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Tuesday 9 August 2022
Five Individuals and Two Nursing Facilities Indicted on Charges of Conspiracy to Defraud the United States and Health Care FraudRead the Press Release
PITTSBURGH - Five individuals and two for-profit skilled nursing facilities in Southwestern Pennsylvania have been indicted by federal grand jury in Pittsburgh on charges of conspiracy to defraud the United States and related health care fraud charges, United States Attorney Cindy K. Chung announced today.
The 15-count Superseding Indictment, returned on August 5, 2022, named
- Sam Halper, age 39, of Miami Beach, Fla.
- Eva Hamilton, age 35, of Beaver, Pa.
- Susan Gilbert, age 61, of Lawrence, Pa.
- Michelle Romeo, age 46, of Hillsville, Pa., and
- Johnna Haller, 41, of Monaca, Pa., as co-defendants.
Also named in the Superseding Indictment were two nursing facilities operating in Western Pennsylvania, Comprehensive Healthcare Management Services, LLC d/b/a Brighton Rehabilitation and Wellness Center and Mt. Lebanon Operations, LLC d/b/a Mt. Lebanon Rehabilitation and Wellness Center.
The Superseding Indictment alleges that Halper, the CEO and part-owner of the two indicted skilled nursing facilities, among others, conspired with others to defraud the United States and commit healthcare fraud. The Superseding Indictment alleges two schemes: first, that management-level employees at two nursing facilities, Brighton Rehabilitation and Wellness Center and Mt. Lebanon Rehabilitation and Wellness Center, knowingly provided, or directed others to provide, falsified staffing records to the Pennsylvania Department of Health (DOH) during federally mandated surveys; and second, that the facilities, under the direction of Halper and two other regional directors, Michelle Romeo and Johnna Haller, made false statements in resident assessments, also called Minimum Data Set (MDS) assessments, provided to the government to increase Medicare and Medicaid reimbursements.
Count One of the Superseding Indictment charges Halper and the former Director of Nursing, Eva Hamilton, with, from in and around June 2018, to in and around January 2020, conspiring to defraud the United States by obstructing and interfering with the lawful governmental functions of the Centers for Medicare and Medicaid Services (CMS); that is, co-defendants Halper and Hamilton, as well as other co-conspirators conspired to interfere with and obstruct DOH in its ability to conduct valid federally mandated surveys of the care provided to residents at Brighton by knowingly falsifying staffing sheets provided to DOH in order to show that the facilities were in compliance with the conditions of participation in Medicare and PA Medicaid. Among other acts, co-defendants Halper and Hamilton, as well as other co-conspirators added the names of nursing staff who were not in the building on the dates listed on records provided to DOH to make it appear as though these nurses were working and providing direct care to residents. The co-defendants allegedly engaged in these acts in whole or in part, to avoid government sanctions, including a denial of payments for new admissions, additional monitoring, the imposition of civil monetary penalties, and other potential penalties.
Count Two of the Superseding Indictment charges these same individuals as well as Brighton, with, between on or about July 18, 2018, to on or about January 22, 2020, falsifying, concealing or covering up by trick, scheme or device material facts in connection with the delivery of or payment for health care benefits; that is, the co-defendants engaged in a scheme to provide falsified staffing sheets to DOH in order to show that Brighton was in compliance with the conditions of participation in Medicare and Medicaid, including that the facility had “sufficient” nursing staff to meet residents’ needs and that the facilities were operating and providing services in compliance with all applicable Federal, State, and local laws, regulations, and codes. Counts Three through Seven of the Superseding Indictment charge Hamilton and Brighton with making false statements in staffing records with the intent to impede, obstruct, and influence the investigation and proper administration of a matter within the jurisdiction of CMS, an agency of the United States.
Count Eight of the Superseding Indictment charges Susan Gilbert, the former Administrator of Mt. Lebanon Rehabilitation and Wellness Center and the current Administrator of another facility owned by Halper, with, from on or about October 10, 2018, to in and around March 2020, conspiring to defraud the United States by interfering with and obstructing DOH in its ability to conduct valid federally mandated surveys of the care provided to residents at Mt. Lebanon. Among other acts, the Superseding Indictment alleges that Gilbert and/or other co-conspirators directed administrative and management-level nursing staff and other employees to “clock-in” for shifts not actually worked. In doing so, Mt. Lebanon Rehabilitation and Wellness Center created falsified timecard documentation provided to DOH that made it appear as though these individuals were providing direct resident care, when in fact they were not in the building and therefore not providing direct resident care.
Count Nine charges Gilbert and Mt. Lebanon, with, on or about November 13, 2019, and continuing to on or about February 20, 2020, participating in a scheme to falsify, conceal or cover up by trick, scheme or device material facts in connection with the delivery of or payment for health care benefits; that is, the co-defendants engaged in a scheme to provide falsified staffing sheets to DOH in order to show that Mt. Lebanon had “sufficient” nursing staff to meet residents’ needs and that the facilities were operating and providing services in compliance with all applicable Federal, State, and local laws, regulations, and codes.
Counts Ten through Twelve charge Gilbert and Mt. Lebanon with making false statements with the intent to impede, obstruct, and influence the investigation and proper administration of a matter within the jurisdiction of CMS.
Count Thirteen charges Gilbert further with, in or around March 2020, participating in a scheme to falsify staffing records at another nursing facility in order to show that this facility was in compliance with the conditions of participation in Medicare and Medicaid.
In addition, Count Fourteen of the Superseding Indictment alleges, from in and around June 2014 to in and around June 2021, Halper conspired with two regional-level employees, Michelle Romeo and Johnna Haller, and others to commit healthcare fraud. Among other acts, the Superseding Indictment alleges that Romeo instructed nursing staff that completed MDS assessments at the various facilities she supervised to make changes to residents’ assessments to ensure that those facilities had certain Case Mix Index (CMI) score associated with higher reimbursements. Romeo and other co-conspirators also instructed staff at the facilities to create false documentation in residents’ MDS assessments to justify changing a resident’s Activities of Daily Living (ADL) score – a score intended to reflect a resident’s needs for assistance with daily living activities such as bed mobility, toilet use, and eating – by writing a note stating that the changes were made after “interviewing” nursing staff when in fact no such interviews were conducted.
Co-defendants Halper, Romeo and Haller and/or other co-conspirators also conspired to input inaccurate responses to certain resident questionnaires in order to falsely inflate residents’ depression scores. The Superseding Indictment alleges that Halper, Romeo and Haller directed these changes in the MDS data to increase reimbursements and not to accurately capture residents’ medical conditions or needs.
Count Fifteen of the Superseding Indictment charges Romeo and Haller, with from in and around December 2016 to in and around June 2021, with health care fraud related to their involvement in the submission of false information in the MDS assessments to receive higher reimbursements from Medicare and Medicaid.
“Our office will continue to hold individuals and facilities that break the law accountable,” said U.S. Attorney Chung. “Health care fraud is not a victimless crime. It affects everyone—individuals and businesses alike—and causes tens of billions of dollars in losses each year.”
“Through our joint investigation with the U.S. Attorney’s Office for the Western District of Pennsylvania and the Federal Bureau of Investigation, we found that Brighton and Mt. Lebanon’s senior administrators used two criminal schemes to take advantage of federal programs and make extra money while putting residents at risk,” said Pennsylvania Attorney General Josh Shapiro. “These charges today represent a dereliction of duty to report accurate information, criminal schemes designed to manipulate the system, and above all else, companies and individuals that put profits above truthful reporting. I am proud to stand with our federal partners and in unison say, we will not stand by while companies or those who run them break our laws and put people’s safety at risk.”
“Health care fraud impacts every American and destroys the basic trust between providers and patients,” said FBI Pittsburgh Special Agent in Charge Mike Nordwall. “Fraud and abuse take critical resources from across our health care system and contribute to the rising cost of health care for everyone. The FBI will continue to work with our partners to investigate and hold accountable those who exploit the health care system at the expense of patients.”
“Health care fraud will not be tolerated. It is a federal crime that carries serious consequences,” stated Special Agent in Charge Maureen Dixon of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Working closely with our law enforcement partners, HHS-OIG remains committed to detecting and preventing illegal actions and holding parties who execute them accountable.”
“Today’s superseding indictment underscores the commitment of our office to bring this investigation to a thorough and complete conclusion,” said Yury Kruty, Special Agent in Charge of IRS-Criminal Investigation. “Actions like those outlined in the indictment are carried out for greed and can put people at risk. IRS-Criminal Investigation will continue working in a collaborative manner with our law enforcement partners to prosecute offenders who execute schemes like this.”
As to Counts One, Two, Eight, Nine and Thirteen, the law provides for a maximum total sentence of not more than five years in prison, a fine of $250,000 or both. Counts Three through Seven, and Ten through Twelve each carry a maximum possible sentence of twenty years in prison, a fine of $250,000 or both. Finally, Counts Fourteen and Fifteen each carry a maximum possible sentence of ten years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
Assistant United States Attorneys, Robert S. Cessar, Karen Gal-Or and Nicole A. Stockey are prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the U.S. Department of Health & Human Services – Office of Inspector General, the Pennsylvania Office of Attorney General, and the Internal Revenue Service – Criminal Investigation conducted the investigation leading the Superseding Indictment in this case.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
On December 18, 2023, a federal jury found Brighton Rehabilitation and Wellness Center guilty of Counts 2, 3, 4, 5, 6, and 7, and Mount Lebanon Rehabilitation and Wellness Center guilty of Counts 9, 10, 11, and 12. The jury acquitted the individual defendants Sam Halper, Eva Hamilton, Susan Gilbert, Michelle Romeo, and Johnna Haller of the charged offenses.
Fenton man admits soliciting child pornography from undercover officerRead the Press Release
ST. LOUIS – A man from Fenton, Missouri on Tuesday admitted soliciting nude pictures from an undercover St. Louis County police officer pretending to be a 16-year-old.
Robert L. Payne, 77, pleaded guilty in front of U.S. District Judge Ronnie L. White to a felony charge of solicitation of child pornography. Payne admitted that he repeatedly tried to talk to boys at Fenton City Park, 1215 Larkin Williams Road, and that his behavior sparked complaints to police.
St. Louis County Police spotted Payne at the park each day between March 1 and 4, 2021. On March 2nd, Payne reposition his vehicle in the park about eighteen times, including backing into a space to allow him to watch the Lindbergh High School boys’ lacrosse team practice. The next day Payne tried to engage about ten to twelve young males in conversation near the basketball courts.
On March 8, 2021, an officer pretending to be a 16-year-old played basketball at the park and then used a trashcan near Payne, who was sitting in his parked red 2003 Ford Ranger. Payne began talking to the officer, offered to perform oral sex on him and gave the officer his contact information.
Payne later contacted the officer and repeatedly offered to engage in sex acts with him before requesting a picture of the purported teen’s genitals.
Payne is scheduled to be sentenced in November. The crime carries a potential sentence of five to 20 years in prison.
As part of his plea, Payne admitted that in 2018, the Sunset Hills Police Department investigated him over allegations that he’d approached a 16-year-old male at Minnie Ha Ha Park and offered to perform oral sex on him. Payne later pleaded guilty to a harassment charge and was ordered to stay away from the park.
The case was investigated by the St. Louis County Police Department and the FBI. Assistant U.S. Attorney Jillian Anderson 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. 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.
Fort Washakie Man Charged with Violent CrimeRead the Press Release
Acting United States Attorney Nicholas Vassallo announced today that KOBE CURTIS TILLMAN, age 20, of Fort Washakie, Wyoming, was charged with assault resulting in serious bodily injury, assault with a dangerous weapon, and using, carrying, brandishing, and discharging a firearm during and in relation to a crime of violence. Tillman appeared for an arraignment hearing on August 4, 2022, before Federal District Court Magistrate Judge Teresa McKee and pleaded not guilty to those charges. A trial has been set for October 3, 2022, and Tillman was remanded to the custody of the United States Marshal Service.
Tillman faces 10 years up to life imprisonment, up to five years of supervised release, a $750,000 fine, and a $300 special assessment. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
This crime is being investigated by the Federal Bureau of Investigation. Assistant United States Attorney Michael J. Elmore is prosecuting the case.
An indictment merely contains allegations, and every defendant is presumed innocent unless and until proven guilty.
Case No. 22-cr-00092-SWS
Expired license plate stop leads to firearm conviction for HonduranRead the Press Release
CORPUS CHRISTI, Texas – A federal jury in Corpus Christi has convicted a 27-year-old man for possession of a firearm, announced U.S. Attorney Jennifer B. Lowery.
The jury deliberated for approximately 45 minutes before convicting Carlos Javier Zelaya-Guerra following a two-day trial.
On Feb. 5, authorities stopped Zelaya-Guerra in Sinton for driving with an expired temporary license plate. At that time, Zelaya-Guerra admitted he had a firearm with him in the vehicle.
Zelaya-Guerra provided law enforcement with a Honduran passport, but did not have a driver’s license or any documentation allowing him to be in the United States lawfully.
Authorities later determined Zelaya-Guerra was present in the country illegally.
At trial, Zelaya-Guerra testified that he thought he had permission to be in the United States because he married a U.S. citizen who had initiated the paperwork necessary to obtain lawful status.
The jury did not believe his story and found him guilty as charged.
Zelaya-Guerra will remain in custody pending that hearing.
The San Patricio County Sheriff’s Office, Border Patrol and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant U.S. Attorneys Joel Dunn and John Marck are prosecuting the case.
Defendant Who Assaulted Officer at San Ysidro Port of Entry Sentenced to 68 Months in PrisonRead the Press Release
Assistant U. S. Attorneys Paul E. Benjamin (619) 546-7579 and Colin M. McDonald (619) 546-9144
NEWS RELEASE SUMMARY – August 9, 2022
SAN DIEGO – Rene Robert Ruiz was sentenced in federal court to 68 months in prison for assaulting a Customs and Border Protection Officer at the San Ysidro Port of Entry when attempting to enter the United States from Mexico.
According to court records and trial testimony, on May 17, 2021, Ruiz walked towards the limit line separating the United States and Mexico at the San Ysidro Port of Entry. He was irate, yelling “f*** you!” at an officer near the line. As he reached the front of the line, Ruiz continued to yell at officers and made no effort to show documents permitting him to enter the United States. An officer told Ruiz he could not enter until he calmed down.
Ruiz responded, “F*** you, I’m a U.S. citizen, I’m coming in,” and attempted to push past the officer into the United States. Concerned for his safety, the officer pushed Ruiz back beyond the limit line. Immediately, Ruiz came back at the officer and punched him in the head with a closed fist. Ruiz then repeatedly struck the officer in the head as the officer attempted to restrain him. The officer suffered a concussion and other injuries because of Ruiz’s assaultive conduct. On October 13, 2021, following a two-day trial, a jury convicted Ruiz of two counts of assault on a federal officer.
At the sentencing hearing yesterday, U.S. District Judge Gonzalo P. Curiel observed that Ruiz attacked an officer who was simply doing his job. Judge Curiel further remarked that Ruiz’s assaultive conduct was the culmination of a thirty-year history of violence and disregard for law enforcement, including his self-admitted leadership role in a violent motorcycle gang. A restitution hearing to determine the financial penalty Ruiz owes to the officer is scheduled for August 29, 2022.
“This defendant viciously attacked a customs officer completing routine duties at the port of entry,” said U.S. Attorney Randy Grossman. “Law enforcement officers—such as the victim here—perform vital services for us all and must be allowed to do their jobs without the risk of harm. The U.S. Attorney’s Office will continue to vigorously prosecute those who place their safety and security at risk.” Grossman commended the excellent work of the prosecution team as well as officers and agents from Customs and Border Protection and Homeland Security Investigations.
“Violent acts like these against our officers will not be tolerated and we are thankful to the San Diego USAO for ensuring justice was served,” said Anne Maricich, acting Director of Field Operations for the San Diego Field Office.
“This case unfortunately serves as yet another example of the dangers encountered by agents and officers along the border,” said HSI San Diego Special Agent in Charge Chad Plantz. “This sentence should serve as a reminder that assaults on the officers who protect our borders will not be tolerated.”
DEFENDANT Case Number 21-cr-02911-GPC
Rene Robert Ruiz Age: 55 Residence: San Diego, California
SUMMARY OF CHARGES
8 U.S.C. § 111(a)(1) – Assault on a Federal Officer
Maximum penalty: Five years in prison; $250,000 fine.
8 U.S.C. § 111(a)(1) and (b) – Assault on a Federal Officer Inflicting Bodily Injury
Maximum penalty: Twenty years in prison; $250,000 fine.
AGENCIES
Homeland Security Investigations
Customs and Border Protection
Charlotte Woman Is Sentenced to Prison for Bank FraudRead the Press Release
CHARLOTTE, N.C. – Charles Morgan Harrell, 58, of Charlotte, was sentenced to five years in prison today for bank fraud, announced Dena J. King, U.S. Attorney for the Western District of North Carolina. Harrell was also ordered to serve two years of supervised release.
Tommy D. Coke, Inspector in Charge of the Atlanta Division of the U.S. Postal Inspection Service (USPIS), which oversees Charlotte, and Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, join U.S. Attorney King in making today’s announcement.
According to filed court documents and court proceedings, from Jan. 2020 to Feb. 2021, Harrell operated a bank fraud scheme in North Carolina, Georgia, Virginia, and elsewhere. To execute the scheme, Harrell targeted neighborhoods in the Charlotte area and stole mail from residential mailboxes. The stolen mail included individual and business checks, and personal identifying information (PII) of victims, which Harrell used to create fake identification documents in furtherance of the scheme.
As Harrell previously admitted in court, at times, Harrell altered the names of the payees on the stolen checks to the names of the identity theft victims and used the false identification documents to open bank accounts in the identify theft victims’ names and cash the checks. Other times, Harrell obtained blank checks which she fraudulently wrote in her name and then cashed. In addition to the check cashing scheme, Harrell also used the victims’ stolen identities to rent apartments and to buy at least one vehicle. In total, Harrell obtained more than $200,000 through the fraudulent scheme.
Harrell is currently released on bond and will be ordered to report to prison upon designation of a facility by federal Bureau of Prisons.
In making today’s announcement, U.S. Attorney King thanked the USPIS and the FBI for their investigation of the case.
Assistant United States Attorney Caryn Finley, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
California Man Pleads Guilty to Possession of Cocaine with Intent to DistributeRead the Press Release
Gulfport, Miss. -- A Lemon Grove, California man pled guilty to possession of cocaine with intent to distribute, announced U.S. Attorney Darren J. LaMarca and Special Agent in Charge Jermicha Fomby of the Federal Bureau of Investigation.
According to court documents, on October 8, 2021, Albert Joseph Jones, 31, was stopped by an agent with the South Mississippi Metro Enforcement Team for a traffic violation. Jones was the driver and sole occupant of the vehicle. A K-9 hit on the vehicle for the presence of narcotics. A search of the vehicle produced eighteen (18) heat-sealed packages of cocaine.
Jones is scheduled to be sentenced on November 16, 2022, at 1:30 p.m., in Gulfport. He faces a maximum penalty of 40 years in prison and a $5,000,000 fine. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The case was investigated by the Federal Bureau of Investigation and its FBI Task Force, and the South Mississippi Metro Enforcement Team. It is prosecuted by Assistant U.S. Attorney Andrea Jones.
California Man Pleads Guilty to $3.5 Million Scam-PAC FraudRead the Press Release
A California man pleaded guilty yesterday in the Western District of Texas to conspiracy to solicit millions of dollars in contributions to two political action committees based on false and misleading representations that the funds would be used to support presidential candidates during and after the 2016 election cycle.
According to court documents, from 2016 through at least April 2017, Robert Reyes, Jr., 40, of Hollister, along with others, operated two political action committees—Liberty Action Group PAC and Progressive Priorities PAC—which solicited contributions from the public via robocalls and television, radio, and internet advertisements. The two PACs represented that the contributions would be used to support dueling presidential nominees of the two major political parties, respectively. Instead, Reyes and his co-conspirators used the funds to enrich themselves and to fund additional fraudulent solicitations. Specifically, Reyes admitted that the two PACs raised approximately $3.5 million in contributions during the 2016 election cycle and subsequent months, of which Reyes received approximately $714,000. Of the approximately $3.5 million raised, the two PACs contributed approximately $19 to legitimate political causes.
Additionally, to conceal the origin and nature of the proceeds of the fraudulent scheme, Reyes and others instructed a third-party vendor to withdraw approximately $353,000 from the two PACs in excess of the payments for services rendered, then deposit the excess payments into accounts held by shell companies that they controlled. Reyes admitted to operating additional fraudulent PACs beyond the 2016 election cycle, Support American Leaders and Campaign to Support the President, from which he received approximately $95,000 generated from false and misleading solicitations to donors.
As part of his plea, Reyes agreed to forfeit $809,920.40 that he received for his participation in the scam-PACs during the scheme.
Reyes pleaded guilty to one count of conspiracy to commit wire fraud and to cause false statements to the Federal Election Commission and one count of money laundering. Sentencing will be scheduled at a later date. He faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division and Special Agent in Charge Oliver E. Rich of the FBI’s San Antonio Field Office made the announcement.
The investigation was conducted by the FBI’s San Antonio Division, Austin White Collar Crime Task Force.
Trial Attorneys Michael N. Lang and Celia Choy of the Criminal Division’s Public Integrity Section are prosecuting the case. Former PIN Trial Attorney Rebecca Schuman also contributed significantly to the investigation.
Buyer, Seller of ‘Sex Slave’ Sentenced to Combined 25 YearsRead the Press Release
Two human traffickers have been sentenced to a combined 25 years in federal prison, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.
Alfonso Orozco Juarez, 37, and Robert Hubert, 68, were first charged in October 2020. Mr. Hubert pleaded guilty in February 2022 to kidnapping and was sentenced in May 2022 to 121 months in federal prison; Mr. Juarez pleaded guilty in March 2022 to sex trafficking and was sentenced last week to 180 months in federal prison.
“Treated like chattel, the victim in this case endured horrors beyond imagining,” said U.S. Attorney Chad E. Meacham. “The North Texas Trafficking Task Force was launched to investigate and prosecute cases just like this one. We hope the sentences announced today will bring some peace to the victim as she recovers from her ordeal.”
“The physical and mental abuse suffered by the victim in this devasting sex-trafficking crime is heart-breaking. These perpetrators treated their victim as if she were personal property and not human,” said Special Agent in Charge Lester Hayes Jr., Homeland Investigations Dallas. “The HSI Dallas-led North Texas Trafficking Task Force will work relentlessly to eliminate these commercial sex-trafficking schemes. Fortunately, the defendants’ 25-year combined prison sentences will not allow them to target anyone else.”
According to plea papers, Mr. Juarez admitted that on Sept. 11, 2019, he authored a social media post advertising a sex “slave” who he claimed he had won in a card game. Mr. Hubert admitted that he responded to the post, offering to buy the “slave” for $5,000. In messages, Mr. Juarez referred to the victim as “property” and bragged that he “pistol whip[ped] her.”
On Sept. 18, 2019, the pair met at a gas station in Dallas, where Mr. Juarez handed over the victim in exchange for $5,000. On the drive back to his home, Mr. Hubert admitted, he clamped a metal collar around her neck.
Terrified, the victim texted Mr. Juarez, pleading for help:
“I’m afraid if I don’t do something, he’s going to hurt me,” she said.
“Endure what you have to,” he responded. “He’ll punish you whip you . . . but not kill you.”
Once they reached his home, Mr. Hubert admitted, he handcuffed her and forced her to sleep naked at the foot of his bed. The victim eventually persuaded him to allow her to call her parents, who agreed to his demand of $5,000 for safe return. Eventually, the victim was able to escape the home.
Homeland Security Investigations and the North Texas Trafficking Task Force conducted the investigation with substantial support from the Crime Strategies Unit with the 2nd Judicial District Attorney's Office in Albuquerque, NM. Assistant U.S. Attorneys Andrew Briggs and Rebekah Ricketts (fmr.) of the Northern District of Texas are prosecuting the case, with significant assistance from Assistant U.S. Attorney Letitia Simms of the District of New Mexico.
Brooklyn Company Sentenced for Price Gouging KN95 Masks During COVID-19 PandemicRead the Press Release
NEWARK, N.J. – A New York company was sentenced today to one year of probation and fined $314,165 for its role in price gouging a chain of New Jersey grocery stores in connection with the sale of KN95 masks during the COVID-19 pandemic, U.S. Attorney Philip R. Sellinger announced.
Milk & Honey Ventures LLC (MHV), based in Brooklyn, New York, previously pleaded guilty by videoconference before U.S. Magistrate Judge Jessica S. Allen to an information charging it with price gouging in violation of the Defense Production Act.
According to documents filed in this case and statements made in court:
In March 2020, MHV and two partners purchased 250,000 KN95 filtering facepiece respirators from a foreign manufacturer. MHV and one of those partners then sold 100,000 masks to a chain of New Jersey grocery stores at prices in excess of prevailing market prices. MHV sold the masks at a price of $5.25 per mask, which amounted to a markup of more than 400 percent from its acquisition cost. Prior to the spread of COVID-19, MHV had no history of selling personal protective equipment.
U.S. Attorney Sellinger credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Acting Special Agent in Charge Ricky J. Patel in New York, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney David V. Simunovich of the Government Fraud Unit in Newark and Nicholas P. Grippo, Chief of the Criminal Division in Newark.
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.
Blind Rapper who goes by ‘Mac Wayne’ sentenced to six years in prison for drug distributionRead the Press Release
Seattle – A legally blind rapper who was profiled in an Amazon Prime documentary, was sentenced today in U.S. District Court in Seattle to six years in prison, announced U.S. Attorney Nick Brown. Wayne Frisby aka ‘Mac Wayne,’37, of Snohomish County, Washington was arrested in December 2020, for his role in a large drug trafficking ring. Investigators had numerous recorded phone calls of Frisby making drug deals and even one discussing his efforts to help a murder suspect hide from law enforcement. U.S. District Judge John C. Coughenour imposed four years of supervised release to follow prison, noting “the massive size of the conspiracy and the huge quantity of drugs involved.”
“Mr. Frisby gained notoriety through his drug dealing and self-promotion, but his conduct was serious and put countless lives at risk,” said U.S. Attorney Nick Brown. “Drug trafficking is a gritty, dangerous business, and one that is ruining lives across our state. Those who make it their life are destined to spend time behind bars.”
According to records filed in the case, Frisby was one of eleven people indicted in December 2020 in connection with a drug trafficking ring distributing heroin, methamphetamine, and fentanyl pills in Pierce, King, Snohomish, and Lewis Counties. The drug ring takedown was the third in a series of wiretap cases. All told, the search warrants executed in this case resulted in the seizure of approximately 93 pounds of methamphetamine, 15 pounds of heroin, 35,000 suspected fentanyl pills, 24 firearms, approximately $525,000, and a bank account valued at $100,000. Seizures made prior to December 16, 2020, included more than 154 pounds of methamphetamine, 20 pounds of heroin, and more than 7,000 suspected fentanyl pills.
Frisby was heard on the wiretap ordering up pound quantities of methamphetamine and significant amounts of heroin. Other recordings have him discussing firearms he carried or his efforts to assist a partner who shot another man in Marysville in a drug deal gone wrong.
Agents were able to identify Frisby as the person on the phone by comparing his voice to the Amazon Prime documentary, “Blind and Battered, the Blind Kingpin.” The documentary chronicles Frisby’s life and, in it, he freely discusses his work as a drug dealer and pimp.
On May 6, 2022, Frisby pleaded guilty to Conspiracy to Distribute Controlled Substances.
In asking for a 96-month sentence, prosecutors wrote to the court, “The risks of synthetic opioids, like methamphetamine, are well documented – according to the University of Washington Addictions, Drug & Alcohol Institute, state drug poisonings went up by approximately 30% in 2020, with methamphetamine and other synthetic opioids (mostly fentanyl) comprising “a growing share of drug-caused deaths.”
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The investigation was conducted by the U.S. Drug Enforcement Administration (DEA) Tacoma Residence Office in partnership with Tahoma Narcotics Enforcement Team (TNET), Kent Police Department, Homeland Security Investigations, SeaTac Police Department, Tacoma Police Department, Snohomish Regional Drug Task Force (SRDTF), the Skagit County Sheriff's Office, the Federal Bureau of Investigation, the Bureau of Alcohol Tobacco, Firearms and Explosives, and the Internal Revenue Service (IRS).
The case is being prosecuted by Assistant United States Attorneys Amy Jaquette and Andy Colasurdo.
Annapolis Drug Dealer Sentenced to 10 Years in Federal Prison After Pleading Guilty to Drug Conspiracy Involving Fentanyl, Heroin, PCP, and CocaineRead the Press Release
Baltimore, Maryland – Chief U.S. District Judge James K. Bredar sentenced Khayr Basimibnbrown, a/k/a “Keith Brown,” and “Shitty,” age 42, of Annapolis, Maryland, yesterday to 10 years in federal prison, followed by five years of supervised release, after Basimibnbrown pleaded guilty to conspiracy to possess with intent to distribute fentanyl, heroin, PCP, and cocaine.
The guilty plea and sentence were announced by United States Attorney for the District of Maryland Erek L. Barron; Acting Special Agent in Charge Robert Turner of the Federal Bureau of Investigation, Baltimore Field Office; Special Agent in Charge Jarod Forget of the Drug Enforcement Administration, Washington Division; Anne Arundel County Police Chief Amal E. Awad; Chief Edward Jackson of the Annapolis Police Department; and Anne Arundel County State’s Attorney Anne Colt Leitess.
According to Basimibnbrown’s guilty plea, law enforcement observed the defendants participate or conduct drug transactions on multiple instances. For example, Basimibnbrown participated in the sale of 600.9 grams of a heroin and fentanyl mixture in an Annapolis, Maryland hotel parking lot. After the transaction, law enforcement observed Basimibnbrown enter and exit several vehicles in an effort to avoid law enforcement detection.
As stated in his guilty plea, on January 13, 2022, law enforcement executed search warrants at eight residences in Annapolis, Maryland, including Basimibnbrown’s residence, a home that belonged to his grandmother, where officers located 470 grams of PCP, 55.5 grams of crack cocaine, 6.2 grams of heroin, and 71 grams of cocaine. At the home of Basimibnbrown’s cousin, which Basimibnbrown frequently visited, law enforcement seized 145.05 grams of cocaine, 67.19 grams of PCP, and 59.56 grams of a cutting agent, all found on the top shelf of a child’s bedroom closet. From the eight residences searched, law enforcement seized a total of $32,695 in cash, constituting drug proceeds.
Basimibnbrown admitted that he conspired to distribute more than 400 grams of fentanyl, as well as heroin, PCP, cocaine, and crack cocaine. Further, Basimibnbrown knew that he was on federal supervised release at the time he was committing these crimes.
United States Attorney Erek L. Barron commended FBI, DEA, the Anne Arundel County Police Department, the Annapolis Police Department, and the Anne Arundel County State’s Attorney’s Office for their work in the investigation. Mr. Barron thanked Assistant U.S. Attorneys Joan C. Mathias and LaRai Everett, who prosecuted the case. Mr. Barron also thanked Paralegals Kristy Penny, Damon Gasque, and Alisha Swiger for their assistance.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.
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Albany Man Pleads Guilty to Unemployment Insurance FraudRead the Press Release
ALBANY, NEW YORK – Kahleke Taylor, age 21, of Albany, pled guilty today to mail fraud, wire fraud and aggravated identity theft charges related to a scheme to obtain COVID-19 pandemic-related unemployment insurance benefits using the personal information of other people. Taylor admitted his fraud scheme resulted in a loss of $207,004 to the New York State Department of Labor (NYSDOL).
The announcement was made by United States Attorney Carla B. Freedman; Matthew Scarpino, Acting Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI); New York State Inspector General Lucy Lang; Jonathan Mellone, Special Agent in Charge, New York Region, United States Department of Labor, Office of Inspector General (USDOL-OIG); and Ketty Larco-Ward, Inspector in Charge of the Boston Division of the United States Postal Inspection Service (USPIS).
In his plea, Taylor admitted to soliciting personal information from other people on social media. He used the information to make false unemployment insurance applications on NYSDOL’s website. On one application he filed in August 2020, for example, Taylor certified that a person had lost work at a hotel in Latham, New York in March 2020 due to “Lack of Work – COVID,” all of which was false. From September 2020 through June 2021, the applications Taylor admitted to filing as part of the fraud scheme resulted in benefits payments of $207,004. Taylor has agreed to pay full restitution to NYSDOL.
Taylor’s mail fraud and wire fraud convictions each carry maximum terms of 20 years in prison, fines of up to $250,000, and terms of supervised release of up to 3 years. The aggravated identity theft conviction carries a mandatory term of 2 years in prison, to be imposed consecutively to any other term of imprisonment. Taylor is scheduled to be sentenced on December 8, 2022, by United States District Judge Mae A. D’Agostino. A defendant’s sentence is imposed by a judge based on the particular statutes the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
This case is being investigated by HSI, the New York State Inspector General’s Office, USDOL-OIG, and USPIS, with assistance from the NYSDOL Office of Special Investigations and the Schenectady County Department of Social Services, and 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.
Activity in the United States Attorney's OfficeRead the Press Release
United States District Court Judge Nancy D. Freudenthal sentenced BRETT SCHEELER, age 53, of Gillette, Wyoming, on August 4, 2022, for possession with intent to distribute 500 grams or more of methamphetamine. He received a sentence of 97 months’ imprisonment, five years of supervised release, and was ordered to pay $5,000 in community restitution and a $100 special assessment. The crime was investigated by the Drug Enforcement Administration and prosecuted by Assistant United States Attorney Jonathan C. Coppom.
United States District Court Judge Nancy D. Freudenthal sentenced DAVID LEROY YOUNG, age 64, of Casper, Wyoming, on August 4, 2022, for being a felon in possession of a firearm. He received a sentence of 46 months’ imprisonment, three years of supervised release, and was ordered to pay a $100 special assessment. The crime was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant United States Attorney Jonathan C. Coppom.
United States District Court Judge Alan B. Johnson sentenced GERALD LEE JOHNSTON, 57, of Springfield, Oregon, on July 26, 2022, to nine months’ imprisonment and a $100 special assessment for possession of stolen mail. The crime was investigated by the United States Postal Inspection Service and prosecuted by Assistant United States Attorney Michael J. Elmore.
Chief United States District Court Judge Scott W. Skavdahl sentenced WILLIAM DOUGAS BLATTEL, 51, of Sacramento, California, on July 27, 2022, for being a felon in possession of a firearm to 120 months’ imprisonment, three years of supervised release and a $100 special assessment. The crime was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant United States Attorney Timothy J. Forwood.
Chief United States District Court Judge Scott W. Skavdahl sentenced DONAE LARAE CHAVEZ, 40, of Gillette, Wyoming, on July 29, 2022, for conspiracy to commit bank fraud to 28 months’ imprisonment and five years of supervised release. Chavez was also ordered to pay $9,971.29 in restitution and a $100 special assessment. The crime was investigated by the Campbell County Sheriff’s Department and the United States Postal Inspection Service and prosecuted by Assistant United States Attorney Christyne M. Martens.
37 Members of a Violent Gang Charged with Drug Trafficking and Firearms Violations in San Juan, Puerto RicoRead the Press Release
SAN JUAN, Puerto Rico – On August 3, 2022, a federal grand jury in the District of Puerto Rico returned an indictment charging 37 violent gang members from the municipality of San Juan with conspiracy to possess with intent to distribute, possession and distribution of controlled substances, and firearms violations, announced W. Stephen Muldrow, United States Attorney for the District of Puerto Rico. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Rico Police Bureau (PRPB), San Juan Strike Force were in charge of the investigation of the case, with the collaboration of the Puerto Rico Department of Treasury (Hacienda), the Puerto Rico Department of Corrections and Rehabilitation, and the San Juan Municipal Police.
“These arrests represent yet another example of the excellent collaboration between our state, local, and federal partners to take violent individuals off the streets,” said W. Stephen Muldrow, U.S. Attorney for the District of Puerto Rico. “I commend the hard work of the agents and prosecutors who have worked tirelessly on this investigation to make our community safer.”
“This series of arrests represents ATF’s collaborative efforts to build, foster, and maintain relationships with our external partners in the continuing fight against those who seek to endanger the innocent with the plague of violent gun crimes,” said Christopher Robinson, Special Agent in Charge of the ATF, Miami Field Office.”
The indictment alleges that, from 2021 to the date of the return of the indictment, the drug trafficking organization distributed heroin, cocaine base (commonly known as “crack”), cocaine, marihuana, Oxycodone (Percocet), and Alprazolam (Xanax), within 1,000 feet of the Jardines de Country Club Public Housing Project and the Polvorín Ward. The object of the conspiracy was to operate a drug-trafficking organization to distribute controlled substances in the Jardines de Country Club Public Housing Project in the municipality of San Juan for significant financial profit.
Some members of the drug trafficking organization called themselves “PV” or “PV Familia.” During the investigation, members of the conspiracy moved the location of the drug points to avoid detection from law enforcement. At times, they placed locks on the access door of the building where the drug point was operating and only members of the gang had the keys to that lock, exercising control of the entrance and exit of the building.
As part of the conspiracy, the defendants operated a place where drug addicts could consume the controlled substances bought at the drug points, while out of sight from law enforcement, which they called “El Shooting”.
The defendants acted in different roles in order to further the goals of their organization, to wit: leaders/suppliers, enforcers, runners, sellers, lookouts, and facilitators. The members of the gang used force, violence, and intimidation to maintain control of the areas in which they operated. Members of the gang modified firearms to convert them into automatic weapons (machineguns). Eight (8) defendants are facing one charge of possession of firearms in furtherance of a drug trafficking crime.
The defendants are:
Milton Caliel Rodríguez-Medero, a/k/a “Cali/Árabe/Calibre/Gavilán/Calin/K/Cali P”
Johan Javier Rosales-Medero, a/k/a “Johancito/Alcalde/J/Johansity”
Edgar Betancourt-Ortiz, a/k/a “Galdi/Gar/Gardiologo/Galdy/G/Triple G/G2”
Juan Cancio Rivera-Ballester, a/k/a “Pantro/Pacro/Pantron/Pantro Juan”
Julio Ángel Ortiz-Ortiz, a/k/a “Julito”
Carlos Roberto Correa-Agosto, a/k/a “Carlos Best/Best”
Joseph Miguel Sánchez-Figueroa, a/k/a “Cocho/Cochito/Pochito/J Montana”
Jesús Alberto Montañez-Serrano, a/k/a “Vecino/Vecino Patrón”
Onix Javier De León, a/k/a “Tarzán/Chita Tarzán/Tar”
Jasser Vega-Damiani, a/k/a “Piraña/Jasser Praña/Yaz/Yaziel/Bulty/Bulto/Y”
Héctor Kenneth Ramos-Vega, a/k/a “Kene/K Trump/Kene Tiro”
Carlos Miró-Pagán, a/k/a “Farru/Farruko”
Roberto Rodríguez-Medero, a/k/a “Boina/Boinita/R/Rob/Reien/Roller/R Boina”
Ángel Manuel Rivera-Pizarro, a/k/a “Obama/Obama Malo”
Wilmer Alemán Vélez, a/k/a “Manita/Perro/Wil/Wilmer Perro”
Edwin Rafael Moux-Marquez, a/k/a “Mou/Moe/Tripy Tripy”
Ricardo Osorio-Alverio, a/k/a “Giovani/Ricky/Riky/Riky Case”
Tishanny Vélez-Castillo, a/k/a “Tisha/Ticha/Tysha”
Zwailynn Santana-Vázquez, a/k/a “Zwaili/Zua/Zwa/Sua/S”
John Michael Correa-Agosto, a/k/a “John Best/Hermano Best/John Pablo Casella”
Jean Carlos Castillo-Rivera, a/k/a “Tío/El Tío”
William Joel Delgado-Linares, a/k/a “Canito/Kanito/Cano/Will”
Israel Ortiz-Santiago, a/k/a “Chimbi”
Frank Yaniel Torres-García, a/k/a “Gran/Frnk/Ferra/Boss”
Michael Ivaniel Rivera-López, a/k/a “M/Eme/Michel/Em”
Kevin Ortiz-Valentín, a/k/a “El Colo/Colo PV”
Luis Enrique López-Rivera, a/k/a “Chino Bebote/Chino PV”
Larry Ja’Male Michael-Ferrer, a/k/a “Pina”
Alexis De Arce-López, a/k/a “Warrior/Wario/Wariol”
Javier González-Marquez, a/k/a “Javi”
Arlene Morales-Jiménez, a/k/a “La Tuerta”
José Raúl López-Cruz, a/k/a “El Menor/Menor”
Carmen Delgado-Ortiz
FNU, LNU, a/k/a “Kenia Ivette Morales-Serrano/Kenia Marie Rivera-Torres/Kenya
Rivera-Torres/Kenya Marie Rivera-Torres/La Colorá/La Colorada/La Colo/Victoria”
Pablo Rivera-Pimentel, a/k/a “Luisito”
Luis Hernández-Serpa, a/k/a “Barber/Tuto”
Luz Elenia Rivera-Rohena, a/k/a “La Abuela/Abue”
Assistant U.S. Attorney (AUSA) and Chief of the Gang Section Alberto López-Rocafort, Deputy Chief of the Gang Section, AUSA Teresa Zapata-Valladares, AUSA Joseph Russell, and Special AUSA Cristina Caraballo-Colón from the Puerto Rico Department of Justice are in charge of the prosecution of the case. If convicted on the drug charges, the defendants face a minimum sentence of 10 years, and up to life in prison. If convicted of both the drug and firearms charges, the defendants face a minimum sentence of 15 years, and up to life in prison. All defendants are facing a narcotics forfeiture allegation of $24,888,000.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Monday 8 August 2022
Woman Convicted in $34 Million Health Care Fraud SchemeRead the Press Release
A federal jury convicted a North Carolina woman last Thursday for her role in a scheme to defraud several private health insurers by submitting over $34 million in false and fraudulent claims for physical therapy services that were never actually provided.
According to court documents and evidence presented at trial, Jaroslava Ruiz, 50, of Chapel Hill, paid kickbacks and bribes to patient recruiters and patients with private insurance in exchange for allowing four Miami physical therapy clinics to bill for medical services that were never actually provided to those patients. Ruiz and her co-conspirators falsified medical records to give the impression that the physical therapy services were medically necessary, prescribed by a doctor, and actually rendered. In truth and fact, none or virtually none of the purported services had been provided. Ruiz and her co-conspirators submitted approximately $34.6 million in false and fraudulent claims to several private insurers for those nonexistent physical therapy services, of which the insurers paid approximately $7.7 million.
Ruiz was convicted of one count of conspiracy to commit health care fraud and wire fraud, and nine counts of health care fraud. She faces up to 20 years in prison on the conspiracy count, and up to 10 years in prison on each health care fraud count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Sentencing is scheduled for Oct. 26, 2022.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.
The FBI is investigating the case.
Trial Attorneys Emily Gurskis and Patrick Queenan of the Criminal Division’s Fraud Section are prosecuting the case.
Warren County Man Found Guilty of Child Sexual Exploitation ChargesRead the Press Release
Erie, Pa. - After deliberating about five hours, a federal jury on Friday found Jeffrey Colin Rogers guilty of six counts of violating federal laws relating to the sexual exploitation of children, United States Attorney Cindy K. Chung announced today.
Rogers, 59, was tried before United States District Judge Stephanie L. Haines in Erie, Pennsylvania.
According to Assistant United States Attorney Christian A. Trabold, who prosecuted the case, the evidence presented at trial established that in November 2017, Rogers used his phone to take multiple sexually explicit photos of two minors after providing them marijuana and alcohol at his apartment in Sheffield, Pennsylvania. Rogers then kept the photos on his phone. Rogers also had sexual contact with the two minor victims. The Pennsylvania State Police discovered the illegal images after executing a search warrant at Rogers’ apartment in February 2018 and seizing Rogers’ phone.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the 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 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.
Judge Haines scheduled sentencing for December 5, 2022, at 10:00 a.m. The law provides for a total sentence of 160 years in prison, a fine of $1,500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based on the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The Federal Bureau of Investigation and the Pennsylvania State Police conducted the investigation that led to the prosecution of Rogers.
Virginia Landlords to Pay $225,000 to Resolve Violations of the Servicemembers Civil Relief ActRead the Press Release
The Justice Department today announced that two Virginia landlords have agreed to pay $225,000 to resolve allegations that they violated the Servicemembers Civil Relief Act (SCRA) by obtaining unlawful court judgments against military tenants at the Hideaway at Greenbrier Luxury Apartment Homes in Chesapeake, Virginia, and the Chase Arbor Apartments in Virginia Beach, Virginia.
“Eviction judgments seriously jeopardize servicemembers’ ability to find and obtain affordable housing and negatively impact the financial readiness of our armed forces,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The department will vigorously pursue any landlord that obtains eviction judgments against servicemembers by misrepresenting their military status to the court.”
“A servicemember’s military career is adversely affected by a judgment, which affects the military’s readiness,” said U.S. Attorney Jessica D. Aber for the Eastern District of Virginia. “The U.S. Attorney’s Office is committed to pursuing companies that obtain default judgments against servicemembers by misrepresenting a servicemember’s military status or by failing to file an affidavit of military service, as required by the SCRA.”
Under the SCRA, if a landlord files a civil lawsuit against a tenant and the tenant does not appear in court, the landlord must file an affidavit with the court stating whether the tenant is in the military before seeking a judgment. If the affidavit says that the tenant is in military service, the court cannot enter judgment until it appoints an attorney to represent the servicemember. The court must also postpone the case for at least 90 days. In a complaint filed in the U.S. District Court for the Eastern District of Virginia, the department alleges that the owners of the Hideaway at Greenbrier and Chase Arbor Apartments filed false affidavits and failed to file affidavits of military service, as required by the SCRA, prior to obtaining default judgments against numerous servicemembers. The properties are affiliated with one another and used the same law firm to file eviction claims in Virginia state courts.
The department alleges that the properties’ owners knew or should have known that the affidavits that they filed were inaccurate, because their files contained information that would have allowed them to easily verify their tenants’ military status. Landlords and lenders can also verify an individual’s military status by searching the Defense Manpower Data Center’s free publicly available website and by reviewing their files to see if there are applications, military leave and earnings statements or military orders indicating military status.
Under the proposed consent order, which still must be approved by the court, the owners of the two properties will pay $162,971 to affected servicemembers and a $62,029 civil penalty to the United States. The order also requires the owners to vacate the eviction judgments, repair the servicemembers’ credit, provide SCRA training to their employees and develop new policies and procedures consistent with the SCRA. The owners must also reimburse affected servicemembers for any amounts collected pursuant to an unlawful judgment.
This matter was handled jointly by the Civil Rights Division’s Housing and Civil Enforcement Section and the U.S. Attorney’s Office for the Eastern District of Virginia. Since 2011, the department has obtained over $476 million in monetary relief for over 121,000 servicemembers through its enforcement of the SCRA. For more information about the department’s SCRA enforcement efforts, please visit www.servicemembers.gov.
Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil.
The civil claims settled are allegations only; there has been no determination by a court of liability.
Virginia Landlords to Pay $225,000 for Alleged Violations of the SCRARead the Press Release
ALEXANDRIA, Va. – The Justice Department today announced that two Virginia landlords have agreed to pay $225,000 to resolve allegations that they violated the Servicemembers Civil Relief Act (SCRA) by obtaining unlawful court judgments against military tenants at the Hideaway at Greenbrier Luxury Apartment Homes in Chesapeake and the Chase Arbor Apartments in Virginia Beach.
The department launched its investigation after a Navy legal assistance attorney reported that the owner of the Hideaway at Greenbrier had obtained an eviction default judgment against a servicemember after filing an affidavit that falsely stated that she was not in military service. Under the SCRA, if a landlord files a civil lawsuit against a tenant and the tenant does not appear in court, the landlord must file an affidavit with the court stating whether the tenant is in the military before seeking a judgment. If the affidavit says that the tenant is in military service, the court cannot enter judgment until it appoints an attorney to represent the servicemember. The court must also postpone the case for at least 90 days.
In a complaint filed in the U.S. District Court for the Eastern District of Virginia, the department alleges that the owners of the Hideaway at Greenbrier and Chase Arbor Apartments filed false affidavits and failed to file affidavits of military service, as required by the SCRA, prior to obtaining improper judgments against numerous servicemembers. The properties are affiliated with one another and used the same law firm to file eviction claims in Virginia state courts.
The department alleges that the properties’ owners knew or should have known that the affidavits that were filed were inaccurate because their files contained information that would have allowed them to easily verify their tenants’ military status. Landlords and lenders can also verify an individual’s military status by searching the Defense Manpower Data Center’s free publicly available website and by reviewing their files to identify applications, military leave and earnings statements, or military orders indicating military status.
“Eviction judgments seriously jeopardize a servicemember’s ability to find and obtain affordable housing and negatively impact the financial readiness of our armed forces,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The department will vigorously pursue any landlord that obtains eviction judgments against servicemembers by misrepresenting their military status to the court.”
“A servicemember’s military career is adversely affected by a judgment, which affects the military’s readiness,” said Jessica D. Aber, United States Attorney for the Eastern District of Virginia. “The U.S. Attorney’s Office is committed to pursuing companies that obtain default judgments against servicemembers by misrepresenting a servicemember’s military status or by failing to file an affidavit of military service, as required by the SCRA.”
Under the proposed consent order, which still must be approved by the court, the owners of the two properties will pay $162,971 to affected servicemembers and a $62,029 civil penalty to the United States. The order also requires the owners to vacate the eviction judgments, repair the servicemembers’ credit, provide SCRA training to their employees, and develop new policies and procedures consistent with the SCRA. The owners must also reimburse affected servicemembers for any amounts collected pursuant to an unlawful judgment.
This matter was handled jointly by the U.S. Attorney’s Office for the Eastern District of Virginia and the Civil Rights Division’s Housing and Civil Enforcement Section. Since 2011, the department has obtained over $476 million in monetary relief for over 121,000 servicemembers through its enforcement of the SCRA. For more information about the department’s SCRA enforcement efforts, please visit www.servicemembers.gov.
Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER.
The civil claims settled are allegations only; there has been no determination by a court of liability
Used car salesman admits hiding commissions from IRSRead the Press Release
ST. LOUIS – A used car salesman in Imperial, Missouri pleaded guilty Monday to three tax charges and admitted hiding more than $300,000 in sales commissions from the IRS.
Donald Benck was primarily compensated for his sales job at a used car lot through commissions. Benck admitted that starting in 2014, he recruited acquaintances to receive the commissions by check, cash the checks and give the cash to Benck. The acquaintances kept a small fee for themselves. In total, the acquaintances cashed $326,000 in checks from 2014-2016.
Benck’s employer issued 1099 forms to the acquaintances instead of Benck, who did not inform his tax return preparer of the commissions and did not report the income on his tax returns. As a result, the 1040 forms that Benck filed with the IRS for 2014 through 2016 underreported his income. Benck failed to report $31,300 in income for tax year 2014, $131,400 for 2015 and $93,035 for 2016, causing a tax loss to the IRS of $84,092.
“Our tax system depends on everyone paying their fair share of taxes based on the filing of accurate tax returns, said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation’s St. Louis Field Office. “Dishonest tax filers leave honest tax payers to pick up the tab for their schemes.”
Benck on Monday pleaded guilty to three counts of making a false statement on an income tax return in front of U.S. District Judge Audrey G. Fleissig. He is scheduled to be sentenced Nov. 18.
The Internal Revenue Service investigated the case. Assistant U.S. Attorney Gwendolyn Carroll is prosecuting the case.
United States Obtains Warrant for Seizure of Airplane of Sanctioned Russian Oligarch Andrei Skoch, Worth over $90 MillionRead the Press Release
The United States of America has been authorized to seize an Airbus A319-100 (the Airbus) owned and controlled by sanctioned Russian oligarch Andrei Skoch, pursuant to a seizure warrant from the U.S. District Court for the Southern District of New York, which found that the airplane is subject to seizure and forfeiture based on probable cause of violation of the federal anti-money laundering laws.
According to the seizure warrant and affidavit sworn out today:
Pursuant to the International Emergency Economic Powers Act (IEEPA), the National Emergencies Act (NEA), and Executive Orders Issued by the President of the United States, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Andrei Skoch as a Specially Designated National (SDN) on or about April 6, 2018 “for being an official of the Government of the Russian Federation,” “a deputy of the Russian Federation’s State Duma,” and because of his “longstanding ties to Russian organized criminal groups, including time spent leading one such enterprise.” After Russia invaded Ukraine in 2022, OFAC issued further sanctions against Skoch and his assets. On or about March 24, 2022, OFAC designated Skoch and other members of the Duma for “support[ing] the Kremlin’s efforts to violate Ukraine’s sovereignty and territorial integrity.” On or about June 2, 2022, OFAC identified the Airbus as blocked property in which Skoch had an interest.
Skoch is the beneficial owner of the Airbus through a series of shell companies and trusts tied to his romantic partner. After OFAC designated Skoch in or about April 2018 and continuing through in or about at least in or about 2021, U.S. dollar transactions were made to pay for the registration of the Airbus in Aruba and for aviation insurance premiums for the Airbus, each of which was a necessary expense to maintain and operate the Airbus.
The Airbus (pictured below), bearing tail number P4-MGU and serial number 5445, is believed to be worth more than $90 million.
U.S. Attorney Williams praised the outstanding work of the FBI and U.S. Department of Commerce, Bureau of Industry and Security. The Justice Department’s National Security Division and Office of International Affairs and the U.S. Treasury Department’s Office of Foreign Assets Control provided valuable assistance in this investigation.
Assistant U.S. Attorneys Joshua A. Naftalis and Nicholas S. Bradley for the Southern District of New York are in charge of the investigation.
The investigation was coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls, and economic countermeasures that the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2 and run out of the Office of the Deputy Attorney General, the task force will continue to leverage all of the Department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.
United States Obtains Warrant for Seizure of Airplane of Sanctioned Russian Oligarch Andrei Skoch Worth over $90 MillionRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Lisa O. Monaco, the Deputy Attorney General of the United States, Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Matthew S. Axelrod, Assistant Secretary of Commerce for Export Enforcement, announced today that the United States of America has been authorized to seize an Airbus A319-100 (the “Airbus”) owned and controlled by sanctioned Russian oligarch Andrei Skoch, pursuant to a seizure warrant from the U.S. District Court for the Southern District of New York, which found that the airplane is subject to seizure and forfeiture based on probable cause of violation of the federal anti-money laundering laws.
U.S. Attorney Damian Williams said: “Today’s affidavit and warrant authorizing the seizure of Andrei Skoch’s private airplane demonstrate the Southern District’s partnership commitment with the task force to pursuing sanctioned Russian oligarchs and their blocked property. We will continue to use every legal tool available to enforce our anti-money laundering laws and to pursue those who seek to use the U.S. financial system to violate and evade sanctions.”
Task Force KleptoCapture Director Andrew C. Adams said: “Once again U.S. law enforcement has demonstrated that international shell games will not suffice to hide the fruits of corruption and money laundering. Through today’s warrant, the Department of Justice lays out a roadmap for those engaged in the legitimate financial sector to follow when assessing transactions with Skoch’s laundering network, while taking steps to freeze, seize, and forfeit the fruits of his criminal activities.”
FBI Assistant Director-in-Charge Michael J. Driscoll said: “An oligarchy is defined as a government in which a small group exercises control for their own selfish and corrupt gain. Members of that group in Russia have long hid and disguised their illegal activities using the U.S. dollar in the process. The sanctions levied by the U.S government and the work of this task force demonstrate to these offensively wealthy oligarchs who support Russia’s military aggression that they are not untouchable, and we are dramatically impacting their way of life.”
Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod said: “Today’s action demonstrates that the U.S. government will be relentless in our efforts to bring to justice those that are enabling Putin’s heinous war against Ukraine. Coordination and collaboration between federal law enforcement and international partners is essential to effective enforcement of U.S. law, and I’m proud of our team of dedicated law enforcement professionals.”
According to the seizure warrant and affidavit sworn out today:[1]
Pursuant to the International Emergency Economic Powers Act (“IEEPA”), the National Emergencies Act, and Executive Orders Issued by the President of the United States, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated Andrei Skoch as a Specially Designated National (“SDN”) on April 6, 2018 “for being an official of the Government of the Russian Federation,” “a deputy of the Russian Federation’s State Duma,” and because of his “longstanding ties to Russian organized criminal groups, including time spent leading one such enterprise.” After Russia invaded Ukraine in 2022, OFAC issued further sanctions against Skoch and his assets. On March 24, 2022, OFAC designated Skoch and other members of the Duma, for “support[ing] the Kremlin’s efforts to violate Ukraine’s sovereignty and territorial integrity.” On June 2, 2022, OFAC identified the Airbus as blocked property in which Skoch had an interest.
Skoch is the beneficial owner of the Airbus through a series of shell companies and trusts tied to his romantic partner. After OFAC designated Skoch in April 2018 and continuing through at least 2021, U.S. dollar transactions were made to pay for the registration of the Airbus in Aruba and for aviation insurance premiums for the Airbus, each of which was a necessary expense to maintain and operate the Airbus.
The Airbus (pictured below), bearing tail number P4-MGU and serial number 5445, is believed to be worth more than $90 million.
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Mr. Williams praised the outstanding work of the FBI and U.S. Department of Commerce, Bureau of Industry and Security. Mr. Williams further thanked the Justice Department’s National Security Division and Office of International Affairs, and OFAC for their assistance in this investigation.
This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit and National Security and International Narcotics Unit. Assistant United States Attorneys Joshua A. Naftalis and Nicholas S. Bradley are in charge of the investigation.
The investigation was coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls, and economic countermeasures that the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2 and run out of the Office of the Deputy Attorney General, the task force will continue to leverage all of the Department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.
[1] The burden to prove forfeitability in a forfeiture proceeding is upon the government.
U.S. Attorney’s Office Reaches Settlement with City of Denver and Concert Promoters Relating to Overcharging for Wheelchair-Accessible Seating at Red Rocks AmphitheatreRead the Press Release
DENVER – The U.S. Attorney’s Office for the District of Colorado announced today that the United States has resolved a discrimination claim under the Americans with Disabilities Act (ADA) against the City and County of Denver and concert promoters Live Nation, AEG, and PBS12.
The Department of Justice received a complaint that wheelchair-accessible seats for concerts held at Red Rocks Amphitheatre were more expensive than tickets for non-accessible seats. The U.S. Attorney’s Office investigated the complaint and alleged that the City and County of Denver, which owns Red Rocks, and concert promoters, which contracted with Denver to host events, violated the ADA by charging more for wheelchair-accessible seats than was allowed under ADA regulations.
There are 121 wheelchair-accessible seats available for each Red Rocks event. The United States alleged that, between 2018 and 2020, concertgoers who used wheelchairs, and their guests, were charged $47,950.90 more for those seats than was permitted by ADA regulations. The United States alleged that in total, Denver and concert promoters overcharged for 1,817 tickets at 178 events held at Red Rocks.
To resolve the complaint, Denver agreed to set aside $47,950.90 that will be refunded to individuals who were overcharged for wheelchair-accessible tickets. Denver has implemented a system to ensure that wheelchair-accessible tickets are priced in accordance with ADA regulations. In addition, concert promoters Live Nation, AEG, and PBS12 each paid a civil penalty to the United States.
“Red Rocks is an iconic concert venue, and people with disabilities who attend events and watch their favorite bands there should not be unfairly overcharged for wheelchair-accessible seating,” Matt Kirsch, Attorney for the United States, Acting under Authority Conferred by 28 U.S.C. § 515. “This agreement reflects our commitment to enforcing the Americans with Disabilities Act, which requires equal treatment for people with disabilities.”
This case was handled by Assistant U.S. Attorney Zeyen Wu.
The agreement is not an admission of any violation or liability by the City and County of Denver.
https://twitter.com/USAO_CO/status/1556679470832123905
U.S. Attorney’s Office Collects More Than $620k in Restitution from Defendant in Penny Stock Fraud SchemeRead the Press Release
First Assistant U.S. Attorney Michelle M. Baeppler announced that the Financial Litigation Program (FLP) of the U.S. Attorney’s Office for the Northern District of Ohio collected full restitution in the amount of $624,122.15 from a defendant convicted of participating in a securities fraud scheme that caused a $39 million loss to investors.
According to court records, a notice of judgment satisfaction was approved for Defendant Justin Esposito, of Thornwood, New York, on Saturday, August 6, 2022. In 2016, Esposito and other codefendants were convicted of orchestrating a penny-stock fraud scheme that resulted in a $39 million loss to investors in the Northern District of Ohio and elsewhere.
As part of his role in the scheme, Esposito cold-called potential investors and sold stock in public companies that he knew were being manipulated. Esposito was paid commission from coconspirators for these sales.
In January 2017, Esposito was ordered to pay $624,122.15 in restitution to the defendants for his role in the scheme.
This case was investigated by the FBI. The financial litigation was handled by Assistant U.S. Attorney Suzana K. Koch. This case was criminally prosecuted by Assistant U.S. Attorney Brian M. McDonough.
The U.S. Attorney’s Office is responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.
While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.
Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
U.S. Attorney Announces Return of 30 Looted Antiquities to Kingdom of CambodiaRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, and Ricky J. Patel, Acting Special Agent in Charge of Homeland Security Investigations (“HSI”) in New York, announced today the return to the Kingdom of Cambodia of 30 antiquities which were stolen from Cambodia as part of an organized looting network and sold by antiquities dealer Douglas Latchford. Among the antiquities returned today was a 10th Century sculpture of Skanda on a Peacock and a monumental 10th Century sculpture of Ganesha, both looted from the ancient Khmer capital Koh Ker. Cambodian Ambassador to the United States Keo Chhea received the antiquities today during a ceremony at the U.S. Attorney’s Office.
U.S. Attorney Damian Williams said: “Today, we celebrate the return of Cambodia’s cultural heritage to the Cambodian people, and reaffirm our commitment to reducing the illicit trafficking of art and antiquities. It is with great pleasure that we send the Skanda on a Peacock and the rest of these artworks on the final leg of their journey home.”
HSI Acting Special-Agent-in-Charge Ricky J. Patel said: “These antiquities we return today were ripped from their country. Beyond their extraordinary beauty and craftsmanship, many are sacred artifacts pried from temples and palaces to be smuggled across borders and peddled by those seeking profit, without any regard to the intangible value they have to the people of their homeland. For over five years, the agents and experts in HSI New York’s specialized dedicated Cultural Property, Arts and Antiquities Unit, alongside our government partners, hunted down leads, examined origin, reviewed financial records, and conducted dozens of interviews to find and recover these pieces we are returning today. These artifacts belong to the people of Cambodia, and we are proud to participate in their recovery and their return home.”
The 30 antiquities returned to Cambodia today were the subjects of three civil forfeiture actions filed in this District. According to the civil forfeiture complaints filed in 2021 and 2022, and other documents filed in the cases:
The antiquities repatriated to Cambodia are sandstone and bronze sculptures and artifacts, ranging in age from the Bronze Age to the 12th Century, which were either removed illegally from Cambodia by looters, imported into the United States based on false statements to United States Customs and Border Protection (“CBP”), or both.
During the civil conflicts of late 20th century, statues and other artifacts were stolen from Koh Ker and other archeological sites in Cambodia and entered the international art market through an organized looting network. Local teams of looters would first remove the statues from the original sites. The statues would then be transported to the Cambodia-Thailand border, and transferred to brokers, who would in turn transport them to dealers in Khmer artifacts located in Thailand, particularly Bangkok. These dealers would sell the artifacts to local or international customers, who would either retain the pieces or sell them on the international art market.
Bangkok-based antiquities dealer Douglas Latchford, a/k/a “Pakpong Kriangsak” sold the antiquities to individuals in the Western art market, including the two private collectors and an American museum which were the prior owners of the pieces returned today. In 2019, Latchford was charged by this Office with wire fraud conspiracy and other crimes related to a many-year scheme to sell looted Cambodian antiquities on the international art market, primarily by creating false provenance documents and falsifying invoices and shipping documents. The indictment was ultimately dismissed due to the death of Latchford.
Once the prior owners were contacted by the United States, they agreed to relinquish possession of the antiquities and to waive all claims of right, title, and interest in them.
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Mr. Williams thanked Homeland Security Investigations for its outstanding work on this investigation, and U.S. Customs and Border Protection for its invaluable assistance. Mr. Williams also thanked the Kingdom of Cambodia’s Ministry of Culture and Fine Arts for its assistance with this investigation.
This matter is being handled by the Office’s Money Laundering and International Criminal Enterprises Unit. Assistant U. S. Attorney Jessica Feinstein is in charge of the case.
Tyler County woman admits to mail fraudRead the Press Release
WHEELING, WEST VIRGINIA – Margaret Ann Moffitt, of Sistersville, West Virginia, has admitted to mail fraud, United States Attorney William Ihlenfeld announced.
Moffitt, 63, pleaded guilty today to one count of “Mail Fraud.” Moffitt stole money from the estate of someone in the amount of $156,744.87. As the executor of the estate, she made cash withdrawals and endorsed checks to be mailed to people not associated with the estate in any way. She then caused checks to be mailed to the beneficiaries of the state, knowing the funds were no longer in the account. She stopped payments on those checks because she knew the funds were gone. The crimes occurred from August 2019 to December 2020 in Tyler and Wetzel Counties.
Moffitt faces up to 20 years of incarceration and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Danae DeMasi-Lemon is prosecuting the case on behalf of the government. The Wet Virginia State Police and the Office of the Prosecuting Attorney for Tyler County investigated.
U.S. Magistrate Judge James P. Mazzone presided.
Two Jefferson County Men Sentenced to at Least 15 Years in Prison for Production of Child PornographyRead the Press Release
KNOXVILLE, Tenn. – On August 4, 2022, the Honorable Katherine A. Crytzer, United States District Judge for the Eastern District of Tennessee, sentenced Alan Malott, age 27, of Dandridge, Tennessee, to serve 195 months in federal prison, and on August 5, 2022, the Honorable Katherine A. Crytzer sentenced Christopher Thurman, age 25, also of Dandridge, Tennessee, to serve 180 months in federal prison. Malott and Thurman were co-defendants who were both charged with the production of child pornography.
As part of plea agreements filed with the court, Malott and Thurman both agreed to plead guilty to an indictment charging them with producing child pornography in violation of 18 U.S.C. § 2251(a) and (e). Following their term of imprisonment, Malott and Thurman will be on supervised release for life. Both Malott and Thurman will be required to register with state sex offender registries and comply with special sex offender conditions during their supervised release.
According to documents filed in the case, Malott and Thurman admitted in 2019 they filmed themselves raping a minor family member of Malott’s. Malott then sent the video of the rape to his prior boyfriend in Louisiana and to Thurman. The defendants also admitted they sexually abused a horse and dog.
This prosecution was the result of an investigation by the Federal Bureau of Investigation.
Assistant U.S. Attorney Jennifer Kolman represented the United States in court.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, PSC 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 PSC, please visit www.projectsafechildhood.gov.
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Two Florida Men Charged with Conspiring to Launder Money Obtained from Internet-Enabled ScamsRead the Press Release
NEWARK, N.J. – Two Florida men were charged with conspiring to launder money taken from victims across the United States, many of whom were elderly, as a part of a series of romance scams and other internet fraud, U.S. Attorney Philip R. Sellinger announced today.
Marlin Perra, 63, of Lake Panasoffkee, Florida, and Leslie Lallande, 65, of Pompano Beach, Florida, were both arrested in Florida and are charged by complaint with one count of money laundering conspiracy. Both defendants are expected to have their initial appearances in the District of New Jersey at a date to be determined.
According to documents filed in this case and statements made in court:
Perra and Lallande laundered the proceeds of romance scams and other fraud scams through trade-based money laundering. Perra and Lallande tried to conceal the fraudulent proceeds stolen from romance scam victims by claiming that entities they controlled were in the business of buying and shipping used cars. Lallande and his conspirators prepared and executed fraudulent agreements that purported to be signed by victims agreeing to invest in Lallande’s alleged automobile business. In fact, these agreements were phony cover stories designed to paper over their receipt and movement of the romance scam proceeds.
The money laundering conspiracy charge has a maximum penalty of 20 years in prison and a fine of $500,000, or twice the value of the funds involved in the transfer, whichever is greater.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, Special Agent in Charge Gregory D. Nelsen in Cleveland, Ohio, and Special Agent in Charge Joseph E. Carrico in Knoxville, Tennessee, with the investigation leading to the arrests. He also thanked special agents of the FBI in Miami, Florida, for their assistance.
The government is represented by Assistant U.S. Attorney Jamie L. Hoxie of the Cybercrime Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Two East Stroudsburg Women Sentenced for Evading Tobacco Excise TaxesRead the Press Release
HARRISBURG—The United States Attorney’s Office for the Middle District of Pennsylvania announced that Hope Carbone, age 72, and Donna Venturini, age 70, both of East Stroudsburg, Pennsylvania, were sentenced on August 5, 2022, by U.S. District Court Judge Jennifer P. Wilson to two years of probation for conspiring to evade federal excise taxes on imported large cigars.
According to United States Attorney Gerard M. Karam, Carbone and Venturini previously admitted to conspiring with Jose Dominguez, the owner of cigar manufacturer Victor Sinclair Cigars, to evade the excise taxes imposed on the importation of Victor Sinclair manufactured cigars from 2009 to 2011. Carbone and Venturini served as the U.S. importer for Victor Sinclair Cigars, which is located in the Dominican Republic. Through fraudulent invoices, Dominguez, Carbone, and Venturini collected approximately $3.9 million in excise taxes from U.S. purchasers of Victor Sinclair manufactured cigars. Of that amount, the co-conspirators paid only approximately $2.1 million to the government, retaining approximately $1.8 million for themselves. As part of their sentence, Carbone and Venturini were ordered to pay restitution.
Jose Dominguez pleaded guilty to conspiracy to evade federal excise taxes in June 2022. He is awaiting sentencing.
The case was investigated by the INternal Revenue Service - Criminal Investigation and the Department of Treasury, Alcohol and Tobacco Tax and Trade Bureau. Assistant U.S. Attorneys Carlo D. Marchioli and Joseph J. Terz prosecuted the case.
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Travel Agent Sentenced to Prison for Fraud on Clients, Cruise Lines and Payment ProcessorsRead the Press Release
Tampa, Florida – U.S. District Judge Susan C. Bucklew today sentenced Diana M. Hopkins (48, Wimauma) to 37 months in federal prison for wire fraud, access device fraud, and money laundering. As part of her sentence, the Court also entered an order of forfeiture in the amount of $115,995.67, the proceeds of the charged criminal conduct, and ordered her to pay restitution in the amount of $432,938.64. Hopkins had pleaded guilty on April 12, 2022.
According to court documents, Hopkins owned and operated Hopkins Travel Services LLC (“HTS”) in Wimauma, Florida. From about April of 2017 through September 2019, Hopkins used HTS to commit wire fraud and access device fraud and to engage in illegal monetary transactions. Specifically, Hopkins made false and fraudulent misrepresentations in soliciting clients via Facebook, a website (www.htsvacationdeals.com) and other means, to purchase cruise packages through HTS at discounted prices and/or “buy one get one” deals, which fares were well below what the cruise lines actually offered and the amounts that HTS had to pay or would ultimately pay for clients’ cruises. Hopkins made additional misrepresentations in offering clients further discounts and/or additional travel amenities to induce them to make payments for cruise package reservations and related travel arrangements in full and well in advance of the clients’ cruise sail dates.
Hopkins caused some clients to provide credit card information ostensibly for the purpose of paying for their cruise package reservations and related travel arrangements, and then used the credit card information to make Ponzi-style payments on other clients’ reservations via the cruise lines’ reservation portals, without any of the clients’ knowledge or consent. In fact, when Hopkins input credit card information into the cruise lines’ reservation portals, she altered the names associated with certain credit card information so that said names matched the names on the cruise package reservations to which she applied the payments.
Hopkins caused other clients to make payments via Stripe, Square, PayPal and other ePayment services, and she caused the payments to be transferred into bank accounts she controlled. Then Hopkins used proceeds of some clients’ ePayments to make Ponzi-style payments on other clients’ reservations via the cruise lines’ reservation portals, without any of the clients’ knowledge or consent.
Moreover, Hopkins used a portion of her clients’ payments made for cruise package reservations and related travel arrangements to pay for personal and family expenses for, among other things, groceries, restaurants, retail shopping, and other household items and services, and otherwise for her own personal enrichment. Such expenditures included, but were not limited to, cruises for family members, jewelry, and a 2019 Dodge Ram 1500.
In total, Hopkins’ offenses resulted in financial losses to the victims in the amount of approximately $461,823.38. She personally received at least $91,495.67 in fraudulent proceeds, and she used an additional $24,500 in fraudulent proceeds towards the purchase of the 2019 Dodge Ram.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Rachelle DesVaux Bedke.
Trafficking meth in an Igloo cooler results in prison timeRead the Press Release
McALLEN, Texas – A 25-year-old Mexican citizen illegally residing in Monte Alto has been ordered to federal prison after admitting to possessing with intent to distribute 140 kilograms of meth, announced U.S. Attorney Jennifer B. Lowery.
Jose Maria Hernandez-Alvarez pleaded guilty Dec. 3, 2021.
Today, U.S. District Judge Randy Crane ordered Hernandez to serve a 70-month sentence. Not a U.S. citizen, he is expected to face removal proceedings following his/h imprisonment.
On Sept. 8, 2021, law enforcement was conducting surveillance which led to a traffic stop. At that time, Hernandez gave consent for a search of his car.
Authorities soon discovered approximately 15.5 kilograms of meth in an Igloo ice chest in the trunk of his vehicle. Hernandez claimed ownership of the narcotics and admitted he had more drugs stored at his residence. A search at that location resulted in the discovery of an additional 123.5 kilograms of meth.
Hernandez stated he had been living in the United States for three months and, during that time, had received three shipments of meth from Mexico.
The estimated street value of the meth is $490,000.
Hernandez has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Drug Enforcement Administration conducted the investigation with the assistance of the Hidalgo County High Intensity Drug Trafficking Area Task Force. Assistant U.S. Attorney M. Alexis Garcia prosecuted the case.
Tokio, ND, Woman Sentenced to Life in Prison for Murder of Foster Child and Abuse and Neglect of Other ChildrenRead the Press Release
Fargo –United States Attorney Jennifer Klemetsrud Puhl announced that Tammy Longie of Tokio, ND, appeared before Chief Judge Peter D. Welte, U.S. District Court, Fargo, ND, and was sentenced to serve life in prison after having plead guilty to Second-Degree Murder within Indian Country; three counts of Child Abuse in Indian Country; and Child Neglect in Indian Country.
On May 6, 2020, agents with the Bureau of Indian Affairs and the Federal Bureau of Investigation responded to the home of Erich and Tammy Longie on the Spirit Lake Reservation. Law enforcement observed a deceased 5-year-old child in the basement of the home and observed bruising throughout the body. An autopsy concluded the death a homicide and identified the cause of death as bilateral subdural hematomas incurred from assault. The pathologist observed abrasions and contusions consistent with "multiple episodes of inflicted trauma." The child’s sibling was examined at a local hospital and determined to need a higher level of care and was hospitalized for more than a month. An attending physician explained the child had bruising over the child’s body consistent with abuse. The primary medical concern, however, was heart failure due to malnutrition.
Spirit Lake Tribal Social Services ("SLTSS") had placed the two children in foster care in the home of Erich Longie, Jr., and Tammy Longie in July of 2019.
The investigation revealed that two biological children were also abused including with objects and hands.
"This is a tragic and horrifying case," said United States Attorney Jennifer Klemetsrud Puhl. "The children endured prolonged physical and emotional abuse by Longie, who was responsible for caring and protecting them. In particular, Longie’s physical and psychological abuse of five-year-old R.T. and seven-year-old Z.T. represents some of the worst of humanity; for Longie ultimately killed R.T. and severely injured Z.T. Today’s sentence ensures that she will be removed from her community forever."
Co-defendant Erich Longie, Jr. plead guilty to First-Degree Murder; three counts of Child Abuse in Indian Country, and Child Neglect in Indian Country and was also sentenced to serve life in prison.
This case was investigated by the Federal Bureau of Investigation and the Bureau of Indian Affairs and is being prosecuted by the United States Attorney’s office, with Assistant United States Attorney Lori H. Conroy assigned to the case.
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Three Defendants Sentenced in Fraud and Identity Theft Scam Targeting Customers of Banks and Credit UnionsRead the Press Release
Three Miami Residents Stole $1,400,000 From Hundreds of Depositors by Posing as Security Officials to Obtain Access to Online Accounts.
GRAND RAPIDS, MICHIGAN — U.S. District Judge Paul Maloney today sentenced Cedric Smith to a prison term of 70 months. His sentence is the last handed down in a West Michigan federal case charging three Miami, Florida residents with bank fraud and aggravated identity theft.
In February 2021, a grand jury charged Cedric Smith, Daja Smith and Devonte Hoskins with stealing the identities of customers of banks and credit unions and then using that information to commit widespread fraud. Prior to today’s sentence, Judge Maloney ordered Daja Smith to a prison term of five years; Devonte Hoskins received a term of six years.
The fraudulent scheme exploited the online system used by customers of banks and credit unions everywhere. The defendants identified a targeted customer’s online account using compromised personal information they purchased from computer hackers on the internet. To obtain a customer’s confidential password and access to the money in the customer’s account, the defendants called the customer, posing as bank security personnel, and induced the victim to share the onetime code a bank sends its customers when they need to reset their password. Then defendants drained the victim’s account and moved the money to where they could use it for their own purposes. The defendants, operating out of Miami, Florida, targeted victims around the U.S. in this fashion, including customers of United Federal Credit Union in St. Joseph, Michigan. Total losses are estimated at $1,400,000.
U.S. Attorney Mark Totten stated he was pleased with the convictions and sentences. “Online thieves like these think they will never be caught because they can hide on the internet. They are wrong. We have the tools to identify and hunt them down, even if they committed their crimes from hundreds of miles away. And that is what we will do.”
“These defendants may have thought they were beyond the reach of law enforcement because their crimes were committed entirely online," said James A. Tarasca, Special Agent in Charge of the FBI in Michigan. “They were sorely mistaken. The FBI treats these types of financial crimes very seriously and we will use our considerable resources to bring cybercriminals to justice.”
This case was investigated by the St. Joseph office of the Federal Bureau of Investigation. Prosecution was handled by Assistant United States Attorney Timothy VerHey.
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Tampa Area Man Arrested for Robbing Businesses While Brandishing A FirearmRead the Press Release
Tampa, FL - United States Attorney Roger B. Handberg announces the arrest and filing of a criminal complaint charging Donald Robert Smith (27, Tampa) with two Hobbs Act robberies and brandishing a firearm during the commission of those robberies. If convicted, Smith faces up to 20 years for each robbery. The firearm charges will carry a mandatory minimum term of imprisonment of 7 years, and up to, life in prison consecutive to any other term of imprisonment.
According to the complaint, on August 1, 2022, Smith robbed a restaurant in Tampa. While the restaurant employee was preparing a soft drink for Smith, Smith pointed a firearm at the employee and demanded money. Two days later, on August 3, 2022, Smith robbed a retail establishment in Tampa. He approached a store employee who was at the cash register, pointed a firearm at them, and demanded money from the register.
This case was investigated by the United States Bureau of Alcohol, Tobacco, Firearms and Explosives, the Hillsborough County Sheriff’s Office, and the Tampa Police Department. It will be prosecuted by Assistant United States Attorney Samantha Newman.
A complaint is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, 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.
Syracuse Man Convicted of Conspiracy to Distribute Methamphetamine and Heroin and Firearms ViolationsRead the Press Release
SALT LAKE CITY- on August 3, 2022, after a two-week trial, a federal jury in the District of Utah found Christopher Flynn, 38, of Syracuse, guilty of conspiracy to distribute methamphetamine, conspiracy to distribute heroin, possession of a firearm in furtherance of a drug trafficking crime, and possession of a firearm as a convicted felon.
At trial, federal prosecutors presented evidence that Flynn worked with others to sell $720,000 dollars’ worth of methamphetamine and heroin along the Wasatch Front. Evidence was also presented that Flynn traded 16 firearms, 6 of which were stolen, to his supplier as payment for narcotics.
The jury found Flynn guilty of conspiring with his co-defendants to distribute heroin and methamphetamine. Flynn was also convicted of the possession of a handgun which he used in furtherance of the distribution of methamphetamine and heroin. Because Flynn had previously been convicted of a felony, it was also illegal for Flynn to possess a firearm at any time. Flynn’s co-defendants previously pleaded guilty to similar charges.
Assistant United States Attorney Aaron Flater and Special Assistant United States Attorney Michael Gadd tried the case against the defendant. Special Agents from the ATF, DEA, and the Davis Metro Narcotics Strike Force conducted the investigation.
Sentencing in this matter is currently set for November 10, 2022.
St. Louis man sentenced to 15 years in prison on carjacking, gun chargesRead the Press Release
ST. LOUIS – U.S. District Judge Sarah E. Pitlyk on Monday sentenced a man involved in two carjackings and the theft of a gun after a shooting to 15 years in prison.
Jeremiah Couch, 32, pleaded guilty in April to two carjacking charges, a charge of possession of a stolen firearm and a charge of being a felon in possession of a firearm.
Couch admitted stealing a Mini Draco AK-47-style pistol on Oct. 17, 2019 from a man who had just been shot in the 5500 block of South 37th Street in St. Louis.
On Oct. 19, 2019, Couch and two others stole a 2020 Jeep Cherokee from outside a home located in the 4100 block of Camellia Avenue in St. Louis, as well as the driver’s phone.
Couch also admitted stealing a man’s 2007 Ford Edge and his money at gunpoint on Oct. 21, 2019 in the 4700 block of South Spring Avenue in St. Louis.
Saint Louis Metropolitan Police Department officers spotted the stolen car less than two hours later. Couch sped off, but crashed while exiting Interstate 70 at West Florissant Avenue. He was caught a short distance away, and officers found a pistol and a shotgun behind the driver’s seat of the stolen car.
The case was investigated by the Saint Louis Metropolitan Police Department and the FBI.
St. Louis man admits threatening to blow up a St. Louis synagogueRead the Press Release
ST. LOUIS – A man from St. Louis on Monday admitted threatening to blow up a St. Louis synagogue in 2021.
Cody Steven Rush admitted calling the St. Louis office of the FBI on Nov. 5, 2021 and saying, “I’m going to blow up a church.” Rush gave his name and identified his target as the Central Reform Congregation in St. Louis. Rush said he would take action the next morning, when people were inside. Rush said he hated Jewish people. He called back later and again threatened to attack the synagogue “while they are in service.” Asked if had anything else he wanted to say, Rush said, “Yeah, that I hate them with rage.”
In a third call, Rush gave his location, which was on the same street as the CRC. When authorities called Rush back, he again made threats.
Officers with the St. Louis Metropolitan Police Department, the St. Louis County Police Department and the FBI found Rush, who told them, “I am feeling suicidal and homicidal. I just feel like killing Jews.” He was arrested without incident.
Rush, 30, pleaded guilty Monday in front of U.S. District Judge Henry E. Autrey to use of a telephone and instrument of interstate commerce to make a threat. The charge carries a potential sentence of up to 10 years in prison. He is scheduled to be sentenced Nov. 8.
The case was investigated by the FBI, the St. Louis Metropolitan Police Department and the St. Louis County Police Department.
St. Louis man admits federal murder-for-hire plot, drug chargeRead the Press Release
ST. LOUIS – A man from St. Louis pleaded guilty Monday to a murder-for-hire charge and a drug conspiracy charge and admitted trying to have a man who owed him more than $100,000 killed.
Kevin Cunningham, 36, pleaded guilty Monday in front of U.S. District Judge Audrey G. Fleissig to the murder-for-hire charge. He pleaded guilty later in the day in front of U.S. District Judge Henry E. Autrey to a charge of conspiring to distribute fentanyl.
Cunningham admitted as part of his plea that the victim owed more than $100,000, and that he approached higher-ranking members in the conspiracy to arrange the victim's murder. A Mexico-based member of the organization connected a confidential source secretly working with the Drug Enforcement Administration to a woman working with the drug group. The woman said the confidential source and an associate would each get $5,000 for the murder and gave the source Cunningham’s phone number.
On Oct. 13, 2021, the source and another person met with Cunningham, who said he wanted them to pick up the debtor, get as much money as they could from him and kill him.
Cunningham later texted a picture of the target and his address to the source and provided them with $600 in expense money and four firearms.
Cunningham and a co-defendant were arrested after the guns were handed over.
Cunningham agreed in his plea to forfeit those guns: two .45-caliber pistols, a 12-gauge shotgun and an AR-15 style pistol with a 50-round drum magazine. He is scheduled to be sentenced in November.
"We often say that drug trafficking and violence are closely connected," said Assistant Special Agent in Charge Colin Dickey of the DEA’s St. Louis office. “But this case of murder between drug traffickers shows the people in this illegal industry have no limits to the criminal activities they are willing to engage in. Selling fentanyl that causes overdose deaths and plotting to kill someone? It’s best for St. Louis that this man will not be on our streets.”
The case was investigated by the St. Louis County Police Department and the Drug Enforcement Administration.
Shots fired call leads to conviction of San Benito manRead the Press Release
BROWNSVILLE, Texas - A 27-year-old man has pleaded guilty to illegally possessing numerous firearms, announced U.S. Attorney Jennifer B. Lowery.
Marco Antonio Moreno pleaded guilty to unlawfully possessing four semiautomatic rifles and five pistols while under felony indictment.
On May 8, 2021, law enforcement responded to reports of shots fired at a residence located in San Benito. Upon arrival, they encountered Moreno who denied discharging a firearm. He claimed unknown individuals had entered his property and shot a gun.
However, they observed spent shell casings in the area and asked Moreno if he owned any firearms. He said he did not and granted consent to search his residence.
After entering the residence, authorities discovered various amounts of illegal narcotics as well as numerous firearms, including three AR-15 style semiautomatic rifles, one AK-47 style semiautomatic pistol, one .45-caliber rifle and four handguns. They also found over 450 rounds of ammunition of various calibers.
At that time, Moreno was under indictment for charges of unlawful use of a criminal instrument. He was, therefore, prohibited from possessing any firearms or ammunition.
U.S. District Judge Fernando Rodriguez Jr. will impose sentencing Nov. 15. At that time, Moreno faces up to five years in federal prison and a possible $250,000 maximum fine.
He will remain in custody pending that hearing.
The Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation with the assistance of the Brownsville Police Department and Cameron County Sheriff’s Office. Assistant U.S. Attorney Edgardo J. Rodriguez is prosecuting the case.
Rome-area methamphetamine distributor and money launderer sentenced after trialRead the Press Release
ROME, Ga. - Juan Cain Valencia-Ramirez has been sentenced for conspiring to distribute large quantities of methamphetamine and to launder drug money.
“This defendant was responsible for importing, processing and distributing hundreds of kilograms of methamphetamine in the metro-Atlanta and Northwest Georgia areas,” said U.S. Attorney Ryan K. Buchanan. “His long history of methamphetamine dealing and eluding arrest has ended thanks to the coordinated efforts of DEA and other federal and local law enforcement partners.”
“No matter how sophisticated the techniques get for smuggling drugs, the DEA and its law enforcement partners remain a step ahead of criminals and will deny them the opportunity to destroy communities with their insidious drugs,” said Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Field Division. “This investigation was a success as it dismantled a once-thriving meth ring in North Georgia.”
According to U.S. Attorney Buchanan, the charges and other information presented in court: In April 2018, Juan Cain Valencia-Ramirez operated a methamphetamine processing and distribution cell in Rome, Georgia. Valencia-Ramirez processed liquid methamphetamine imported in vehicle gas tanks from Mexico and coordinated the distribution of the drugs in metro-Atlanta and Northwest Georgia. He also directed associates to deposit thousands of dollars in drug money that he funneled through bank accounts.
Valencia-Ramirez had remained an elusive law enforcement target because he frequently changed phones and relied on associates to complete drug deals. But federal investigators successfully tracked Valencia-Ramirez’s phone to his residence in Rome following an undercover methamphetamine purchase during which DEA agents recorded a phone call with him.
Undercover agents again recorded a phone call with Valencia-Ramirez during an attempted methamphetamine purchase in September 2018. In October 2018, DEA agents, the Dalton Police Department, and the Rome/Floyd Metro Task Force searched Valencia-Ramirez’s stash house located in a wooded area outside Rome. During the search, investigators recovered approximately 176 kilograms of crystal methamphetamine (worth more than $1.1 million at 2018 prices), evidence of a methamphetamine processing lab, and several firearms. The drugs were buried in caches of camouflaged ice chests and plastic bins concealed in the woods around the property.
Valencia-Ramirez fled to Houston, Texas, following the search, where he continued managing his methamphetamine and money laundering operation. In November 2018, DEA agents searched a stash house belonging to Valencia-Ramirez in Houston where they seized approximately 17 kilograms of methamphetamine. DEA agents eventually located him in June 2019 in Smyrna, Georgia, and arrested him. That same day, agents searched the residence of two of Valencia-Ramirez’s co-defendants, Javier Rivera and Jasmine Garcia, and found more methamphetamine and firearms.
Juan Cain Valencia-Ramirez, a/k/a “Chapa,” 39, of Rome, Georgia, was sentenced to 22 years, one month in prison to be followed by five years of supervised release. On November 1, 2021, a jury convicted Valencia-Ramirez of the offenses of conspiracy to distribute methamphetamine, distribution of methamphetamine, attempted distribution of methamphetamine, and conspiracy to launder money.
The following co-defendants pleaded guilty, including several who have been sentenced:
- Javier Rivera, 26, of Lawrenceville, Georgia, was sentenced to 17 years and one month of imprisonment, followed by five years of supervised release. He pleaded guilty to the offenses of conspiracy to distribute methamphetamine, possession of a firearm in furtherance of a drug trafficking offense, and conspiracy to launder money on December 11, 2020.
- Luis Perez, 28, of Norcross, Georgia, was sentenced to 11 years and 10 months of imprisonment, followed by five years of supervised release. He pleaded guilty to the offense of conspiracy to distribute methamphetamine on March 12, 2020.
- Ricky McPherson, 26, of Rome, Georgia, was sentenced to five years and five months of imprisonment, followed by five years of supervised release. He pleaded guilty to the offense of conspiracy to distribute methamphetamine on October 16, 2019.
- Jasmine Garcia, 24, of Lawrenceville, Georgia, pleaded guilty to the offenses of conspiracy to distribute methamphetamine, conspiracy to launder money, and possession of a firearm in furtherance of a drug trafficking offense on December 1, 2020, and is awaiting sentencing.
This case was investigated by the Drug Enforcement Administration, with assistance provided by IRS Criminal Investigations, the Dalton Police Department, and the Rome/Floyd Metro Task Force.
Assistant U.S. Attorneys John DeGenova and Nicholas Joy prosecuted the case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.gov.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Ringleader of credit card skimming scheme sent to prisonRead the Press Release
HOUSTON - A 31-year-old Cuban citizen who resided in Houston has been sentenced for his role as leader of an organization that installed hundreds of credit card skimmers in Southeast Texas over the last six years, announced U.S. Attorney Jennifer B. Lowery.
Durlan Garica-Pupo pleaded guilty May 18, 2021, to one count of conspiracy to commit fraud in connection with access devices and one count of aggravated identity theft.
Today, U.S. District Judge Lee Rosenthal sentenced Durlan Garcia-Pupo to 60 months in prison for the conspiracy. He also must serve 24 months for the aggravated identity theft which must be served consecutively for a total 84-month prison term. In handing down the sentence, Judge Rosenthal noted Garcia-Pupo’s leadership role in the scheme, sophistication of the scheme and the volume of stolen personal information involved. Garcia-Pupo is expected to face removal proceedings following his incarceration.
From 2017 through 2019, Garcia-Pupo directed other members of the scheme to install credit card skimmers at gas station pumps located around Harris and Montgomery counties to steal personal and banking information. Garcia-Pupo also used at least one of those stolen identities himself to purchase fuel.
Authorities executed a search at his residence and found a laptop computer filled with up to 1500 stolen credit card numbers as well as materials to make credit card skimmers. Garcia-Pupo and his co-defendants would either sell the stolen information to other criminals or use the information to buy fuel that was then resold at much lower prices to generate cash.
Two others - Lazaro Martinez-Garcia, 36, Houston, and Julio Cesar Blanco-Diaz, 41, Houston, were previously sentenced to 33 and 24 months, respectively.
Garcia-Pupo has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Texas Department of Public Safety conducted the investigation. Assistant U.S. Attorney Thomas H. Carter prosecuted the case.
Retired New Jersey Doctor Convicted at Trial of Selling Toxic Chemical as Weight-loss DrugRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that William Merlino, 85, of Mays Landing, NJ, was convicted at trial of selling misbranded drugs online, arising from his scheme to sell a toxic industrial chemical as a weight-loss drug which he manufactured in a lab in his home.
In December 2019, the defendant was charged with one count of introduction of misbranded drugs into interstate commerce in connection with operating a business through which he packaged and sold Dinitriophenol (DNP) for human consumption from at least November 2017 until March 2019. In the 1930s, before the law required drugs to be proven safe before they were marketed, DNP was used as a weight-loss drug despite significant negative side effects, including dehydration, cataracts, liver damage, and death. The chemical has never been approved for human consumption by the U.S. Food and Drug Administration, but has a variety of industrial/commercial uses, such as herbicides, dyes, and wood preservatives. Using Twitter to advertise, eBay to sell, and email to communicate with clients, Merlino earned approximately $54,000 from clients in the U.S., Canada, and the U.K. through the sale of this drug. During trial, a witness from the shipping service the defendant used to ship the drug to customers testified that they referred to Merlino among their colleagues as ‘the yellow man,’ due to the fact that every time he would bring in a package to ship, he would have yellow dust from the chemical on his skin, nails and clothes.
After a year-long investigation by the FDA, investigators served a search warrant at the defendant’s residence, where they found bulk DNP, packaging and encapsulating materials, and a pill press. Subsequently, while awaiting trial on this charge, Merlino faked a diagnosis of pancreatic cancer in order to attempt to avoid trial; the jury heard evidence that the defendant altered a doctor’s letter and his medical records. As a result, the defendant is now separately facing obstruction of justice charges related to these fraudulent submissions to the court.
“The United States sets standards for the foods and drugs we ingest in order to keep American consumers and patients safe,” said U.S. Attorney Romero. “The defendant knowingly skirted our country’s regulations by marketing an unsafe chemical to people hoping for a quick and easy solution. This scheme put many people’s health and safety at risk. We urge everyone to refrain from ingesting DNP for any reason.”
“The distribution of misbranded, unapproved and dangerous drugs in the U.S. marketplace puts consumers’ health at risk,” said Special Agent in Charge George A. Scavdis, FDA Office of Criminal Investigations Metro Washington Field Office. “We will continue to pursue and bring to justice those who jeopardize the public health.”
“The Postal Service has no interest in being the unwitting accomplice to anyone using the U.S. Mail to distribute contraband or other harmful substances,” said Damon Wood, Inspector in Charge of the Philadelphia Division of the United States Postal Inspection Service. “One of the Inspection Service’s key objectives is to rid the mail of illegal and dangerous substances that at best fleece our fellow citizens, and at worst, cause serious harm. William Merlino is no different than the snake oil salesmen from a century ago. Thanks to hard work of the Inspectors, Special Agents from the FDA and an Assistant United States Attorney’s Office, a jury saw through Merlino’s lies and held him accountable.”
The case was investigated by U.S. Food & Drug Administration Office of Criminal Investigations, U. S. Postal Inspection Service, and Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Joan Burnes
Rapid City Man Charged with Multiple Counts of Fraud and Money LaunderingRead the Press Release
United States Attorney Alison J. Ramsdell announced that a Rapid City, South Dakota, man has been indicted by a federal grand jury for five counts of Bank Fraud, eight counts of Money Laundering, and one count of Wire Fraud.
Steven Arthur Knigge, 76, was indicted in July 2022. He appeared before U.S. Magistrate Judge Veronica L. Duffy on August 3, 2022, and pleaded not guilty to the Indictment.
The maximum penalty upon conviction is 30 years in federal prison and/or a $500,000 fine, five years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges stem from Knigge devising a scheme to defraud Rapid City banking institutions for his own personal gain between April 2021 and October 2021, and for filing a fraudulent application under the Paycheck Protection Program. The charges are merely an accusation and Knigge is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Internal Revenue Service-Criminal Investigations. Assistant U.S. Attorney Benjamin Patterson is prosecuting the case.
Knigge was released pending trial. A trial date has been scheduled for October 11, 2022.
Philadelphia Men Charged with Tax Fraud and Commercial Bribery OffensesRead the Press Release
SCRANTON- The United States Attorney’s Office for the Middle District of Pennsylvania announced that on August 5, 2022, Den Lam, age 48, and Danny Sing, age 59, both of Philadelphia, Pennsylvania, were charged in criminal informations with various federal tax offenses and commercial bribery.
According to United States Attorney Gerard M. Karam, the information filed against Den Lam alleges that he conspired with other individuals to evade federal income taxes for approximately $1,600,000 in wages paid by Global Staffing Services, Inc. (Global Staffing), a temporary staffing company that he and his coconspirators owned and operated. Global Staffing leased temporary employees to a manufacturing business in northeastern Pennsylvania. Den Lam also was charged with failing to withhold and remit approximately $1,360,000 in federal employment taxes owed, but never paid, by Global Staffing to the Internal Revenue Service (IRS).
The information filed against Danny Sing alleges that he conspired with other individuals to evade federal income taxes for approximately $1,600,000 in wages paid by Global Staffing, and to fail to withhold and remit approximately $1,360,000 in federal employment taxes to the IRS. Den Lam and Danny Sing allegedly paid Global Staffing employees in cash, paid themselves in cash, and cashed all checks received from Global Staffing’s client, to conceal the income and wages from the IRS. The criminal activities allegedly occurred between 2013 and 2020. Sing also was charged with allegedly providing in excess of approximately $400,000 in bribes and kickbacks to managers and supervisors at Global Staffing’s client, to obtain business for Global Staffing.
Three other individuals were previously prosecuted in this investigation:
- Mark Holmes, age 66, of Hughes Springs, Texas, pleaded guilty to failing to remit approximately $135,000 in employment taxes to the IRS that were owed by Encore. Holmes also pleaded guilty to accepting, as the General Manager of a Pennsylvania food services company, approximately $400,000 in bribes and kickbacks from two temporary staffing companies, one of which was Penns Independent Staffing, in exchange for hiring their employees. The two temporary staffing companies, in turn, received approximately $7,800,000 from Holmes’s employer. Holmes awaits sentencing.
- Nari Lam, age 29, of Wilmington, Delaware, pleaded guilty to failing to remit employment taxes to the IRS. From 2016 through 2020, Nari Lam, the owner of Pennsylvania-based temporary staffing company Penns Independent Staffing, failed to pay approximately $300,000 in employment taxes owed by Penns Independent Staffing to the IRS. Nari Lam awaits sentencing.
- Madeline Nieves, age 48, of Plains, Pennsylvania, was indicted by a federal grand jury on tax fraud and conspiracy offenses. Nieves allegedly conspired with other individuals to defraud the IRS, from 2018 to 2020, in connection with a temporary staffing company, Encore Staffing Solutions LLC (Encore), that she and her coconspirators owned and operated. Encore leased temporary employees to manufacturing businesses throughout Pennsylvania. Nieves also was charged with failing to report Encore employee wages to the IRS, resulting in approximately $67,000 in employment taxes owed, but never paid, by Encore to the IRS. Nieves further was charged with three counts of tax evasion, for failing to report her own personal income from Encore. Nieves awaits trial.
The cases were investigated by the Internal Revenue Service - Criminal Investigation. Assistant U.S. Attorney Phillip J. Caraballo is prosecuting the case.
The maximum penalty under federal law for each tax offense is five years of imprisonment, a term of supervised release following imprisonment, and a fine. The maximum penalty under federal law for the commercial bribery offense is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Indictments and Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
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Omaha Man Sentenced for Firearm OffensesRead the Press Release
COUNCIL BLUFFS, IA – Jesse Dean Seifert, age 33, was sentenced on Wednesday, August 3, 2022, to 77 months in prison for charges of Possession of an Unregistered Firearm and Prohibited Person in Possession of a Firearm. This sentence is consecutive to any state prison sentence. Seifert must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
In September 2021, police attempted to stop Seifert who was driving stolen dump truck. Seifert eluded officers and abandoned the truck in a residential neighborhood and fled on foot. Seifert dropped a firearm—a loaded sawed off shotgun—as he eluded police. Seifert was apprehended a short distance from the firearm. He was also in possession of methamphetamine and drug paraphernalia.
United States Attorney Richard D. Westphal of the Southern District of Iowa made the announcement. The Council Bluffs Police Department, Pottawattamie County Sheriff Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa as part of Project Safe Neighborhoods, a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.
Nurse Arrested for Diversion of Controlled SubstancesRead the Press Release
Amy J. Vickers, 44, of Bradford, Vermont was arrested today on a complaint charging her with obtaining controlled substances by misrepresentation, fraud, forgery, deception or subterfuge, U.S. Attorney Jane E. Young announced.
According to the complaint, on June 17, 2022, Vickers was working as a nurse at Alice Peck Day Memorial Hospital in Lebanon, New Hampshire, when hospital personnel noticed a discrepancy regarding the purported disposal of a dosage of hydromorphone. When confronted with the discrepancy, Vickers is alleged to have admitted to diverting the substance for her personal use, and having done so repeatedly over the course of a few months. It is not believed that any patients were affected by Vickers’ diversion of medications.
Vickers was arrested on August 8 and had an initial appearance before a U.S. Magistrate Judge. She was released pending further proceedings.
This matter is being investigated by the Drug Enforcement Administration, with assistance from the Lebanon Police. The case is being prosecuted by Assistant U.S. Attorney Charles L. Rombeau.
The charges in the complaint are only allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
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Northampton County Man Convicted of CyberstalkingRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Anthony Elonis, age 39, of Bethlehem, Pennsylvania, was convicted on August 5, 2022, of three counts of cyberstalking after a five-day trial in Easton before U.S. District Court Judge Edward G. Smith.
According to United States Attorney Gerard M. Karam, jurors deliberated for approximately an hour and a half before rendering a guilty verdict. Elonis was indicted by a grand jury in Philadelphia in July 2021 and charged with three counts of cyberstalking involving three separate victims, including a government employee in the Eastern District of Pennsylvania, Elonis’ former girlfriend, and Elonis’ ex-wife. The indictment alleged that between 2018 and 2021, Elonis send numerous harassing and intimidating emails directly to the governmental employee and sent or posted numerous harassing and intimidating communications via Twitter, text message or other form of electronic communication regarding the governmental employee, his former girlfriend and his ex-wife.
Sentencing has been scheduled for November 18, 2022, in Easton. The matter has been specially assigned to the United States Attorney’s Office in the Middle District of Pennsylvania for prosecution.
The charges resulted from an investigation conducted by the Federal Bureau of Investigation, Allentown Office. Assistant U.S. Attorneys Robert O’Hara and Geoffrey MacArthur prosecuted the case.
Under federal law, Counts One and Three of the Indictment, involving a government employee and Elonis’ ex-wife as victims, each carry a maximum penalty of up to five years in prison, a term of supervised release following imprisonment, and a fine. Count Two, involving Elonis’ former girlfriend as a victim, carries a maximum penalty of up to ten years in prison because the offense of cyberstalking was committed in violation of a Protection from Abuse Order (PFA) previously issued against Elonis in Northampton County. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
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Nigerian National Pleads Guilty to Role in Fraud and Money Laundering SchemeRead the Press Release
HUNTINGTON, W.Va. – A Nigerian national pleaded guilty today to receipt of stolen money in connection with a fraud and money laundering scheme that defrauded at least 200 victims, many of whom are elderly, of at least $2.5 million.
According to court documents and statements made in court, John Nassy, 29, admitted to participating in the scheme from June 2018 until at least May 2019 while he attended college in Huntington. Other members of the conspiracy created online false personas and contacted victims via email, text messaging or online dating and social media websites. The conspirators sought to induce the victims into believing they were in a romantic relationship, friendship, or business relationship with various false personas. The victims were persuaded to send money for a variety of false and fraudulent reasons for the benefit of the false personas. Nassy admitted that he let victims transfer at least $148,000 to his bank accounts that he knew was from unlawful activity.
Nassy further admitted that after the victims’ funds were deposited in his accounts, he kept some of the money for himself and forwarded some of the money to his co-conspirators via the Zelle digital payments network. Nassy also transferred money to bank accounts located in Nigeria.
Nassy is among 10 men charged in four separate indictments with various fraud-related crimes in connection with the scheme. Six co-defendants have pleaded guilty. Charges remain pending against the other co-defendants. An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Nassy is scheduled to be sentenced on November 14, 2022, and faces a maximum penalty of 10 years in prison, three years of supervised release and a $250,000 fine. Nassy also agrees that he owes $148,000 in restitution.
United States Attorney Will Thompson made the announcement and commended the investigative work of the United States Secret Service, the United States Postal Inspection Service, the Federal Deposit Insurance Corporation-Office of Inspector General (FDIC-OIG), the West Virginia State Police and the South Charleston Police Department.
United States District Judge Robert C. Chambers presided over the hearing. Assistant United States Attorney Kathleen Robeson is prosecuting the case.
The public is encouraged to report potential online fraud activity or scams at https://www.ic3.gov/.
If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed 10am-6pm Eastern Time, Monday-Friday. English, Spanish, and other languages are available.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 3:21-cr-68.
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New York Man Sentenced to Prison for Role in Identity Theft ConspiracyRead the Press Release
A Springfield Gardens man was sentenced to five years in prison yesterday for conspiring to commit aggravated identity theft and aiding in the preparation of false tax returns for his transportation business.
According to court documents and evidence presented at trial, Afolabi Ajelero worked at Kaybamz, a tax preparation business, during tax season from approximately 2012 through 2016. Ajelero conspired with Hakeem Bamgbala, the owner of the business, and others to prepare and file tax returns seeking fraudulent refunds in the names of individuals whose identities had been acquired unlawfully. Bamgbala then forged the names of the taxpayers on the refund checks and provided the checks to Michael Campbell and other co-conspirators to be cashed at banks. Among other roles, Ajelero was responsible for supplying his Electronic Filing Identification Number (EFIN) for use on each fraudulent return and helping fabricate tax paperwork to satisfy a third party that audited some of the returns filed by Kaybamz.
In addition to participating in the identity theft conspiracy, Ajelero also owned Mo-Betta Ventures, a transportation business that provided airport shuttle services in the New York City metropolitan area. From 2011 through 2016, Ajelero aided the filing of false corporate tax returns for Mo-Betta Ventures. Each of these returns included false items, including exaggerated fuel tax credits or deductions intended only for off-highway vehicles such as farm equipment.
In addition to the term of imprisonment, U.S. District Judge William F. Kuntz II ordered Ajelero to serve two years of supervised release and to pay approximately $45,000 in restitution to the United States.
Bamgbala previously pleaded guilty to 18 counts of wire fraud, 22 counts of aggravated identity theft, one count of conspiring to commit aggravated identity theft, and one count of aiding and assisting the filing of a false tax return. Bamgbala died before he could be sentenced. Campbell pleaded guilty to one count of conspiracy to commit aggravated identity theft. He is scheduled to be sentenced on August 19.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Breon S. Peace for the Eastern District of New York made the announcement.
Trial Attorneys Mark McDonald and Eric B. Powers of the Tax Division prosecuted the case.
Massachusetts Construction Company Owner Indicted for Tax CrimesRead the Press Release
A Massachusetts man was arrested on Saturday, after being charged by indictment with willfully failing to pay over employment taxes to the IRS, conspiring to defraud the IRS, and aiding in the preparation of a false tax return.
According to the superseding indictment, Mauricio Baiense, formerly of Quincy, owned and operated Contract Framing Builders, Inc. (CFB), a Medford construction business. Baiense allegedly was responsible for filing CFB’s quarterly employment tax returns and collecting and paying over to the IRS payroll taxes withheld from the wages of the company’s employees.
From approximately 2013 through 2017, Baiense allegedly took a series of steps to convert CFB’s corporate funds into cash. The indictment charges that he allegedly wrote checks drawn on CFB’s bank account to purported subcontractors, which were in fact nominee entities controlled by him. Baiense allegedly then cashed or directed others to cash approximately $11 million in such checks at a check cashing business during this period. Baiense, and at times another man, then allegedly used the cash to operate an “off-the-books” cash payroll for CFB’s employees. He allegedly did not report the cash wages to the IRS and did not pay employment taxes on wages paid to employees in cash. Baiense also allegedly assisted in the preparation of at least one fraudulent employment tax return that understated the actual wages paid to CFB’s employees.
In June, Baiense was indicted for making a false statement when questioned at a U.S. Department of Labor Occupational Safety and Health Administration hearing regarding a workplace accident.
If convicted, Baiense faces up to five years in prison for each of the seven counts of willful failure to collect or pay over employment taxes, five years in prison for conspiring to defraud the United States, and three years in prison for aiding and assisting in the preparation of a false tax return. He also faces up to five years in prison for the false statement charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Rachael S. Rollins for the District of Massachusetts made the announcement.
IRS-Criminal Investigation, the Department of Labor’s Occupational Health and Safety Administration, and Homeland Security Investigations investigated the case.
Trial Attorney Thomas F. Koelbl of the Justice Department’s Tax Division and Assistant U.S. Attorney David Tobin of the U.S. Attorney’s Office are prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.