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Friday 2 September 2022
Former Children's Museum Director Pleads Guilty to Distributing Child PornographyRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, today announced that ROBERT ECKERT, 56, of West Hartford, pleaded guilty yesterday before U.S. District Judge Stefan R. Underhill in Bridgeport to distribution of child pornography.
According to court documents and statements made in court, Eckert used multiple internet platforms, including MeWe and Kik, to solicit, receive and distribute images of child sexual abuse and to communicate with others about the distribution of child pornography. He accessed the online platforms on his phone, at his residence, and at the Lutz Children’s Museum in Manchester where he was employed as its executive director. Between September 2019 and May 2020, Eckert possessed 1,837 image files and 73 videos depicting child sex abuse, including the abuse of prepubescent minors.
Eckert was arrested on April 8, 2021.
Judge Underhill scheduled sentencing for November 28, at which time Eckert faces a mandatory minimum term of imprisonment of five years and a maximum term of imprisonment of 20 years.
Eckert is released on a $100,000 bond pending sentencing.
This matter has been investigated by Homeland Security Investigations (HSI), with the assistance of the Connecticut State Police and the Manchester Police Department. The case is being prosecuted by Assistant U.S. Attorneys Nancy V. Gifford and Daniel Cummings.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
Florissant man sentenced to 14+ years on gun, drug chargesRead the Press Release
ST. LOUIS – U.S. District Judge Rodney W. Sippel on Thursday sentenced a man from Florissant, Missouri to 14 years and three months in prison on drug and gun charges.
The investigation into Deandre J. White began with the fatal shooting of a 6-year-old boy in St. Louis on Feb. 22, 2020, during which White was identified as a suspect, according to a sentencing memorandum filed in court. The boy’s 9-year-old sister was also shot and wounded. The investigation revealed that White was heavily involved in selling fentanyl and guns, the memo says.
Over the course of approximately five months, undercover investigators bought over 30 grams of fentanyl and three firearms, including two high-powered, large capacity rifles and one pistol with an extended magazine. The defendant was also spotted driving at least two stolen vehicles during the drug transactions.
On social media, White boasted about selling drugs and being a shooter and posted pictures of himself with cash and firearms.
White also faces a pending charge in St. Louis County Circuit Court, where he is accused of shooting two people and three vehicles at his former girlfriend’s apartment complex, the sentencing memo says.
“Investigators were unable to recover the murder weapon, but followed the evidence and were able to prove beyond a reasonable doubt that Deandre White was selling a highly dangerous drug on the streets of St. Louis and equally dangerous firearms,” said U.S. Attorney Sayler Fleming. “The investigation resulted in a significant prison sentence, and while state and federal investigators are eager for additional information about the shooting of a kindergartner and his sister, the community will be safer because of the joint efforts of investigators,” she said.
White, now 26, was originally charged by complaint on Aug. 12, 2020 and indicted by a grand jury on Aug. 27, 2020. He pleaded guilty in May to two counts of being a felon in possession of a firearm, one count of possession of fentanyl with intent to distribute and two counts of possession of a firearm in furtherance of a drug trafficking crime.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the St. Louis Metropolitan Police Department. Assistant U.S. Attorney Catherine Hoag prosecuted the case.
Anyone with information about White or the shooting should contact the police homicide division at 314-444-5371, or report information anonymously via CrimeStoppers at 866-371-8477.
Federal Grand Jury Indicts New Orleans Man for Being a Felon in Possession of a FirearmRead the Press Release
NEW ORLEANS, LOUISIANA – NEWMAN HOOKER, age 29, a resident of New Orleans, Louisiana, was charged on September 1, 2022 in a one-count indictment for being a convicted felon in possession of a firearm.
If convicted, HOOKER faces up to ten (10) years imprisonment, followed by up to three (3) years of supervised release, up to a $250,000.00 fine, and a mandatory special assessment fee of $100.00.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
U.S. Attorney Evans reiterated that the indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
The case was investigated by the New Orleans Police Department, the Orleans Parish District Attorney’s Office, and the Federal Bureau of Investigation. Assistant United States Attorneys Rachal Cassagne and David Berman are in charge of the prosecution.
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Federal Grand Jury Indicts Man for Gun and Drug OffensesRead the Press Release
NEW ORLEANS, LOUISIANA – U.S. Attorney Duane A. Evans announced that EDDIE HARRIS, age 38, a resident of New Orleans, Louisiana, was charged on September 1, 2022 in a three-count indictment by a Federal Grand Jury for violations of the Federal Gun Control and Controlled Substances Acts.
HARRIS is charged in Count 1 with possession with intent to distribute a quantity of a substance containing a detectable amount of cocaine, in violation of Title 21, United States Code, Sections 841(a)(1) and (b)(1)(C). In Count 2, HARRIS is charged with possession of a firearm in furtherance of a drug trafficking crime, in violation of Title 18, United States Code, Section 924(c)(1)(A). In Count 3, HARRIS is charged with possession of a firearm by a convicted felon, in violation of Title 18, United States Code, Section 922(g)(1).
If convicted of Count 1, HARRIS faces a maximum sentence of 20 years imprisonment, up to a $1,000,000 fine, and at least three years of supervised release. If convicted of Count 2, HARRIS faces a mandatory minimum sentence of 5 years up to life imprisonment, which is to run consecutively to all other sentences, up to a $250,000 fine, and up to 5 years of supervised release. If convicted of Count 3, HARRIS faces a maximum term of imprisonment of 15 years, up to a $250,000 fine, and up to three years of supervised release. For each conviction, HARRIS must pay a mandatory special assessment fee of $100.
U. S. Attorney Evans reiterated that the indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and
legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
The case was investigated by the New Orleans Police Department and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney David Berman.
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Federal Grand Jury Indicts Lafourche Parish Man for Violating the Federal Controlled Substances ActsRead the Press Release
NEW ORLEANS, LOUISIANA – On September 1, 2022, a federal grand jury in New Orleans, Louisiana returned a one-count indictment charging a man for violating the Federal Controlled Substances Act announced U.S. Attorney Duane A. Evans
According to court documents, TERRANCE STEWART, age 31, is charged in Count 1 with possession with intent to distribute 40 grams or more of a mixture or substance containing a detectable amount of fentanyl, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(B).
If convicted of Count 1, STEWART faces a mandatory minimum sentence of 5 years, up to a maximum of 40 years imprisonment, a fine of up to $5,000,000, at least 4 years of supervised release, and a mandatory special assessment fee of $100.
U.S. Attorney Evans reiterated that the indictment is merely a charging document and that the guilt of the defendants must be proven beyond a reasonable doubt.
This case was investigated by the Drug Enforcement Administration, New Orleans Division and Lafourche Parish Sheriff’s Office Drug Task Force. The prosecution of this case is being handled by Assistant United States Attorney Christopher Usher.
Enlisted Sailor Stationed in Belle Chasse, Louisiana Pleads Guilty, Admits Producing Files Depicting the Sexual Victimization of Children, Including Through ExtortionRead the Press Release
NEW ORLEANS – U.S. Attorney Duane A. Evans announced that BIAGIO WILLIAM AMBROSINO, age 20, originally from Queens, NY, who was an enlisted sailor stationed in Belle Chasse, Louisiana, pleaded guilty on September 1, 2022 before United States District Judge Wendy B. Vitter after previously being charged by a federal grand jury for producing images and videos depicting the sexual exploitation of children, in violation of Title 18, United States Code, Section 2251(a) (Count 1) and transmitting interstate threats for the purpose of extorting a thing of value, in violation of Title 18, United States Code, Section 875(b) (Count 2).
According to court documents, the charges stem from AMBROSINO’S implementation of an exploitation and extortion scheme to convince individuals to send him sexually explicit content between August 2020 and January 2022. AMBROSINO utilized several different strategies depending on victims’ ages, cognitive ability, level of compliance, and his previous knowledge of them. For individuals he knew, AMBROSINO would, anonymously, either prey on their friendship or use information he already had about the individuals and their families to obtain sexually explicit depictions from them. For individuals he did not already know, AMBROSINO would utilize other measures. For example, AMBROSINO would contact some minors via social media direct message, purport to be a social media mogul, and inquire whether the minor wanted “to be Instagram famous.” He would then request a sexually suggestive or sexually explicit photograph to prove that the minor was serious about being famous or receiving a gift. Alternatively, AMBROSINO would offer items of value to minors, including a camera, a lighting system, sponsorship, or stuffed animals as enticements to take and send him sexually explicit pictures and videos or to engage in sexually explicit conduct while on a video chat with him. When victims expressed reluctance to provide him sexually explicit depictions or to continue doing so, AMBROSINO would extort them by threatening reputational harm or physical violence. Once AMBROSINO successfully obtained sexually explicit content from a victim, he continued to demand increasingly explicit, invasive, and humiliating content from his victims. Thereafter, AMBROSINO transmitted some of the sexually explicit depictions he obtained to other individuals in exchange for the identities of other, future potential victims.
In pleading guilty, AMBROSINO admitted to victimizing at least eleven people, including nine minors ranging in age from ten to seventeen years old, one of whom had a diagnosed developmental cognitive disability and a speech disability. The identified victims were residents of eight different states and the country of Australia.
AMBROSINO faces a mandatory minimum term of imprisonment of fifteen (15) years and a maximum term of imprisonment of thirty (30) years as to Count 1, and a maximum term of imprisonment as to Count 3 of twenty (20) years. AMBROSINO also faces a mandatory minimum of five years, up to a lifetime of supervised release after his prison term, up to a $250,000 fine, and he may be required to register as a sex offender. Finally, he faces a mandatory special assessment fee of $100 per count.
Sentencing before Judge Vitter has been scheduled for December 6, 2022.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
U.S. Attorney Evans praised the work of the Naval Criminal Investigative Service (NCIS) in investigating this matter, with assistance from the New York Police Department. Assistant United States Attorney Jordan Ginsberg is in charge of the prosecution.
East Bay Man Sentenced to 51 Months in Federal Prison for Armed Robbery of U.S. Mail CarrierRead the Press Release
OAKLAND – Kevin Allan Fowler was sentenced today to 51 months in federal prison for the armed robbery of a United States Postal Service letter carrier, announced United States Attorney Stephanie M. Hinds and U.S. Postal Inspection Service (USPIS) San Francisco Division Acting Inspector-In-Charge Kevin Rho. The sentence was handed down by United States District Judge Haywood S. Gilliam Jr.
Fowler, 31, a resident of the East Bay, was charged by federal information on April 13, 2022, with the armed robbery of a mail carrier that occurred on Merritt Avenue in Oakland on December 2, 2021. The charge alleged that Fowler used a pistol in the robbery.
On June 15, 2022, Fowler entered a plea agreement and pleaded guilty to the armed robbery. In his plea agreement, Fowler admitted that on December 2, 2021, he walked past a letter carrier while she was approaching a building to deliver mail. He then returned and approached the letter carrier. Fowler demanded that she turn over her keys. When she refused, Fowler admits he took out and brandished a handgun. The letter carrier then handed over her vehicle keys and two USPS keys. Fowler fled.
The government described in its sentencing memo that Fowler’s vehicle was identified through surveillance footage and stopped days later by Oakland Police Department officers. When arrested, Fowler had a loaded P80 9mm magazine and a counterfeit USPS mail key. The keys stolen from the victim letter carrier were not recovered, but the victim was able to identify Fowler has the perpetrator of the robbery.
In addition to the 51 month sentence, United States District Judge Gilliam ordered Fowler to serve a five year period under supervision when he leaves prison and to pay restitution to the victim. Fowler was in custody at his sentencing hearing and begins serving his prison sentence immediately.
Evan Mateer is the Assistant U.S. Attorney who is prosecuting the case, with the assistance of Christine Tian and Soana Katoa. The prosecution is the result of an investigation by the USPIS and Oakland Police Department.
EDVA Observes Overdose Awareness WeekRead the Press Release
ALEXANDRIA, Va. – This week the U.S. Attorney’s Office for the Eastern District of Virginia (EDVA) recognized Overdose Awareness Week and renewed its commitment to addressing the nation’s overdose epidemic.
“Over 107,000 people died of a drug overdose in the United States last year. That is more than twice the number of people who were killed by firearms,” said U.S. Attorney Jessica D. Aber. “In Virginia, more people died of a drug overdose than by firearm and car accidents combined. We must raise awareness of what is killing our loved ones at such an alarming rate.”
Overdose Awareness Week, observed from August 29 through September 3, is a time to remember those tragically lost to overdose and the pain of the families who are left behind. On Wednesday, the flags around Virginia flew at half-staff in recognition of the lives lost to overdose. This week is also an opportunity to recommit to working together to build safe, healthy, and resilient communities. By adopting evidence-based approaches to reducing overdose risks and lowering barriers to treatment and support, we can save more American lives.
According to the CDC, in 2021 there was a 15 percent rise in the rate of overdose deaths in the United States. The death rate for 2022 is on track to be even higher. Opioids were responsible for almost 75 percent of the overdose deaths in 2020 – and the primary driver of those deaths was illicit fentanyl, the synthetic opioid most commonly found in counterfeit pills bought on the street. According to the CDC, across the U.S., law enforcement has seized everything from fake blue 30mg Oxycodone pills, to fake Adderall and Xanax pills which contain illicitly made fentanyl. Recently, law enforcement have begun seizing multicolored pills that look like candy made with illicit fentanyl. Within Virginia, a recent trend of cocaine laced with fentanyl has caused a number of overdoses. Overdose deaths within the state from methamphetamine are also on the rise. Law enforcement seizures in and around the district have included what appear to be Ecstasy pills made with high-purity methamphetamine.
In addition to prosecuting offenders who distributed illicit substances, EDVA leads a number of on-going programs and efforts to raise awareness and find solutions to the overdose pandemic, including the Central Virginia Overdose Working Group, Project Recover, and the “Silent No More” awareness program for schools, parents, and community organizations.
The Central Virginia Overdose Working Group (CVOWG) is comprised of over 330 stakeholders from 14 disciplines. It was created to eliminate the siloed structure of the substance use arena by bringing experts from multiple fields together to discuss issues, identify gaps, and develop solutions to the overdose epidemic in Central Virginia.
Project Recover funds Certified Peer Recovery Specialists to support Virginians suffering with substance use disorders during one of the most critical times in their path to recovery – immediately following an overdose. All too often, once EMS and law enforcement have addressed the immediate trauma of an overdose incident and have left the scene to respond to the next call from the community, the victim is left without sustainable treatment and recovery options. Project Recover’s goal is to help fill this gap by providing individuals in need with immediate support from a peer who has overcome similar challenges and has gained real-world knowledge of the ongoing process of treatment and recovery. Currently, Project Recover funds peers in Richmond City Police Department, Chesterfield County Police Department, Henrico Fire/EMS and Police Department, and Richmond Ambulance Authority.
“Silent No More” is a community-based educational outreach and prevention program. This program is being introduced at schools in the Eastern District of Virginia to educate students and parents about the threat of opioids and other dangerous substances, as well as connecting law enforcement with parents, medical professionals, and educators for life-saving conversations. “Silent No More” is currently available in Central Virginia and in Tidewater and is in the process of developing a program in Northern Virginia.
If you or your organization would like to participate in the Working Group or would like to have the “Silent No More” team present to your school or organization, please contact Kim Ulmet at [email protected].
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.
District Man Sentenced to 78 Months in Prison for Schemes to Defraud Small Business Pandemic Relief Programs Relief Programs and the Archdiocese of WashingtonRead the Press Release
WASHINGTON – Kenneth Gaughan, 44, of Washington, D.C., was sentenced today to 78 months in prison for carrying out a series of financial schemes. In one, he embezzled more than $438,000 from the Catholic Archdiocese of Washington, D.C., where he was previously employed as Assistant Superintendent. In the other, he fraudulently obtained more than $2.1 million in federal Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL).
The announcement was made by U.S. Attorney Matthew M. Graves, Darrell Waldon, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation, Washington, D.C. Field Office, Thomas J. Sobocinski, Special Agent in Charge of the FBI’s Baltimore Field Office, and Amaleka McCall-Brathwaite, Special Agent in Charge of the U.S. Small Business Administration, Office of the Inspector General, Eastern Region.
Gaughan, who used the alias of Richard Strauski, pleaded guilty on March 2, 2022, in the U.S. District Court for the District of Columbia to three counts: one count of wire fraud and one count of money laundering in the PPP and EIDL case, and one count of wire fraud in the case involving the Archdiocese. He was sentenced by the Honorable Tanya S. Chutkan. Following his prison term, he will be placed on three years of supervised release. He also must pay restitution, and the amount will be determined at a later date.
“For a decade, Kenneth Gaughan stole money meant to help needy people, businesses, and organizations, starting with a scheme defrauding his own employer and later looting government COVID-relief efforts,” said U.S. Attorney Graves. “He went to great lengths to conceive, carry out, and conceal his crimes. Now, he will be facing the consequences of his greed with confinement in a federal prison.”
“Kenneth Gaughan is facing the consequences for defrauding his employer for years and then enriching himself with taxpayer funds meant to help businesses and employees at a time of crisis,” said IRS-CI Special Agent in Charge Waldon. “Instead of enjoying his ill-gotten yacht, new car and home, he will now be serving his sentence in prison thanks to our IRS-CI and law enforcement partner investigators. We will continue to pursue CARES Act fraud and bring these criminals to justice.”
“This sentence demonstrates the FBI’s commitment to hold accountable those who attempt to defraud pandemic-related assistance programs designed to aid businesses and employees in these challenging times,” said FBI Special Agent in Charge Sobocinski. “We will continue to collaborate with our partners to combat this self-serving type of fraud. I want to thank our partners at the Internal Revenue Service-Criminal Investigation and the U.S. Small Business Administration, Office of the Inspector General, for their efforts in bringing Kenneth Gaughan to justice.”
“Those that commit fraud against SBA’s programs will be brought to justice and held accountable,” said SBA OIG’s Special Agent in Charge McCall-Brathwaite. “OIG remains committed to rooting out bad actors and protecting the integrity of SBA programs every day. I want to thank the U.S. Department of Justice and our law enforcement partners for their dedication and pursuit of justice.”
Scheme Involving the Archdiocese of Washington:
In his guilty plea, Gaughan admitted defrauding the Archdiocese of Washington of more than $438,000. Gaughan began working for the Archdiocese as its Director of Counseling in 2008 and was later promoted to Assistant Superintendent. In his role, Gaughan was responsible for recruiting and acting as the point of contact for contractors who provided various services to the Archdiocese. These included contractors that could help the Archdiocese implement anti-bullying, crisis intervention, and professional development programs at the approximately 95 Catholic schools overseen by the Archdiocese in Maryland and Washington, D.C. Gaughan also obtained invoices for services from contractors and provided those invoices, along with requests for payment and supporting documentation, to his superiors for approval.
Beginning in at least June 2010 and continuing through April 2018, Gaughan caused the Archdiocese to pay invoices manufactured by Gaughan purportedly for anti-bullying and crisis intervention programs, as well as for software used to send mass messages to Archdiocese students and families. To execute the scheme, Gaughan concealed his ownership and control of three companies, including by submitting forms using an alias. Gaughan then transmitted fraudulent invoices for these companies and persuaded the Archdiocese to issue checks for services that Gaughan knew the companies did not provide as represented. Gaughan opened virtual and private mailboxes to receive the checks issued to pay for the fraudulent invoices. He deposited the checks into the bank accounts he controlled and converted the money to his personal use.
Scheme Involving Government Programs:
According to court documents, Gaughan subsequently carried out his scheme targeting federal funds from at least March 2020 through August 2020. The PPP loans were created through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. These forgivable loans were to be used by businesses and organizations for payroll costs, interest on mortgages, rent and utilities. The EIDL loans, part of a program run by the Small Business Administration, also were designed to help businesses and organizations facing hardship.
In Gaughan’s case, he used funds from the two programs, in part, to purchase a $300,000 yacht, a $1.13 million rowhouse, and a $46,000 luxury sports sedan.
According to the government’s evidence, in the course of his scheme, Gaughan sought over $2.7 million in PPP loans on behalf of nine companies. Some of the applications were submitted in his own name, and others were in the name of another individual. Gaughan received approximately $2.1 million in PPP and EIDL funds through applications to SBA lenders for the companies, which falsely purport to register emotional support animals. Gaughan made false representations to receive the loan funds, including forged paperwork and bank records.
Gaughan then used a portion of the loan proceeds to purchase a 2020 Cruisers Yachts 338 CX 33-foot watercraft, a 2020 Kia Stinger, and a rowhouse in Northeast Washington.
Gaughan was arrested in both cases on Aug. 11, 2020.
At the time of Gaughan’s arrest, the government obtained a warrant authorizing the seizure of the yacht, the Kia Stinger, Gaughan’s investment account, and Gaughan’s bank accounts. The government also filed a civil forfeiture complaint against the home Gaughan purchased with his fraudulently obtained proceeds. Additionally, the government filed a lis pendens on that property to give proper notice of the forfeiture litigation and to prevent the sale of the property prior to the resolution of this case.
The matter involving the Archdiocese of Washington was investigated by the FBI. The PPP and EIDL matters were investigated by the IRS-CI, FBI, and SBA-OIG.
The cases were prosecuted by Assistant U.S. Attorney Christine Macey of the Fraud, Public Corruption, and Civil Rights Section of the U.S. Attorney’s Office for the District of Columbia; Assistant U.S. Attorney Jessica Collins of the U.S. Attorney’s Office for the District of Maryland; and Assistant U.S. Attorney Greg Bernstein, formerly of the U.S. Attorney’s Office for the District of Maryland. They were supported by Paralegal Specialists Michon Tart and Quiana Dunn-Gordon, Victim-Witness Advocate Yvonne Bryant, and Supervisory Litigation Technology Specialist Leif Hickling. The seizure and forfeiture matters were handled by Assistant U.S. Attorney Arvind Lal, former Special Assistant U.S. Attorney Matthew Grisier, former Special Assistant U.S. Attorney Steven Brantley, and Senior Attorney Advisor James S. Alexander of the Justice Department’s Money Laundering and Asset Recovery Section.
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On May 17, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of fraud related to COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
District Man Sentenced to 14 Years in Prison for Killing Man Stopped at Traffic LightRead the Press Release
WASHINGTON – Barry Marable, 26, of Washington, D.C., was sentenced today to 14 years in prison for firing a gun in a busy area of Northeast Washington and fatally wounding a 22-year-old man whose car was stopped at a traffic light.
The announcement was made by U.S. Attorney Matthew M. Graves and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD).
Marable pleaded guilty on Nov. 19, 2021, in the Superior Court of the District of Columbia, to a charge of voluntary manslaughter while armed. He was sentenced by the Honorable Neal E. Kravitz. Following his prison term, Marable will be placed on five years of supervised release.
According to the government’s evidence, on Oct 24, 2018, just before 6 p.m., the victim, Roger Thomson Marmet, known as Tom to his family and friends, was driving home from a job with the non-profit So Others Might Eat (SOME). Mr. Marmet was driving down 17th Street NE and stopped for a light at 17th and Bladensburg Road NE.
Marable, meanwhile, was in the same area. He saw a man at a nearby gas station who he believed had assaulted him about one week earlier. Marable removed a firearm from his pocket and pointed it towards the gas station. He fired four times from an alley – with two sidewalks and four lanes of traffic between him and the other man, who was unarmed. One of these shots struck Mr. Marmet, who died less than an hour later. No one else was hit by the gunfire.
Marable was arrested on Dec. 28, 2018. He has been in custody ever since.
In announcing the sentence, U.S. Attorney Graves and Chief Contee commended the work of those who investigated the case from the Metropolitan Police Department. They also expressed appreciation for the work of those who handled the case at the U.S. Attorney’s Office, including Deputy Chief Sharon Donovan, of the Office’s Homicide Section, Victim/Witness Advocate Jennifer Clark, and Paralegal Specialist Stephanie Gilbert, Finally, they commended the efforts of Assistant U.S. Attorneys Kimberley C. Nielsen and Gauri Gopal, who investigated and prosecuted the case.
Davenport Man Found Guilty of Being a Felon in Possession of a Firearm Related to a 2021 Shooting and Tampering with a WitnessRead the Press Release
DAVENPORT, IA – On August 31, 2022, a federal jury found Roylee Richardson, Jr., age 32, of Davenport, guilty of being a felon in possession of a firearm and two counts of tampering with a witness.
According to court documents and evidence presented at trial, at approximately 11:00 a.m. on February 7, 2021, officers from the Davenport Police Department were dispatched to an apartment complex at 3348 Heatherton Drive, in Davenport, related to shots fired. At the scene, officers located a shell casing, a spent slug, and two bullet fragments. Richardson was identified as the shooter, and officers subsequently located Richardson attempting to scale off a second-story balcony. Officers then located a loaded pistol inside of the apartment that Richardson had fled from. Ballistics testing confirmed that the firearm recovered was used to shoot the shell casing, spent slug, and one of the bullet fragments located. After being arrested, Richardson repeatedly called the victim, in violation of a no contact order, and in an attempt to tamper with the witness.
This is Richardson’s third conviction related to a shooting. In November 2008, Richardson was convicted of Willful Injury Resulting in Bodily Injury and Intimidation with a Dangerous Weapon, in the Iowa District Court for Scott County. In July 2016, Richardson was convicted of Intimidation with a Dangerous Weapon with Intent, Possession of a Firearm or Offensive Weapon by a Felon, Willful Injury Resulting in Bodily Injury, and Going Armed with Intent, in the Iowa District Court for Scott County.
The federal conviction for felon in possession of a firearm is punishable by a term of imprisonment not to exceed 10 years. The convictions for tampering with a witness are each punishable by terms of imprisonment not to exceed 20 years. Richardson is scheduled to be sentenced in federal court on January 24, 2023.
U.S. Attorney Richard D. Westphal of the Southern District of Iowa made the announcement.
This case was investigated by the Davenport Police Department. This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. In May 2021, the Department of Justice launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Convicted Felon Found Guilty on Drug and Gun ChargesRead the Press Release
ANNISTON, Ala. – A federal jury this week convicted a New York resident on drug and gun charges, announced U.S. Attorney Prim F. Escalona and Bureau of Alcohol, Tobacco, Firearms, and Explosives Special Agent in Charge Mickey French.
The jury returned its guilty verdict against Jerrelle Quintrez Gladden, 38, after two days of testimony before U.S. District Court Judge Corey L. Maze. Gladden was convicted of possession with intent to distribute 5 grams or more of methamphetamine, possession of a firearm in furtherance of a drug crime, and felon in possession of a firearm.
“Citizens should feel safe in their communities, families should feel safe in their homes, and children should feel safe while playing in their backyards,” U.S. Attorney Escalona said. “Gladden committed serious crimes which could have resulted in the loss of life. He now faces serious penalties. I want to commend the ATF, 7th Judicial Major Crimes Unit, the Anniston Police Department, and the prosecution team for their work on this case.”
”There is one less criminal off of our streets,” SAC French said. “We at ATF work tirelessly to keep our communities safe from people who endanger our neighborhoods. We will continue to work collaboratively with all of our law enforcement partners to combat violent crimes in an effort to maintain public safety.”
According to evidence presented at trial, in January 2020, law enforcement officers executed a state search warrant on a residence in Anniston. Police officers searched the house and found Gladden, a convicted felon, in a bedroom where officers also found digital scales with white crystal-like residue, small plastic baggies consistent with distribution, Gladden’s personal items, and 2 baggies of methamphetamine. Behind the door in the bedroom next to Gladden’s room, officers found a folded chair that contained a clear baggie of methamphetamine, a brown paper bag of U.S. currency, and two loaded firearms: a Sig Sauer 9mm pistol, and a Taurus .380 caliber pistol. The Sig Sauer was reported stolen 8 days prior to finding it during the execution of the search warrant.
The penalty for possession with intent to distribute more than 5 grams of methamphetamine is not less than 5 years, but not more than 40 years. However, the jury also found in Phase II of the trial that Gladden had been previously convicted of a serious drug felony, which enhances his punishment for this charge to not less than 10 years but no more than life in prison. The minimum penalty for possession of a firearm during a drug trafficking crime is five years in prison, which must run consecutive to any other sentence. The maximum penalty for possession of a firearm by a convicted felon is 10 years.
The ATF investigated the case along with the 7th Judicial Major Crimes Unit and the Anniston Police Department. Assistant U.S. Attorneys Brittney Plyler and Kristy Peoples are prosecuting the case.
Consultant Pleads Guilty to Providing Bribes to Public Officials to Benefit ClientsRead the Press Release
CHICAGO — A consultant pleaded guilty in federal court today to offering and providing bribes to public officials in an effort to benefit his clients.
ROBERTO CALDERO, 69, of Chicago, pleaded guilty to one count of wire fraud. The conviction is punishable by up to 20 years in federal prison. U.S. District Judge Steven C. Seeger set sentencing for Dec. 15, 2022.
The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Ashley T. Johnson, Acting Special Agent-in-Charge of the Chicago Field Office of the FBI. The Chicago Public Schools Office of Inspector General participated in the investigation. The government is represented by Assistant U.S. Attorney Michelle Kramer.
Caldero admitted in a plea agreement that in 2016 he offered and arranged for bribes to be provided to a City of Chicago alderman and a Chicago Public Schools employee in exchange for them taking official actions to benefit Caldero’s clients, who were seeking a custodial services contract at CPS, an honorary street name designation in Chicago, and the renaming of a parcel of property believed to be a Chicago Park District park. The benefits Caldero offered the CPS employee included the prospect of future employment, champagne, discounted event space for a family event, and admission to an annual benefit for a museum. To influence the alderman, Caldero arranged for campaign contributions to be made to political organizations affiliated with the alderman or his ward. Unbeknownst to Caldero, the alderman was cooperating with the FBI.
Colorado Springs Man Sentenced for Drug Trafficking and Money LaunderingRead the Press Release
DENVER – The U.S. Attorney’s Office for the District of Colorado announces Armando DeLeon, age 51, of Colorado Springs, was sentenced to 62 months in prison for distribution of cocaine and money laundering. DeLeon previously pled guilty on August 24, 2021.
According to the filed information and the stipulated facts in the plea agreement, DeLeon sold approximately three kilograms of cocaine to a confidential informant through a series of transactions from various locations, including his personal residence, between approximately July 26, 2017, and September 15, 2017. During a search warrant of DeLeon’s residence executed on October 3, 2017, a Panther Arms AR-15-style rifle and two pistols were located, along with over $27,000 cash. The defendant was prohibited from possessing firearms as a result of a prior felony conviction.
Analysis of the defendant’s bank records show DeLeon maintained a credit card in the name of his business, D&D Detailing. While DeLeon told investigators the business was shut down earlier in 2017, the credit card showed spending activity between July and October. DeLeon acknowledged making a $7,000 payment on this credit card account in July 2017 that, at least in part, included proceeds from DeLeon’s drug trafficking activity.
U.S. District Court Judge William J. Martinez sentenced the defendant on August 31, 2022.
“We appreciate our law enforcement partners identifying and investigating this case,“ said U.S. Attorney Cole Finegan. “The fact that this drug dealer is going to spend several years in federal prison should serve as a warning to others who think they can get away with this kind of illegal activity.”
“This sentencing is a great example of the combined law enforcement efforts necessary to prosecute drug traffickers and IRS:CI‘s role in unraveling their financial transactions” said IRS-Criminal Investigation Special Agent in Charge Andy Tsui. “IRS:CI is proud to provide our financial expertise as we work alongside our law enforcement partners to bring criminals to justice."
“The harm this defendant posed to the community illustrates why FBI Denver’s Southern Colorado Safe Streets Task Force is so crucial,” said Special Agent in Charge Michael Schneider. “Whether taking down one individual or a network, this case reflects the valuable partnership the FBI holds with law enforcement agencies to mitigate the distribution of illegal drugs and make our communities safer.”
This case was investigated by IRS:CI and the FBI. The case was prosecuted by Assistant U.S. Attorney Aaron Teitelbaum.
Case Number: 21-cr-00197-WJM
Co-defendants Sentenced in Methamphetamine Distribution ConspiracyRead the Press Release
Acting United States Attorney Steven Russell announced Patricia Jacobsen, 36, of Omaha, Nebraska, and Elycia Washington, 24, of Arizona, were sentenced in federal court in Omaha for conspiracy to distribute and possess with intent to distribute methamphetamine. Chief United States District Judge Robert F. Rossiter, Jr. sentenced Washington to 54 months imprisonment. Jacobsen received a total sentence of 12 years’ imprisonment as the court revoked a prior term of supervised release and added an additional year based on the revocation. Jacobsen was also ordered to forfeit $17,380.00. There is no parole in the federal system. After their release from prison, Washington will begin a five-year term of supervised release and Jacobsen will begin a 10-year term.
On October 20, 2020, Omaha Police Department officers executed a search warrant on Jacobsen’s Omaha residence and found 339.2 grams of actual methamphetamine and $17,380.00. For a few months before October 20, Jacobsen was receiving methamphetamine from Brandy Williamson who is from Arizona. Jacobsen and Williamson had an agreement in which Williamson regularly traveled to Omaha, from Arizona, to provide Jacobsen with quantities of methamphetamine to sell.
The next day officers had contact with Williamson and Washington at an Omaha hotel room. The room was searched, and officers found with 16.4 pounds of methamphetamine. Williamsons has pleaded guilty and is pending sentencing.
This case was investigated by the Omaha Police Department.
Clinton man sentenced to more than six years in prison for trafficking meth in Missoula, Flathead countiesRead the Press Release
MISSOULA — A Clinton man who admitted to trafficking methamphetamine in Missoula and Flathead counties was sentenced today to six years and four months in prison, to be followed by five years of supervised release, U.S. Attorney Jesse Laslovich said.
Michael Scott Naron, 34, pleaded guilty in April to conspiracy to distribute meth.
U.S. District Judge Donald W. Molloy presided.
The government alleged in court documents that Naron was a meth dealer in Missoula and Flathead counties from January 2020 through October 2020. In May 2020, a burglary investigation led to a search of Naron’s home in which law enforcement recovered heroin, cocaine, fentanyl, U.S. currency, two stolen firearms and other stolen items. During a traffic stop of Naron on Interstate 90 in Montana in October 2020, law enforcement later searched his vehicle and recovered meth, heroin, firearms and drug paraphernalia. Additionally, law enforcement learned from an informant that the individual provided Naron large quantities of meth and received two stolen firearms from him.
Assistant U.S. Attorney Tara J. Elliott prosecuted the case, which was investigated by the FBI’s Montana Regional Violent Crime Task Force, Missoula County Sheriff’s Office, Missoula Police Department and Montana Highway Patrol.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
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Cedar Rapids Man Sentenced to Six Months in Federal Prison for Being a Drug User in Possession of Firearms and AmmunitionRead the Press Release
A drug user who possessed firearms and ammunition was sentenced September 1, 2022, to six months in federal prison.
Douglas Studer, age 63, of Cedar Rapids, received the sentence after a November 15, 2021 guilty plea to one count of being a drug user in possession of firearms and ammunition. At the plea hearing, Studer admitted that, on May 17, 2019, he knowingly possessed two pistols and 932 rounds of ammunition while being a user of methamphetamine.
Studer was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Studer was sentenced to six months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Studer was released on the bond previously set and is to surrender to the United States Marshal on October 3, 2022.
This case was prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Dubuque Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Iowa Division of Criminal Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is CR 21-1027.
Follow us on Twitter @USAO_NDIA.
Birmingham Man Indicted on Gun ChargesRead the Press Release
BIRMINGHAM, Ala. – A federal grand this week indicted a man on gun charges, announced U.S. Attorney Prim F. Escalona and Bureau of Alcohol, Tobacco, Firearms, and Explosives Special Agent in Charge Mickey French.
A two-count indictment filed in U.S. District Court charges David Jermaine Lake, 31, of Vance, with possession of a machine gun and receipt of an unregistered firearm.
According to the indictment, in March 2022, Lake illegally possessed a Glock 9mm pistol equipped with a “Glock switch” – an after-market device designed to illegally convert a semiautomatic Glock pistol into a fully automatic machine gun.
The maximum penalty for possession of a machine gun is 10 years in prison.
The maximum penalty for receipt or possession of an unregistered firearm is 10 years in prison.
ATF investigated the case, along with the Hoover Police Department. Assistant U.S. Attorney Michael A. Royster is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
The conversion of the semiautomatic Glock pistol to a fully automatic machine gun causes the firearm to become inaccurate, spraying bullets everywhere, and increasing danger to innocent bystanders. If you know someone who has a Glock switch, you are asked to call law enforcement. Information about Glock switches can be reported to ATF at 1-888-ATF-TIPS or 1-888-283-8477.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Bayer to Pay $40 Million to Resolve the Alleged Use of Kickbacks and False Statements Relating to Three DrugsRead the Press Release
Bayer Corporation, an Indiana corporation and manufacturer of pharmaceutical products, and its related entities, Bayer HealthCare Pharmaceuticals Inc., Bayer HealthCare LLC and Bayer AG (collectively “Bayer”), have agreed to pay $40 million to resolve alleged violations of the False Claims Act in connection with the drugs Trasylol, Avelox and Baycol.
The settlement announced today arose from two “whistleblower” lawsuits filed and pursued by Laurie Simpson, a former employee of Bayer who worked in its marketing department.
In a lawsuit filed in the District of New Jersey, Simpson alleged that Bayer paid kickbacks to hospitals and physicians to induce them to utilize the drugs Trasylol and Avelox, and also marketed these drugs for off-label uses that were not reasonable and necessary. Simpson further alleged that Bayer downplayed the safety risks of Trasylol. The lawsuit alleged that as a result of this conduct, Bayer caused the submission of false claims to the Medicare and Medicaid Programs and violated the laws of 20 states and the District of Columbia. Trasylol is a drug used to control bleeding in certain heart surgeries. Avelox is an antibiotic approved to treat certain strains of bacteria.
Simpson filed a second lawsuit relating to Bayer’s statin drug, Baycol, which was later transferred to the District of Minnesota. That lawsuit alleged that Bayer knew about, but downplayed, Baycol’s risks of causing rhabdomyolysis. The lawsuit further alleged that Bayer misrepresented the efficacy of Baycol when compared to other statins and fraudulently induced the Defense Logistics Agency to renew certain contracts relating to Baycol. Subsequently, Trasylol and Baycol were withdrawn from the market for safety reasons.
“Simpson diligently pursued this matter for almost two decades,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Department of Justice’s Civil Division. “Today’s recovery highlights the critical role that whistleblowers play in the effective use of the False Claims Act to combat fraud in federal healthcare programs.”
“We recognize Simpson for her perseverance with this matter,” said U.S. Attorney Andrew M. Luger for the District of Minnesota. “We are pleased we were able to work with the parties to facilitate this resolution and help bring this longstanding matter to a close.”
“As alleged in the complaints, Bayer – one of the largest pharmaceutical companies in the world – engaged in a series of unlawful acts, including paying kickbacks to doctors and hospitals, marketing them off-label, and downplaying their safety risks,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey. “This resolution should send a message to the pharmaceutical industry that such conduct undermines the integrity of federal health care programs and jeopardizes patient safety. This settlement reflects the importance of the whistleblower’s role in litigating False Claims Act actions on behalf of the United States, and we thank Ms. Simpson and her counsel for stepping forward and pursuing this case to conclusion.”
Under the terms of the settlement, Bayer will pay $38,860,555 to the United States and $1,139,445 to the 20 states and the District of Columbia.
The two actions resolved by the settlement were brought under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens to bring suit on behalf of the government for false claims and share in any recovery. The United States may intervene in the action or, as in this case, the whistleblower may proceed with the matter. Simpson will receive approximately $11 million from the proceeds of the settlement.
The cases are captioned United States ex rel. Simpson v. Bayer Corp. Civ. No. 05-cv-3895 (D.N.J.), and United States ex rel. Simpson v. Bayer Corp., Civ. No. 08-5758 (D.Minn), and were monitored by the Civil Division’s Commercial Litigation Branch and the U.S. Attorneys’ Offices for the District of New Jersey and the District of Minnesota.
The claims settled by this agreement are allegations only, and there has been no admission of liability.
Bayer to Pay $40 Million to Resolve the Alleged Use of Kickbacks and False Statements Relating to Three DrugsRead the Press Release
MINNEAPOLIS – Bayer Corporation, an Indiana corporation and manufacturer of pharmaceutical products, and its related entities, Bayer HealthCare Pharmaceuticals Inc., Bayer HealthCare LLC and Bayer AG (collectively “Bayer”), have agreed to pay $40 million to resolve alleged violations of the False Claims Act in connection with the drugs Trasylol, Avelox and Baycol.
The settlement announced today arose from two “whistleblower” lawsuits filed and pursued by Laurie Simpson, a former employee of Bayer who worked in its marketing department.
In a lawsuit filed in the District of New Jersey, Simpson alleged that Bayer paid kickbacks to hospitals and physicians to induce them to utilize the drugs Trasylol and Avelox, and also marketed these drugs for off-label uses that were not reasonable and necessary. Simpson further alleged that Bayer downplayed the safety risks of Trasylol. The lawsuit alleged that as a result of this conduct Bayer caused the submission of false claims to the Medicare and Medicaid Programs and violated the laws of 20 states and the District of Columbia. Trasylol is a drug used to control bleeding in certain heart surgeries Avelox is an antibiotic approved to treat certain strains of bacteria Simpson filed a second lawsuit relating to Bayer’s statin drug, Baycol, which was later transferred to the District of Minnesota. That lawsuit alleged that Bayer knew about, but downplayed, Baycol’s risks of causing rhabdomyolysis. The lawsuit further alleged that Bayer misrepresented the efficacy of Baycol when compared to other statins and fraudulently induced the Defense Logistics Agency to renew certain contracts relating to Baycol. Subsequently, Trasylol and Baycol were withdrawn from the market for safety reasons.
“Simpson diligently pursued this matter for almost two decades,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Department of Justice’s Civil Division. “Today’s recovery highlights the critical role that whistleblowers play in the effective use of the False Claims Act to combat fraud in federal healthcare programs.”
“We recognize Simpson for her perseverance with this matter,” said U.S. Attorney Andrew M. Luger for the District of Minnesota. “We are pleased we were able to work with the parties to facilitate this resolution and help bring this longstanding matter to a close.”
“As alleged in the complaints, Bayer – one of the largest pharmaceutical companies in the world – engaged in a series of unlawful acts, including paying kickbacks to doctors and hospitals, marketing them off-label, and downplaying their safety risks,” said U.S. Attorney Philip R. Sellinger, District of New Jersey. “This resolution should send a message to the pharmaceutical industry that such conduct undermines the integrity of federal health care programs and jeopardizes patient safety. This settlement reflects the importance of the whistleblower’s role in litigating False Claims Act actions on behalf of the United States, and we thank Ms. Simpson and her counsel for stepping forward and pursuing this case to conclusion.”
Under the terms of the settlement, Bayer will pay $38,860,555 to the United States and $1,139,445 to the 20 states and the District of Columbia.
The two actions resolved by the settlement were brought under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens to bring suit on behalf of the government for false claims and share in any recovery. The United States may intervene in the action or, as in this case, the whistleblower may proceed with the matter. Simpson will receive approximately $11 million from the proceeds of the settlement.
The cases are captioned United States ex rel. Simpson v. Bayer Corp. Civ. No. 05-cv-3895 (D.N.J.), and United States ex rel. Simpson v. Bayer Corp., Civ. No. 08-5758 (D.Minn), and were monitored by the Civil Division’s Commercial Litigation Branch, and the U.S. Attorneys’ Offices for the District of New Jersey and the District of Minnesota.
The claims settled by this agreement are allegations only, and there has been no admission of liability.
Bayer Corp. to Pay $40 Million to Resolve Alleged use of Kickbacks and False Statements Relating to Three DrugsRead the Press Release
NEWARK, N.J. – Bayer Corp., an Indiana corporation and manufacturer of pharmaceutical products, and its related entities, Bayer HealthCare Pharmaceuticals Inc., Bayer HealthCare LLC, and Bayer AG (collectively “Bayer”), have agreed to pay $40 million to resolve alleged violations of the False Claims Act in connection with the drugs Trasylol, Avelox, and Baycol.
The settlement announced today arose from two “whistleblower” lawsuits filed and pursued by a former employee of Bayer who worked in its marketing department.
In a lawsuit filed in the District of New Jersey, the employee, Laurie Simpson, alleged that Bayer paid kickbacks to hospitals and physicians to induce them to utilize the drugs Trasylol and Avelox, and also marketed these drugs for off-label uses that were not reasonable and necessary. Simpson further alleged that Bayer downplayed the safety risks of Trasylol. The lawsuit alleged that as a result of this conduct Bayer caused the submission of false claims to the Medicare and Medicaid programs and violated the laws of 20 states and the District of Columbia. Trasylol is a drug used to control bleeding in certain heart surgeries. Avelox is an antibiotic approved to treat certain strains of bacteria.
Simpson filed a second lawsuit relating to Bayer’s statin drug, Baycol, which was later transferred to the District of Minnesota. That lawsuit alleged that Bayer knew about, but downplayed, Baycol’s risks of causing a serious syndrome that results from the death of muscle fibers and the release of their contents into the bloodstream. The lawsuit further alleged that Bayer misrepresented the efficacy of Baycol when compared to other statins and fraudulently induced the Defense Logistics Agency to renew certain contracts relating to Baycol. Subsequently, Trasylol and Baycol were withdrawn from the market for safety reasons.
“As alleged in the complaints, Bayer – one of the largest pharmaceutical companies in the world – engaged in a series of unlawful acts, including paying kickbacks to doctors and hospitals, marketing them off-label, and downplaying their safety risks,” U.S. Attorney Philip R. Sellinger, District of New Jersey, said. “This resolution should send a message to the pharmaceutical industry that such conduct undermines the integrity of federal health care programs and jeopardizes patient safety. This settlement reflects the importance of the whistleblower’s role in litigating False Claims Act actions on behalf of the United States, and we thank Ms. Simpson and her counsel for stepping forward and pursuing this case to conclusion.”
“Ms. Simpson diligently pursued this matter for almost two decades,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Department of Justice’s Civil Division. “Today’s recovery highlights the critical role that whistleblowers play in the effective use of the False Claims Act to combat fraud in federal healthcare programs.”
“We recognize Ms. Simpson for her perseverance with this matter,” said U.S. Attorney Andrew M. Luger, District of Minnesota, said. “We are pleased we were able to work with the parties to facilitate this resolution and help bring this longstanding matter to a close.”
Under the terms of the settlement, Bayer will pay $38.9 million to the United States and $1.14 million to the 20 states and the District of Columbia.
The two actions resolved by the settlement were brought under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens to bring suit on behalf of the government for false claims and share in any recovery. The United States may intervene in the action or, as in this case, the whistleblower may proceed with the matter. Ms. Simpson will receive $11 million from the proceeds of the settlement.
The resolution obtained in this matter was supported by a coordinated effort between the U.S. Attorney’s Office in the District of New Jersey, the Department of Justice Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office in the District of Minnesota.
The government is represented by Assistant U.S. Attorney Kruti D. Dharia of the District of New Jersey’s Opioid Abuse Prevention and Enforcement Unit, Senior Trial Counsel Sanjay M. Bhambhani of the Civil Division’s Commercial Litigation Branch, Fraud Section, and First Assistant U.S. Attorney Ann M. Bildtsen of the District of Minnesota.
The cases are captioned United States ex rel. Simpson v. Bayer Corp. Civ. No. 05-cv-3895 (D.N.J.), and United States ex rel. Simpson v. Bayer Corp., Civ. No. 08-cv-5758 (D.Minn).
The claims settled by this agreement are allegations only, and there has been no admission of liability.
Arizona Man Sentenced for Trafficking Fentanyl in Eastern IdahoRead the Press Release
POCATELLO – Gabriel Lopez, 46, of Tucson, Arizona was sentenced to five years in federal prison for possession with intent to distribute fentanyl, U.S. Attorney Josh Hurwit announced today.
According to court records, Lopez was arrested on July 19, 2021, after detectives with the BADGES Task Force conducted an investigation and found a bag containing 1,694 pills that tested positive for fentanyl in Lopez’s vehicle during a traffic stop. The approximate street value of the pills seized is $34,000-$42,500. Lopez admitted to police that he knew that the pills contained fentanyl.
Fentanyl is a powerful synthetic opioid that is often disguised as oxycodone, blue pills stamped with “M 30.” Most fentanyl is produced in Mexico by drug cartels. Inconsistent dosages in illicitly manufactured pills containing fentanyl have contributed to a dramatic increase in overdoses across the county. Approximately 42% of fentanyl pills seized by law enforcement have a lethal dose of fentanyl in them.
“Fentanyl is a deadly poison causing incalculable harm across country, and unfortunately Idaho is not exempt from this crisis,” said U.S. Attorney Hurwit. “We must band together to raise awareness, and our Office is grateful to work with dedicated law enforcement partners to take this drug off of our streets and to remove from our communities those who peddle it.”
“These are important cases as the drug trade and illicit drug use takes a deadly toll on our communities,” said Oregon-Idaho High Trafficking Area (HIDTA) Lieutenant Clint Skinner. “Over the past three years, we have seen an increase of fentanyl in Idaho; it is addictive and dangerous. Law enforcement agencies will continue working together to interrupt the supply while community support is needed to address demand for the drug. A five-year sentence taking almost 1,700 pills off our streets is a success. We thank all the agencies involved.”
U.S. District Judge B. Lynn Winmill also ordered Lopez to serve five years of supervised release following his prison sentence. Lopez pleaded guilty to the charge on April 28, 2022.
U.S. Attorney Hurwit, of the District of Idaho, commended the cooperative efforts of the BADGES Task Force which led to charges.
The BADGES Task Force is a multi-jurisdictional narcotics task force that identifies, disrupts, and dismantles local, multi-state, and international drug trafficking organizations using intelligence-driven, multi-agency prosecutor-supported approach. BADGES Task Force is supported by the Oregon-Idaho High-Intensity Drug Trafficking Area (HIDTA) which is composed of members from the Idaho State Police, Pocatello Police Department, Bannock County Sheriff’s Department, Chubbuck Police Department, and the Drug Enforcement Administration.
This case was handled by the U.S. Attorney Office’s specially deputized Special Assistant U.S. Attorney (SAUSA), funded by the Eastern Idaho Partnership (EIP) and the State of Idaho. The EIP is a coalition of local city and county officials in eastern Idaho as well as the Idaho Department of Correction.
The EIP SAUSA program allows law enforcement to utilize the federal criminal justice system – through the EIP SAUSA – to prosecute, convict, and sentence violent, armed criminals and drug traffickers. These criminals often receive stiffer penalties than they might in state courts.
This program was created in January 2016. Since that time, approximately 199 defendants have been indicted by the EIP SAUSA. Of these defendants, 146 have been indicted on drug trafficking charges. The defendants indicted under the program have been sentenced to 8,469 months (approximately 706 years) in federal prison, representing an average prison sentence of 54 months (4.5 years). Defendants indicted for drug trafficking offenses serve, on average, approximately 58.2 months (4.85 years) in federal prison.
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Thursday 1 September 2022
Wolf Point man admits fentanyl trafficking crimeRead the Press Release
GREAT FALLS — A Wolf Point man suspected of going to the post office and picking up a package he thought contained fentanyl pills admitted to charges today, U.S. Attorney Jesse Laslovich said.
Andre Jean Reum, 24, pleaded guilty to attempted possession with intent to distribute fentanyl. Reum faces a mandatory minimum five years to 40 years in prison, a $5 million fine and at least four years of supervised release.
Chief U.S. District Judge Brian M. Morris presided. Chief Judge Morris set sentencing for Jan. 5, 2023. The court will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Reum was detained pending further proceedings.
The government alleged in court documents that the U.S. Postal Service inspector identified a suspicious package mailed from Tacoma, Washington, to a post office box in Wolf Point, on the Fort Peck Indian Reservation. On May 23, the inspector served a search warrant on the package and found toys and plastic bags that contained suspected fentanyl. The inspector removed the suspected fentanyl and repackaged the parcel, which was delivered to the Wolf Point post office the next day. Reum went to the post office later in the day, after having checked on the package earlier in the day and on the previous day. Reum retrieved the package, spoke to a bystander and was arrested. The bystander reported that Reum had slapped the parcel and stated he had to take care of business. An analysis determined that 586 pills contained fentanyl.
Assistant U.S. Attorney Ethan R. Plaut is prosecuting the case, which was investigated by the FBI, Bureau of Indian Affairs, U.S. Postal Service, Fort Peck Tribes Department of Law and Justice and the Roosevelt County Sheriff’s Office.
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Wilmington Man Who Possessed Fake Oxycodone Pills for Resale Sentenced to 10 Years in Federal PrisonRead the Press Release
WILMINGTON, Del. – David C. Weiss, U.S. Attorney for the District of Delaware, announced that Jacquill Stovall, 33, of Wilmington, was sentenced today to 10 years in federal prison by U.S. District Judge Richard G. Andrew for possessing a stolen firearm and possessing fentanyl with the intent to distribute it.
According to court documents and statements made in open court, the Wilmington Police Department and the Drug Enforcement Administration (DEA) began investigating Stovall after he sold fake Oxycodone pills to a law-enforcement cooperator in January 2021. In a subsequent search of Stovall’s apartment in downtown Wilmington, officers found additional fake Oxycodone pills, along with a stolen firearm hidden in a kitchen cabinet. When law enforcement arrested Stovall, they found a second loaded gun in his waistband. Stovall admitted that he had been selling the pills and that he knew they were not Oxycodone. Chemical testing showed that the pills contained fentanyl, an extremely dangerous controlled substance.
U.S. Attorney Weiss commented on the sentence, “More people die every year by overdosing on fentanyl than by homicide. In the midst of an escalating opioid epidemic, Stovall sold fake Oxycodone pills to addicts. Unlike lawfully prescribed medications, these counterfeit pills had been pressed on the streets and actually contained fentanyl. And although he tried to hide it in a kitchen cabinet, Stovall also possessed a stolen firearm. Now, he will spend ten years in federal prison for his crimes.”
“This investigation is a great example of our strong partnership with the DEA and our joint efforts to make our communities safer,” stated Wilmington Department of Police Chief Robert Tracy.
“Stovall was responsible for trafficking fake pills that contained illicit fentanyl and for possessing a stolen firearm,” said Thomas Hodnett, Special Agent in Charge of the DEA’s Philadelphia Field Division. “Stopping the deadly supply of fake pills such as the ones that Stovall trafficked is the highest enforcement priority for the DEA. Learn more about the dangers of fake pills from DEA’s One Pill Can Kill campaign, which can be accessed at DEA.gov/OnePill.”
Assistant U.S. Attorney Christopher R. Howland prosecuted the case, which was investigated by WPD and the DEA.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the District of Delaware. Related court documents and information is located on the website of the District Court for the District of Delaware or on PACER by searching for Case No. 22-cr-18-RGA.
United States Awards $10 Million Default Judgment and Permanent Injunction Against Two Michigan Companies and Their Owner for the Sale of Vehicle Emission “Defeat Devices”Read the Press Release
On Aug. 29, the U.S. District Court in the Eastern District of Michigan awarded a default judgment, granting the proposed $10 million civil penalty against Diesel Ops LLC and Orion Diesel LLC of Waterford, Michigan. The violations the United States identified in its December 2021 complaint included the manufacture, sale and installation of aftermarket parts known as “defeat devices” designed to disable or bypass required vehicle emissions controls.
The court also granted the proposed $455,925 civil penalty against the owner of the two companies, Nicholas Piccolo, for failing to respond to an information request issued pursuant to Section 208 of the Clean Air Act and entered a judgment against Piccolo of slightly less than $1 million for alleged fraudulent transfers in violation of the Federal Debt Collection Procedures Act. The court entered a permanent injunction against future sales of defeat devices against all of the defendants.
“Defeat devices violate Clean Air Act emissions requirements that protect public health and the environment, including by protecting vulnerable communities that are disproportionately impacted by air pollution,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division (ENRD). “The United States will vigorously enforce the Clean Air Act, including its prohibition of illegal devices that bypass emission controls and harm the environment and public health.”
“The Environmental Protection Agency (EPA) has made it a priority to stop the manufacture, sale and installation of defeat devices, because they result in illegal and harmful emissions that continue over the life of the vehicle,” said Acting Assistant Administrator Larry Starfield for EPA’s Office of Enforcement and Compliance Assurance. “This case shows that EPA and our law enforcement partners will hold responsible those who illegally profit from defeat devices.”
“This action sends a strong message that selling and installing defeat devices on vehicles and engines will not be tolerated,” said EPA Region 5 Administrator Debra Shore. “Emission control systems on vehicles are designed to protect public health by reducing pollution, which is why EPA is committed to ensuring that companies comply with the Clean Air Act.”
As a result of EPA’s efforts to improve air quality and fuel efficiency, cars and trucks manufactured today emit far less pollution than older vehicles. To meet EPA's emission standards, engine manufacturers have carefully calibrated their engines and installed sophisticated emissions control systems. EPA testing has shown that aftermarket defeat devices can increase vehicle emissions substantially, which can contribute to a variety of public health problems typically associated with exposure to air pollution. These health effects can include premature death in people with heart or lung disease, heart attacks, irregular heartbeat, aggravated asthma, decreased lung function and respiratory symptoms such as irritation of the airways, coughing or difficulty breathing. This enforcement action is one of more than 40 civil enforcement cases initiated by EPA and the Justice Department as part of the National Compliance Initiative for Stopping Aftermarket Defeat Devices for Vehicles and Engines: https://www.epa.gov/enforcement/national-compliance-initiative-stopping-aftermarket-defeat-devices-vehicles-and-engines.
Because defeat devices contribute excess dirty emissions to communities located adjacent to highways and freight facilities, EPA regards halting the manufacture, sale, offering for sale and installation of defeat devices as key issues in working toward environmental justice.
Union City Man Sentenced to 4 Years in Federal Prison for Small Business RobberiesRead the Press Release
OAKLAND - Nelson Enrike Ramirez was sentenced today to 48 months in federal prison for multiple robberies of small stores and gas stations in East Bay and South Bay communities that affected interstate commerce, announced United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Sean Ragan. The sentence was handed down by United States District Judge Jon S. Tigar.
Ramirez, 41, of Union City, California, was charged on December 1, 2021, by a federal information for the November 3, 2020, robbery of a 7-Eleven convenience store in Campbell, California, and the November 6, 2020, robbery of a 7-Eleven in Fremont.
On April 22, 2022, Ramirez entered a plea agreement and pleaded guilty to those two robberies and admitted 21 others. In his plea agreement, Ramirez described that from May to November 2020, he committed or attempted 23 robberies of small businesses in the East and South Bay areas, including Fremont, Newark, Hayward, Union City, Campbell, Milpitas, Mountain View, Los Altos, and Sunnyvale. During the robberies and attempted robberies, he carried a black rubber replica semiautomatic firearm and brandished it, and sometimes pointed it, at store clerks when demanding money. Ramirez often apologized to the store employees, stating he needed money because he had a sick child at home – but in his plea agreement he admitted he lied. He does not have a child.
Ramirez detailed two robberies in his plea agreement. On November 3, 2020, Ramirez entered a 7-Eleven convenience store in Campbell and asked the store clerk a question. When she approached, Ramirez told the clerk he needed money because his son was sick and insurance would not cover it. He pulled the black rubber replica firearm out of his pocket and held it at his side. He instructed the clerk to open the register, then walked behind the store’s counter with the clerk. Ramirez took approximately $1,500 from the open register and fled.
Ramirez also described in his plea agreement that three days later, on November 6, 2020, he walked into a 7-Eleven store in Fremont. He told the store clerk he needed a soda. When the clerk helped him, Ramirez pulled the replica firearm out of his pocket and told the clerk he needed money. He ordered the clerk to walk to the cash register. The clerk opened the register and handed Ramirez approximately $200. Ramirez forced the clerk to open a second cash register, but it was empty. Ramirez then left the store.
In addition to the 48 month sentence, United States District Judge Tigar ordered Ramirez to pay $9,192 in restitution and to serve a three year period of supervision when he leaves prison. Ramirez was in custody at his sentencing hearing and begins serving his sentence immediately.
Noah Stern is the Assistant U.S. Attorney who is prosecuting the case, with the assistance of Karina Ruiz, Kay Konopaske, and Kathleen Turner. The prosecution is the result of an investigation by the FBI, the Fremont Police Department, the Union City Police Department, the Newark Police Department, the Hayward Police Department, the Campbell Police Department, the Milpitas Police Department, the Mountain View Police Department, the Los Altos Police Department, and the Sunnyvale Police Department.
U.S. Attorney Settles Fraud Lawsuit Against Non-Profit for Inflating Medicaid Reimbursements by Falsely Reporting Millions in CostsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Scott Lampert, the Special Agent in Charge of the New York Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), announced that the United States has settled civil fraud claims against Maranatha Human Services, Inc. (“MARANATHA”) for falsely claiming that millions of dollars expended to benefit for-profit ventures owned and controlled by MARANATHA and its founder HENRY ALFONSO COLEY (“COLEY”), as well as payments to cover COLEY’s personal expenses and excessive payments to COLEY’s family members, were reasonable and necessary costs in connection with MARANATHA’s provision of Medicaid-funded services to individuals with developmental disabilities. MARANATHA is a non-profit organization based in Poughkeepsie, New York; COLEY founded MARANATHA in 1988 and served as its chief executive officer until last year.
Specifically, the Government’s complaint, which was filed in November 2021, alleges that MARANATHA, with its board’s approval, funded for-profit companies operated by COLEY; paid excessive salaries and consulting fees to COLEY’s family members, often in exchange for little to no work; and paid for tens of thousands of dollars of COLEY’s personal expenses. The Government further alleges that, from 2010 to 2019, COLEY and MARANATHA submitted to the State of New York cost reports that falsely claimed millions of dollars of these expenses as “allowable” costs, which fraudulently inflated MARANATHA’s Medicaid reimbursement rates and resulted in MARANATHA receiving millions of dollars in Medicaid funds to which it was not entitled.
U.S. Attorney Damian Williams said: “For a decade, Henry Alfonso Coley and Maranatha defrauded Medicaid by submitting reports that fraudulently claimed as allowable expenses millions of dollars spent on for-profit companies owned by them, excessive salaries and fees for Coley’s family members, and Coley’s personal expenses. These expenses were not related to providing care or assistance to the individuals with developmental disabilities who Maranatha was meant to serve. Now Coley and Maranatha have each agreed to pay damages, Coley has been barred from working for any entity that bills federal healthcare programs, and Maranatha will close its doors.”
HHS-OIG Special Agent in Charge Scott Lampert said: “It is incumbent upon the recipient of Medicaid funds to ensure that costs reported for reimbursement are accurate and in accordance with the program’s regulations; this is a steadfast requirement of participating in the Medicaid program. The use of federal dollars for unallowable expenses diverts much-needed resources meant to support health care services for vulnerable individuals. Putting a stop to such activity, through collaboration with our law enforcement partners, is a prime objective of HHS-OIG.”
Under the settlement approved yesterday by U.S. District Judge Kenneth M. Karas, MARANATHA agrees to cease operations after transitioning the operation of its programs to other providers under the supervision of the governing state regulatory agency. MARANATHA will also pay $340,000 to the United States and has admitted and accepted responsibility for conduct alleged by the Government in its complaint as further described below. In addition, MARANATHA has agreed to pay $510,000 to the State of New York to resolve the State’s claims, for a total recovery of $850,000. The settlement amount is based on the Office’s assessment of MARANATHA’s ability to pay based on the financial information it provided and its commitment to cease operations. The United States previously resolved the claims against COLEY through a settlement approved by Judge Karas on November 17, 2021. In addition to paying damages to the United States and the State of New York, COLEY was barred from working for any entity that bills federal healthcare programs; he also entered into a Voluntary Exclusion Agreement with HHS-OIG, which prohibits him from, among other things, billing Medicaid and other federal healthcare programs for 15 years.
According to the Government’s complaint, from 2010 through 2019:
MARANATHA was required to submit cost reports, called Consolidated Financial Reports (“CFRs”), to the State of New York each year, specifying the reasonable and necessary costs MARANATHA incurred in providing services for its Medicaid-funded programs. These costs were to be reported as “allowable” costs. MARANATHA was required separately to report its other, “non-allowable” costs; “non-allowable” costs include costs unrelated to its Medicaid-funded programs, as well as any unreasonable or unnecessary costs.
With its board’s approval, MARANATHA funded for-profit companies operated by COLEY and owned by COLEY or MARANATHA, as well as various unincorporated pet projects started by COLEY. One of the chief purposes of these ventures was to serve as vehicles to funnel money to COLEY’s daughter, as well as others associated with COLEY, whom MARANATHA paid for work they purportedly did to support these ventures and projects. Over the course of a decade, not one of these ventures ever launched a product or service or earned a single dollar in revenue. COLEY and MARANATHA hired COLEY’s family members as employees and consultants, some in connection with these for-profit ventures, and others in connection with MARANATHA’s Medicaid-funded services. COLEY and MARANATHA paid excessive salaries and consulting fees to COLEY’s family members, often in return for little to no work. MARANATHA also paid for tens of thousands of dollars of COLEY’s personal expenses, including more than $34,000 for personal training sessions at a gym.
COLEY and MARANATHA knowingly submitted CFRs annually to the State of New York fraudulently reporting these expenses—totaling millions of dollars—as “allowable” costs. On each CFR, COLEY falsely certified to the completeness and accuracy of the report. COLEY and MARANATHA knew that the State of New York relied on providers’ CFRs when setting provider-specific reimbursement rates for certain Medicaid-funded programs, including MARANATHA’s largest Medicaid-funded program. As a result of COLEY’s and MARANATHA’s falsely inflated cost reports, the State of New York awarded MARANATHA a higher reimbursement rate and MARANATHA received millions of dollars in Medicaid funds to which it was not entitled.
As part of the settlement, MARANATHA admits, acknowledges, and accepts responsibility for the following conduct:
- COLEY made a presentation to MARANATHA’s board of directors acknowledging that “[i]t was always the plan for Maranatha to use government funds as a launching pad to create private enterprise that would enable it to not be dependent on [the] government while at the same time fulfilling its function” consistent with its mission.
- MARANATHA knew of the requirement to distinguish “allowable costs” from “non-allowable costs” in its CFRs.
- MARANATHA knew that the allowable costs reported in its CFRs are used by the New York State Department of Health, in part, to determine MARANTHA’s reimbursement rates for the provision of Medicaid services.
- In each CFR that MARANATHA submitted from 2010 to 2019 (the “Covered Period”), MARANATHA’s CEO, COLEY, certified that (i) the “information furnished in this report . . . is in accordance with the instructions and is true and correct to the best of my knowledge”; and (ii) the statement attached to the CFR “fully and accurately represents all reportable income and expenditures made for services performed in accordance with the provision of the Mental Hygiene Law and approved budgets.”
- Throughout the Covered Period, MARANATHA submitted CFRs every year that reported as “allowable costs” amounts expended not for MARANTHA’s provision of Medicaid-funded services but instead to pursue certain for-profit business ventures.
- In particular, MARANATHA submitted CFRs reporting as “allowable costs” costs expended to benefit certain entities owned and/or operated by COLEY or MARANATHA that did not provide Medicaid-funded services (the “Non-Medicaid Ventures”).
- MARANATHA’s board, which approved MARANATHA funding these Non-Medicaid Ventures, was briefed on them by COLEY.
- MARANATHA paid COLEY’s family members to perform work related to the Non-Medicaid Ventures. For example, since 2010, MARANATHA paid COLEY’s daughter more than $300,000. Though much of her time was spent on work related to the Non-Medicaid Ventures, MARANATHA reported her full compensation as an “allowable cost” in the CFRs.
- Since 2010, MARANATHA paid COLEY more than $2 million in salary and benefits, and MARANTHA claimed the full amount of that compensation as “allowable costs” on its CFRs. However, COLEY devoted much of his time to working on the Non-Medicaid Ventures.
- MARANATHA also paid for certain of COLEY’s personal expenses, including more than $34,000 spent on personal training sessions, as well as holiday gifts and jewelry. MARANATHA reported these expenses as “allowable costs” in its CFRs.
This lawsuit originated as a whistleblower lawsuit filed under seal pursuant to the False Claims Act.
Mr. Williams praised the outstanding investigative work of HHS-OIG, and he thanked the Medicaid Fraud Control Unit at the New York State Attorney General’s Office for its extensive collaboration in the investigation.
The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Jacob Lillywhite is in charge of the case.
Three Men Arrested in Unemployment Insurance Fraud ConspiracyRead the Press Release
ALBANY, NEW YORK – Thomas Brace a/k/a “Justice,” age 61, of Altoona, Pennsylvania, and formerly of Albany; Taliek Lanier, age 22, of Albany; and Errol Murray, age 21, of Yonkers, New York, were arrested this week on an indictment alleging their participation in a conspiracy to defraud the New York State Department of Labor (NYSDOL). The defendants allegedly conspired with Jamie Johnson, who previously pled guilty to fraudulently obtaining $701,441 in unemployment insurance benefits under the names of other people, including benefits funded by the federal government in response to the COVID-19 pandemic.
The announcement was made by United States Attorney Carla B. Freedman; New York State Inspector General Lucy Lang; Matthew Scarpino, Acting Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI); Ketty Larco-Ward, Inspector in Charge of the Boston Division of the United States Postal Inspection Service (USPIS); and Jonathan Mellone, Special Agent in Charge, New York Region, United States Department of Labor, Office of Inspector General (USDOL-OIG).
The indictment alleges that Brace, Lanier, and Murray provided Johnson with the personal identifying information of other people, which Johnson used to file false claims via the NYSDOL website. The charges in the indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty.
Murray was arraigned yesterday before United States Magistrate Judge Daniel J. Stewart and released with conditions pending trial. Brace also appeared yesterday before Judge Stewart and is scheduled to be arraigned tomorrow. Lanier appeared today before a federal magistrate judge in the Middle District of Pennsylvania, was released with conditions, and will be arraigned before Judge Stewart on September 7.
The defendants are charged with mail and wire fraud, as well as aggravated identity theft. The mail and wire fraud charges carry a maximum term of 20 years in prison, a fine of up to $250,000, and a term of supervised release of up to 3 years. The charges for aggravated identity theft carry a mandatory term of 2 years in prison, to be imposed consecutive to any other term of imprisonment. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case was investigated by the New York State Inspector General’s Office, HSI, USPIS, and USDOL-OIG, with assistance from the NYSDOL Office of Special Investigations, the Capital Region Crime Analysis Center, and the Albany County Department of Social Services. The case is being prosecuted by Assistant U.S. Attorney John T. Chisholm.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The Willow Domestic Violence Center in Rochester and Community Services for Every1 and the Family Justice Center in Buffalo Awarded Grants from the Office on Violence Against WomenRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, NY – U.S. Attorney Trini E. Ross announced today that two organizations in the Western District of New York have been awarded grants from the Department of Justice’s Office on Violence Against Women (OVW). OVW has awarded nearly $31 million across the country to improve outreach, services, and support for survivors of sexual assault, domestic violence, dating violence, and stalking from underserved communities and culturally specific populations.
The Willow Domestic Violence Center of Greater Rochester received a $450,000 OVW Underserved Program grant award to serve Deaf, Deaf-Blind, and hard of hearing survivors of sexual assault, domestic violence, dating violence and stalking in Monroe County. Deaf Ignite, a Deaf victim services program housed within Willow, will provide advocacy, counseling, community education, and referrals.
Community Services for Every1 and the Family Justice Center of Erie County received a $325,000 grant under OVW’s Disabilities Program to advance the work of their collaborative Helping Others through Protection and Empowerment of Western New York (HOPE of WNY) initiative, which focuses on intellectual/developmental disabilities. Community Services for Every1 and the Family Justice Center will engage local nonprofit organizations, government agencies, and other domestic violence stakeholders in training strategies that foster improved supports for survivors with intellectual/developmental disabilities diagnoses and connect people with intellectual/developmental disabilities to empowering education and victim support opportunities.“These grants, awarded to agencies in the Western District of New York, will ensure that survivors of serious crimes from underserved communities, including survivors with disabilities, have access to vitally important support services, including counseling, advocacy, and education,” said U.S. Attorney Ross.
OVW provides leadership in developing the nation’s capacity to reduce violence through the implementation of the Violence Against Women Act and subsequent legislation. Created in 1995, OVW administers financial and technical assistance to communities across the country that are developing programs, policies, and practices aimed at ending domestic violence, dating violence, sexual assault, and stalking. In addition to overseeing federal grant programs, OVW undertakes initiatives in response to special needs identified by communities facing acute challenges. Learn more at www.justice.gov/ovw.
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Texas Woman Admits to Collecting $1.26 Million in Romance Scam ProceedsRead the Press Release
PROVIDENCE – A Houston, TX, woman today admitted to a federal judge in Providence, RI, that she participated in a conspiracy that scammed unsuspecting and trusting victims of more than $2.6 million dollars through internet-based “romance scams,” and that she personally collected more than $1.26 million dollars in cash, checks, money orders, and wire transfers from individuals from across the United States, and deposited the funds into bank accounts she controlled, announced United States Attorney Zachary A. Cunha.
Dominique Golden, 31, admitted that, as part of the scam, she opened mailboxes and bank accounts in the names of fake individuals and businesses for the purpose of receiving and depositing “romance scam” victim funds. From approximately February 4, 2018, through December 12, 2018, she collected and deposited a total of $1,263,822.54 into bank accounts she controlled.
A United States Postal Inspection Service investigation determined that, collectively, members of the conspiracy defrauded victims of approximately $2,619,839.
To carry out the scheme, members of the conspiracy contacted victims via the internet and app-based communication platforms, cultivated relationships of trust, convinced the victims that money was needed, and then directed the victims to send money via mail or wire transfer to various persons, including Golden. Golden was aware that other members of the conspiracy contacted and developed relationships with the victims for the sole purpose of perpetrating the scam.
Golden pleaded guilty today to one count each of conspiracy to commit mail fraud and wire fraud. She is scheduled to be sentenced on December 6, 2022. The defendant’s sentence will be determined by a federal district judge after consideration of the U.S. Sentencing Guidelines and other statutory factors.
The case is being prosecuted by Assistant United States Denise M. Barton, with the assistance of Assistant United States Attorney Dulce Donovan.
According to a plea agreement filed in this matter, Golden will forfeit all interest in any fraud-related assets traceable or derived from her criminal conduct; this includes a 2018 Bentley Bentayga; a 2017 Mercedes E-Class; a gold oyster perpetual women’s Rolex watch; a gold oyster perpetual men’s Rolex watch; a gold and diamond Rolex bezel; a 16” gold rope chain with a diamond coin pendant; a 24” gold rope chain; three firearms; and $11,731 seized from her home and from the Bentley.
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Terrebonne Parish Men Indicted for Conspiracy to Distribute CocaineRead the Press Release
NEW ORLEANS, LOUISIANA – ANTHONY MONREAL-FABELA, age 21, a resident of Houma, Louisiana, and DIOGO HERNANDEZ, age 18, a resident of Bourg, Louisiana, were charged August 4, 2022, in a sealed one-count indictment by a federal grand jury.
According to court documents, beginning on or about June 14, 2022 and continuing until on or about July 27, 2022, MONREAL-FABELE and HERNANDEZ conspired to distribute and possess with intent to distribute five kilograms or more of cocaine, in violation of Title 21, United States Code, Sections 841(a)(1), 841(b)(1)(A), and 846, announced U.S. Attorney Duane A. Evans. The indictment was unsealed on August 23, 2022.
If convicted, MONREAL-FABELA and HERNANDEZ face a mandatory minimum sentence of ten years, up to maximum of life imprisonment, a fine of up to $10,000,000, at least five years of supervised release following any term of imprisonment, and a $100 mandatory special assessment fee
U.S. Attorney Evans reiterated that the indictment is merely a charging document and that the guilt of the defendants must be proven beyond a reasonable doubt.
This case was investigated by the United States Homeland Security Investigations, Jefferson Parish Sheriff’s Office, and United States Customs and Border Protection. The prosecution is being handled by Assistant United States Attorney J. Benjamin Myers.
Tampa Gang Leader Sentenced to Nearly Four Years for Possessing A Firearm as A Convicted FelonRead the Press Release
Tampa, Florida – U.S. District Judge Mary S. Scriven has sentenced Devin Kelly (27, Tampa) to three years and ten months in federal prison for possessing a firearm and ammunition as a convicted felon. The court also ordered Kelly to forfeit the firearm and ammunition used in the offense. Kelly had pleaded guilty on April 19, 2022.
According to court documents, on July 2, 2021, Kelly, a convicted felon, and Keyshawn Watts, also a convicted felon, held and displayed a rifle during an Instagram live video. One week later, investigators searched Kelly’s residence and seized a Ruger AR .556 caliber rifle and an extended magazine loaded with 40 rounds of ammunition. The rifle had features that matched those of the rifle observed by investigators on the Instagram live video. Kelly admitted that the rifle was the same firearm he had displayed on the video.
Kelly was a member of the Bloods street gang and held a leadership position within the gang. At the time he possessed the firearm, Kelly had been convicted of multiple felony offenses, including aggravated assault and being a felon in possession of a firearm, and therefore, he is prohibited from possessing a firearm or ammunition under federal law.
Watts previously pleaded guilty to the same offense. His sentencing hearing is scheduled for October 4, 2022.
This case was investigated by the Federal Bureau of Investigation and the Tampa Police Department. It was prosecuted by Assistant United States Attorney Michael Sinacore.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Syracuse Man Sentenced to Prison for Drug TraffickingRead the Press Release
SYRACUSE, NEW YORK – Marquail Jones, age 33, of Syracuse, was sentenced yesterday to 96 months in prison for distributing cocaine, cocaine base and fentanyl. The announcement was made by United States Attorney Carla B. Freedman; Frank A. Tarentino III, Special Agent in Charge of the U.S. Drug Enforcement Administration (DEA), New York Division; and Kevin P. Bruen, Superintendent of the New York State Police.
In previously pleading guilty, Jones admitted he trafficked cocaine, cocaine base and fentanyl from Syracuse to the areas of Glens Falls and Plattsburgh, New York. Jones admitted that when police pulled him over in Plattsburgh on December 18, 2020, he possessed 82 grams of cocaine, 8.8 grams of cocaine base and 38 grams of fentanyl that he intended to distribute. Jones also admitted that he had distributed another 82 grams of cocaine just before he was pulled over.
Senior United States District Judge Norman A. Mordue also imposed a 3-year term of supervised release, which will start after Jones is released from prison.
This case was investigated by the DEA and New York State Police, and was prosecuted by Assistant U.S. Attorney Douglas Collyer.
Surgeon Pleads Guilty to Federal Charge for Accepting $3.3 Million in Illicit Payments to Perform Spinal Surgeries at Corrupt HospitalRead the Press Release
LOS ANGELES – A neurosurgeon pleaded guilty today to a federal criminal charge for accepting approximately $3.3 million in bribes for performing spinal surgeries at a now-defunct Long Beach hospital whose owner later was imprisoned for committing a massive workers’ compensation system scam.
Lokesh Tantuwaya, 55, of San Diego, pleaded guilty to one count of conspiracy to commit honest services fraud and to violate the federal Anti-Kickback statute. He has been in federal custody since May 2021 after he was found to have violated the terms of his pretrial release.
According to his plea agreement and statements at today’s change-of-plea hearing, from 2010 to 2013, Tantuwaya accepted money from Michael Drobot, who owned Pacific Hospital in Long Beach, in exchange for Tantuwaya performing spinal surgeries at that hospital. The bribe amount varied depending on the type of spinal surgery.
Pacific Hospital specialized in surgeries, especially spinal and orthopedic procedures. Drobot conspired with doctors, chiropractors and marketers to pay kickbacks and bribes in return for the referral of thousands of patients to Pacific Hospital for spinal surgeries and other medical services paid for primarily through the California workers’ compensation system. During its final five years, the scheme resulted in the submission of more than $500 million in medical bills for spine surgeries involving kickbacks.
Tantuwaya entered into contracts with Drobot and Drobot-owned companies. Tantuwaya admitted in his plea agreement that he knew or deliberately was ignorant that the payments were being given to him in exchange for bringing his patient surgeries to Pacific Hospital.
In furtherance of the scheme, Tantuwaya met with Drobot and Drobot’s employees. Tantuwaya further admitted to depositing bribe checks into his bank accounts.
Tantuwaya admitted that he knew the receipt of money in exchange for the referral of medical service was illegal and that he owed a fiduciary duty to his patients to not accept money in exchange for taking their surgeries to Pacific Hospital.
In total, Tantuwaya received approximately $3.3 million in illegal payments.
In April 2013, law enforcement searched Pacific Hospital, which was sold later that year, bringing the kickback scheme to an end.
To date, 23 defendants have been convicted for participating in the kickback scheme.
United States District Judge Josephine L. Staton scheduled a December 9 sentencing hearing, at which time Tantuwaya will face a statutory maximum sentence of five years in federal prison.
The FBI, IRS Criminal Investigation, United States Postal Service Office of Inspector General, and the California Department of Insurance investigated this matter.
Assistant United States Attorneys Joseph T. McNally and Billy Joe McLain of the Violent and Organized Crime Section are prosecuting this case.
St. Peters woman accused of $200,000 pandemic loan fraudRead the Press Release
ST. LOUIS – A grand jury on Wednesday indicted a woman from St. Peters, Missouri on charges accusing her of committing a $204,095 fraud involving a loan program intended for small businesses to continue to pay their employees during the pandemic.
The indictment says that from June 2020 through April 2021, Trashunda M. Harrison, 36, submitted multiple applications for Paycheck Protection Program loans in the names of three businesses: The Quiet Space LLC, Blow LLC and StrutN 80s LLC, as well as in her own name as a sole proprietor. On the application, Harrison made false representations about the payroll and income of the businesses and submitted fraudulent tax forms to support her false claims. On applications for additional loans, she falsely claimed to have used the first loan for payroll and other business expenses.
Harrison spent the PPP money on unapproved purposes, including shopping, dining, rent and payments to individuals who had no affiliation with the companies, the indictment says.
Harrison was indicted on two counts of bank fraud and seven counts of wire fraud. Each bank fraud charge carries a potential penalty of 30 years in prison, a $1 million fine, or both. The wire fraud charges carry a penalty of up to 20 years in prison, a $250,000 fine, or both.
Charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
The case was investigated by the FBI. Assistant U.S. Attorney Jonathan Clow is prosecuting the case.
St. Martinville Man Sentenced for Possession of MethamphetamineRead the Press Release
LAFAYETTE, La. - United States Attorney Brandon B. Brown announced that Irvin J. Butler, 41, of St. Martinville, Louisiana, was sentenced today. United States District Judge Robert R. Summerhays sentenced him to 151 months (12 years, 7 months) in prison, followed by 5 years of supervised release, on drug trafficking charges. Butler pleaded guilty on May 20, 2022 to possession with intent to distribute methamphetamine.
On March 26, 2019, agents with the United States Postal Inspection Service intercepted a suspicious package which had been mailed from Arizona to an address in Lafayette, Louisiana. Agents deployed a canine trained in detecting narcotics who positively alerted on the seized package. A search warrant was obtained and later that day, agents conducted a controlled delivery of the package to the residence at the location specified by the sender. After the package was delivered, a female appeared and took possession of it. Agents were able to execute the search warrant and confirmed that the package contained approximately 1,858 grams of methamphetamine.
Further investigation by agents revealed that Butler had made two wire transfers to an individual in Arizona and had been tracking the package via the internet after it had been placed in the mail in Arizona. The female who took possession of the package admitted to agents that she had been dating Butler and he had packages sent to her residence. In addition, Butler sent a text message to the girlfriend that the package would be delivered to her residence that day. The seized substance was sent to the Acadiana Criminalistics Laboratory for analysis and the results confirmed that the substance was in fact methamphetamine.
The case was investigated by the U.S. Postal Inspection Service and was prosecuted by Assistant U.S. Attorney Craig R. Bordelon.
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South Windsor Woman Sentenced to 5 Years in Federal Prison for Defrauding Immigrant Clients, USCISRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, announced that KHATIJA KHAN, 41, of South Windsor, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to 60 months of imprisonment, followed by three years of supervised release, for conspiracy and fraud offenses related to a scheme through which individuals seeking immigration services were defrauded.
According to court documents and statements made in court, Khan and her husband, Babar Khan, operated JLLAS CORP. and EIMAAN LLC, which were created to provide services to clients involved in proceedings with U.S. Citizenship and Immigration Services (“USCIS”). From 2015 to 2020, the Khans recruited clients who sought some form of immigration status, relief or benefit. Many of these clients were aliens residing in the U.S. without legal status and had limited education, a limited ability to understand English, and little to no knowledge of the documents that the Khans were filing with USCIS on their behalf.
Khatija Khan represented herself as an attorney with a background in immigration matters, even though she was not an attorney. The Khans prepared petitions and applications for their clients that contained information that they knew to be false. They also fabricated false documents to support their clients’ applications with USCIS without their clients’ knowledge. They then mailed, or caused to be mailed, these fraudulent applications and documents to USCIS, where they were received and made part of the official Alien file of each respective client.
Many of the Khans’ clients received no relief from USCIS despite paying the Khans significant amounts of money. To generate fees from clients, Khatija Khan filed applications with USCIS even when the submissions lacked merit or a legitimate basis.
Khatija and Babar Khan were arrested on December 19, 2019. After her arrest, Khatija Khan continued to defraud multiple clients.
Victims identified to date have lost at least $326,212 as a result of this scheme. Judge Underhill ordered Khatija Kahn to pay full restitution.
On November 19, 2021, Khatija Khan pleaded guilty to one count of conspiracy to commit mail fraud and one count of mail fraud.
Khatija Khan, who is released on bond, is required to report to prison on December 14.
On February 28, 2022, Babar Khan pleaded guilty to one count of conspiracy to commit mail fraud and one count of making and subscribing a false tax return. He is scheduled to be sentenced tomorrow.
This matter is being investigated by Homeland Security Investigations (HSI), and the Internal Revenue Service – Criminal Investigation Division, with assistance from U.S. Citizenship and Immigration Services. This case is being prosecuted by Assistant U.S. Attorney Hal Chen.
South Florida Federal Judge Orders Prison Time for Former Pharmatech CEORead the Press Release
Miami, Florida – A former owner and CEO of a Broward County drug manufacturing company who lied to the FDA and allowed contaminated products to make their way to pediatric hospitals was sentenced yesterday to 37 months in federal prison.
Raidel Figueroa co-owned Pharmatech, LLC, a company that from 2016 to 2017 manufactured and distributed the laxative Diocto Liquid. In July 2016, as part of a larger investigation into an outbreak of infections linked to bacteria known as Burkholderia cepacia (“B. cepacia”), the FDA inspected Pharmatech’s operations. Typically found in water and soil, and transmissible through contaminated medications, B. cepacia can lead to respiratory and other infections for people with weak immune systems, chronic lung disease, and other conditions.
The FDA notified Figueroa in August 2016 that a sample taken from Pharmatech’s water system had tested positive for B. cepacia. Figueroa assured the FDA that Pharmatech would re-engineer its purified water system to prevent future contaminations.
In March 2017, the FDA again inspected Pharmatech’s operations and asked Figueroa to disclose all products that the company had manufactured since its supposed water system upgrade. Figueroa lied to the FDA investigators by knowingly excluding Diocto Liquid from its products distribution list (even though Pharmatech shipped over 7,000 units of the drug earlier that month) and by telling the FDA that Pharmatech’s new water system had met “acceptance criteria,” which was not true.
In July 2017, the CDC notified the FDA of multiple B. cepacia infections in pediatric patients at Stanford Children’s Health Lucile Packard Children’s Hospital in Palo Alto, California and Johns Hopkins Children’s Center in Baltimore, Maryland. The FDA investigated, collecting bottles of Diocto Liquid from these medical centers. Several of the bottles contained unacceptable amounts of bacteria, yeast, and mold. Some bottles tested positive for B. cepacia. The FDA’s investigation revealed that Pharmatech had distributed those same bottles in March 2017 – something that Figueroa knowingly failed to disclose to the FDA.
In June, Raidel pled guilty to conspiring to defraud the FDA, falsifying records in an FDA investigation, obstructing proceedings before the FDA, and distributing adulterated drugs.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and Justin C. Fielder, Special Agent in Charge, Food and Drug Administration (FDA) Office of Criminal Investigations Miami Field Office, announced the sentence imposed by Senior United States District Judge James I. Cohn.
The FDA Office of Criminal Investigations, Miami Field Office investigated the case. Assistant U.S. Attorney Deric Zacca is prosecuting this case, with the assistance of Laura Akowuah, from FDA’s Office of Chief Counsel.
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, under case number 22-cr-60033.
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Shreveport Businesswoman Pleads Guilty in CARES Act Fraud SchemeRead the Press Release
SHREVEPORT, La. - United States Attorney Brandon B. Brown announced that Janola Massaquoi, 41, of Shreveport, Louisiana, pleaded guilty today before Chief United States District Judge S. Maurice Hicks, Jr. to making false statements to a federal agency.
In March 2020 Congress enacted the Coronavirus Aid, Relief and Economic Security (CARES) Act which was designed to provide emergency financial assistance to the millions of Americans who were suffering the economic effects caused by the COVID-19 pandemic. As part of the CARES Act, the Small Business Administration (SBA) provided Economic Injury Disaster Loans (EIDL), which were low-interest financing to small businesses, renters and homeowners in regions affected by declared disasters. The CARES Act also provided authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through a program referred to as the Paycheck Protection Program (“PPP”).
According to evidence presented to the court, Massaquoi formed the Jane Elizabeth Education Group (JEEG) in 2018 and also served as the president of a beauty career training company. In 2020, Massaquoi applied to the SBA for an EIDL in the name of JEEG d/b/a Company 1 seeking approximately $500,000 in EIDL Program funds. At the same time, she applied for a PPP loan in the name of JEEG d/b/a Company 1 seeking $178,750.
On or about April 20, 2020, as part of the EIDL application process, Massaquoi electronically submitted to the SBA a Loan Authorization and Agreement in which she certified to the SBA that “[JEEG] will not, without the prior written consent of SBA, make any distribution of Borrower’s assets, or give any preferential treatment, make any advance, directly or indirectly, by way of loan, gift, bonus, or otherwise to any owner or partner…” Massaquoi also certified that the loan funds would be used solely as working capital for JEEG.
Both loan applications were subsequently approved. Based on Massaquoi’s material misrepresentations set forth in the false Loan Authorization and Agreement, the SBA disbursed approximately $500,000 in EIDL benefits to a bank account held by Company 1. On April 23, 2020, approximately $178,750 in PPP loan benefits were disbursed to a bank account held by Company 1.
In reality and unbeknownst to the SBA, Massaquoi intended to make a large advance directly to herself and did not intend to use the EIDL funds solely as working capital for JEEG. After obtaining the loan benefits, Massaquoi transferred funds from Company 1’s bank account to other bank accounts she personally controlled and used the funds for a variety of personal expenses including a down payment on the purchase of a personal residence and mortgage payments. Massaquoi also withdrew over $30,000 in cash, transferred over $50,000 to friends and family members, and used approximately $83,000 to fund her personal investment and retirement accounts. In total, Massaquoi used $250,000 of the EIDL proceeds for her personal use.
“This defendant took advantage of taxpayer dollars at one of the most vulnerable times in American history,” stated U.S. Attorney Brandon B. Brown. “Over the last few years, small businesses have struggled to survive during the pandemic. Massaquoi exploited an opportunity given by the government to provide legitimate financial assistance to said businesses. Individuals who commit such fraud will be investigated and ultimately prosecuted. We will continue to work with our federal partners who have allocated their investigative resources toward combating this type of fraud.”
Massaquoi faces a sentence of not more than 5 years in prison, 3 years of supervised release, and a fine of up to $250,000. Sentencing has been set for January 11, 2023.
The case was investigated by the Department of Treasury-Inspector General for Tax Administration and Internal Revenue Service-Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Seth D. Reeg.
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 of Justice’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.
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Scranton Doctor Sentenced to 140 Months’ Imprisonment for Unlawfully Prescribing Controlled Substances and Health Care FraudRead the Press Release
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Scranton physician, Kurt Moran, age 70, was sentenced yesterday by United States District Court Judge Robert D. Mariani to 140 months’ imprisonment for unlawful distribution of controlled substances and engaging in a health care fraud scheme.
According to the United States Attorney Gerard M. Karam, Moran previously pleaded guilty to crimes related to the unlawful distribution of a controlled substance (Subsys), maintaining drug-involved premises, and health care fraud. As part of his plea agreement, Moran also agreed that he knowingly and intentionally distributed oxycodone and fentanyl, Schedule II controlled substances, outside the usual course of professional practice and not for legitimate medical purposes, and that the death of one of his patients resulted from the use of the substances.
With respect to the health care fraud scheme, Moran admitted that between December 2014 and through 2017, he conspired with others to receive bribes in exchange for prescribing the drug Subsys (sublingual fentanyl spray) to his patients. Subsys is a transmucosal immediate release fentanyl (TIRF) drug. It is approved by the Food and Drug Administration (FDA) only for use in cancer patients suffering from breakthrough cancer pain. Moran admitted that Insys Therapeutics paid him approximately $140,000 over a two-year period to prescribe Subsys to his patients for pain not associated with cancer. In order to conceal and disguise that kickbacks and bribes were being paid to Moran to prescribe Subsys, the company falsely designated the payments to Moran as “honoraria” for purportedly providing educational presentations regarding Subsys. Moran prescribed millions of micrograms of the sublingual fentanyl spray to patients with no cancer diagnosis and not suffering from breakthrough cancer pain.
Moran surrendered his DEA registration on September 18, 2020. His license to practice medicine in the Commonwealth of Pennsylvania was suspended on October 7, 2020.
Judge Mariani ordered Moran to serve 3 years of supervised release upon release from custody. Forfeiture of illicit proceeds were also ordered forfeited by Judge Mariani and included unlawful proceeds in the amount of $140,000; his medical license; the contents of a bank account in the amount of $12,570.45; and $5,430.00 seized from Moran in January 2018.
Restitution in the amount of $6,586.00 related to funeral expenses was also ordered.
The case was investigated by the Drug Enforcement Administration (DEA) located in Scranton, the United States Postal Service – Office of Inspector General, U.S. Department of Labor – Office of Inspector General, and the Pennsylvania Attorney General’s Office. Assistant United States Attorneys Michelle Olshefski and Michael Consiglio prosecuted the case.
This case was prosecuted as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin and other opioids. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin and opioid traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit opioid trafficking offenses.
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Round Rock Man Sentenced to 10 Years in Prison for Fraud SchemesRead the Press Release
AUSTIN – Last week, a federal judge sentenced Okanlawon Azeez Egerongbe, aka Tony Kunle, Alex Tohee, 37, of Round Rock to 120 months in prison and to pay $633,520 in restitution for his role in a money laundering scheme.
On May 18, 2021, Egerongbe pleaded guilty to one count of conspiracy to commit money laundering. According to court records, Egerongbe knowingly laundered millions of dollars from victims that he obtained through various fraud schemes. The frauds included romance, business email compromise (BEC), unemployment insurance, and investment scams all designed to trick innocent victims through false pretenses. The amount of attempted and actual loss from the conspiracy was at least $3.5 million. To perpetuate the frauds, Egerongbe used fake passports to open multiple bank accounts in Austin. He would then structure withdrawals into smaller amounts to avoid a transaction reporting requirement. Many victims faced serious financial hardship from these schemes.
“My office will continue to pursue fraudsters and identity thieves who use the internet to prey on vulnerable victims online,” said U.S. Attorney Ashley C. Hoff. “That includes the money launderers who enable these transnational criminal networks by concealing and transferring their ill-gotten gains. The tragic suicide of one of the romance fraud victims in this case, who suffered the betrayal and the loss of so much hard-earned money, underscores the real-world impact of these online scams.”
“Let this sentence serve as a notice that Homeland Security Investigations (HSI) is committed to actively investigating individuals who prey on the vulnerable to perpetuate financial crimes,” said Acting Special Agent in Charge Craig Larrabee, HSI San Antonio. “These types of crimes have devastating effects on the victims and our financial institutions. HSI will continue to aggressively pursue cyber criminals and financial fraudsters to the full extent of the law and will fight to recover and legally return victim’s funds to their rightful owner.”
“The U.S. Postal Inspection Service (USPIS) has a long and proud history of protecting the U.S. Mail and investigating fraud schemes,” said Scott Fix, Inspector in Charge of the Houston Division of the USPIS. “Okanlawon Egerongbe devised multiple schemes to defraud innocent people and misused Postal Service products and the U.S. Mail to facilitate his crime. Postal Inspectors will continue to work with our law enforcement partners, including HSI Austin, to ensure anyone using the U.S. Mail for fraudulent financial gains are brought to justice.”
HSI and the USPIS investigated the case. Assistant U.S. Attorneys Keith M. Henneke and Michael C. Galdo prosecuted the case.
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Rockford Man Sentenced to More than Five Years in Federal Prison for Illegally Possessing Firearm “Switch” DevicesRead the Press Release
ROCKFORD — A Rockford man has been sentenced to five and a half years in federal prison for illegally possessing firearm “switch” devices.
JAVAUGHN A. HIXSON, 23, possessed and sold four of the devices, also known as “Glock switches,” in Rockford from October to December of 2020. Each conversion device is designed and intended to convert a firearm into a machine gun capable of automatically firing more than one shot with a single pull of the trigger.
Hixson also illegally possessed a loaded handgun with an extended magazine. On Jan. 4, 2021, Hixson was a passenger in a vehicle that was stopped by the Rockford Police Department. Hixson ran from the officers and tossed the gun into the snow. Hixson had previously been convicted of a felony weapons offense and was prohibited by federal law from possessing a firearm.
Hixson pleaded guilty earlier this year to one count of illegally possessing machine guns and one count of illegally possessing the firearm.
U.S. District Judge Iain D. Johnston imposed the 66-month prison sentence on Aug. 25, 2022, after a hearing in federal court in Rockford. In a written sentencing order, Judge Johnston stated, “The sole and exclusive purpose of Glock switches, which are easily manufactured, is to convert an already dangerous firearm into an extremely dangerous machinegun. The dangerousness manifests itself not only in the sheer number of bullets that can be emptied from the magazine in the blink of an eye but also in the resulting lack of control of the firearm when discharging it. The damage a machinegun can inflict is enormous. The damage — intended and unintended — a handheld machinegun can inflict is just as great. This offense involved 9 Glock switches, some of which Mr. Hixson sold believing they would be resold to others.”
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kristen de Tineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives; Gary Caruana, Winnebago County Sheriff; and Carla Redd, Chief of the Rockford Police Department. The government was represented by Assistant U.S. Attorney Talia Bucci.
Holding illegal firearm possessors accountable through federal prosecution is a centerpiece of Project Safe Neighborhoods (PSN) – the Department of Justice’s violent crime reduction strategy. In the Northern District of Illinois, U.S. Attorney Lausch and law enforcement partners have deployed PSN program to attack a broad range of violent crime issues facing the district, particularly firearm offenses.
Retired Jacksonville School Teacher Sentenced to Nearly 6 Years in Federal Prison for Possessing Videos and Images Depicting the Sexual Abuse of ChildrenRead the Press Release
Jacksonville, Florida – Chief United States District Judge Timothy J. Corrigan has sentenced Michael Paul Gillis (65, Jacksonville) to 5 years and 10 months in federal prison for possessing images and videos depicting the sexual abuse of young children. The court also ordered Gillis to serve a 10-year term of supervised release, register as a sex offender, and forfeit his computer media. Gillis had pleaded guilty on April 27, 2022.
According to court documents and information provided in court, FBI agents were investigating individuals who were using a particular online network to share child sexual abuse materials. The investigation revealed that Gillis, a retired Jacksonville public school teacher, had accessed this network from his home.
On February 2, 2022, FBI agents executed a search warrant at Gillis’s home. Gillis, who was home at the time, admitted that he had been accessing child sexual abuse materials using the internet for the past 15 years, and that he had viewed materials depicting children as young as 3 years old. Gillis also stated that he viewed these images and videos while employed as a schoolteacher and would fantasize about touching children inappropriately but claimed that he had never acted on it. He acknowledged that he would continue to seek out these materials online because he would have “a hard time” stopping this behavior because it is an “urge.” During the execution of the search warrant, FBI personnel seized several computers belonging to Gillis that contained at least 2,000 images and 150 videos depicting infants, toddlers, and other young children being sexually abused.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Repeat Felon Sentenced to 85 Months in Federal Prison After Being Found Unconscious in his Running Vehicle while Illegally Possessing a FirearmRead the Press Release
INDIANAPOLIS – Jerry Poindexter, 27, of Indianapolis, was sentenced to 85 months in federal prison after pleading guilty to being a felon in possession of a firearm.
According to court documents, on August 31, 2021, officers with the Indianapolis Metropolitan Police Department (IMPD) responded to a report of a personal injury accident on West Morris Street, in Indianapolis. Officers found Poindexter in the driver’s seat of his vehicle unconscious and slumped over the center console. The vehicle was stopped and still idling. An officer saw a black extended handgun magazine sticking out of Poindexter’s front right side that he believed was inserted into a handgun.
The officer also saw that vehicle was locked, still in drive and was being held in place by bushes or shrubbery. The officer tried several times to wake Poindexter but was unsuccessful, forcing the officer to break out the driver’s side window, to secure the vehicle. When officers opened the door and pulled Poindexter out of the vehicle, they found a handgun with an extended magazine in Poindexter’s right front waistband. The firearm was identified as a SCCY, model CPX-1, 9mm Luger, semi-automatic handgun with an extended magazine.
Poindexter regained consciousness after being treated by medics and initially provided officers with a false name. Once officers were able to positively identify Poindexter, they learned he had several warrants for his arrest. Poindexter was transported to the hospital for treatment and while enroute informed the medics that he had taken Xanax. Officers searched the front passenger seat of Poindexter’s vehicle and found a small baggie of suspected heroin. Poindexter was later arrested.
Poindexter has four previous state court felony convictions, including, dealing methamphetamine and marijuana, criminal recklessness, and forgery. Poindexter is prohibited from possessing firearms because of these prior felony convictions.
Zachary A. Myers, U.S. Attorney for the Southern District of Indiana, and Daryl S. McCormick, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Columbus Field Division, made the announcement.
ATF investigated the case in conjunction with the Indianapolis Metropolitan Police Department. The sentence was imposed by U.S. District Judge James R. Sweeney II. As part of the sentence, Judge Sweeney ordered that Poindexter be supervised by the U.S. Probation Office for three years following his release from federal prison.
U.S. Attorney Myers thanked Assistant U.S. Attorney Peter A. Blackett who prosecuted this case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
Recidivist Florida Fraudster Convicted at Trial for Financial Frauds, Aggravated Identity Theft, and Possession of Stolen MailRead the Press Release
MOBILE, AL – A federal jury convicted a Tampa, Florida man this week for conspiring to commit bank fraud, unlawfully possessing fake and stolen identification documents, possessing counterfeit and forged checks, aggravated identity theft, and possessing stolen mail.
According to court documents and evidence presented at trial, Timothy Howard Buchanan, 39, was arrested by deputies with the Baldwin County Sheriff’s Office during a traffic stop in February 2022. Buchanan was traveling northbound on I-65 with his codefendants, Tyre Dayshawn Crawford and Jaleeshia Deanna Robinson. Deputies initiated the traffic stop because the rental car in which the defendants were traveling had illegal tint applied to its side windows. During the stop, deputies saw drugs in plain view in the car, which led them to search it. Inside the car, deputies found dozens of counterfeit and stolen checks worth more than $300,000. The checks corresponded to victims in multiple states who had their checks stolen from the mail in Alabama and Florida. Deputies also recovered fake and stolen driver’s licenses, a scanner/printer, a check encoder, and a stack of blank check paper. The driver’s licenses had names matching those listed on the counterfeit checks and pictures matching Buchanan’s description.
Deputies and agents with the U.S. Secret Service interviewed Buchanan, and he confessed to his role in the scheme, which involved defrauding banks by attempting to cash counterfeit checks using fake and stolen driver’s licenses. The counterfeit checks that Buchanan possessed contained the personal identifying information of numerous victims, including names, addresses, bank account numbers, and signatures. Buchanan confessed that for his efforts, he would receive 10% of the illegal proceeds of the fraud scheme, which occurred over a period of several months in 2021 and 2022. Buchanan has previously been convicted of felony check fraud and grand theft in Hillsborough County, Florida on several occasions, including as recently as August 2021.
For his aggravated identity theft conviction, Buchanan faces a mandatory term of two years in federal prison, which must run consecutively to any prison term that Buchanan receives for his other crimes. Buchanan faces up to 30 years in federal prison for his bank fraud conspiracy conviction. He will be sentenced by United States District Judge Kristi K. DuBose in December 2022.
Crawford and Robinson each pleaded guilty to bank fraud conspiracy and aggravated identity theft. Judge DuBose will sentence them in September 2022.
U.S. Attorney Sean P. Costello of the Southern District of Alabama made the announcement.The Baldwin County Sheriff’s Office, the U.S. Secret Service, and the U.S. Postal Inspection Service investigated the case. The Tampa Police Department and the Hillsborough County Sheriff’s Office provided substantial assistance in the investigation.
Assistant U.S. Attorneys Justin Roller and Lydia Lucius are prosecuting the case on behalf of the United States.
Rapid City Man Sentenced to Federal Prison for Receipt of Child PornographyRead the Press Release
United States Attorney Alison J. Ramsdell announced that a Rapid City, South Dakota, man convicted of Receipt of Child Pornography was sentenced on August 16, 2022, by Judge Jeffrey L. Viken, U.S. District Court.
Javier Clark Moreno, age 41, was sentenced to 17 ½ years in federal prison, followed by eight years of supervised release. Moreno was ordered to pay a special assessment to the Federal Crime Victims Fund in the amount of $100 and will be required to register as a sex offender under the Sex Offender Registration and Notification Act.
Moreno, formerly the Captain of the Salvation Army of the Black Hills, was arrested and federally indicted following two Cybertips from Kik Messenger. An examination of Moreno’s Kik account revealed over 10,000 recordings and images of child pornography including sadism and penetration of infants and toddlers. Moreno later admitted to viewing and collecting child pornography since the early 2000’s.
This case was investigated by Homeland Security Investigations, South Dakota Division of Criminal Investigation, Rapid City Police Department, and the Pennington County Sheriff’s Office. Assistant U.S. Attorney Sarah B. Collins prosecuted the case.
Moreno was immediately remanded to the custody of the U.S. Marshals Service.
Rapid City Man Sentenced to Federal Prison for Illegal Possession of a FirearmRead the Press Release
United States Attorney Alison J. Ramsdell announced that a Rapid City, South Dakota, man convicted of Possession of a Firearm by a Prohibited Person was sentenced on August 29, 2022, by Judge Jeffrey L. Viken, U.S. District Court.
Travis Spotted Wolf, age 30, was sentenced to six years in federal prison, followed by three years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Spotted Wolf was indicted by a federal grand jury in December of 2021 and pleaded guilty in April 2022. The conviction stems from Spotted Wolf, a previously convicted felon who is prohibited from possessing firearms, knowingly possessing a Taurus, model PT111 Millennium Pro G2, 9mm caliber, semi-automatic pistol, which was found after Spotted Wolf came into contact with law enforcement in August of 2021.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Rapid City Police Department. Assistant U.S. Attorney Benjamin Patterson prosecuted the case.
Spotted Wolf was immediately remanded to the custody of the U.S. Marshals Service.
Raleigh County Man Pleads Guilty to Child Pornography CrimeRead the Press Release
BECKLEY, W.Va. – Austin Michael Light, 21, of Beaver, pleaded guilty today to possession of prepubescent child pornography.
According to court documents and statements made in court, on January 27, 2021, law enforcement officers received a CyberTipline report from the National Center for Missing and Exploited Children (NCMEC) regarding possible child pornography uploaded to a Google Mail account. The investigation led officers to Light. On August 18, 2021, investigators executed a search warrant at Light’s residence and seized several electronic devices including Light’s cell phone.
A forensic analysis of Light’s cell phone revealed nine images and 49 videos of minors and prepubescent minors, including infants, engaged in sexually explicit conduct. Several of the videos were of adults sexually assaulting prepubescent minors and of minors engaged in sadistic or masochistic conduct. Light admitted to downloading the child pornography from the internet from January 2020 until at least August 18, 2021. Light further admitted to attempting to upload a video depicting child pornography to the internet on January 26, 2021.
Light is scheduled to be sentenced on December 22, 2022, and faces a maximum penalty of 20 years in prison, five years to a lifetime of supervised release, and a $250,000 fine. Light must also register as a sex offender.
United States Attorney Will Thompson made the announcement and commended the investigative work of the Federal Bureau of Investigation (FBI) Violent Crimes Against Children Task Force.
United States District Judge Frank W. Volk presided over the hearing. Assistant United States Attorney Julie White is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and 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 Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 5:21-cr-259.
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Purported Surgeon Sentenced to 9 Years in Federal Prison for Romance Scam Involving Online Dating WebsitesRead the Press Release
TALLAHASSEE, FLORIDA – Brian Brainard Wedgeworth (a/k/a “Dr. Brian Anderson,” a/k/a “Dr. Anthony Watkins,” a/k/a “Dr. Brian Adams,” a/k/a “Dr. Edward Chen,” a/k/a “Dr. Brian Chris,” a/k/a “Dr. Chris Williamson,” a/k/a “Dr. Brian Christopher Williamson,” a/k/a “Dr. Brian Edmonds,” a/k/a “Dr. Brian Ammerson,” a/k/a “Dr. Brian Lamar Wilson,” a/k/a “Dr. Brian Wilson,” a/k/a “Dr. Brian Mims,” a/k/a “Dr. Brian Lamar Sims”), 47, formerly of Tallahassee, Florida, and Center Point, Alabama, was sentenced to 9 years in federal prison after pleading guilty on May 19, 2022, to twenty-five counts of wire fraud, mail fraud, aggravated identity theft, and money laundering. Jason R. Coody, United States Attorney, for the Northern District of Florida announced the sentence.
“Our citizens should not be preyed upon by fraudsters who steal through overtures of affection,” said U.S. Attorney Coody. “With the assistance of our dedicated law enforcement partners, we are committed to investigating and vigorously prosecuting those who engage in all acts of fraud. Moreover, today’s sentence should serve as a significant deterrent to criminals of like mind.”
According to court documents, between October 2016 and March 2021, Wedgeworth devised a scheme to defraud women located across the country who he met through online dating forums by falsely representing that he was a physician in order to fraudulently obtain money and property from them. In so doing, Wedgeworth made promises to the women to induce them to send him money and buy him jewelry and watches. Wedgeworth admitted to causing, or intending to cause, a total loss of over $1.3 million to over 30 women who he victimized as a result of his scheme.
“Rooting out fraudulent schemes furthered by the U.S. Mail, such as romance scams, remains a top priority for the U.S. Postal Inspection Service,” said Juan A. Vargas, Acting Inspector In Charge, U.S. Postal Inspection Service, Miami Division. “Our agency will continue to investigate those that target innocent individuals and abuse their trust for financial gain.”
Wedgeworth’s federal prison sentence will be followed by three years of supervised release. He will also be required to pay $1,161,325.82 in restitution.
The conviction and associated sentence was the result of a joint investigation conducted by the United State Postal Inspection Service and the Internal Revenue Service–Criminal Investigations. Assistant United States Attorney Justin M. Keen prosecuted the case.
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office for the Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Philipsburg woman sentenced to prison for Social Security, SNAP, and Medicaid fraud totaling more than $140,000Read the Press Release
MISSOULA — A Philipsburg woman who admitted to lying for more than 10 years about her income and resources to receive more Social Security Administration (SSA) benefits and other federal aid than she was qualified to receive was sentenced today to one year and one day in prison, followed by three years of supervised release, and was ordered to pay full restitution of $142,542, U.S. Attorney Jesse Laslovich said.
Virginia Kathleen Pearson, 56, pleaded guilty in April to false statements to a government agency.
U.S. District Judge Donald W. Molloy presided. Judge Molloy remanded Pearson into custody.
“Pearson knew she was obligated to truthfully report her income and resources but instead lied for more than a decade to boost her benefits. Supplemental Security Income and Medicaid are federal programs intended to help those truly in need and to ensure they get adequate care when they cannot afford it. Pearson’s conduct took assistance from others who were without options. We will continue to safeguard federal benefits and will investigate and prosecute those who try to exploit these programs. I want to thank Assistant U.S. Attorney Karla E. Painter, the Social Security Administration’s Office of Inspector General and the Montana Department of Health and Human Services for their work on this case,” U.S. Attorney Laslovich said.
“This sentence holds Ms. Pearson accountable for defrauding government programs. As part of her scheme, she abused the Supplemental Security Income program, the needs-based safety net for the most vulnerable among us by falsifying her true circumstances and causing SSA to improperly pay her over $101,000,” said Gail S. Ennis, Inspector General for the Social Security Administration. “My office will continue to pursue those who exploit SSA programs for personal gain. I thank our law enforcement partners for their support in this investigation and the U.S. Attorney’s Office for prosecuting this case.”
The government alleged in court documents that in 2006, Pearson applied for Social Security Income (SSI) from the SSA and was approved for benefits in 2008. Pearson was informed of her obligation to report any change to her household income, resources and household composition. Pearson had advised she lived in a home with her husband, Doyle Pearson, and, as such, his income and resources were considered in determining the amount of SSI for which Pearson was eligible. One month after receiving her first SSA payment, Pearson reported to SSA that her husband had moved out of the home. Pearson’s SSI benefits increased significantly after SSA removed Doyle Pearson’s contributions and re-calculated Pearson’s benefits. Further, between November 2008 and December 2019, Pearson received nine cost of living adjustments and two change in payment letters detailing her obligation to report changes to her income, resources and household composition.
In August 2019, Doyle Pearson applied for Social Security retirement benefits, reported he was married and provided the same address where Pearson stated she had lived alone since September 2008.
In response, SSA conducted a redetermination and Pearson again represented she lived alone, rented a home, had one savings account and co-owned one vehicle. Pearson attested that Doyle Pearson lived at another address and that they had been separated for 15 years.
An investigation determined that Pearson’s statements were false and that the couple lived together and co-owned the house. Pearson also had unreported bank accounts and additional vehicles that were titled in her name or jointly with her husband.
Pearson made similar misrepresentations to Montana Public Assistance. In total, Pearson fraudulently obtained $101,136 from SSA, $23,116 from the Montana Department of Health and Human Services, which distributes Supplement Nutrition Assistance Program (SNAP) benefits, and $18,203 from Medicaid.
Assistant U.S. Attorney Karla E. Painter prosecuted the case, which was investigated by the SSA Office of Inspector General and Montana Department of Health and Human Services.
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