes elder fraud very seriously and, along with our law enforcement partners, will work to hold accountable those who take advantage of the isolation and vulnerability that often surrounds the elderly.”
In June 2021, the Alton, Illinois Police Department filed a report when a resident received a phone call from an individual who claimed to be a member of law enforcement warning her that her identity had been stolen. The caller demanded the victim to send $29,000 to an address in Florida so he could help rectify the situation. The story was false: the victim’s identity had not been stolen, the caller was not law enforcement, and no legitimate law enforcement officer would ever demand money from a victim. But the victim didn’t know that, so she sent the money. A few days later, Patel turned up to pick up the package in Florida and was arrested.
Further investigation showed the fraud on the Alton victim was a small part of the criminal scheme. There were several other victims across the United States who were bullied and frightened out of their hard-earned money. In just a few weeks in 2021, Mr. Patel picked up or intended to pick up packages sent by victims containing more than $481,000.
Individuals should use caution when speaking with strangers on the phone, especially if a caller is asking the person to send money. Legitimate law enforcement will never try to blackmail victims or request residents to send cash by mail. Talk to a family member or someone who can help if something doesn’t sound quite right. There are resources available:
National Elder Fraud Hotline: 833-FRAUD-11. The Department of Justice maintains a National Elder Fraud Hotline. Staffed by experienced case managers who provide personalized support to callers, the hotline serves to assist elders and caretakers who believe they have been a victim of fraud by reporting and providing appropriate services.
Money Mule Initiative. In October 2018, the Department and law enforcement partners began a concentrated effort across the country and around the world to disrupt, investigate, and prosecute money mule activity used to facilitate fraud schemes, especially those victimizing senior citizens. Money mules are individuals used to move criminal proceeds around on behalf of other criminal actors, and money mules may be knowing or unknowing. Efforts by law enforcement disrupt hundreds of money mule operations every year.
The investigation was conducted by the FBI Springfield - Fairview Heights Resident Agency, the St. Petersburg Police Department, and the Alton Police Department. Many other police departments across the United States took statements from victims. Assistant U.S. Attorney Peter Reed prosecuted the case.
Suamico and Kaukauna Car Dealer Sentenced on Fraud ChargeRead the Press Release
United States Attorney Gregory J. Haanstad of the Eastern District of Wisconsin announced that on January 5, 2023, John M. Solberg (age: 40) of Suamico, Wisconsin, was sentenced to 30 months in federal prison by Senior United States District Judge William C. Griesbach.
According to court records, Solberg established “Backwoods Bargains,” a used car dealership located in Suamico, Wisconsin, in 2012. Ultimately, the dealership was renamed “Standard Pre-Owned,” and Solberg opened a second location in Kaukauna, Wisconsin, also named “Standard Pre-Owned.” While operating his dealerships, Solberg developed a scheme to defraud individuals that listed their vehicles for sale on Craigslist. Solberg would contact these individuals and offer to sell their vehicles on consignment from his car lots. Court records indicate that Solberg then would sell the consignment cars without paying the owners of the vehicle and would provide fraudulent vehicle titles to the purchasers.
At sentencing, Senior Judge Griesbach noted the serious nature of Solberg’s scheme based on the emotional and financial toll he imposed on his victims. He also questioned whether Solberg truly accepted responsibility for his criminal acts. Though Solberg requested a sentence of probation, the judge determined that a 30-month term in federal prison was required to address the magnitude of the crime and to send a message to Solberg and others that taking advantage of people will result in serious consequences. After serving his prison sentence, Solberg will spend three years on supervised release. The Court also ordered Solberg to pay approximately $290,000 in restitution to his victims.
This case was investigated by the Brown County Sheriff’s Office and the Federal Bureau of Investigation with the assistance of the Kaukauna Police Department and the Wisconsin Department of Transportation’s Division of Motor Vehicles. It was prosecuted by Assistant United States Attorneys Daniel R. Humble and Julie F. Stewart.
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St. Charles County Man Sentenced to 4+ Years in Prison for Downloading and Sharing Child PornographyRead the Press Release
ST. LOUIS – U.S. District Judge Rodney W. Sippel on Friday sentenced a man from St. Peters, Missouri to four and one-half years in prison for downloading and sharing child pornography via a variety of social media apps.
Eric S. Crews, 38, will be on supervised release for life after his release from prison.
Crews used social media, including Kik Messenger, Viber, WhatsApp and TamTam, to send and receive child pornography. When Crews uploaded 14 files containing child sexual abuse material to Kik Messenger on Nov. 11, 2020 and shared them with at least one other Kik user, it triggered an alert to the National Center for Missing and Exploited Children, according to Crews’ plea agreement. After a court-approved search of Crews’ home by St. Charles County police on June 15, 2021, investigators found at least 5,400 images and 610 videos containing child pornography on Crews’ Apple iPhone.
Crews pleaded guilty in U.S. District Court in October to a charge of possession of child pornography.
The St. Charles County Cyber Crime Task Force and the FBI investigated this case. Assistant U.S. Attorney Jillian Anderson prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Department of Justice Criminal Division's Child Exploitation and Obscenity Section, 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.
South Dakota Man Sentenced for Unlawful Firearm PossessionRead the Press Release
United States Attorney Steven Russell announced that Trentelle Clifton, 46, of South Dakota, was sentenced today in federal court in Omaha, Nebraska, for being a felon in possession of a firearm. Chief United States District Court Judge Robert F. Rossiter, Jr. sentenced Clifton to 72 months of imprisonment. There is no parole in the federal system. After his release from federal prison, Clifton will begin a 3-year term of supervised release.
On July 6, 2022, officers were dispatched to a vehicle in Omaha. Upon arrival, officers located Clifton in the driver’s seat. Clifton attempted to conceal a Springfield Armory handgun. Officers collected the handgun and arrested Clifton. The investigation revealed that the handgun was stolen and that Clifton’s DNA was on it.
Clifton was prohibited from possessing firearms because of prior felony convictions for: possession of a firearm by a prohibited person (2012); robbery (1999); robbery (2012); possession of a controlled substance (2010); escape (2005); and theft (1995).
This case was investigated by Omaha Police Department and was 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 make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
Shelbyville Man Sentenced to over 43 Years in Federal Prison for Crimes Including Hiring a Hitman to Kill a Child Abuse & Exploitation Victim and Her MotherRead the Press Release
INDIANAPOLIS – Robert Mason Elliott, 28, of Shelbyville, Indiana, was sentenced to 520 months in federal prison after pleading guilty to two counts of murder for hire, witness tampering, illegally possessing a firearm, and producing and distributing child sexual abuse material.
According to court documents, Robert Mason Elliott met Minor Victim 1 in 2017, when she was 16 years old. He was later charged with domestic battery of Minor Victim 1 and barred by several court orders from having contact with Minor Victim 1. In violation of those orders, and while Elliott was on pretrial release, Elliott attempted to deliver heroin to the minor when she was home with her mother, Witness Victim 1. Elliott was subsequently charged with dealing narcotics in Shelby County, Indiana. During the investigation, officers also discovered that Elliott had produced and distributed child sex abuse material of Minor Victim 1 over Facebook.
Elliott was detained pending trial on these state offenses. While incarcerated in the Shelby County Jail on February 20, 2018, Elliott used a jail phone to instruct his mother to hire a member of the Hells Angels motorcycle club to kill or commit serious bodily injury to Witness Victim 1 to prevent her from testifying against him. Elliott’s mother hired the Hells Angel to commit serious bodily injury to Witness Victim 1 in exchange for $500. The jail calls between Elliott and his mother, as well as the calls and texts to the Hells Angel, were recorded and intercepted by law enforcement officials.
After his first attempt was unsuccessful, Elliott then engaged in a second murder for hire plot from inside the Shelby County Jail. Elliott offered three different Shelby County inmates $5,000 per person to kill Minor Victim 1, Witness Victim 1, and another individual. The three inmates provided information to law enforcement officials who again thwarted Elliott’s plan.
On May 7, 2019, Elliott was indicted in federal court for offenses related to child exploitation and illegal firearm possession.
While detained in Marion and Henderson County Jails on those federal charges, Elliott again attempted to have Minor Victim 1 and Witness Victim 1 killed. This time, Elliott asked a cooperating witness to provide him with the phone number for a “cartel hitman.” Through letters, calls, and texts, Elliott hired the individual he believed to be a “cartel hitman” to prevent the witnesses from testifying against him in their state and federal proceedings. Elliott offered, in coded language, to exchange heavy duty equipment, a motorcycle, and military-grade weapons including shoulder-launched multipurpose assault weapons and M203 grenade launchers for the murders. Elliott provided the “cartel hitman” with the victims’ first and last names, Facebook accounts, locations, and places of employment. Elliott conspired with his grandfather to provide the equipment, motorcycle, and military-grade weapons to the purported hitman.
Unbeknownst to Elliott, the “cartel hitman” he contacted during this third attempt to have Minor Victim 1 and Witness Victim 1 murdered was an undercover federal agent. All calls and texts between Elliott, his grandfather, and the “cartel hitman” were recorded. Federal agents executed a search warrant at Elliott’s grandfather’s home and recovered a 2008 Hayabusa motorcycle and at least twenty firearms, including several assault rifles, and thousands of rounds of ammunition. Elliott had agreed to provide the guns, motorcycle, and ammunition the hitman in exchange for killing federal and state witnesses. One of the firearms was illegally purchased for Elliott by another individual, who agreed to falsify federal firearms purchasing forms and provide Elliott with the gun in exchange for a meal at Olive Garden.
Elliott’s repeated efforts to procure the murders of his victim, her mothers, and a witness were unsuccessful.
On June 14, 2022, Elliott pleaded guilty to two counts of Murder for Hire, two counts of Witness Tampering, and one count being a felon in possession of a firearm. Elliott further stipulated in a plea agreement that he had produced and distributed child sex abuse material.
“The defendant’s heinous, violent crimes demonstrate an utter disrespect for the law or the value of human life,” said Zachary A. Myers, United States Attorney for the Southern District of Indiana. “His physical abuse and sexual exploitation of a child were compounded by his relentless attempts to have the victim and her mother murdered. Only a lengthy federal prison term like the one imposed today will ensure that the victims and the public are protected from this dangerous criminal. I commend the outstanding efforts of our prosecutors, the FBI, the Shelby County Sheriff’s Department, and the Shelby County Prosecutor’s Office to stand up for victims and hold violent abusers accountable.”
“This defendant’s abuse of a minor victim was beyond despicable. He physically and sexually assaulted her, sought to provide her with dangerous narcotics, and had no qualms about killing the minor victim and others in a desperate and twisted attempt to get away with it. Today, the court determined that these horrible crimes deserve a lengthy term of imprisonment.” said FBI Indianapolis Special Agent in Charge Herbert J. Stapleton. “The FBI will continue our efforts with our law enforcement partners to ensure the most vulnerable in our society are protected from individuals such as this who would seek to harm them.”
The FBI, Shelby County Sheriff’s Department, and Shelby County Prosecutor’s Office investigated this case. The sentence was imposed by U.S. District Court Chief Judge Tanya Walton Pratt. Judge Pratt also ordered that Elliott be supervised by the U.S. Probation Office for 5 years following his release from federal prison. Elliott must also pay restitution of $5,000 each to Minor Victim 1 and Witness Victim 1.
U.S. Attorney Myers thanked Assistant United States Attorneys Tiffany J. Preston and Kristina M. Korobov, who prosecuted this case.
In fiscal year 2019, the most recent year for which data is available, the Southern District of Indiana was second out of the 94 federal districts in the country for the number of child sexual exploitation cases prosecuted.
This case was 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 U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section, 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
Savitz Drug Store to Pay $275,000 to Resolve Alleged Controlled Substance Act ViolationsRead the Press Release
COLUMBIA, SOUTH CAROLINA -- Savitz Drug Store, Inc., has agreed to pay $275,000 to resolve allegations that it committed recordkeeping and dispensing violations of the Controlled Substances Act (CSA). These requirements are designed to prevent the diversion of controlled substances.
This civil settlement includes a corrective action plan and is the culmination of a joint investigation by the United States Drug Enforcement Agency (DEA); S.C. Department of Health and Environmental Control, Bureau of Drug Control (DHEC); and U.S. Attorney’s Office that began in March 2022, when a routine controlled substance inspection by S.C. DHEC revealed that Savitz could not account for approximately 22,056 milliliters of Promethazine with Codeine.
“When pharmacists fail to comply with federal law, they can put controlled substances on the street and place the public at great risk,” said U.S. Attorney Adair F. Boroughs. “Our office is committed to working with our partners to hold pharmacists accountable for their responsibilities under federal law.”
“The mission of DEA’s Office of Diversion Control is to prevent, detect and investigate the diversion of controlled pharmaceutical and listed chemicals from legitimate sources,” said Robert J. Murphy, the Special Agent in Charge (SAC) of the Atlanta Division of the DEA. “In this case, DEA Diversion Investigators did an outstanding job of uncovering this pharmacist’s systemic record-keeping violations and failures to safeguard controlled substances.”
The United States alleges that the Pharmacist-in-Charge of Savitz failed to properly safeguard his Controlled Substance Ordering System (CSOS) private user identification login and password, which resulted in a staff Pharmacist using the CSOS login and password to order controlled substances at least one hundred times.
The United States further alleges that due to Savitz’s failure to maintain complete and accurate controlled substance records and necessary oversight, a tenured Pharmacy Technician at Savitz was able to divert 46 bottles of Promethazine with Codeine (Schedule V) from Savitz over a three-month timeframe. Promethazine with Codeine is a cough syrup that can be used as the main ingredient in a drink mixture commonly known as “Lean” or “Purple Drank.” Effects of “Lean” or “Purple Drank” are consistent with the abuse characteristics of other opioids and result in a sedative and woozy or swooning euphoria.
The conduct outlined in the settlement agreement is merely alleged; the agreement does not constitute an admission of liability by Savitz.
A main objective of the CSA is controlling illegitimate traffic in controlled substances. To prevent the diversion of controlled substances, the CSA regulates persons, companies, and other entities that manufacture, distribute, and dispense controlled substances.
This matter was investigated by DHEC Agent Ann Shields, DEA Acting Group Supervisor Derek Barr, DEA Investigator Kelli Capehart, and Assistant U.S. Attorney Johanna Valenzuela of the U.S. Attorney’s Office for the District of South Carolina.
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Sandusky Man Charged with Threatening Law Enforcement and Unlawful Possession of Machine GunRead the Press Release
TOLEDO – A federal grand jury returned a six-count indictment charging Aron McKillips, 29, of Sandusky, Ohio, with five counts of interstate communication of threats and one count of unlawful possession of a machine gun.
The indictment against McKillips alleges that from September 2021 to July 2022, McKillips made at least five online threats to harm and/or kill law enforcement members. In addition, the indictment alleges that in September 2022, McKillips unlawfully possessed a machine gun, specifically, a drop-in auto sear that could convert an AR-15 semi-automatic rifle into a fully automatic machinegun.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
If convicted, the defendant’s sentence will be determined by the Court after a review of factors unique to this case, including the defendant’s prior criminal records, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum; in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the Cleveland FBI, Toledo Resident Agency. This case is being prosecuted by Assistant United States Attorneys Michael J. Freeman and Gene Crawford.
Rock Island Man Sentenced to Federal Prison for Drug TraffickingRead the Press Release
Davenport, IA – Jayvontae Dashwan Bland Robertson, age 29, of Rock Island, Illinois, was sentenced on January 4, 2023, to 96 months in prison for conspiracy to distribute fentanyl and marijuana, and felon in possession of a firearm. Following his term of imprisonment, Robertson was ordered to serve three years of supervised release.
According to court records, in 2021, law enforcement investigated Bland Robertson for fentanyl and marijuana trafficking. In July 2021, Bland Robertson was found in possession of over 13 grams of fentanyl during a traffic stop. In August 2021, law enforcement executed a search warrant at Bland Robertson’s residence, locating additional evidence of drug trafficking and a loaded firearm. In February 2022, police had contact with Bland Robertson and again he had a loaded firearm, along with fentanyl and marijuana. The investigation determined that Bland Robertson received and trafficked at least 6 kilograms of marijuana and over 240 grams of fentanyl.
U.S. Attorney Richard D. Westphal of the Southern District of Iowa made the announcement. The Davenport Police Department’s Tactical Operations Bureau along with the Iowa State Patrol investigated the case.
Rochester Woman Pleads Guilty to Assaulting Two People on an AirplaneRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney Trini E. Ross announced today that Cynthia McKnight, 24, of Rochester, NY, pleaded guilty before U.S. District Judge Lawrence J. Vilardo to two counts of simple assault in the special aircraft jurisdiction of the United States, which each carry a maximum penalty of six months in prison and a $5,000 fine.
Assistant U.S. Attorneys John D. Fabian and Charles M. Kruly, who are handling the case, stated that on April 19, 2022, McKnight was a passenger on an American Airlines flight from the Buffalo Niagara International Airport to Chicago O’Hare International Airport. After the aircraft’s doors were closed, and while the aircraft was preparing to depart, McKnight made her way to the front of the aircraft and engaged in a verbal altercation with one passenger, then spat on another passenger. As a result, the aircraft was required to return to the gate. McKnight then attempted to exit the aircraft as it was in motion on the ground, pushing a flight attendant in the process who had attempted to prevent her from opening an aircraft door. McKnight was able to open an aircraft door, which deployed the aircraft’s emergency slide, and exited the aircraft.
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Acting Special Agent-in-Charge Michael Stansbury and the Niagara Frontier Transportation Authority Police, under the direction of Chief Brian Patterson.
Sentencing is scheduled for May 16, 2023, before Judge Vilardo.
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Recidivist Child Pornography Offender Sentenced to 10 Years in PrisonRead the Press Release
DETROIT – An offender who possessed child pornography only four months after his release from federal prison for the same offense was sentenced to ten years in federal prison for possession of child pornography, announced United States Attorney Dawn N. Ison.
Ison was joined in the announcement by Angie Salazar, Special Agent in Charge of the Detroit Office of the Department of Homeland Security.
Jacob Jeffrey Baron, 34, of Fort Gratiot, Michigan, was sentenced by United States District Judge Sean F. Cox. As part of his plea, Baron admitted that he possessed and uploaded files of child pornography involving pre-pubescent children engaged in sex acts to Dropbox, a cloud storage service. Agents later found evidence of 191 child pornography images on Baron’s cellular phone. Baron was under supervision at the time of the offense because he had just completed a 4-year prison sentence for another federal child pornography conviction.
“Every time an image of child sexual abuse is downloaded or viewed it is a revictimization for the child involved. This significant sentence demonstrates that we will continue to protect children from recidivist offenders,” U.S. Attorney Ison stated.
“Repeat offenders like Baron are a clear and present danger to our communities and our children,” said HSI Detroit Special Agent in Charge Angie Salazar. “Our special agents and law enforcement partners will continue to investigate these despicable crimes and bring child predators to justice.”
This case was investigated by the Department of Homeland Security and was prosecuted by Assistant United States Attorneys Myra Din and Christopher Rawsthorne.Reality Show Cast Member Jennifer Shah Sentenced to 78 Months in Prison for Running Nationwide Telemarketing Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that JENNIFER SHAH was sentenced today by United States District Judge Sidney H. Stein to 78 months in prison for running a nationwide telemarketing fraud scheme. SHAH previously pled guilty to one count of conspiracy to commit wire fraud in connection with telemarketing.
U.S. Attorney Damian Williams said: “With today’s sentence, Jennifer Shah finally faces the consequences of the many years she spent targeting vulnerable, elderly victims. These individuals were lured in by false promises of financial security, but in reality, Shah and her co-conspirators defrauded them out of their savings and left them with nothing to show for it. This conviction and sentence demonstrate once again that we will continue to vigorously protect victims of financial fraud and hold accountable those who engage in fraudulent schemes.”
According to the Superseding Indictment and statements made in court proceedings and filings:
From at least 2012 until her arrest in March 2021, SHAH was an integral leader of a wide-ranging, nationwide telemarketing fraud scheme that victimized thousands of innocent people. The scheme principally involved selling those victims so-called “business services” in connection with the victims’ purported online businesses (the “Business Opportunity Scheme”). In particular, SHAH knowingly and intentionally facilitated the sale of “leads” — contact information for potential victims who had been identified as susceptible to the scheme’s lies — to sales floors that were perpetrating the Business Opportunity Scheme and, during the latter portion of her participation in the scheme, owned and operated one of the sales floors that was part of the scheme.
Many of SHAH’s victims were elderly or vulnerable. Many of those people suffered significant financial hardship and damage. At SHAH’s direction, victims were defrauded over and over again until they had nothing left. She and her co-conspirators persisted in their conduct until the victims’ bank accounts were empty, their credit cards were at their limits, and there was nothing more to take.
SHAH was not deterred by the Federal Trade Commission’s investigations or enforcement actions, nor by learning that dozens of her co-conspirators had been arrested by federal law enforcement, pled guilty for their roles in the scheme, and that two were convicted at trial. SHAH was not ignorant of these developments: she took a series of increasingly extravagant steps to conceal her criminal conduct from the authorities. She directed others to lie, she put businesses and bank accounts in the name of others, she required payment in cash, she instructed others to delete text messages and electronic documents, she moved some of her operations overseas, and she tried to put computers and other evidence beyond the reach of investigators. These efforts were not short-lived or narrow in scope. She engaged in a yearslong, comprehensive effort to hide her continued role in the scheme.
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In addition to the prison term, SHAH, 49, of Salt Lake City, Utah, was sentenced to five years of supervised release. She was also ordered to forfeit $6,500,000, 30 luxury items, and 78 counterfeit luxury items, and to pay $6,645,251 in restitution.
Mr. Williams praised the outstanding investigative work of Homeland Security Investigations’ El Dorado Task Force.
This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorneys Kiersten A. Fletcher, Benet J. Kearney, Robert B. Sobelman, and Sheb Swett are in charge of the prosecution.
Philadelphia, Lehigh Valley Postal Workers Agree to Repay Fraudulently Obtained Unemployment Assistance BenefitsRead the Press Release
PHILADELPHIA, PA – United States Attorney Jacqueline C. Romero announced that Jaire Chance, 27, of Philadelphia, has agreed to a consent judgment of $100,399, and Robert Day, 42, of Center Valley, Lehigh County, has agreed to a consent judgment of $110,610 to resolve allegations that they violated the False Claims Act by improperly seeking Pandemic Unemployment Assistance (PUA) benefits when they were employed by the United States Postal Service.
The United States alleges that Chance and Day made materially false and fraudulent statements to the Pennsylvania Department of Labor and Industry to obtain PUA benefits, meant for individuals not eligible for regular unemployment compensation or extended unemployment benefits. In fact, both were working full-time for the United States Postal Service for most or all of the time they were receiving PUA benefits. During that time, Day was also earning income as a driver using the Uber mobile application to arrange work. Further details regarding the United States’ allegations regarding conduct by Chance and Day can be found in the complaints filed in federal court, United States v. Jaire Chance, U.S.D.C. E.D. Pa. No. 2:22-cv-4626, and United States v. Robert Dean Day, U.S.D.C. E.D. Pa. No. 5:22-cv-4736.
“There is no excuse for any individual who fraudulently obtains money set aside to help victims of the COVID-19 pandemic,” said U.S. Attorney Romero. “The fraud alleged in this case is particularly egregious as it was perpetrated by a federal employee. The United States Attorney’s Office is ready to investigate and bring to justice any individual who abuses emergency assistance in this way.”
“It is alleged in the settlement agreements filed in court that Jaire Chance and Robert Day submitted weekly certifications, which falsely represented they were unemployed due to the COVID-19 pandemic, to the Pennsylvania Department of Labor and Industry’s Pandemic Unemployment Assistance (PUA) program. In actuality, they were employed full-time by the U.S. Postal Service for all or a majority of the period that they submitted the certifications. The submission of those certifications resulted in Chance and Day receiving PUA benefit payments that they were not eligible to receive. We will continue to work with the Pennsylvania Department of Labor and Industry and our law enforcement partners to safeguard unemployment compensation benefit programs,” said Syreeta Scott, Special Agent-in-Charge, Philadelphia Region, U.S. Department of Labor Office of Inspector General.
“The majority of postal employees are hard-working public servants dedicated to moving the mail to its proper destination. Unfortunately, Day and Chance betrayed this public trust when applying for unemployment benefits. The USPS-OIG, along with our law enforcement partners, will continue to aggressively investigate those who engage in fraudulent activities intended to defraud federal benefit programs and the United States Postal Service,” stated Jeffrey E. Krafels, Special Agent-in-Charge of the Mid Atlantic Area Field Office, United States Postal Service Office of Inspector General.
This investigation was conducted by United States Attorney’s Office for the Eastern District with investigators from the United States Postal Service Office of Inspector General and United States Department of Labor Office of Inspector General. Assistant United States Attorneys Paul W. Kaufman and Isaac J. Jean-Pierre handled the investigation and consent resolution.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
Pensacola Man Pleads Guilty to Purchasing A Firearm for A Convicted FelonRead the Press Release
PENSACOLA, FLORIDA – Tavaris East, 42, of Pensacola, Florida, pled guilty to making a false statement to a federally licensed firearms dealer when purchasing a firearm. The plea was announced by Jason R. Coody, United States Attorney for the Northern District of Florida.
On April 27, 2022, East purchased a firearm from a federally licensed firearms dealer and checked the box “yes” that he was “the actual transferee/buyer of the firearm” on the ATF Form 4473. However, East purchased the firearm for Kennon Farrow, a convicted felon. The firearm was recovered by law enforcement on May 24, 2022, after it was used by Kennon Farrow to commit a homicide.
Sentencing in this case is set for March 30, 2023, at 9:00 a.m., at the United States Courthouse in Pensacola before the Honorable United States District Judge T. Kent Wetherell II. East faces 10 years in prison.
The case resulted from an investigation by the Pensacola Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case is being prosecuted by Assistant United States Attorney Jeffrey M. Tharp.
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.
As part of its PSN strategy, the United States Attorney’s Office is encouraging everyone to lock their car doors, particularly at night. Burglaries from unlocked automobiles are a significant source of guns for criminals in the Northern District of Florida. Please do your part and protect yourself by locking your car doors.
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office for the Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Passaic County Man Admits Producing Child Pornography and Online EnticementRead the Press Release
NEWARK, N.J. – A Passaic County, New Jersey, man admitted producing one or more images of child sexual abuse and enticing a minor to engage in sexually explicit conduct, U.S. Attorney Philip R. Sellinger announced today.
Jose Minaya, 27, of Paterson, New Jersey, pleaded guilty before U.S. District Judge Julien X. Neals on Jan. 5, 2023, to an information charging him with one count of production of child pornography and one count of online enticement.
According to documents filed in this case and statements made in court:
In July 2019, Minaya used a web-based application to engage a child in a sexually explicit conversation online. Minaya persuaded the child to take sexually explicit photographs of the child and send them to him. Minaya was arrested at his home in May 2020, at which time agents seized multiple electronic devices. Further investigation revealed that Minaya had used another application to entice an additional minor to engage in sexually explicit conduct.
The charge of production of child pornography, carries a mandatory minimum penalty of 15 years in prison and a maximum potential penalty of 30 years in prison. The charge of online enticement carries a mandatory minimum of 10 years in prison and a maximum of life in prison. Each of the charges carry a fine of up to $250,000. Sentencing is scheduled for May 9, 2023.
U.S. Attorney Sellinger credited special agents with the Department of Homeland Security – Homeland Security Investigations, under the direction of Special Agent in Charge Ricky J. Patel in Newark, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Shawn Barnes of the U.S. Attorney’s Office Criminal Division in Newark.
Ohio Man Pleads Guilty for Unlawfully Stealing over 712 Seized Bitcoin Subject to Forfeiture in Brother’s Pending Criminal CaseRead the Press Release
Defendant’s Brother Convicted of Running the Money Laundering Service Helix
WASHINGTON – Gary James Harmon, 31, of Cleveland, Ohio, pleaded guilty today to perpetrating a scheme to steal cryptocurrency that was pending criminal forfeiture from Harmon’s brother, now-convicted money launderer and proprietor of Grams-Helix, Larry Dean Harmon. Specifically, Harmon pleaded guilty to wire fraud and obstruction of justice for unlawfully taking more than 712 bitcoin that had been seized by law enforcement and was subject to forfeiture in the pending criminal prosecution of Larry Harmon.
The plea was announced by United States Attorney Matthew M. Graves, Darrell J. Waldon, Special Agent in Charge of IRS-Criminal Investigation (IRS-CI), and Wayne A. Jacobs, Special Agent in Charge of the FBI Washington Field Office’s Criminal and Cyber Divisions.
The wire fraud charge carries a statutory maximum sentence of up to 20 years in prison; the obstruction of justice charge carries a statutory maximum sentence of 20 years in prison. U.S. District Court Chief Judge Howell scheduled a sentencing hearing for March 17, 2023.
According to court documents, in February 2020, the defendant’s brother, Larry Harmon, was arrested for his operation of Helix, a darknet-based cryptocurrency money laundering service, known as a “mixer” or “tumbler.” As Harmon later admitted, Helix laundered over 350,000 bitcoin – valued at over $300 million at the time of the transactions – on behalf of customers, with the largest volume coming from Darknet markets. As part of the arrest, law enforcement seized various assets, including a cryptocurrency storage device containing Larry Harmon’s illegal proceeds generated through the operation of Helix, which were subject to forfeiture in the criminal case. However, law enforcement was initially unable to recover bitcoin stored on the device due to the device’s additional security features.
Knowing that the government was seeking to recover the bitcoin stored on the seized device for forfeiture in Larry Harmon’s criminal case, Gary Harmon used his brother’s credentials to recreate the bitcoin wallets stored on the device and covertly transfer more than 712 bitcoin, valued at approximately $4.8 million at the time, to his own wallets – stealing those funds and obstructing the pending criminal forfeiture proceeding. Gary Harmon further laundered the proceeds through two online bitcoin mixer services before using the laundered bitcoins to finance large purchases and other expenditures.
In August 2021, Larry Harmon pled guilty to money laundering conspiracy in connection with his case.
As part of his plea today, Gary Harmon also agreed to the forfeiture of cryptocurrencies and other properties derived from the fraudulently taken proceeds, including more than 647.41 Bitcoin (BTC), 2.14 Ethereum (ETH), and 17,404,400.64 Dogecoin (DOGE). Due to the increase in market prices, the total value of these forfeitable properties exceeds $12 million.
- This matter was investigated by the IRS-CI District of Columbia Cyber Crime Unit and the Federal Bureau of Investigation.
In announcing the plea, U.S. Attorney Graves, IRS-CI Special Agent in Charge Waldon, and FBI Special Agent in Charge Jacobs commended the work of those who investigated the case from the IRS Criminal Investigation – Cyber Crime Unit and the FBI’s Washington Field Office. The case is being prosecuted by Assistant U.S. Attorney Christopher B. Brown and Trial Attorney C. Alden Pelker, of the Department of Justice Computer Crime and Intellectual Property Section (CCIPS), with assistance from Paralegal Specialist Michon Tart and former Paralegal Specialist Chad Byron. Additional assistance has been provided by Assistant U.S. Attorneys Segev Phillips and Daniel Riedl of the Northern District of Ohio and CCIPS Trial Attorney S. Riane Harper.
Niagara Falls Man Pleads Guilty to Gun ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney Trini E. Ross announced today that Lazarus R. Hayes, 33, of Niagara Falls, NY, pleaded guilty before U.S. District Judge John L. Sinatra, Jr. to possession of a firearm in furtherance of drug trafficking, which carries a mandatory minimum penalty of five years in prison, a maximum of life, and a $250,000 fine.
Assistant U.S. Attorney Timothy C. Lynch, who is handling the case, stated that on June 19, 2021, the Niagara Falls Police Narcotics Unit and Niagara County Drug Task Force executed a search warrant at Hayes’s Pierce Avenue residence. During the search, they recovered from a bag belonging to co-defendant Gerald Harper approximately 93 grams of cocaine, 9 grams of fentanyl, 26 grams of amphetamine, 245 milligrams of hydrocodone, and 720 milligrams of oxycodone. In addition, within Hayes’s residence, investigators seized approximately 8 grams of cocaine, 20 clonazepam tablets, a digital scale, two loaded firearms, $3,958 in cash, which is proceeds of drug trafficking activities.
Gerald Harper was previously convicted and is awaiting sentencing.The plea is the result of an investigation by the Niagara Falls Police Department, under the direction of Superintendent John Faso, the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Frank A. Tarentino III, New York Field Division, and the Niagara County Sheriff’s Office, under the direction of Sheriff Michael Filicetti.
Sentencing is scheduled for May 9, 2023, at 2:00 p.m. before Judge Sinatra.
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Niagara Falls Man Going to Prison for 28 Years for Production of Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney Trini E. Ross announced today that Jonathon Cassatt, 36, of Niagara Falls, NY, who was convicted of production of child pornography, was sentenced to serve 28 years in prison by U.S. District Judge John L. Sinatra, Jr.
Assistant U.S. Attorney Russell T. Ippolito, Jr., who handled the case, stated that Cassatt repeatedly sexually abused a child between the ages of 12 and 14 years old. The sexual abuse was reported to the Niagara Falls Police Department, which obtained a search warrant for Cassatt’s cell phone. During a search of the cell phone, images of the ongoing abuse were recovered. In addition, other images of child pornography that Cassatt had downloaded from the internet were also discovered on the cell phone.
The sentencing is the result of a coordinated investigation by the Federal Bureau of Investigation, under the direction of Acting Special Agent-in-Charge Michael Stansbury, the Niagara County Sheriff’s Office, under the direction of Sheriff Michael Filicetti, and the Niagara Falls Police Department, under the direction of Superintendent John Faso.
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