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9 January 2023
San Fernando Valley Man Pleads Guilty to Selling Used and Counterfeit Medical Devices Used for Skin Tightening and Fat BurningRead the Press Release
LOS ANGELES – A Tarzana man pleaded guilty today to federal criminal charges for running a nearly $6 million scheme in which he knowingly sold used skin-tightening medical devices that were deliberately misbranded as new, as well as counterfeit devices that he claimed were to be used with fat-reducing laser machines.
Kambiz Youabian, 49, pleaded guilty to a two-count information charging him with mail fraud and introducing a misbranded medical device into interstate commerce.
According to his plea agreement, Youabian owned and operated MSY Technologies Inc., a West Los Angeles-based company that did business under the names “Thermagen” and “Global Electronic Supplies” (GES).
From March 2016 to June 2022, Youabian purchased used transducers, which are medical devices used to tighten the skin of dermatology patients by delivering ultrasound energy to a patient’s skin. Used properly, transducers are designed to provide no more than 2,400 treatments. After this number is reached, the devices are considered depleted and should be disposed of in accordance with health code regulations.
Through GES, Youabian purchased depleted transducers for nominal sums, typically $50. Youabian then remanufactured the depleted transducers and added fabricated serial numbers to make the transducers appear to be new.
Then, through his Thermagen company, Youabian fraudulently marketed and sold – for many times more than he paid for them – the remanufactured transducers to health care providers and customers as “new” transducers with 2,400 remaining treatments. To conceal his connection to Thermagen, Youabian used names of fabricated Thermagen employees on correspondences with victim providers and used out-of-state commercial mailboxes for Thermagen’s return of address on shipments, which he sent through the U.S mail.
For example, in February 2020, Youabian, through Thermagen’s website, sold a device falsely advertised as “new” and “containing 2,400 lines” – and with a retail price of $1,695 – to a buyer. Youabian then shipped the device – which contained a fake serial number – from Los Angeles to Florida via the United States Postal Service.
Youabian also shipped counterfeit PAC keys, medical devices used to operate laser machines designed to reduce fat on patients, through the mail.
He then transferred his ill-gotten gains to bank account his controlled, including accounts he opened in the names of MSY Technologies, himself, and his au pair.
In June 2022, law enforcement executed search warrants at Youabian’s home and the GES-Thermagen office in West Los Angeles.
In the GES-Thermagen office, law enforcement seized 75 transducers in various states of refurbishment, a manufacturing workstation containing tools and transducer parts, and detailed records of GES and Thermagen’s expenses.
Youabian admitted in his plea agreement to unlawfully selling thousands of medical devices, including transducers and PAC keys, and receiving at least $5,821,474 in fraudulent proceeds that should have been paid to the companies that are the sole U.S. distributors for these devices. Youabian also admitted to causing reputational harm to the device manufacturers and distributors of these medical devices.
United States District Judge Dale S. Fischer scheduled a June 26 sentencing hearing, at which time Youabian will face a statutory maximum sentence of 23 years in federal prison.
The U.S. Food and Drug Administration Office of Criminal Investigations and the United States Postal Inspection Service investigated this matter.
Assistant United States Attorney Gregory D. Bernstein of the Major Frauds Section is prosecuting this case.
Sacramento Man Sentenced to over 3 Years in Prison for Assaulting a Court Security OfficerRead the Press Release
SACRAMENTO, Calif. — Adam Fuller, 36, of Sacramento, was sentenced today to three years and four months in prison for assaulting a federal officer, U.S. Attorney Phillip A. Talbert announced.
According to court records, on Aug. 27, 2019, Fuller punched a federal Court Security Officer in the face outside the Sacramento federal courthouse. The punch knocked the officer to the ground and split open his forehead, requiring five stitches.
This case was the product of an investigation by the Federal Protective Services, the U.S. Marshals Service, and the Sacramento Police Department. Assistant U.S. Attorney Cameron L. Desmond prosecuted the case.
Rosebud Woman Sentenced for Assaulting a Federal OfficerRead the Press Release
PIERRE - United States Attorney Alison J. Ramsdell announced that a Rosebud, South Dakota, woman charged with Assaulting, Resisting, and Impeding a Federal Officer pleaded guilty and was sentenced on January 4, 2023, by U.S. Magistrate Judge Mark A. Moreno.
Kendall Logan, age 29, was sentenced to one year in federal prison, followed by one year of supervised release, and ordered to pay $25.00 to the Federal Crime Victims Fund.
The conviction stems from an incident that took place on February 5, 2020, in Rosebud, when Logan kicked a federal police officer employed by the Rosebud Sioux Tribe in the abdomen.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services. The case was prosecuted by Assistant U.S. Attorney Jay Miller.
Logan was remanded to the custody of the U.S. Marshals Service.
Repeat Offender Admits Possessing Child PornographyRead the Press Release
NEWARK, N.J. – A Somerset County, New Jersey, man today admitted possessing multiple images and videos of child sexual abuse, U.S. Attorney Philip R. Sellinger announced.
John Schulenburg, 67, of Basking Ridge, New Jersey, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez in Newark federal court to a superseding information charging him with possession of child pornography.
According to documents filed in this case and statements made in court:
In July 2019, an undercover law enforcement officer conducted an online session using a publicly available peer-to-peer program, which allows internet users to trade digital files. During this session, a user shared multiple files featuring images of child sexual abuse from an internet address traced to Schulenburg’s residence. On Nov. 6, 2019, law enforcement lawfully obtained a computer from Schulenburg’s residence that contained hundreds of images and videos of child sexual abuse, including images of prepubescent children.
Schulenburg was previously convicted of endangering the welfare of a child/possession of child pornography in Somerset County in 2013. For a repeat offender, the charge of possession of child pornography carries a mandatory minimum term of 10 years in prison, a maximum of 20 years in prison, and a $250,000 fine. Sentencing is scheduled for May 22, 2023.
U.S. Attorney Sellinger credited special agents with the Newark Child Exploitation and Human Trafficking Task Force, under the direction of FBI Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to the guilty plea. He also thanked the Somerset County Prosecutor’s Office for its assistance.
The government is represented by Assistant U.S. Attorney Shawn Barnes of the U.S. Attorney’s Office Criminal Division in Newark.
Rapid City Man Sentenced for EscapeRead the Press Release
RAPID CITY - United States Attorney Alison J. Ramsdell announced that U.S. District Judge Jeffrey L. Viken has sentenced a Rapid City, South Dakota, man convicted of Escape from Custody. The sentencing took place on January 5, 2023.
Jeremy Crow, 29, was sentenced to six months in federal prison, with no supervised release to follow, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund. He remains under supervision obligations in a different case.
Jeremy Crow was indicted for Escape from Custody by a federal grand jury in August of 2022. He pleaded guilty on October 21, 2022.
Crow was in the Bureau of Prisons custody serving a sentence for Robbery and Brandishing a Firearm During the Commission of a Crime. He was placed at the Community Education Center in Rapid City to finish serving his sentence as part of a reentry process. He walked away from the facility in July of 2022 and was located in Rapid City approximately 45 days later by the Rapid City Police Department.
This case was investigated by the U.S. Marshals Service. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.
Crow was immediately remanded to the custody of the U.S. Marshals Service.
Pennsylvania Man Pleads Guilty to Distribution and Transportation of Child Exploitation MaterialRead the Press Release
CONCORD – Michael Wilcox, 33, of Philadelphia, PA, pled guilty in federal court today to distribution and transportation of child sexual abuse material, United States Attorney Jane E. Young announced.
According to court documents and statements made in court, Wilcox engaged in sexually explicit online chats with an undercover law enforcement officer on various social media platforms. In the course of those chats, Wilcox offered to sell child sexual abuse material to the undercover in exchange for payment via CashApp. Wilcox sent various images of child sexual abuse material to the undercover as “samples” of material that he had available for sale. He later sent the undercover links to online cloud storage folders that contained hundreds of additional images, many of them depicting child sexual abuse material.
The plea agreement filed in court recommends that Wilcox be sentenced to 5-10 years in federal prison. Sentencing is set for April 17, 2023.
This matter was investigated by Homeland Security Investigations with assistance from the Nashua Police Department. The case is being prosecuted by Assistant U.S. Attorney Kasey Weiland.
In February 2006, the Department of Justice introduced Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices, 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 identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Oelwein Man Sentenced to 30 Years for Distributing Methamphetamine and Obstructing JusticeRead the Press Release
A man who distributed methamphetamine out of his residence, conspired to have a government witness assaulted, and sexually abused multiple women was sentenced to 30 years in federal prison.
Justin Michael Buehler, age 39, from Oelwein, Iowa, received the prison term after a June 9, 2022 jury verdict finding him guilty of two counts of distribution of methamphetamine.
The evidence at trial showed that Buehler distributed methamphetamine to an employee at his workplace. In January 2019, law enforcement agents coordinated with the employee to set up two controlled purchases of methamphetamine from Buehler’s home. The agents surveilled both purchases.
Sentencing was held before United States District Court Judge C.J. Williams. At sentencing, the Court found Buehler obstructed justice by conspiring with his cell mates to have one of the government’s witnesses physically assaulted before trial. The Court also found that two witnesses credibly testified that Buehler convinced them to come to his residence, provided substances to them, and sexually assaulted them multiple times.
The Court credited Buehler with at least 15 adult criminal convictions and found he qualified as a career offender under the United States Sentencing Guidelines.
Buehler was sentenced to serve 360 months’ imprisonment and must serve a 6-year term of supervised release following his term of incarceration. There is no parole in the federal system. Buehler remains in custody of the United States Marshal until he can be transported to federal prison.
The case was prosecuted by Assistant United States Attorneys Jason Dorval Norwood and Pat Reinert. The case was investigated by the Iowa Division of Narcotics Enforcement.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 21-CR-2006.
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Norfolk Man Convicted of Sexually Abusing 11-Year-OldRead the Press Release
NORFOLK, Va. – A federal jury convicted a Norfolk man last Friday on charges of abusive sexual contact of a minor.
According to court records and evidence presented at trial, in 2019, Donald Gene Ferguson II, 51, was working as a civilian Department of Defense employee in Iwakuni, Japan. During the summer of 2019, while in military housing in Iwakuni, Ferguson forced an 11-year-old minor to touch his genitals. While the Naval Criminal Investigative Service (NCIS) was investigating the abuse, they discovered Ferguson also sexually abused a 12-year-old in the summer of 2012 while living in Florida.
Ferguson faces a maximum penalty of life in prison when sentenced on May 9. 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; Kenneth A. Polite, Jr., Assistant Attorney General of the Justice Department’s Criminal Division; and Mack Hickman, Special Agent in Charge of the NCIS Norfolk Field Office, made the announcement after Chief U.S. District Judge Mark S. Davis accepted the verdict.
Assistant U.S. Attorney Elizabeth Yusi and Trial Attorney Alicia A. Bove of the Department of Justice’s Child Exploitation and Obscenity Section are 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
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. 2:22-cr-49.
New prosecutor to lead civil rights enforcement in West VirginiaRead the Press Release
Assistant U.S. Attorney Carly Nogay and U.S. Attorney William IhlenfeldWHEELING, WEST VIRGINIA — Civil rights enforcement will be the focus of the newest prosecutor in the United States Attorney’s Office.
U.S. Attorney William Ihlenfeld announced today that Carly Nogay has been hired to lead civil rights investigations, to include hate crimes, disability and housing rights violations, and infractions of laws that prohibit discrimination based upon race, color, national origin, sex, and religion.
“I’m excited to have Carly Nogay on our team,” said Ihlenfeld. “She is an experienced litigator with outstanding academic credentials and a strong desire to serve the public. Her leadership on civil rights matters will help to make our communities safer and stronger.”
Nogay comes from the Allegheny County District Attorney’s Office in Pittsburgh where she handled a busy docket of violent crime and firearms cases. Prior to her work in Pittsburgh, she served as law clerk for Judge Valarie Costanzo of Washington County.
Nogay graduated with honors from both Duquesne University and the West Virginia University College of Law.
New Jersey Man Pleads Guilty to Fraudulent Schemes to Steal California Unemployment Insurance Benefits and to Steal Economic Injury Disaster LoansRead the Press Release
SACRAMENTO, Calif. — Eric Michael Jaklitsch, 40, of Elizabeth, New Jersey, pleaded guilty today to charges in two related cases, one case alleging wire fraud and aggravated identity theft and the other case alleging wire fraud, U.S. Attorney Phillip A. Talbert announced.
For the first case, according to court documents, between October 2020 and December 2021, Jaklitsch executed a scheme to defraud the California Employment Development Department (EDD) by filing at least 78 fraudulent unemployment insurance claims with EDD, seeking Pandemic Unemployment Assistance and other benefits under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. During the scheme, Jaklitsch collected personally identifiable information (PII) of numerous individuals — including names, birth dates, and Social Security numbers — and used their identities to file fraudulent unemployment insurance claims. The filings represented, among other things, that the claimants had recently lost employment or were unable to find employment due to the COVID-19 pandemic. These unemployment insurance claims were fraudulent because, for example, the claimants were not unemployed, they were not eligible for California unemployment insurance benefits, or Jaklitsch did not have authority to file claims on their behalf.
Since at least October 2021, EDD has partnered with ID.me — a private company used by the EDD for ID verification of claimants — to implement a system for verifying claimant identities before EDD can process unemployment insurance claims. An internal investigation conducted by ID.me identified Jaklitsch as a person conducting a fraud scheme and referred the case to federal law enforcement.
In executing his fraudulent scheme, Jaklitsch also submitted false information to ID.me that allowed his fake and stolen identities to be verified. This false information included images of fake driver’s licenses that contained photos of Jaklitsch and the names of the purported claimants. He also submitted live photos of himself that were used to verify the photos on the fake driver’s licenses. Once these false identities were verified, Jaklitsch filed the fraudulent unemployment insurance claims with EDD under the same identities.
In the fraudulent unemployment insurance applications, Jaklitsch requested that the unemployment insurance benefits be mailed to various addresses under his control, including his residence in New Jersey. EDD approved dozens of the fraudulent claims and authorized Bank of America to mail out EDD debit cards containing unemployment insurance benefits. Jaklitsch then activated the EDD debit cards and used them to withdraw the benefits at ATMs throughout New Jersey. The scheme sought over $2.5 million in unemployment insurance benefits and caused EDD and the United States to incur actual losses exceeding $900,000.
For the second case, according to court documents, between July 2020 and August 2020, Jaklitsch executed a scheme to defraud the Small Business Administration (SBA) by fraudulently acquiring COVID-19 Economic Injury Disaster Loans (EIDL), which were loans meant to provide low-interest financing and grants to small businesses, renters, and homeowners in regions affected by declared disasters, like the COVID-19 pandemic.
To obtain an EIDL, a qualifying business applied to the SBA and provided certain information about its operations through an online portal. The EIDL approval process required applicants to supply minimal eligibility documentation and to affirm that the information in the application was true and correct under the penalty of perjury and applicable criminal statutes. The amount of an EIDL was based, in part, on the information provided by the applicant—primarily, gross revenue minus cost of goods sold, divided by two. Qualifying entities could use EIDL funds only on certain expenses, including fixed debts, payroll, and accounts payable.
In furtherance of the scheme, Jaklitsch or one or more co-schemers knowingly submitted fraudulent EIDL loan applications to the SBA for the benefit of entities that did not authorize the applications. The false material information included, among other things, that (a) the schemers had the authority to submit the loan applications on behalf of the applying entities, (b) the entities’ gross revenues; (c) the entities’ costs of goods sold; and (d) bank account information purportedly belonging to the entities. These fraudulent applications sought at least $1,280,680. SBA approved these fraudulent applications and caused the transfer of approximately $1,280,540 in EIDL loan funds to at least 14 separate bank accounts held by a financial institution.
Between August and September 2020, Jaklitsch used a cellphone application to conduct numerous cash-out transactions that debited the fraudulent EIDL loan funds held in the 14 bank accounts. Each transaction caused money to be depleted from one or more of the 14 bank accounts, and Jaklitsch received the withdrawn cash from the stores. In total, Jaklitsch withdrew at least $777,312 in cash.
This case is the product of an investigation by the Federal Bureau of Investigation, the Department of Labor – Office of the Inspector General, the Department of Homeland Security – Office of the Inspector General – Covid Fraud Unit, and the California Employment Development Department (EDD) – Investigation Division. Assistant U.S. Attorney Denise N. Yasinow is prosecuting the case.
Jaklitsch is scheduled to be sentenced by U.S. District Judge William B. Shubb on April 10, 2023. Jaklitsch faces a maximum statutory penalty of 20 years in prison and a $250,000 fine on each of the wire fraud counts. He also faces a two-year mandatory prison sentence for the aggravated identity theft count, which must run consecutive to any sentence received on the wire fraud counts. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This effort is part of a California COVID-19 Fraud Enforcement Strike Force operation, one of three interagency COVID-19 fraud strike force teams established by the U.S. Department of Justice. The California Strike Force combines law enforcement and prosecutorial resources in the Eastern and Central Districts of California and focuses on large-scale, multistate pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces use prosecutor-led and data analyst-driven teams to identify and bring to justice those who stole pandemic relief funds.
Michigan Man Pleads Guilty to Federal Drug CrimeRead the Press Release
HUNTINGTON, W.Va. – Brandon Lamarr McCauley, also known as “Louie,” 30, of Detroit, Michigan, pleaded guilty today to possession with intent to distribute heroin.
According to court documents and statements made in court, on May 12, 2022, law enforcement officers pulled over a vehicle driven by McCauley on Fifth Avenue in Huntington. McCauley admitted that he possessed approximately 62 grams of suspected heroin, which he had divided into multiple bags for distribution, that officers found during the traffic stop. The West Virginia State Police Forensic Laboratory confirmed the controlled substance was fentanyl.
McCauley further admitted to aiding and abetting another individual in the distribution of additional quantities of heroin totaling 2.6 grams on Sixth Street in Huntington on May 12, 2022.
McCauley is scheduled to be sentenced on April 10, 2023, and faces a maximum penalty of 20 years in prison, three years of supervised release, and a $1 million fine.
United States Attorney Will Thompson made the announcement and commended the investigative work of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Huntington Violent Crime and Drug Task Force.
United States District Judge Robert C. Chambers presided over the hearing. Assistant United States Attorney Courtney L. Cremeans 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. 3:22-cr-187.
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Mexican National Pleads Guilty to Tax Fraud ChargesRead the Press Release
NASHVILLE – A Mexican national pleaded guilty last week in U.S. District Court to conspiring to file false claims against the United States in order to defraud the United States and steal more than $1,000 of public money, announced U.S. Attorney Henry C. Leventis for the Middle District of Tennessee.
Claudio Juarez, 41, pleaded guilty on Wednesday and had been a fugitive for six years following his indictment in 2016, before being arrested in June 2022 in Bowling Green, Kentucky.
“The U.S. Attorney’s Office remains committed to working with our law enforcement partners at IRS – Criminal Investigation to identify and prosecute those who exploit the tax system and defraud the United States,” said U.S. Attorney Leventis. “I commend the agents and prosecutors who have remained diligent through several years of this protracted investigation which has brought dozens of offenders to justice.”
Juarez was one of 46 persons ultimately charged for participating in a tax fraud scheme involving tax preparation businesses throughout middle Tennessee, including Soto Income Tax Services. The federal investigation began in April 2015, when 10 federal search warrants were executed at various residences and tax return preparation businesses. As a result of this investigation, agents subsequently determined that part of the tax fraud scheme dated back to 2011 and resulted in nearly $6 million in bogus refunds.
During the investigation, more than $1 million in cash was seized, as well as several late model, luxury automobiles and 11 Nashville-area properties. Many of the individuals charged, including Juarez, were in the United States illegally. Juarez’s role in the scheme was crucial to its success as he cashed fraudulent checks and dealt in fake documents such as W-2’s and other fraudulent identification documents.
"As we approach tax filing season, those who might consider preparing false tax returns should be aware of the extremely negative consequences as evidenced by the 46 defendants charged," said Donald “Trey” Eakins, Special Agent in Charge of the Charlotte Field Office. "Today's plea again emphasizes that the Internal Revenue Service Criminal Investigation and U.S. Attorney’s office will continue their aggressive pursuit of those who would attempt to defraud America's tax system."
Juarez’s sentencing hearing is scheduled for May 15, 2023. He faces up to 5 years in prison and a $250,000 fine.
This case was investigated by the Internal Revenue Service-Criminal Investigation and Homeland Security Investigations, with arrest assistance by the Bowling Green Police Department. Assistant United States Attorney J. Christopher Suedekum is prosecuting the case.
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Metairie Woman Sentenced for Theft of Social Security Funds and Cares Act FundsRead the Press Release
Note: The U.S. Attorney's Office would like to acknowledge the assistance of the United States Departmemt of Treasury, Inspector General for Tax Administration in investigating this matter.
NEW ORLEANS, LOUISIANA – U.S. Attorney Duane A. Evans announced that defendant, RACHEL COONEY, of Metairie, Louisiana, was sentenced on January 5, 2023 for Theft of Government Funds, in violation of Title 18, United States Code, Section 641.
According to court documents, COONEY’s mother was receiving social security benefits before her death. When she died, these benefits should have terminated. However, COONEY continued to receive the payments by accessing her deceased mother’s bank account from November 2015 through January 2020. COONEY also received $1,200.00 of COVID-19/CARES ACT funds deposited into her mother’s account. COONEY admitted to federal authorities that she used her deceased mother’s ATM card to pay for her own personal expenses knowing she was not entitled to Social Security benefits or the COVID-19/CARES ACT funds. COONEY failed to notify the Social Security Administration of her mother’s death, and fraudulently received approximately $76,139.00 in benefits to which she was not entitled. COONEY also received $1,200.00 of COVID-19/CARES ACT funds to which she was not entitled.
U.S. District Judge Carl J. Barbier sentenced COONEY to five (5) years of probation, the payment of restitution to the Social Security Administration in the amount of $76,139.00 and a $100 mandatory special assessment fee.
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.
The U.S. Attorney’s Office would also like to acknowledge the assistance of the Social Security Administration, Office of the Inspector General with this matter. The prosecution of this case is being handled by Assistant U.S. Attorneys Rachal Cassagne and Jon Maestri.
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Markenzy Lapointe Toma Juramento al Cargo de Fiscal Federal del Distrito Sur de FloridaRead the Press Release
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Nombrado por el presidente Joseph Biden y confirmado por el Senado de los Estados Unidos, Lapointe dirige ahora la oficina de casi 500 abogados y profesionales de apoyo responsables de la investigación y persecución de delitos federales en el sur de Florida, tanto como litigios civiles en los que los Estados Unidos tiene interés jurídico.
"Siento profunda honra de servir a mi país y a la comunidad como fiscal federal del distrito sur de Florida," dijo Lapointe. "La gloriosa historia de ésta oficina procede de décadas de compromiso con la justicia, equidad, integridad, y el servicio a la comunidad. Me comprometo a respetar estos principios y esforzarme por mantener el nivel de excelencia sobre el que se construyó esta oficina."
Antes de su nombramiento como fiscal federal de los Estados Unidos, Lapointe fué socio en el despacho de Miami de Pillsbury Winthrop Shaw Pittman LLP, donde se ocupaba de asuntos comerciales, responsabilidad civil de productos defectuosos de alto riesgo, negligencia profesional, y asuntos de investigación penal. También copresidió el comité de promoción de la diversidad de abogados del bufete, promoviendo la retención y promoción de abogados de diversas procedencias.
Lapointe comenzó su carrera judicial en el Tribunal Supremo de Florida, donde trabajó como asistente jurídico del Honorable Harry Lee Anstead del 1999 al 2001. Pasó a ser fiscal adjunto del distrito sur de Florida del 2002 al 2006, donde se encargaba de asuntos penales federales que van desde delitos relacionados con estupefacientes y armas de fuego hasta fraudes bancarios e hipotecarios. Lapointe trabajó como asociado de litigios, y más tarde como socio en el bufete de Miami de Boise Schiller Flexner LLP del 2006 hasta el 2017. Después de eso, se unió a Pillsbury como socio.
A lo largo de su carrera, Lapointe mantuvo una destacada práctica pro bono.
Recibió el Premio de Asistencia Jurídica/Premio Pro Bono de Devolver Algo a Cambio en la Defensa del Menor y el Premio de Abogado más Eficiente en el Daily Business Review por Trabajo Pro Bono en Derecho de Familia.
Lapointe recibió su licenciatura en derecho de la Facultad de Derecho de Florida State University y una licenciatura en finanzas de la Facultad Empresarial de Florida State University. También estudió en Miami Dade College.
Lapointe es un veterano de la Guerra del Golfo en la Marina y el primer abogado estadounidense de origen haitiano en servir al país como fiscal federal. Emigró de Haití a los Estados Unidos siendo adolescente, vivió en el vecindario de Liberty City, y se graduó de Edison High School.
El sustituye a Juan Antonio Gonzalez, fiscal federal de carrera que dirigía la oficina desde marzo 2021.
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Markenzy Lapointe Swears Oath of Office as South Florida United States AttorneyRead the Press Release
MIAMI – Markenzy Lapointe was sworn in today as United States Attorney for the Southern District of Florida by Chief U.S. District Judge Cecilia M. Altonaga.
Nominated by President Joseph Biden and confirmed by the U.S. Senate, Lapointe now leads an office of nearly 500 attorneys and support professionals responsible for investigating and prosecuting federal crimes in South Florida and for litigating civil matters in which the U.S. has an interest.
“I am deeply honored to serve my country and community as U.S. Attorney for the Southern District of Florida,” said Lapointe. “The proud history of this office stems from decades of commitment to justice, fairness, integrity, and community service. I will follow these principles and strive to uphold the standard of excellence on which this office is built.”
Prior to his appointment, Lapointe was a partner in the Miami office of Pillsbury Winthrop Shaw Pittman LLP, where he handled commercial, high exposure product liability, professional malpractice, and criminal investigation matters. He also co-chaired the law firm’s Advancement of Diverse Attorneys Committee, promoting the retention and advancement of attorneys from diverse backgrounds.
Lapointe began his legal career with the Florida Supreme Court, where he served as a law clerk to the Honorable Harry Lee Anstead from 1999 to 2001. He went on to serve as an assistant U.S. attorney for the Southern District of Florida from 2002 to 2006, handling federal criminal matters that ranged from narcotics and firearms crimes to bank and mortgage fraud. Lapointe worked as a litigation associate, and later partner, for the Miami office of Boies Schiller Flexner LLP from 2006 to 2017. After that, he joined Pillsbury as a partner.
Throughout his career, Lapointe has maintained a notable pro bono practice. He received the Legal Aid/Put Something Back Pro Bono Award in Child Advocacy and the Daily Business Review’s Most Effective Lawyer Award for Pro Bono in Family Law.
Lapointe received his law degree from Florida State University College of Law and a degree in finance from Florida State University College of Business. He also attended Miami Dade College.
Lapointe is a U.S. Marine Gulf War veteran and the first Haitian-born American lawyer to serve the country as U.S. Attorney. He emigrated from Haiti to the U.S. as a teenager, lived in Miami’s Liberty City neighborhood, and graduated from Edison High School.
He replaces Juan Antonio Gonzalez, a career federal prosecutor who had led the office since March 2021.
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Markenzy Lapointe Prete Sèman pou Pòs Pwokirè Jeneral La Florid di SidRead the Press Release
The referenced media source is missing and needs to be re-embedded.MIAMI - Markenzy Lapointe prete sèman jodiya kom Pwokirè Jeneral Distri Sid Laflorid devan Chèf Jij Distri Dèzetazini Cecilia M. Altonaga.
Nonmen pa Prezidan Joseph Biden epi konfimè pa Sena Lèzetazini, Lapointe an tèt yon biwo ki gen prèske 500 Avoka ak tout profesyonèl dapwi yo ki responsab envestige ak pouswiv tout zak kriminèl federal nan Laflorid di Sid, ak litij koze sivil kote entère Lèzetazini an je.
"Se avèk anpil onè ke ma va sèvi peyi m ak kominote a antan ke Pwokirè Jeneral Distri Sid Laflorid la." Msye Lapointe di. "Istwa fyète biwo sa a pran nesans nan deseni de angajman ak la jistis, san patipri, entegrite, ak sèvis kominòtè. Mwen angaje m a swiv tout prensip sa yo ak fè tout efò pou respekte tout nòm ekselans ki se fondasyon biwo sa a.
Anvan yo te nonmen l, Lapointee te patnè nan kabinè Pillssbury Winthrop Shaw Pittman LLP, kote li te jere litij komèsyal, ak responsabilite sivil pwodwi defektye a gwo risk, neglijans pwofesyonèl, ak koze envestigasyon kriminèl. Li te ko-prezidan tou, nan Komite pou Avansman Divèsite Avoka, pou pwomouvwa retansyon ak avansman avoka divès orijin.
Lapointe te komanse karyè legal li nan Tribinal Siprèm Laflorid kote li te sèvi antan ke Asistan Legal Onorab Harry Lee Anstead de 1999 a 2001. Aprè sa li pase a Adjidan Komisè Gouvènman nan Distri Sid Laflorid de 2002 a 2006, kote li tap jere tout koze zak kriminèl depi sou zak ki gen rapò ak dwòg, zamafe rive jiska fwòd bankè ak fwòd ipotèk. Lapointe travay tou kom assosye litij, epi li vinn fè patnè nan Kabinè Boise Schiller Flexner nan Miami a de 2006 a 2007. Aprè sa li rantre nan Pillsbury antan ke asosye
Atravè karyè li, Lapointe te kenbe yon pratik asistans legal gratis solid. Li resevwa Pri de Legal Aid/Put Something Back Pro bono pou defans timoun ak Pri Avoka pi Efisyan nan Daily Business Review pou travay pro bono nan Dwa Koze Familyal.
Lapointe resevwa diplòm avoka liya de Fakilte Dwa Florida State University ak dipòm nan finans de Lekòl Komès Florida State University. Li te etidye nan Miami Dade College tou.
Lapointe se yon Veteran Gè Golf la Marin ak premye Avoka Ameriken ki fèt an Ayiti ka pral sèvi peyi a antan ke Pwokirè Jeneral. Li emigre de Ayiti vinn Lèzetazini lè li te yon jèn adolesan, li te abite nan vwazinaj Liberty City epi li gradye de Edison High School.
Li ranplase Juan Antonio Gonzalez, yon pwokirè de karyè ki tap dirije biwo a depi mas 2021.
Man Sentenced for Integral Role in Sophisticated International Fraud SchemeRead the Press Release
A Romanian national was sentenced today to 89 months in prison for his role in a transnational, multimillion-dollar scheme to defraud American victims. He is the 24th member of the organized criminal group to be sentenced, of the 28 who were charged.
Ionut-Razvan Sandu, 35, of Romania, pleaded guilty in April 2022 to conspiracy to commit a Racketeer Influenced and Corrupt Organizations Act (RICO) offense. Four other defendants pleaded guilty to this offense and were sentenced for their roles in the conspiracy between Nov. 16 and 18, 2022, including: Rafael-Liviu Cucu, 33, of Romania to 61 months; Alexandru-Catalin Calin, 40, of Romania, to 61 months; Ciprian-Ionut Filip, 37, of Romania to 70 months; and Gabriel Constantin Georgescu, 37, of Romania to 63 months.
“This highly organized and sophisticated syndicate stole directly from the pockets of hard-working Americans. The criminals then used digital currency to launder their ill-gotten gains,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Today’s result is proof that the Criminal Division and our law enforcement partners will never stop pursuing cybercriminals who target the American public—no matter where these criminals reside, and no matter what tools they use to hide.”
“Cybercrime is an increasingly prevalent means for criminals to prey on the public, causing victims, from across the United States, to lose millions of dollars,” said U.S. Attorney Carlton S. Shier IV for the Eastern District of Kentucky. “To continue to protect Americans against organized cybercrime, cooperation and coordination among law enforcement is essential. This case is the result of a massive, years-long effort by the U.S. Secret Service to coordinate the investigation of this crime and identify and apprehend the offenders. I commend the exceptional work done by all our law enforcement partners, and we are proud to have joined this cooperative effort to prosecute this significant cyber fraud scheme.”
“Financial crimes that take place in the cyber domain have a very real impact on everyday Americans and their families,” said Special Agent in Charge Robert Holman of the U.S. Secret Service Louisville Field Office. “The Secret Service remains committed to investigating such crimes, and we appreciate the continued support of our local, state, federal, and international law enforcement partners as we work together to bring those responsible to justice.”
According to plea documents, beginning as early as October 2014, Sandu and other members of the criminal organization collectively developed a process and offered a service by which co-conspirators based in the United States and abroad would launder the proceeds of online auction fraud.
According to court documents, Georgescu, Filip, and other co-conspirators posted false advertisements to popular online auction and sales websites, such as eBay, for goods that did not actually exist. Members of the conspiracy created fictitious online accounts to post these advertisements and communicate with victims, sometimes using the stolen identities of Americans to do so. The advertisements typically marketed the sale of used vehicles or similar goods and targeted working-class Americans.
Members of the conspiracy used several tactics to convince victims to send money for the advertised goods. For example, they impersonated a military member who needed to sell the advertised item before deployment. In furtherance of the scheme, the defendants delivered invoices to the victims bearing trademarks of reputable companies to make the transaction appear legitimate. The defendants also set up call centers to impersonate customer support, address questions, and alleviate concerns over the advertisements.
Once victims had sent payment, members of the conspiracy engaged in a complex money laundering scheme offered by Sandu and others wherein U.S.-based conspirators received victim funds, converted those funds to cryptocurrency, and transferred proceeds in the form of cryptocurrency to foreign-based money launderers. Those foreign-based money launderers, such as Cucu and Calin, would then work with other members of the conspiracy to convert the bitcoin back into fiat currency. Sandu was held responsible for laundering over $3.5 million worth of fraudulent proceeds. To date, law enforcement has identified over 900 victims of this scheme.
The investigation was conducted by the U.S. Secret Service, Kentucky State Police, Lexington Police Department, IRS Criminal Investigation and U.S. Postal Inspection Service, and supported by the Justice Department’s Organized Crime Drug Enforcement Task Force (OCDETF) and the International Organized Crime Intelligence and Operations Center (IOC-2). Assistance was provided by the Romanian National Police (Service for Combating Cybercrime), the Romanian Directorate for Investigating Organized Crime and Terrorism (Agency for Prosecuting Organized Crime), and the Supreme Prosecutor’s Office of Cassation of the Republic of Bulgaria. The Justice Department’s Office of International Affairs and Criminal Division’s Money Laundering and Asset Recovery Section provided significant support.
This case is being prosecuted by Senior Counsel Frank Lin of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Kathryn M. Dieruf of the U.S. Attorney’s Office for the Eastern District of Kentucky.
Individuals who believe they may be victims of the online auction fraud scheme described herein are encouraged to visit the following website to obtain more information: www.justice.gov/usao-edky/information-victims-large-cases.
Leader of Drug Trafficking Organization Facing up to Life in Prison Following Jury VerdictRead the Press Release
Ocala, Florida – United States Attorney Roger B. Handberg announces that a federal jury has found Uriel Fajardo-Albarran (27, Coleman) guilty of one count of conspiring to distribute 50 grams or more of methamphetamine and three counts of distribution of methamphetamine. Fajardo-Albarran faces a minimum mandatory penalty of 10 years, up to life, in federal prison. A sentencing date has not yet been set.
According to evidence presented during the three-day trial, Fajardo-Albarran received large amounts of methamphetamine from sources in Mexico, Texas, and Atlanta, Georgia. He then transported the methamphetamine to the Middle District of Florida where he used lower-level dealers to distribute multiple kilograms of the substance each week for approximately two years. Fajardo-Albarran organized the network of distribution after taking over for a supplier who had previously been convicted and sentenced to federal prison.
This case was investigated by the Drug Enforcement Administration, the Columbia County Sheriff’s Office, the Lake City Police Department, the Florida Highway Patrol, the Unified Drug Enforcement Strike Team, the Marion County Sheriff’s Office, and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorneys Tyrie K. Boyer and Sarah J. Swartzberg.
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.
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)
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.
* * *
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