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28 June 2022
Luzerne County Man Sentenced to 180 Months’ Imprisonment for Drug Trafficking Conspiracy and Firearm PossessionRead the Press Release
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced that yesterday Damian Julmal Navarro, age 27, of Kingston, Pennsylvania, was sentenced to 180 months’ imprisonment to be followed by 5 years of supervised release by U.S. District Court Judge Malachy E. Mannion following his conviction for conspiracy to distribute and possession with intent to distribute heroin/fentanyl, as well as for possessing a firearm in furtherance of his drug trafficking crimes.
According to United States Attorney Gerard M. Karam, Navarro pleaded guilty to conspiring with others to distribute more than one kilogram of heroin/fentanyl, and to a second charge of unlawfully possessing a firearm in furtherance of drug trafficking. Navarro was one of eleven defendants indicted in May 2020. With the exception of Tysheen Gott, a/k/a “LB,” all other co-conspirators pleaded guilty. Gott was convicted after trial in August 2021, and is awaiting sentencing.
This case was the result of a year-long investigation, in part driven by multiple federal wiretaps conducted by the Federal Bureau of Investigation, the Wilkes-Barre Police Department, the Scranton Police Department, the Pittston City Police Department, the Plymouth Police Department, the Pennsylvania State Police, the Luzerne County District Attorney’s Office, the Wyoming County District Attorney’s Office and the Office of Pennsylvania Attorney General. Assistant U.S. Attorneys Michelle Olshefski and Robert O’Hara prosecuted the case.
This case was 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.
This case was also brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
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Luzerne County Man Indicted for Mailing ThreatsRead the Press Release
SCRANTON- The United States Attorney’s Office for the Middle District of Pennsylvania announced that James Charles Meininger, Jr., age 37, of Kingston, Pennsylvania, was indicted today by a federal grand jury for mailing threatening communications.
According to United States Attorney Gerard M. Karam, the indictment alleges that, in October of 2021, Meininger mailed letters to General Mark Milley, Chairman of the Joint Chiefs of Staff, and Deputy Secretary of Defense Kathleen H. Hicks, threatening to kidnap and injure both of those officials along with Senator Nancy Pelosi. The indictment also alleges Meininger sent a threatening letter to a news journalist in Wilkes-Barre.
The case is being investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Sean A. Camoni is prosecuting the case.
The total maximum penalty under federal law for these offenses is 25 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 are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
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Louisiana Man Sentenced for Attempted Possession of Child PornographyRead the Press Release
United States Attorney Alison J. Ramsdell announced that a Kaplan, Louisiana, man convicted of Attempted Possession of Child Pornography was sentenced on June 22, 2022, by U.S. District Judge Karen E. Schreier.
Robert Lee Goodwill, Jr., age 21, was sentenced to two and a half years in federal prison, followed by five years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund. Goodwill will also be required to register as a sex offender under the Sex Offender Registration and Notification Act.
Goodwill was arrested and federally indicted as a result of an undercover sex trafficking operation conducted during the 2020 Sturgis Motorcycle Rally, targeting internet predators. Goodwill initiated sexual chats and sought images of child pornography from a person he believed to be a 15-year-old girl, but who was in fact an undercover agent. Goodwill then negotiated a time and place he would meet the minor to engage in unlawful sex acts. When Goodwill went to the pre-determined location to meet the minor, he was met by law enforcement and placed under arrest.
This case was investigated by Homeland Security Investigations, South Dakota Division of Criminal Investigation, Rapid City Police Department, and the Pennington County Sheriff’s Office. Assistant U.S. Attorney Sarah B. Collins prosecuted the case.
Goodwill was immediately turned over to the custody of the U.S. Marshals Service.
Local felon heads to prison for smuggling nearly 100 in trailerRead the Press Release
LAREDO, Texas – A 49-year-old Desoto man has been sent to prison following his conviction of alien smuggling, announced U.S. Attorney Jennifer B. Lowery.
Dedrick Lindell Coleman pleaded guilty April 14.
Today, U.S. District Judge Marina Garcia Marmolejo ordered Coleman to serve 24 months in federal prison to be immediately followed by three years of supervised release. At the hearing, the court heard additional testimony that described Coleman’s efforts to smuggle over 90 people inside a tractor trailer. In handing down the sentence, Judge Marmolejo considered that number of individuals and his prior criminal history.
At the time of his plea, Coleman admitted that on Jan. 14, he approached the Interstate Highway 35 Border Patrol (BP) checkpoint located on mile marker 29 while driving a tractor trailer. A K-9 unit alerted authorities to the presence of concealed humans and referred him to secondary inspection.
There, authorities found a total of 95 non-U.S. citizens hidden in the trailer. All were determined to be in the United States illegally. At the time of his arrest, authorities also discovered a pistol in Coleman’s possession.
He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Homeland Security Investigations conducted the investigation with the assistance of the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Matthew Isaac prosecuted the case.
Local couple faces life in prison on charges relating to forced laborRead the Press Release
McALLEN, Texas – Two Edinburg residents have been indicted on multiple charges to include hostage taking, labor trafficking and financially benefitting from the labor of three victims, announced U.S. Attorney Jennifer B. Lowery.
Today, a federal grand jury returned a seven-count superseding indictment against Eduardo Javier Gomez, 31, and Margarita Alvarez, 40. They are expected to appear before U.S. Magistrate Judge Scott Hacker for their arraignment in the near future.
Both had been previously indicted for hostage taking and labor trafficking. The superseding indictment returned today adds the charge of financially benefitting from the forced labor.
According to the complaint originally filed in the case, authorities learned that three individuals had allegedly been taken at gun point and forced to work in McAllen for approximately two weeks.
The investigation revealed the victims were allegedly being harbored separately and forced to work without pay. The two male victims were forced to sell drugs outside of a club, while a female was required to act as a nanny and housekeeper at the house Gomez and Alvarez shared, according to the charges. All three victims were also allegedly made to work at a local fireworks stand Gomez managed.
If convicted, the couple faces up to life in federal prison and a possible $250,000 maximum fine.
Homeland Security Investigations conducted the investigation. Assistant U.S. Attorney Eliza Carmen Rodriguez is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Livingston man admits meth trafficking, firearm crimesRead the Press Release
BILLINGS — A Livingston man today admitted allegations that he trafficked methamphetamine in the community and carried loaded firearms in furtherance of his drug distribution, U.S. Attorney Jesse Laslovich said.
Ryan King Steady, 40, pleaded guilty to a superseding information charging him with possession with intent to distribute meth and possession of a firearm in furtherance of a drug trafficking crime. Steady faces a mandatory minimum five years to 40 years in prison, a $5 million fine and at least four years of supervised release on the drug crime and a mandatory minimum five years to life in prison, consecutive to any other sentence, a $250,000 fine and five years of supervised release on the firearm crime.
U.S. Magistrate Judge Timothy J. Cavan presided. A sentencing date will be set before U.S. District Judge Susan P. Watters. The court will determine a sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Steady was detained pending further proceedings.
The government alleged in court documents that on Jan. 3, 2021, law enforcement conducted a welfare check on a person identified as Jane Doe 1 at Steady’s residence. Steady was home and invited officers in to speak with Doe 1. While walking through the house, an officer saw a 9mm semi-automatic handgun in Steady’s bedroom. The gun contained a loaded magazine with 18 rounds and was next to a holster and an additional loaded magazine. Officers seized the firearm and ammunition.
Officers learned that a few days earlier, Steady had travelled with another individual to Arizona and obtained a pound of meth, which he then sold to several people. Steady also regularly provided Doe 1 with meth. In addition, officers learned that Steady twice went to Belgrade to buy meth, that he had several people moving the drug for him and got the firearm for protection. In an April 17, 2021, traffic stop of Steady in Gallatin County near Belgrade, officers found a 12-gauge shotgun with two shells in the feed tube near a backpack, which contained a digital scale and unused plastic baggies. He described specific items in the backpack but denied knowledge of the scale and baggies. Officers searched the backpack and found gram quantities of meth.
Assistant U.S. Attorney Karla E. Painter is prosecuting the case, which was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Park County Sheriff’s Office, Gallatin County Sheriff’s Office and Montana Probation and Parole.
This case is part of Project Safe Neighborhoods, a U.S. Department of Justice initiative to reduce violent crime. Through PSN, federal, tribal, state and local law enforcement partners in Montana focus on violent crime driven by methamphetamine trafficking, armed robbers, firearms offenses and violent offenders with outstanding warrants.
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Lino Lakes Felon Charged Federally with Methamphetamine Trafficking, Firearms Violations in Connection to Kidnapping, Torture CaseRead the Press Release
MINNEAPOLIS – Jose Angel Chapa-Aguilera has been charged in a federal indictment with drug trafficking and firearms violations in connection to the December 2021 kidnapping and torture of a man, announced U.S. Attorney Andrew M. Luger.
According to state and federal court documents, Chapa-Aguilera, 24, of Lino Lakes, was in possession of quantities of methamphetamine and unlawfully possessed 9mm semi-automatic handguns on two different occasions.
In April 2021 Chapa-Aguilera used a false name during a traffic stop in Nobles County which later resulted in the seizure of methamphetamine and a firearm from the vehicle he was driving near Worthington, Minnesota.
On December 20, 2021, at a Brooklyn Park residence, Chapa-Aguilera allegedly confronted a man about a drug debt. During the confrontation, Chapa-Aguilera pulled out a handgun and pointed it at a victim’s head. Chapa-Aguilera then ordered the victim to the ground and tied his hands behind his back and proceeded to beat and torture the victim for hours before barricading the victim in a crawlspace under the house. The victim was eventually able to escape once Chapa-Aguilera left the house. The victim suffered extensive injuries, including numerous burns, broken ribs, a large laceration above his eye, and required a blood transfusion. Law enforcement seized methamphetamine from Chapa-Aguilera’s residence during a search warrant executed shortly thereafter. Law enforcement eventually captured Chapa-Aguilera on January 7, 2022, and found him in possession of a firearm.
Chapa-Aguilera has also been charged in Hennepin County District Court with first-degree assault and kidnapping in connection with the December 2021 incident.
The federal indictment against Chapa-Aguilera charges him with two counts of possession with intent to distribute methamphetamine, one count of possessing a firearm in furtherance of a drug trafficking crime, one count of brandishing a firearm during a drug trafficking crime, and two counts of illegally possessing firearms as a felon. Because Chapa-Aguilera has a prior felony conviction in Anoka County for second degree assault he is prohibited under federal law from possessing firearms or ammunition at any time.
Chapa-Aguilera made his initial appearance today in U.S. District Court before Magistrate Judge Becky R. Thorson. He will remain in federal custody pending further court proceedings.
This case is the result of an investigation conducted by the Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Hennepin County Violent Offender Task Force (VOTF), and the Brooklyn Park Police Department.
Assistant U.S. Attorney Allen A. Slaughter is prosecuting the case.
An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Lincoln Man Sentenced for Making False Statements to Firearms DealerRead the Press Release
BANGOR, Maine: A Lincoln man was sentenced today in federal court for providing false information to a firearms dealer while purchasing firearms, U.S. Attorney Darcie N. McElwee announced.
U.S. District Judge Lance E. Walker sentenced Dwight Gary, 51, of Lincoln to time served and two years of supervised release. Gary pleaded guilty in November 2021.
According to court records, in February 2021, Gary knowingly made two false and fictitious written statements to Maine Military Supply in Holden, a licensed firearms dealer. When asked on an ATF form, “Are you the actual transferee/buyer of the firearm(s) listed on this form and any continuation sheets,” he checked the box for “yes.” However, at the time of the purchases, Gary knew that he was not the actual buyer of the firearms, but rather was buying them for and at the direction of another person. It is against federal law to provide false information to federal firearm licensees when purchasing firearms. His false statements were discovered after the Orono Police Department seized a Sig Sauer P365 9mm pistol on February 14, 2021.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Orono Police Department investigated the case as part of the Department of Justice’s Project Safe Neighborhoods initiative.
Project Safe Neighborhoods: Project Safe Neighborhoods is a nationwide initiative that brings together federal, state, local and tribal law enforcement officials, prosecutors, community leaders and other stakeholders to identify the most pressing violent crime problems in a community and develop comprehensive solutions to address them. Project Safe Neighborhoods is coordinated by the U.S. Attorneys’ Offices in the 94 federal judicial districts throughout the 50 states and U.S. territories, and the program is customized to account for local violent crime problems and resources. Across all districts, Project Safe Neighborhoods follows four key design elements of successful violent crime reduction initiatives: community engagement, prevention and intervention, focused and strategic enforcement, and accountability. To learn more information about Project Safe Neighborhood, please visit www.justice.gov/psn.
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KC Man Sentenced to 15 Years for Meth Trafficking, Illegal FirearmsRead the Press Release
Nineteen firearms were seized by federal agents from Rusty Snow's residence.KANSAS CITY, Mo. – A Kansas City, Mo., man who was arrested with 19 firearms and quantities of illegal drugs in his home was sentenced in federal court today for trafficking methamphetamine and illegally possessing firearms.
Rusty W. Snow, 29, was sentenced by U.S. District Judge Greg Kays to 15 years and one month in federal prison without parole.
On Jan. 6, 2022, Snow pleaded guilty to one count of conspiracy to distribute methamphetamine and one count of possessing firearms in furtherance of drug-trafficking crimes.
Investigators were conducting surveillance on co-defendant Dylan Lee Larson, 29, of Overland Park, Kansas, who engaged in a series of controlled drug transactions with a confidential source in October 2020. Officers followed Larson to Snow’s residence, where they executed a search warrant on Nov. 5, 2020. Snow and co-defendant Robin A. Graham, 38, who shared the residence with Snow, were at home during the search and were arrested.
Officers found a loaded Glock .40-caliber semi-automatic pistol on the couch, along with a lunchbox that contained approximately 572 grams of crystal methamphetamine. Officers also found approximately 400.8 grams of marijuana in a shoebox on the floor, and multiple items of drug paraphernalia nearby.
Officers found 18 more firearms and numerous rounds of ammunition littered throughout the residence. Six of those firearms – a shotgun, a rifle, and four semi-automatic pistols – had been reported stolen.
Additionally, as they continued the search, officers found another approximately 527.44 grams of marijuana, another approximately 33.39 grams of crystal methamphetamine, approximately 33.39 grams of psychedelic mushrooms, approximately 48.9 grams of THC concentrate/THC wax, and 38 full and 11 half pills of various controlled pharmaceuticals.
Officers also found four stolen motorcycles on the property, two police tasers, police identification and other police items stolen from Kansas City, Mo., and Kansas City, Kan. officers.
Graham pleaded guilty and was sentenced on Jan. 21, 2022, to nine years in federal prison without parole. Larson pleaded guilty and was sentenced on April 15, 2022, to five years in federal prison without parole.
This case was prosecuted by Assistant U.S. Attorney Trey Alford. It was investigated by the Drug Enforcement Administration.
Jury Convicts State Lawmaker of COVID-19 Fraud Scheme at Springfield Health Care CharityRead the Press Release
SPRINGFIELD, Mo. – A Missouri state representative was convicted by a federal trial jury today for a nearly $900,000 COVID-19 fraud scheme, as well as a separate $200,000 fraud scheme in which she made false claims about a fake stem cell treatment marketed through her clinics in southern Missouri, and for illegally providing prescription drugs to clients of those clinics.
“This is an elected official who stole money from the public, a purported humanitarian who cheated and lied to her patients, and a medical professional who illegally distributed drugs,” said U.S. Attorney Teresa Moore. “She violated her position of trust to selfishly enrich herself at the expense of others. But a jury of her peers, in a unanimous verdict, saw through her smokescreen of excuses and ridiculous claims, and now she will be held accountable for her criminal behavior.”
Patricia “Tricia” Ashton Derges, 64, of Nixa, Mo., was found guilty of 10 counts of wire fraud, 10 counts of distributing drugs over the internet without a valid prescription, and two counts of making false statements to a federal law enforcement agent.
Derges was elected in November 2020 as a Missouri state representative in District 140 (Christian County). Derges, who is not a physician but is licensed as an assistant physician, operates three for-profit Ozark Valley Medical Clinic locations in Springfield, Ozark, and Branson, Mo. Derges also operates the non-profit corporation Lift Up Someone Today, Inc., with a medical and dental clinic in Springfield.
“Derges betrayed the confidence entrusted in her as both an elected lawmaker and an assistant physician,” said Charles Dayoub, Special Agent in Charge of FBI Kansas City. “She took advantage of a global pandemic to benefit herself financially with complete disregard, not only to her constituents, but to the oath she took as a health care professional to do no harm. Today’s verdict, decided by a jury of her peers, is a direct message to those who wish to profit on the backs of others: the FBI will vigorously pursue any individual who abuses their position of power and the trust of Missourians for their own gain.”
“By putting personal profit before the health and welfare of her constituents, this official egregiously violated the duties of her position as an elected public servant,” said Curt L. Muller, Special Agent in Charge with the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “HHS-OIG will not tolerate any attempts to defraud federal health care programs, particularly those that steal from essential taxpayer funds and endanger public health.”
COVID-19 Fraud Scheme
Derges was convicted of three counts of wire fraud related to her attempt to fraudulently receive nearly $900,000 in CARES Act funds. Derges actually was awarded $296,574 in CARES Act funds for Lift Up, although Lift Up did not provide any COVID-19 testing services to its patients. In fact, Lift Up’s medical clinic closed at the beginning of the COVID-19 pandemic and remained closed from March to June 2020.
Derges sought CARES Act funding for COVID-19 testing that had been provided, and already paid for, at her for-profit Ozark Valley Medical Clinic. Derges requested reimbursement for $379,294 in COVID-19 testing and related expenses, and future funding in the amount of $503,350. In total, Derges applied for $882,644 from the CARES Act Relief Fund on Lift Up’s behalf.
Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, which provided $150 billion to states, tribal governments, and units of local government. Missouri was allocated approximately $2.3 billion. Missouri allocated approximately $34 million in CARES Act funds to Greene County. To administer the CARES Act funds it received, the Greene County Commission created the CARES Act Relief Fund to “promote recovery by funding programs and services that support the needs of those impacted by the COVID-19 public health emergency.” An advisory council of 30 citizen volunteers was appointed to review funding requests and make funding recommendations to the Greene County Commission.
Derges claimed in her application to the Greene County CARES Act Relief Fund that Lift Up provided COVID-19 testing and she sought reimbursement for “COVID-19 eligible expenses” that Lift Up had incurred. To support her claim, Derges provided invoices totaling $296,574 from Dynamic DNA for more than 3,000 COVID-19 laboratory tests. Derges submitted the Dynamic DNA invoices as Lift Up expenditures, although they were actually for testing done at Derges’s for-profit Ozark Valley Medical Clinic.
Lift Up, a non-profit charity, and Ozark Valley Medical Clinic, a for-profit corporation, are separate legal entities. Ozark Valley Medical Center had already received payment from its clients of approximately $517,000 for these COVID-19 tests. Ozark Valley Medical Center charged clients, patients, or their patients’ employers approximately $167 per sample for its COVID-19 testing services. Derges concealed from Greene County that these COVID-19 tests had already been paid for by other payors.
In December 2020, the Greene County Commission awarded Lift Up $296,574 in CARES Act funding based upon Lift Up’s fraudulent application and the Dynamic DNA invoices Derges had submitted. Derges deposited the check into Lift Up’s bank account, then transferred the funds into Ozark Valley Medical Center’s bank account.
Derges provided several more invoices from Dynamic DNA to Greene County later in December 2020 to further support her application for Lift Up, although the invoices were actually for testing done for clients at Ozark Valley Medical Center, raising the total to $589,143 for 6,177 COVID-19 tests. Derges concealed from Greene County that Ozark Valley Medical Center already had been paid approximately $1 million by clients, patients, or their patients’ employers, for these COVID-19 tests.
Stem Cell Fraud Scheme
Derges also was convicted of seven counts of wire fraud related to a nearly $200,000 fraud scheme, which lasted from December 2018 to May 2020. Derges marketed a stem cell treatment that actually utilized amniotic fluid that did not contain any stem cells. The federal indictment charged her with defrauding four specific victims, each of whom testified during the trial.
Derges exclusively obtained amniotic fluid, which she marketed under the name Regenerative Biologics, from the University of Utah. Derges advertised Ozark Valley Medical Clinic as a “Leader in … Regenerative Medicine,” including stem cells, and marketed her “stem cell” practice through seminars, media interviews, and social media. Derges made similar claims in personal consultations.
In fact, however, the amniotic fluid Derges administered to her patients did not contain mesenchymal stem cells, or any other stem cells. The amniotic fluid she obtained from the University of Utah was a sterile filtered amniotic fluid allograft (a tissue graft comprised of human amniotic membrane and amniotic fluid components derived from placental tissue). The amniotic fluid allograft was “acellular,” meaning it did not contain any cells, including stem cells.
Despite being told that the University of Utah’s amniotic fluid allograft was “acellular” and did not contain mesenchymal stem cells, Derges continued to tell her patients and the public that the amniotic fluid allograft contained stem cells.
Derges administered amniotic fluid, which she falsely claimed contained stem cells, to patients who suffered from, among other things, tissue damage, kidney disease, chronic obstructive pulmonary disease (COPD), Lyme disease, and urinary incontinence. In an April 11, 2020, Facebook post Derges wrote of amniotic fluid allograft: “This amazing treatment stands to provide a potential cure for COVID-19 patients that is safe and natural.”
The University of Utah sold its amniotic fluid allograft to Derges for approximately $244 per milliliter and $438 for two milliliters. Derges charged her patients $950 to $1,450 per milliliter. In total, Derges’s patients paid her approximately $191,815 for amniotic fluid that did not contain stem cells.
Controlled Substances Act
Derges also was convicted of 10 counts of distributing Oxycodone and Adderall over the internet without valid prescriptions. The indictment alleges that Derges, without conducting in-person medical evaluations of the patients, wrote electronic prescriptions for Oxycodone and Adderall for patients and transmitted them to pharmacies over the internet.
Because none of the assistant physicians whom Derges employed at Ozark Valley Medical Clinic could prescribe Schedule II controlled substances, it was the standard practice of the assistant physicians to see a patient and later communicate to Derges the controlled substances they wanted her to prescribe to their patients. Derges, without conducting an in-person medical evaluation of the patients as required by federal law, wrote electronic prescriptions for the patients and transmitted the prescriptions over the internet to pharmacies.
False Statements
Derges also was convicted of two counts of making false statements to federal agents investigating this case in May 2020.
Derges told agents that the amniotic fluid allograft that she used in her practice contained mesenchymal stem cells, which she knew was false. Derges also told federal agents that she had not treated a patient for urinary incontinence with amniotic fluid allograft, which she knew was false.
Assistant Physician
Derges is not a physician but is licensed as an assistant physician. An assistant physician is a mid-level medical professional in the state of Missouri. Under Missouri law, medical school graduates who have not been accepted into a residency program but have passed Step 1 and Step 2 of the United States Medical Licensing Examination may apply to become an assistant physician. State law mandates that assistant physicians practice pursuant to a collaborative practice arrangement with a licensed physician.
Derges obtained her medical degree from the Caribbean Medical University of Curacao in May 2014 but was not accepted into a post-graduate residency program. Derges was licensed as an assistant physician by the state of Missouri on Sept. 8, 2017.
Following the presentation of evidence, the jury in the U.S. District Court in Springfield, Mo., deliberated for about six hours over two days before returning guilty verdicts on all counts to U.S. District Judge Brian C. Wimes, ending a trial that began Monday, June 13.
Under federal statutes, Derges is subject to a sentence of up to 20 years in federal prison without parole on each of the 10 wire fraud counts and on each of the 10 drug distribution counts, and a sentence of up to five years in federal prison without parole on each of the two false statements counts. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Shannon Kempf and Supervisory Assistant U.S. Attorney Randall D. Eggert. It was investigated by the FBI, Health and Human Services – Office of Inspector General, the DEA and the Missouri Attorney General’s Medicaid Fraud Control Unit.
Inland Empire Man Arrested on Indictment Alleging Conspiracy to Distribute Bulk Quantities of Methamphetamine and Firearms OffenseRead the Press Release
LOS ANGELES – A Riverside County man was arrested today on federal charges alleging he manufactured and distributed significant quantities of methamphetamine at his home laboratory – where two young children lived – and illegally possessed firearms and ammunition.
Alvaro Hector Martinez, 32, of Perris, is charged in the indictment with one count of conspiracy to distribute methamphetamine, three counts of possession of methamphetamine, one count of knowingly possessing a firearm in furtherance of a drug trafficking crime and one count of being a felon in possession of a firearm.
Martinez is expected to be arraigned this afternoon at United States District Court in downtown Los Angeles.
According to the indictment returned on June 17, a co-conspirator arranged for wholesale drug purchasers to buy large quantities of narcotics, including methamphetamine, from Martinez. Martinez and others allegedly then manufactured methamphetamine using a homemade laboratory, and used firearms to protect the drugs, the laboratory and their drug proceeds.
Martinez allegedly distributed large amounts of methamphetamine, including a March 2021 drug deal in which he transported 34 pounds (15.4 kilograms) of the drug to a buyer.
After his arrest during a March 2021 traffic stop, law enforcement executed a search warrant on Martinez’s home and found more than 17.6 pounds (8 kilograms) of methamphetamine, 12.6 pounds (5.7 kilograms) of marijuana, five gallons of methamphetamine solution, two rifles, two handguns, eight firearm magazines, 41 rounds of ammunition, tactical vests and a methamphetamine conversion laboratory, according to an affidavit filed with a criminal complaint in this case.
Along with the narcotics, drug paraphernalia and firearms, law enforcement discovered two young boys – 2 and 3 years old, the affidavit states. Child Protective Services subsequently were called to the residence.
Martinez’s criminal history includes felony convictions in Los Angeles Superior Court for grand theft and possession of a firearm by a felon, according to the indictment.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The Drug Enforcement Administration investigated this matter.
Assistant United States Attorney Gregory D. Bernstein of the Major Frauds Section is prosecuting this case.
Indictment Charges 16 Individuals with Drug and Gun OffensesRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, David Sundberg, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, and Hartford Police Chief Jason Thody today announced that a federal grand jury in New Haven has returned a 27-count indictment charging the following 16 individuals with various narcotics distribution and firearm possession offenses stemming from the gang-related distribution of fentanyl, heroin, cocaine and crack:
LUIS FELICIANO, a.k.a. “Louminaty,” 38, of East Hartford
JOSE TIRADO, a.k.a. “Joselito” and “Leet,” 41, of Hartford
CARL JONES, a.k.a. “M.O.B.,” 41, of Hartford
LUIS ROBLES, a.k.a. “Lou,” 25, of Hartford
ROBERTO DIAZ, a.k.a. “Dragon Eyes,” 52, of West Hartford
MILTON ROSARIO, a.k.a. “Little,” 39, of Hartford
ANGEL DELGADO, 58, of Hartford
MARTIN MALDONADO, 33, of Hartford
JEREMY OZUNA, 27, of New Jersey
ROBERT VALLE, 58, of Schenectady, New York
MARSHA WATSON, 33, of Bangor, Maine
DEVIN TEXIRA, a.k.a. “LV,” 25, of Hartford
JOSHUA RODRIGUEZ, 31, of Hartford
JOEL DELEON, JR., a.k.a. “Psycho,” 41, of Hartford
HERIBERTO MENDEZ, a.k.a. “Big Ed,” 43, of Hartford
CHRISTOPHER GILLIARD, a.k.a. “CJ” and “Gilly,” 34, of HartfordThe indictment, which was returned on June 8, alleges that Feliciano and several co-defendants distributed fentanyl, heroin, cocaine and crack to customers and other distributors in the Hartford area, and also to Watson in Bangor, Maine, and Ozuna and Valle in Schenectady, New York. The indictment also alleges that several defendants unlawfully possessed firearms.
Feliciano was arrested on April 13, 2022, after searches of his East Hartford residence and a Hartford apartment he used to store drugs revealed more than three kilograms of heroin, approximately 700 grams of fentanyl, quantities of crack and powder cocaine, and 40 rounds of ammunition. The other defendants have been detained in state custody, or were arrested by members of the FBI’s Northern Connecticut Gang Task Force after the indictment was returned.
The indictment charges Feliciano, Tirado, Jones, Robles, Diaz, Rosario, Delgado, Maldonado, Ozuna, Valle and Watson with conspiracy to possess with intent to distribute, and to distribute, controlled substances. Feliciano, Jones, Tirado, Rodriguez, Delgado, Deleon, Robles and Gilliard are charged in one or more counts with various narcotics distribution offenses.
The indictment also charges Jones, Tirado, Texira, Deleon and Mendez with unlawful possession of a firearm by a felon; Feliciano with unlawful possession of ammunition by a felon; and Robles with possession of a firearm with an obliterated serial number.
U.S. Attorney Avery stressed that an indictment is only a charge and is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This investigation is being conducted by the Federal Bureau of Investigation’s Northern Connecticut Gang Task Force and the Hartford Police Department. The Task Force includes members of the FBI, Hartford Police Department, East Hartford Police Department, New Britain Police Department, West Hartford Police Department, Connecticut State Police and Connecticut Department of Correction. The case is being prosecuted by Assistant U.S. Attorneys Brian P. Leaming and Robert S. Ruff.
Indianapolis Man Sentenced to 188 Months in PrisonRead the Press Release
FORT WAYNE – Daniel Witt, 26 years old, of Indianapolis, Indiana, was sentenced by United States District Court Judge Holly A. Brady after pleading guilty to production of material depicting a minor engaged in sexually explicit conduct, announced United States Attorney Clifford D. Johnson.
Witt was sentenced to 188 months in prison followed by 5 years of supervised release.
According to documents in the case, on or about June 5, 2020, Daniel Witt did employ, use, persuade, induce, entice, or coerce a minor to produce sexually explicit images, knowing and having reason to know that such visual depiction would be transported using any means and facility of interstate commerce.
This case was investigated by the Federal Bureau of Investigation with the assistance of the Allen County Sherriff’s Department. The case was prosecuted by Assistant United States Attorney Lesley J. Miller Lowery.
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Houston truck driver admits to transporting 145 in trailerRead the Press Release
LAREDO, Texas – A 73-year-old Houston man entered a guilty plea to conspiracy to transport an undocumented alien, announced U.S. Attorney Jennifer B. Lowery.
Anthony Alfred Boring arrived at the Border Patrol checkpoint April 15 on IH-35 approximately 29 miles north of Laredo. He was driving a tractor that was pulling a locked utility trailer.
Upon questioning about what he was hauling, Boring appeared shocked. His face also turned pale, his eyes became glassy, and he sunk into his seat. He then shrugged his shoulders and mumbled “I don’t know.”
Law enforcement unlocked the trailer and discovered 145 individuals in the trailer. A total of 86 were from Mexico, 49 from Guatemala and five, three and two from Honduras, El Salvador and Ecuador, respectfully.
One of the people described how hot it was in the trailer and that it was excessively packed with bodies. Further, there was no drinking water in the trailer.
At the time of his sentencing, Boring faces up to 20 years in federal prison and a possible $250,000 maximum fine.
He has been and will remain in custody pending that hearing.
Homeland Security Investigations conducted the investigation with the assistance of Border Patrol. Assistant U.S. Attorney Homero Ramirez is prosecuting the case.
Honduran sent to prison after claims cartel forced him to transport drugsRead the Press Release
CORPUS CHRISTI, Texas – A 28-year-old non-U.S. citizen has been sentenced to federal prison following his conviction for possession with intent to distribute nearly two kilograms of cocaine, announced U.S. Attorney Jennifer B. Lowery.
The jury deliberated for less than five hours following a two-day trial before convicting Edwin Lopez-Chavez March 25 on one count of possession with the intent to distribute cocaine.
Today, U.S. District Judge Nelva Gonzales Ramos ordered Lopez to serve 60 months in federal prison. Not a U.S. citizen, he is expected to face removal proceedings following his sentence. At the hearing, the court heard additional testimony that detailed how Lopez had received money in his jail commissary account from a person related to alien smuggling. Lopez claimed he was unfortunate to get involved with the wrong people as he was attempting to illegally enter the United States.
At trial, the jury heard that Lopez was a passenger in a vehicle that entered the primary inspection area at the Border Patrol checkpoint near Sarita on Aug. 22, 2021. A K-9 alerted to the vehicle which was then sent to the secondary inspection area for further investigation.
There, authorities discovered three non-U.S. citizens inside the trunk of the vehicle. Lopez, admitted he was a citizen and national of Honduras who was illegally present in the United States.
Law enforcement ultimately found four bundles of cocaine taped to his ankles and inside his waist band. Lopez admitted the bundles contained narcotics.
However, during trial, he attempted to convince the jury that he transported the cocaine because some cartel members had threatened him. These people were allegedly involved in moving Lopez and other illegal aliens north.
The jury heard that Lopez could have used his cell phone to contact law enforcement at any time or at the checkpoint explain he had been forced to transport narcotics. Additional evidence showed that he had lied to authorities during an interview by saying that his phone had no service in the United States. A forensic report of his phone revealed otherwise.
The jury ultimately did not believe his claims and found Lopez guilty as charged.
Lopez will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Homeland Security Investigations conducted the investigation with the assistance of the Drug Enforcement Administration and Border Patrol. Assistant U.S. Attorneys Amanda L. Gould and Liesel Roscher prosecuted the case.
Ghislaine Maxwell Sentenced to 20 Years in Prison for Conspiring with Jeffrey Epstein to Sexually Abuse MinorsRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that GHISLANE MAXWELL was sentenced today in Manhattan federal court by United States Circuit Judge Alison J. Nathan to 240 months in prison for her role in a scheme to sexual exploit and abuse multiple minor girls with Jeffrey Epstein over the course of a decade. MAXWELL was previously found guilty on December 29, 2021, following a one-month jury trial, of conspiracy to entice minors to travel to engage in illegal sex acts, conspiracy to transport minors to participate in illegal sex acts, transporting a minor to participate in illegal sex acts, sex trafficking conspiracy, and sex trafficking of a minor.
U.S. Attorney Damian Williams said: “Today’s sentence holds Ghislaine Maxwell accountable for perpetrating heinous crimes against children. This sentence sends a strong message that no one is above the law and it is never too late for justice. We again express our gratitude to Epstein and Maxwell’s victims for their courage in coming forward, in testifying at trial, and in sharing their stories as part of today’s sentencing.”
According to the allegations in the Indictment, court documents, and evidence presented at trial:
From at least 1994, up to and including in or about 2004, GHISLAINE MAXWELL assisted, facilitated, and participated in Jeffrey Epstein’s abuse of minor girls by, among other things, helping Epstein to recruit, groom, and ultimately abuse victims known to MAXWELL and Epstein to be under the age of 18. The victims were as young as 14 years old when they were groomed and abused by MAXWELL and Epstein, both of whom knew that their victims were in fact minors. As a part and in furtherance of their scheme to abuse minor victims, MAXWELL and Epstein enticed and caused minor victims to travel to Epstein’s residences in different states, which MAXWELL knew and intended would result in their grooming for and subjection to sexual abuse.
MAXWELL enticed and groomed minor girls to be abused in multiple ways. For example, MAXWELL attempted to befriend certain victims by asking them about their lives, their schools, and their families, and taking them to the movies or on shopping trips. MAXWELL also acclimated victims to Epstein’s conduct simply by being present for victim interactions with Epstein, which put victims at ease by providing the assurance and comfort of an adult woman who seemingly approved of Epstein’s behavior. Additionally, Epstein offered to help some victims by paying for travel and/or educational opportunities, and MAXWELL encouraged certain victims to accept Epstein’s assistance. As a result, victims were made to feel indebted and believed that MAXWELL and Epstein were trying to help them. MAXWELL also normalized and facilitated sexual abuse for a victim by discussing sexual topics, undressing in front of the victim, being present when the victim was undressed, and encouraging the victim to massage Epstein.
As MAXWELL and Epstein intended, these grooming behaviors left minor victims vulnerable and susceptible to sexual abuse by Epstein. MAXWELL was then present for certain sexual encounters between minor victims and Epstein, such as interactions where a minor victim was undressed, and ultimately was present for sex acts perpetrated by Epstein on minor victims. That abuse included sexualized massages during which a minor victim was fully or partially nude, as well as group sexualized massages of Epstein involving a minor victim where MAXWELL was present. In some instances, MAXWELL participated in the sexual abuse of minor victims.
Ultimately minor victims were subjected to sexual abuse that included, among other things, the touching of a victim’s breasts or genitals, placing a sex toy such as a vibrator on a victim’s genitals, directing a victim to touch Epstein while he masturbated, and directing a victim to touch Epstein’s genitals. MAXWELL and Epstein’s victims were groomed or abused at Epstein’s residences in New York, Florida, and New Mexico, as well as MAXWELL’s residence in London, England.
In the earlier phase of the conspiracy, from at least approximately 1994 through approximately 2001, MAXWELL and Epstein identified vulnerable girls, typically from single-mother households and difficult financial circumstances. This earlier phase required the defendant and Epstein to identify one girl at a time to target for grooming and abuse. In the later phase, from approximately 2001 until at least approximately 2004, MAXWELL and Epstein enticed and recruited, and caused to be enticed and recruited, minor girls to visit Epstein’s Palm Beach Residence to engage in sex acts with Epstein, after which Epstein, MAXWELL, or another employee of Epstein’s would give the victims hundreds of dollars in cash. MAXWELL and Epstein encouraged one or more of those victims to travel with Epstein with the intention that the victim engage in sex acts with Epstein. Moreover, and in order to maintain and increase his supply of victims, MAXWELL and Epstein also paid certain victims to recruit additional girls to be similarly abused by Epstein. In this way, MAXWELL and Epstein created a network of underage victims for Epstein to sexually exploit.
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In addition to the prison sentence, MAXWELL, 60, was sentenced to five years of supervised release and ordered to pay a $750,00 fine.
Mr. Williams praised the outstanding work of the Federal Bureau of Investigation.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Maurene Comey, Alison Moe, Lara Pomerantz, and Andrew Rohrbach are in charge of the prosecution.
Four Plead Guilty to Obtaining Nearly $5 Million in Fraudulent PPP LoansRead the Press Release
Charleston, South Carolina --- Lori Hammond, 53 of Summerville, Catherine (“Cassie”) Needham, 36, of Manning, Jontrell Wright, 35, of Holly Hill, and Christopher Conrad, 39, of Holly Hill, have all pleaded guilty to conspiracy to commit wire fraud, and wire fraud, in connection with their roles in fraudulently obtaining millions of dollars in PPP loans.
Evidence presented to the Court showed that from in or around June 2020 through around January 2021, Lori Hammond caused multiple materially fraudulent PPP loan applications to be submitted to federally insured financial institutions on behalf of herself and her co-conspirators. In these loan applications, Hammond used the identity of a deceased individual, misrepresented the number of employees and payroll expenses of the entities seeking the loans, attached fraudulent tax documents, and made numerous other false and misleading statements. As part of the conspiracy, Hammond assisted Needham, Conrad, and Wright by filling out the loan application documents with materially false and fraudulent information and then submitting them to an individual in California. The individual in California would in turn submit the fraudulent loan applications to financial institutions in exchange for a fee. Based on the false representations and submissions in the applications, the approved PPP lenders funded the PPP loans. After the funds were deposited into the respective accounts, Hammond, Wright, Needham, and Conrad used the funds for non-qualifying, non-business-related purposes, including homes, property, cars, and other personal purchases.
In total, the members of the conspiracy fraudulently obtained $4,721,638.50 in PPP loan funds.
The defendants all face a maximum penalty of twenty years in federal prison. They also face a fine of up to $250,000, restitution, and 3 years of supervision to follow the term of imprisonment. United States District Judge David C. Norton accepted the guilty plea and will sentence the defendants after receiving and reviewing a sentencing report prepared by the United States Probation Office.
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.
This case was investigated by the Federal Bureau of Investigation (FBI). Assistant U.S. Attorney Emily Limehouse is prosecuting the case.
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Fort Thompson Man Indicted for Sexual Abuse ChargesRead the Press Release
United States Attorney Alison Ramsdell announced that a Fort Thompson, South Dakota, man has been indicted by a federal grand jury for Aggravated Sexual Abuse of a Child and Aggravated Sexual Abuse of a Minor by Force.
Jeffery Pickner, age 45, was indicted on June 14, 2022. He appeared before U.S. Magistrate Judge Mark A. Moreno on June 24, 2022, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to life in federal prison and/or a $250,000 fine, up to life of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between July 1994 and June 1997, Pickner sexually abused two victims, both of whom were under the age of twelve. The Indictment further alleges that between November 2015 and September 2016, Pickner sexually abused a third victim by force, who had not attained the age of sixteen.
The charges are merely accusations and Pickner is presumed innocent until and unless proven guilty.
The investigation is being conducted by the FBI. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Pickner was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Former Warren County Businessman Admits Fraudulently Obtaining $1.8 Million in COVID-19 Loans Meant for Small BusinessesRead the Press Release
NEWARK, N.J. – A Warren County, New Jersey, businessman today admitted fraudulently obtaining nearly $1.8 million in federal Paycheck Protection Program (PPP) loans, U.S. Attorney Philip R. Sellinger and Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division announced.
Rocco A. Malanga, 50, formerly of Hackettstown, New Jersey, pleaded guilty by videoconference before U.S. District Judge Julien X. Neals to an information charging him with one count of bank fraud and one count of money laundering.
According to documents filed in the case and statements made in court:
From April 2020 through August 2020, Malanga submitted false documentation to three lenders to fraudulently obtain approximately $1.8 million in federal COVID-19 emergency relief funds meant for distressed small businesses. He submitted at least three PPP loan applications on behalf of three different business entities in which he fabricated the number of employees employed by each business entity, as well as their average monthly payroll. Malanga then diverted some of the proceeds from the loans to fund a business that did not receive PPP loan funds.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allowed qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. Businesses must have used PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allowed the interest and principal to be forgiven if businesses spent the proceeds on these expenses within a set time period and used at least a certain percentage of the loan towards payroll expenses.
The bank fraud charge carries a maximum penalty of 30 years in prison and a $1 million fine; the money laundering charge carries a maximum sentence of 10 years and a $250,000 fine. Sentencing is scheduled for Nov. 2, 2022.
U.S. Attorney Sellinger and Assistant Attorney General Polite credited special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Tammy L. Tomlins; postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Damon Wood; special agents of the Office of Inspector General for the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection, under the Direction of Acting Special Agent in Charge Stephen Donnelly; special agents of the Federal Deposit Insurance Corporation, Office of Inspector General, under the direction of Special Agent in Charge Patricia Tarasca, New York Region; and special agents of the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Sharon MacDermott, with the investigation leading to the today’s guilty plea.
The government is represented by Assistant U.S. Attorney Blake Coppotelli of the District of New Jersey and Trial Attorney Della Sentilles of the Fraud Section of the Department of Justice.
Former Stockbroker Pleads Guilty to Charges for $3.2 Million Investment Fraud, Cheating on Taxes, Defrauding Elderly VictimRead the Press Release
SANTA ANA, California – A former licensed stockbroker pleaded guilty today to federal criminal charges for running a securities fraud scheme in which he targeted low-income Hispanic victims to obtain more than $3.2 million via false promises of high returns from construction loans, cheating on his taxes, and – in a separate scheme – conspiring to defraud an elderly man out of nearly $400,000 through a “relative-in-distress” scheme.
Robert Louis Cirillo, 61, of Chino Hills, pleaded guilty to one count of securities fraud, one count of filing a false tax return, and one count of conspiracy to commit wire fraud.
According to his plea agreement, from 2014 to 2021, Cirillo deceived more than 100 victims by lying to them that he would be investing their funds in short-term construction loans that would pay large return rates that ranged from 15% to 30% for a period of up to 90 days. As part of the scheme, Cirillo showed actual and prospective victim-investors fabricated bank statements that purported to show the investments’ growth.
In reality, Cirillo never invested the victims’ money and instead used it for his own personal expenses, including credit card payments, a trip to Las Vegas, and two automobiles – a Jeep and an Alfa Romeo.
Cirillo admitted to targeting members of the Hispanic community, many of whom were of limited means, for his fraudulent scheme. One victim invested her life savings of $20,000 in Cirillo’s scheme.
In the spring of 2021, Cirillo was part of a scheme that deceived a senior citizen into believing that his grandson had been arrested for possession of illegal narcotics, which was false. Cirillo’s co-conspirators convinced the victim to send a total of nearly $400,000 for his grandson’s “bail.” Cirillo used some of that victim’s money for his own personal benefit.
Finally, Cirillo admitted to filing false income tax returns for the years 2015, 2016 and 2017 by failing to report a total of more than $3 million in income. For example, on his 2017 federal income tax return, Cirillo reported a total income of $30,985, which failed to include more than $1.9 million in income he received from his investment fraud scheme.
Cirillo’s investment fraud resulted in a total loss of $3,237,262; his conspiracy to defraud the senior citizen resulted a total loss of $399,550; and the total tax loss incurred was $675,898.
United States District Judge David O. Carter has scheduled a September 6 sentencing hearing, at which time Cirillo will face a statutory maximum sentence of 43 years in federal prison.
The FBI and IRS Criminal Investigation investigated this matter.
Assistant United States Attorney Charles E. Pell of the Santa Ana Branch Office is prosecuting this case.
Former St. Louis postal union president gets probation, house arrest for embezzling union fundsRead the Press Release
ST. LOUIS – U.S. District Judge Rodney W. Sippel on Tuesday sentenced the former president of a local postal workers union to five years of probation and six months of house arrest for embezzling $80,000.
Scott E. Rodgers, 51, was also ordered to repay the money.
Rodgers embezzled a total of $80,756. From 2016, when he became president of Postal Mail Handlers Local 314, to April 2020, Rodgers made four unauthorized ATM withdrawals from the union account and used the union debit card for personal purchases including meals, fuel, transportation, shopping and travel. He also falsely claimed and received “lost time” payments, or compensation for wages lost when performing work for the union.
Rodgers’ spending happened “on the backs of hard-working postal workers,” said Assistant U.S. Attorney Tiffany Becker, who prosecuted the case, in court. Becker also pointed out that Rodgers’ travel and casino trips occurred while he was receiving both his salary from the union and disability payments.
Rodgers also made his ATM withdrawals despite confronting a former union treasurer about her unauthorized ATM withdrawals, his plea says.
On January 26, Rodgers pleaded guilty to one count of embezzlement from a labor union.
The union’s former treasurer, Yvette Luster, was sentenced last year to 18 months in prison for embezzling over $184,000.
The case was investigated by the Labor Department’s Office of Labor Management Standards.
Former Saratoga County Resident Pleads Guilty to Money Laundering ConspiracyRead the Press Release
ALBANY, NEW YORK – Christopher L. Vandermark, age 57, formerly of Gansevoort, New York, pled guilty today to engaging in a money laundering conspiracy designed to conceal proceeds from a multi-state unemployment insurance fraud scheme.
The announcement was made by United States Attorney Carla B. Freedman and John Pias, Special Agent in Charge of the Detroit Field Office of the U.S. Department of Homeland Security, Office of Inspector General (DHS-OIG).
In pleading guilty, Vandermark admitted to corresponding via online text messages for over one year with a person who represented herself to be a woman living in North Carolina. The woman directed Vandermark to open accounts at multiple financial institutions, as well as provide her with routing details for his existing accounts. From June 2020 through early April 2021, Vandermark’s accounts received transfers of more than $88,000 in fraudulently obtained unemployment insurance benefits from six states. Vandermark purchased hundreds of gift cards from local retailers using the benefits, photographed the identifying numbers on the cards, and sent the photographs to the woman. The identifying numbers could be used to sell the gift cards online as part of an effort to conceal the original source of the funds.
Vandermark admitted that he received multiple warnings from financial institutions that his actions were furthering a fraudulent scheme. Additionally, on April 15, 2021, a federal law enforcement agent and a state investigator interviewed Vandermark at his residence regarding approximately $37,000 in fraudulently obtained unemployment insurance benefits transferred to his account at a local bank. Vandermark denied holding the account and receiving the funds. Both statements were false. Following the law enforcement interview, Vandermark opened yet another account with a financial institution and received an additional $13,734 in benefits from three states into two accounts, which he used to purchase more gift cards through July 2021. As before, he photographed the gift cards and sent the photos to the woman.
Vandermark admitted responsibility for $13,734 in benefits laundered through his accounts after the April 15, 2021 law enforcement interview. He agreed to pay restitution to the affected states.
Vandermark’s money laundering conspiracy conviction carries a maximum term of 20 years in prison, a fine of up to $500,000, and a term of supervised release of up to 3 years. Vandermark is scheduled to be sentenced on October 27, 2022 by Senior United States District Judge Gary L. Sharpe. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
The case was investigated by DHS-OIG, with assistance from the Social Security Administration Office of the Inspector General and the Office of the New York State Comptroller. The case is being prosecuted by Assistant U.S. Attorney John T. Chisholm.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Former Middle School Paraprofessional Pleads Guilty to Child Sextortion SchemeRead the Press Release
MINNEAPOLIS – A Coon Rapids man has pleaded guilty to a sextortion scheme that targeted minors through social media and an online gaming forum, announced U.S. Attorney Andrew M. Luger.
According to court documents, Glen Robert Anderson, 24, previously worked as a middle school paraprofessional in special education. Anderson used multiple internet applications and social media accounts for email, file sharing, and chatting with minors, including Snapchat and Grindr. Anderson also owned and administered an online gaming forum. To participate in the forum, users were required to submit an application, which included the age of the user. As Anderson knew, many of the users were minors. Between April 1, 2016, through August 20, 2021, Anderson used his position as the forum administrator to groom minors to produce child pornography and engage in sexual activity with him, including by providing minors with in-game perks, privileges, and other gifts. For example, Anderson coerced a 13-year-old victim to engage in sexually explicit acts for the purpose of producing images and videos. Anderson later threatened to release those sexually explicit images if the victim did not respond to Anderson’s demands.
Anderson pleaded guilty today before U.S. District Judge Patrick J. Schiltz to two counts of production of child pornography, one count of enticement of a minor, and one count of interstate communications with intent to extort. Anderson was ordered to remain in detention pending his sentencing hearing on October 25, 2022.
This case is brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov. Click on the “resources” tab for information about Internet safety education.
This case is the result of an investigation conducted by the FBI, the Anoka County Sheriff's Office, the Erie County (Ohio) Sheriff's Office, with assistance from the Minnesota Bureau of Criminal Apprehension and Waterloo Regional Police Service in Ontario, Canada.
Assistant U.S. Attorney Miranda E. Dugi is prosecuting the case.
Former Enforcer of New Bedford Latin Kings Chapter Pleads Guilty to Racketeering ConspiracyRead the Press Release
BOSTON – A former member and Enforcer of the New Bedford Chapter of the Massachusetts Almighty Latin King and Queen Nation (Latin Kings) pleaded guilty today to racketeering charges.
Orlando Santiago-Torres, a/k/a “King Landy,” 27, pleaded guilty to conspiracy to conduct enterprise affairs through a pattern of racketeering activity, more commonly referred to as RICO conspiracy, and conspiracy to manufacture and distribute controlled substances. U.S. Senior District Court Judge Rya W. Zobel scheduled sentencing for Oct. 13, 2022.
According to court documents, the Latin Kings are a violent criminal enterprise comprised of thousands of members across the United States. The Latin Kings adhere to a national manifesto, employ an internal judiciary and use a sophisticated system of communication to maintain the hierarchy of the organization. As alleged in court documents, the gang uses drug distribution to generate revenue, and engages in violence against witnesses and rival gangs to further its influence and to protect its turf.
As Enforcer, Santiago-Torres was an officer in the New Bedford Chapter of the Latin Kings and was responsible for organizing violence against rival gang members and instilling discipline among Latin Kings members in the commission of violence. Santiago-Torres also organized security for the Latin Kings’ apartment buildings, or “trap houses,” from which the gang members distributed cocaine and cocaine base.
At today’s hearing, Santiago-Torres admitted to participating in a series of violent acts and shootings that were committed in New Bedford in furtherance of the Latin Kings enterprise. In February 2019, Santiago-Torres assaulted a rival gang member and was captured on video chasing the rival gang member down, pushing him to the ground and kicking him. In May 2019, Santiago-Torres participated in the assault and shooting of a rival gang member and was captured on video surveillance with other Latin King members, one of whom engaged in a fight with the rival member and fired a handgun at him. In July 2019, Santiago-Torres fired multiple rounds of ammunition on a New Bedford street at rival gang members as they fled a fight with the Latin Kings. Later, in September 2019, Santiago-Torres participated in a shooting with other Latin Kings members in which a victim was struck with gunfire and casings from the scene were linked to a firearm recovered from Santiago-Torres’ apartment. Lastly, in November 2019, Santiago-Torres and other Latin Kings members assaulted a rival gang member, in which Santiago-Torres dragged the victim out of a vehicle to beat and kick him on the street.
In December 2019, a federal grand jury returned an indictment alleging racketeering conspiracy, drug conspiracy and firearms charges against 62 leaders, members and associates of the Latin Kings. Santiago-Torres is the 59th defendant to plead guilty in the case.
The RICO conspiracy charge provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. The charge of conspiracy to manufacture and distribute controlled substances provides for a sentence of up to 20 years in prison, at least three years of supervised release and a fine of up to $1 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
United States Attorney Rachael S. Rollins; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Commissioner Carol Mici of the Massachusetts Department of Correction; and New Bedford Police Chief Paul Oliveira made the announcement. Valuable assistance was also provided by the FBI North Shore Gang Task Force and the Bristol County and Suffolk County District Attorney’s Offices. Assistant U.S. Attorney Philip A. Mallard of Rollins’ Organized Crime and Gang Unit is prosecuting the case.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Bookkeeper Sentenced to over Four Years for Stealing $2.6 Million from DRWCRead the Press Release
PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Angela DiPietro-Sabatine, 57, of Pennsauken, NJ, was sentenced to four years and three months in prison, three years of supervised release, and was ordered to pay $2,644,543 in restitution and the same amount in criminal forfeiture by United States District Court Judge Joshua D. Wolson for her theft of more than $2.6 million dollars from her former employer, the Delaware River Waterfront Corporation (DRWC), an organization whose mission is to design, develop, and manage the central Delaware River waterfront from Oregon to Allegheny Avenues for the benefit of Philadelphia residents.
In February 2022, the defendant pleaded guilty to charges of wire fraud, aggravated identity theft and bank fraud in connection with a scheme to create false financial records for the non-profit and then steal the funds for her personal use. As Accounting Administrator for DRWC, her duties included managing the accounts payable and receivable, bank reconciliations, and general ledger work. DiPietro-Sabatine used the non-profit’s computerized accounting software to create false expense items for legitimate vendors of DRWC in order to invoice services that were never rendered. The defendant then generated DRWC checks for these false expense items, manipulated the computerized accounting software to change the payee on the check from the legitimate vendor to herself, and forged the signatures of DRWC’s authorized signatories, the President and Vice President, on these unauthorized checks made payable to herself. She spent the stolen proceeds, more than $2.6 million, on personal expenses, including gambling and luxury vacations.
“Organizations, especially non-profits and charities with a mission to benefit the public good, must be able to rely on the honesty of employees who handle money,” said U.S. Attorney Romero. “DiPietro-Sabatine went to great lengths to hide her criminal conduct from her employer for many years, but justice finally caught up with her. We appreciate DRWC’s cooperation in this investigation so the defendant could be held accountable for her actions.”
The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Nancy Potts.
Former Airline Employee and Aircraft Part Sellers Charged in Kickback and Money Laundering SchemeRead the Press Release
An indictment was unsealed earlier today in federal court in Brooklyn charging Keily Nunez, Julien Levy, Ivan Santos and Ramnik Soni with conspiracy to commit honest services wire fraud and money laundering conspiracy. The charges arise from a scheme in which Nunez, a former employee of a U.S. airline headquartered in Long Island City, New York (Company 1), accepted more than $1 million in kickbacks in exchange for steering Company 1 aircraft part purchase orders to Summit Aviation Supply LLC (Summit LLC), a New Jersey-based company controlled by Levy and Santos; and to Alaris Aerospace Systems LLC (Alaris), a Florida-based company controlled by Soni. Summit LLC and Alaris secured more than $1.5 million and more than $8.5 million, respectively, in purchase orders from Company 1 during the conspiracy. Levy was arrested yesterday; Santos and Nunez were arrested today and all three were arraigned this afternoon before United States Magistrate Judge Roanne L. Mann. Levy was released on a $400,000 bond, Santos on a $150,000 bond, and Nunez on a $150,000 bond. Soni was arrested today and will be arraigned tomorrow.
Breon Peace, United States Attorney for the Eastern District of New York, and Ricky J. Patel, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), announced the arrests and charges.
“As alleged, the defendants were at the helm of a corrupt scheme to defraud an airline by diverting contracts to vendors in exchange for more than $1 million in kickbacks,” stated United States Attorney Peace. “This Office is committed both to protecting the integrity of the bidding process and ensuring that businesses compete on a level, honest playing field.”
Mr. Peace thanked Internal Revenue Service Criminal Investigation for its assistance with the investigation.
“The defendants, as alleged, orchestrated an elaborate scheme to defraud the airline industry – lining their own pockets with kickbacks and bribes along the way. The defendants are alleged to have created false invoices for parts, billed for non-existent material and overbilled on legitimate purchases all while circumventing the airline’s policies and procedures,” said HSI New York Acting Special Agent in Charge Patel. “HSI will continue to work alongside our partners and private sector companies to weed out internal corruption, ultimately protecting the general public from the resulting costs that frauds of this nature eventually pass on to the paying customer.”
As alleged in the indictment, between approximately July 2017 and June 2021, Levy, Nunez and Santos conspired to defraud Company 1 of the honest services of its employees, including Nunez and another Company 1 employee (“Co-Conspirator 1”). In their roles with Company 1, Nunez and Co-Conspirator 1 were responsible for contacting after-market aircraft parts sellers on behalf of Company 1 and filling Company 1’s part requisitions using a solicitation process that typically involved three price quotes and a comparison to historical prices Company 1 had paid for a given part. In their roles, Nunez and Co-Conspirator 1 could request that Company 1 add new aircraft part sellers as business partners to Company 1’s internal ordering system. Upon making such a request, Nunez and Co-Conspirator 1 were required by Company 1’s policies to disclose whether they had a business or financial relationship with the new business partner.
In order to carry out the scheme, Nunez allegedly used his position within Company 1 to establish Summit LLC as a Company 1 business partner and falsely represented to Company 1 that Summit LLC was another entity, Summit Corp., that Company 1 had previously partnered with. In reality, Santos established Summit LLC and opened bank accounts in its name, and Levy created an email account in the name of an individual who had been associated with the defunct Summit Corp., that was used as an alias to communicate with Company 1 on behalf of Summit LLC. Nunez approved approximately 37 purchase orders between Summit LLC and Company 1 valued at over $1.5 million. In exchange, Nunez received multiple kickback payments representing a percentage of the purchase orders directed to Summit LLC. In addition, following the termination of Nunez’s employment with Company 1, Nunez contacted Co-Conspirator 1 about steering Company 1’s purchase orders to Summit LLC and Alaris in exchange for a portion of the invoiced amounts. Co-Conspirator 1 agreed and subsequently directed Company 1 purchase orders, at inflated prices, to Summit LLC and Alaris in exchange for a percentage of some of the invoices Co-Conspirator 1 approved.
Nunez carried out a similar scheme with Soni and Alaris. Between approximately March 2017 and July 2019, Nunez allegedly approved approximately 109 invoices between Alaris and Company 1 valued at over $8.5 million. In exchange, Nunez received wires totaling hundreds of thousands of dollars sent from Alaris to bank accounts held in the name of FI USA Consulting LLC (FI USA), an entity controlled by Nunez. For example, between approximately October 2017 and January 2021, the FI USA accounts received approximately 17 wires from Alaris totaling approximately $536,940.
In order to disguise the source and nature of the funds Summit LLC received from the scheme, Santos and Levy made multiple transfers of the proceeds from the Company 1 payments between bank accounts in their names.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants face up to 20 years in prison.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Department of Justice Trial Attorney Patrick J. Campbell and Assistant United States Attorney Garen S. Marshall are in charge of the prosecution.
The Defendants:
JULIEN LEVY
Age: 37
Englewood, New JerseyKEILY NUNEZ
Age: 42
Jamaica, New YorkIVAN SANTOS
Age: 41
New City, New YorkROMNIK SONI
Age: 48
Parkland, FloridaE.D.N.Y. Docket No. 22-CR-281 (BMC)
Final Defendant of Four Sioux Falls Men Arrested for Role in Bank Fraud & Money Laundering ConspiraciesRead the Press Release
United States Attorney Alison J. Ramsdell announced that a Sioux Falls, South Dakota, man has been indicted by a federal grand jury for his role in bank fraud and money laundering conspiracies.
Keyvon Hamilton Hogan Jr., age 22, was indicted on April 5, 2022. He made his initial appearance before U.S. Magistrate Judge Daneta Wollman on June 22, 2022, and pled not guilty to the Indictment. Keyvon Hamilton Hogan Jr. has been charged with three co-defendants: Antyon Hamilton Hogan Jr., age 24; Marvin Antuon Williams, age 31; and Giovanni Hamilton, age 23.
The maximum penalty upon conviction is up to 30 years in custody for Bank Fraud Conspiracy, 20 years in custody for Money Laundering Conspiracy, and/or a $250,000 fine, three years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution and forfeiture may also be ordered.
According to the Indictment, in 2020 and continuing until April 2022, all of the defendants conspired and agreed with others to knowingly conduct and attempt to conduct bank fraud and financial transactions affecting interstate and foreign commerce. Specifically, the co-conspirators knowingly conspired to execute and attempt to execute a scheme and artifice to defraud financial institutions throughout the Sioux Falls area and elsewhere, including, but not limited to, First Premier Bank, Wells Fargo Bank, Levo Credit Union, First National Bank, First Bank and Trust, U.S. Bank, American Bank and Trust, American State Bank, Navy Federal Credit Union, Pima Federal Credit Union, JP Morgan Chase, and Security National Bank of South Dakota. These defendants, as alleged, schemed to obtain money, funds, and other property owned by, and under the custody and control of, the aforementioned financial institutions, by means of false or fraudulent pretenses, representations, and promises.
After obtaining funds through fraud, the co-conspirators and others engaged in depositing, transferring, wiring, and withdrawing currency, and funds at financial institutions, which involved the proceeds of specified unlawful activity – that is, the bank fraud identified above. These defendants knew that the transactions were designed in whole or in part to conceal and disguise the nature, location, source, ownership, or control of the proceeds of the fraud scheme. While conducting and attempting to conduct such financial transactions, it is alleged that the defendants knew that the property involved in the financial transactions represented the proceeds of some form of unlawful activity.
The charges are merely accusations, and the defendants are presumed innocent until and unless proven guilty.
The investigation is being conducted by the following agencies:
- Internal Revenue Service Criminal Investigation;
- Department of Homeland Security, Homeland Security Investigations;
- Sioux Falls Police Department;
- U.S. Postal Service; and
- South Dakota Highway Patrol.
Assistant U.S. Attorney Jeremy R. Jehangiri is prosecuting the case.
Antyon Hogan, Williams, and Keyvon Hogan were remanded to the custody of the U.S. Marshals Service pending further proceedings and trial. Giovanni Hamilton was released on bond. A trial date of August 30, 2022, has been set.
Fifteen Texas Doctors Agree to Pay over $2.8 Million to Settle Kickback AllegationsRead the Press Release
SHERMAN, Texas – Fifteen additional Texas doctors have agreed to pay a total of $2,831,280 to resolve False Claims Act allegations involving illegal kickbacks in violation of the Anti-Kickback Statute and Stark Law, and to cooperate with the Department’s investigations of and litigation against other parties, announced Eastern District of Texas U.S. Attorney Brit Featherston today.
“These settlements should reinforce the message that the Eastern District of Texas will not tolerate health care providers who seek to enrich themselves through kickback schemes,” said U.S. Attorney Brit Featherston. “We will continue to work with our agency partners to identify those who defraud our taxpayers and we will hold those who have engaged in the schemes responsible.”
The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs. The Stark Law forbids a hospital or laboratory from billing Medicare for certain services referred by physicians that have a financial relationship with the hospital or laboratory. The Anti-Kickback Statute and the Stark Law are intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.
The settlements announced today resolve allegations that fifteen Texas doctors violated the Anti-Kickback Statute and the Stark Law by receiving thousands of dollars in remuneration from nine management service organizations (MSOs) in exchange for ordering laboratory tests from Rockdale Hospital d/b/a Little River Healthcare (Little River), True Health Diagnostics LLC (True Health), and/or Boston Heart Diagnostics Corporation (Boston Heart). Little River allegedly funded the remuneration to certain doctors, in the form of volume-based commissions paid to independent contractor recruiters, who used MSOs to pay numerous doctors for their referrals. The MSO payments to the doctors were allegedly disguised as investment returns but in fact were based on, and offered in exchange for, the doctors’ referrals.
- Louis Coates, D.O., of Garland, Texas, agreed to pay $87,694 to settle allegations that from September 26, 2016 to March 14, 2018 he received kickbacks from an MSO, Herculis MG LLC, in return for ordering laboratory tests from Boston Heart.
- Jason DeMattia, M.D., and Candice DeMattia, M.D., both of Tomball, Texas, agreed to pay $316,142 and $207,009, respectively, to settle allegations that from August 1, 2014 to December 31, 2016 they received kickbacks from two MSOs, North Houston MSO Group, Inc. and Tomball Medical Management, Inc., in return for ordering laboratory tests from True Health and Little River.
- Emanuel Paul (“E.P.”) Descant, II, M.D., of Spring, Texas, agreed to pay $256,466 to settle allegations that from January 5, 2015 through February 3, 2018 he received kickbacks from two MSOs, North Houston MSO Group, Inc. and Tomball Medical Management, Inc., in return for ordering laboratory tests from Little River.
- Mitchell Finnie, M.D., of San Antonio, Texas, agreed to pay $582,522 to settle allegations that from June 4, 2015 to July 11, 2017 he received kickbacks from two MSOs, Alpha Rise Health, LLC and Tango Rise Health Solutions LLC, in return for ordering laboratory tests from Boston Heart, True Health, and Little River.
- Mark Le, M.D., of Tomball, Texas, agreed to pay $57,900 to settle allegations that from May 9, 2016 to September 22, 2017 he received kickbacks from two MSOs, North Houston MSO Group, Inc. and Tomball Medical Management, Inc., in return for ordering laboratory tests from True Health and Little River.
- Richard Le, M.D., of Houston, Texas, agreed to pay $41,000 to settle allegations that from September 29, 2016 to August 24, 2017 he received kickbacks from two MSOs, North Houston MSO Group, Inc. and Tomball Medical Management, Inc., in return for ordering laboratory tests from True Health and Little River.
- Robert Jeremy Laningham, M.D., and Rodney Jason Laningham, M.D., both of Conroe, Texas, agreed to pay $470,560 to settle allegations that from August 8, 2015 through July 6, 2016, they received kickbacks from two MSOs, SYNRG Partners LLC and Transparity Associates LP in return for ordering laboratory tests from Boston Heart, True Health, and Little River.
- Andres Mesa, M.D., of Houston, Texas, agreed to pay $45,484 to settle allegations that from May 1, 2016 to January 9, 2018, he received kickbacks from an MSO, Transparity Associates LP, in return for ordering laboratory tests from Boston Heart and Little River.
- Melissa Miskell, D.O., of New Braunfels, Texas, agreed to pay $100,392 to settle allegations that from July 13, 2015 to December 14, 2017, she received kickbacks from an MSO, Alpha Rise Health, LLC, in return for ordering laboratory tests from Boston Heart and Little River.
- Marco Munoz, M.D., of Fort Worth, Texas, agreed to pay $54,280 to settle allegations that from July 7, 2015 to April 6, 2016, he received kickbacks from an MSO, Alpha Rise Health, LLC, in return for ordering laboratory tests from Boston Heart and Little River.
- Kozhaya Sokhon, M.D., of the Woodlands, Texas, agreed to pay $160,456 to settle allegations that from January 16, 2015 to May 18, 2018, he received kickbacks from two MSOs, SYNRG Partners LLC and Transparity Associates LP, in return for ordering laboratory tests from Boston Heart and Little River.
- Annie Varughese, M.D., of the Woodlands, Texas, agreed to pay $213,888 to settle allegations that from September 1, 2015 to November 17, 2017, she received kickbacks from three MSOs, SYNRG Partners LLC, Transparity Associates, LP, and North Houston MSO Group, Inc., in return for ordering laboratory tests from True Health and Little River.
- Paul Worrell, D.O., of Dallas, Texas, agreed to pay $237,487 to settle allegations that from October 9, 2015 to December 31, 2017, he received kickbacks from three MSOs, Ascend MSO of TX LLC, Eridanus MG LLC, and BDS Healthcare, LLC, d/b/a Vybrem Labs, in return for ordering laboratory tests from Boston Heart, True Health, and Little River.
As part of their settlements, the fifteen physicians have agreed to cooperate with the Department of Justice’s investigations of and litigation against other parties involved in the alleged violations of law.
“The Anti-Kickback and Stark Statutes help protect the integrity of federal healthcare programs,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to pursue both individuals and corporations responsible for schemes that violate these important safeguards.”
“This outcome is the result of cooperation amongst law enforcement partners focused on upholding the integrity of federal healthcare programs,” said Miranda L. Bennett of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). “We will continue to pursue physicians engaging in improper financial relationships to ensure patients are receiving quality medical care.”
“Today’s announcement is another step forward by the Department of Defense, Office of Inspector General’s Defense Criminal Investigative Service (DCIS) and our law enforcement partners to protect the integrity of the military’s health care system, commonly known as TRICARE,” said Acting Special Agent in Charge Gregory P. Shilling of the DCIS Southwest Field Office. “We will continue to aggressively investigate and hold those accountable that take advantage of the U.S. Government and American taxpayers.”
“The VA Office of Inspector General actively investigates those in violation of the Stark Law and the Anti-Kickback Statute,” said Special Agent in Charge Jeffrey Breen of the South Central Field Office of the Department of Veterans Affairs Office of Inspector General (VA-OIG). “Today’s civil settlements demonstrate the VA OIG’s ongoing work to hold individuals accountable and protect the integrity of federal healthcare programs.”
Former True Health CEO Christopher Grottenthaler, former Boston Heart CEO Susan Hertzberg, former Little River CEO Jeffrey Madison, and others are defendants in a separate False Claims Act lawsuit in which the United States filed an amended complaint in May 2022. That pending case is captioned United States ex rel. STF, LLC v. True Health Diagnostics, LLC, et al., No. 4:16-cv-547 (E.D. Tex.). If a defendant is found liable for violating the act, the United States may recover three times the amount of its losses plus applicable penalties.
The civil settlements were the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of Texas and the Civil Division’s Commercial Litigation Branch, Fraud Section, with assistance from HHS-OIG, DCIS, and VA-OIG. As a result of its efforts, the United States has recovered over $32 million relating to conduct involving Boston Heart, True Health, and Little River, including False Claims Act settlements with thirty-three physicians, two healthcare executives, and one laboratory. This matter and the related matters were handled by Assistant U.S. Attorneys James Gillingham, Adrian Garcia, and Betty Young, Senior Trial Counsel Christopher Terranova, and Trial Attorney Gavin Thole.
The government’s pursuit of these matters illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 1-800-HHS-TIPS (800-447-8477).
The claims resolved by the settlements are allegations only, and there has been no determination of liability.
####
Fifteen Texas Doctors Agree to Pay over $2.8 Million to Settle Kickback AllegationsRead the Press Release
Fifteen additional Texas doctors have agreed to pay a total of $2.83 million to resolve False Claims Act allegations involving illegal kickbacks in violation of the Anti-Kickback Statute and Stark Law, and to cooperate with the Department of Justice’s investigations of and litigation against other parties.
“The Anti-Kickback and Stark Statutes help protect the integrity of federal health care programs,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to pursue both individuals and corporations responsible for schemes that violate these important safeguards.”
“These settlements should reinforce the message that the Eastern District of Texas will not tolerate health care providers who seek to enrich themselves through kickback schemes,” said U.S. Attorney Brit Featherston for the Eastern District of Texas. “We will continue to work with our agency partners to identify those who defraud our taxpayers and we will hold those who have engaged in the schemes responsible.”
“This outcome is the result of cooperation amongst law enforcement partners focused on upholding the integrity of federal health care programs,” said Special Agent in Charge Miranda L. Bennett of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). “We will continue to pursue physicians engaging in improper financial relationships to ensure patients are receiving quality medical care.”
The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally-funded programs. The Stark Law forbids a hospital or laboratory from billing Medicare for certain services referred by physicians that have a financial relationship with the hospital or laboratory. The Anti-Kickback Statute and the Stark Law are intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.
The settlements announced today resolve allegations that 15 Texas doctors violated the Anti-Kickback Statute and the Stark Law by receiving thousands of dollars in remuneration from nine management service organizations (MSOs) in exchange for ordering laboratory tests from Rockdale Hospital dba Little River Healthcare (Little River), True Health Diagnostics LLC (True Health), and/or Boston Heart Diagnostics Corporation (Boston Heart). Little River allegedly funded the remuneration to certain doctors, in the form of volume-based commissions paid to independent contractor recruiters, who used MSOs to pay numerous doctors for their referrals. The MSO payments to the doctors were allegedly disguised as investment returns but in fact were based on, and offered in exchange for, the doctors’ referrals.
- Louis Coates, D.O., of Garland, Texas, agreed to pay $87,694 to settle allegations that from Sept. 26, 2016, to March 14, 2018, he received kickbacks from an MSO, Herculis MG LLC, in return for ordering laboratory tests from Boston Heart.
- Jason DeMattia, M.D., and Candice DeMattia, M.D., both of Tomball, Texas, agreed to pay $316,142 and $207,009, respectively, to settle allegations that from Aug.1, 2014, to Dec. 31, 2016, they received kickbacks from two MSOs, North Houston MSO Group Inc. and Tomball Medical Management Inc., in return for ordering laboratory tests from True Health and Little River.
- Emanuel Paul (E.P.) Descant II, M.D., of Spring, Texas, agreed to pay $256,466 to settle allegations that from Jan. 5, 2015, through Feb. 3, 2018, he received kickbacks from two MSOs, North Houston MSO Group Inc. and Tomball Medical Management Inc., in return for ordering laboratory tests from Little River.
- Mitchell Finnie, M.D., of San Antonio, Texas, agreed to pay $582,522 to settle allegations that from June 4, 2015, to July 11, 2017, he received kickbacks from two MSOs, Alpha Rise Health LLC and Tango Rise Health Solutions LLC, in return for ordering laboratory tests from Boston Heart, True Health and Little River.
- Mark Le, M.D., of Tomball, Texas, agreed to pay $57,900 to settle allegations that from May 9, 2016, to Sept. 22, 2017, he received kickbacks from two MSOs, North Houston MSO Group Inc. and Tomball Medical Management Inc., in return for ordering laboratory tests from True Health and Little River.
- Richard Le, M.D., of Houston, Texas, agreed to pay $41,000 to settle allegations that from Sept. 29, 2016, to Aug. 24, 2017, he received kickbacks from two MSOs, North Houston MSO Group Inc. and Tomball Medical Management Inc., in return for ordering laboratory tests from True Health and Little River.
- Robert Jeremy Laningham, M.D., and Rodney Jason Laningham, M.D., both of Conroe, Texas, agreed to pay $470,560 to settle allegations that from Aug. 8, 2015, through July 6, 2016, they received kickbacks from two MSOs, SYNRG Partners LLC and Transparity Associates LP in return for ordering laboratory tests from Boston Heart, True Health and Little River.
- Andres Mesa, M.D., of Houston, Texas, agreed to pay $45,484 to settle allegations that from May 1, 2016, to Jan. 9, 2018, he received kickbacks from an MSO, Transparity Associates LP, in return for ordering laboratory tests from Boston Heart and Little River.
- Melissa Miskell, D.O., of New Braunfels, Texas, agreed to pay $100,392 to settle allegations that from July 13, 2015, to Dec. 14, 2017, she received kickbacks from an MSO, Alpha Rise Health LLC, in return for ordering laboratory tests from Boston Heart and Little River.
- Marco Munoz, M.D., of Fort Worth, Texas, agreed to pay $54,280 to settle allegations that from July 7, 2015, to April 6, 2016, he received kickbacks from an MSO, Alpha Rise Health LLC, in return for ordering laboratory tests from Boston Heart and Little River.
- Kozhaya Sokhon, M.D., of the Woodlands, Texas, agreed to pay $160,456 to settle allegations that from Jan. 16, 2015, to May 18, 2018, he received kickbacks from two MSOs, SYNRG Partners LLC and Transparity Associates LP, in return for ordering laboratory tests from Boston Heart and Little River.
- Annie Varughese, M.D., of the Woodlands, Texas, agreed to pay $213,888 to settle allegations that from Sept. 1, 2015, to Nov. 17, 2017, she received kickbacks from three MSOs, SYNRG Partners LLC, Transparity Associates LP, and North Houston MSO Group Inc., in return for ordering laboratory tests from True Health and Little River.
- Paul Worrell, D.O., of Dallas, Texas, agreed to pay $237,487 to settle allegations that from Oct. 9, 2015 to Dec. 31, 2017 he received kickbacks from three MSOs, Ascend MSO of TX LLC, Eridanus MG LLC and BDS Healthcare LLC, dba Vybrem Labs, in return for ordering laboratory tests from Boston Heart, True Health and Little River.
As part of their settlements, the 15 physicians have agreed to cooperate with the Department of Justice’s investigations of and litigation against other parties involved in the alleged violations of law.
“Today’s announcement is another step forward by the Department of Defense, Office of Inspector General’s Defense Criminal Investigative Service (DCIS) and our law enforcement partners to protect the integrity of the military’s health care system, commonly known as TRICARE,” said Acting Special Agent in Charge Gregory P. Shilling of the DCIS Southwest Field Office. “We will continue to aggressively investigate and hold those accountable that take advantage of the U.S. government and American taxpayers.”
“The VA Office of Inspector General actively investigates those in violation of the Stark Law and the Anti-Kickback Statute,” said Special Agent in Charge Jeffrey Breen of the South Central Field Office of the Department of Veterans Affairs Office of Inspector General (VA-OIG). “Today’s civil settlements demonstrate the VA-OIG’s ongoing work to hold individuals accountable and protect the integrity of federal healthcare programs.”
Former True Health CEO Christopher Grottenthaler, former Boston Heart CEO Susan Hertzberg, former Little River CEO Jeffrey Madison, and others are defendants in a separate False Claims Act lawsuit in which the United States filed an amended complaint in May 2022. That pending case is captioned United States ex rel. STF, LLC v. True Health Diagnostics, LLC, et al., No. 4:16-cv-547 (E.D. Tex.). If a defendant is found liable for violating the act, the United States may recover three times the amount of its losses plus applicable penalties.
The civil settlements were the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the Eastern District of Texas, with assistance from HHS-OIG, DCIS and VA-OIG. As a result of its efforts, the United States has recovered over $32 million relating to conduct involving Boston Heart, True Health and Little River, including False Claims Act settlements with 33 physicians, two health care executives, and one laboratory. This matter and the related matters were handled by attorneys Christopher Terranova and Gavin Thole in the Civil Division’s Commercial Litigation Branch (Fraud Section) and Assistant U.S. Attorneys James Gillingham, Adrian Garcia and Betty Young for the Eastern District of Texas.
The government’s pursuit of these matters illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services, at 1-800-HHS-TIPS (800-447-8477).
The claims resolved by the settlements are allegations only, and there has been no determination of liability.
Fentanyl and Firearm Possession Gets Edenton Man Federal Prison SentenceRead the Press Release
NEW BERN, N.C. – An Edenton man was sentenced today to 91 months in prison for possession with intent to distribute fentanyl and felon in possession of a firearm. On July 14, 2021, Rayshawn Lamont Anthony, pled guilty to the charges.
“One of our top priorities is keeping North Carolinians safe from dangerous narcotics traffickers pushing fentanyl in our communities, which has caused countless overdoses and taken far too many lives,” said U.S. Attorney Michael Easley. “We are working closely with law enforcement across Eastern North Carolina to prosecute narcotics trafficking and the violence so often associated with the drug trade. We are committed to working with Chief King to keep Edenton a safe place for people to live, work, and raise a family.”
“The Edenton Police Department is committed to working closely with our citizens towards a crime free community. We will continue to partner with The United States Department of Justice, The Bureau of Alcohol Tobacco Firearms and Explosive and The First Judicial District. If you are a convicted felon in possession of a firearm and you meet the criteria, we will seek federal prosecution and you will end up on our next video,” said Edenton Police Chief Henry King.
According to court documents and other information presented in court, Anthony, 30, came to the attention of the Edenton Police Department after he was found walking down the highway away from a vehicle. An officer stopped to see if Anthony needed assistance, but he declined. After seeing suspicious items in plain view inside the vehicle, the officer located Anthony again after receiving a report that Anthony had just stolen a separate vehicle. Officers used a K9 unit to conduct an open-air sniff around the first vehicle which alerted to the presence of narcotics. Upon a search, officers located 12 individually wrapped packages of fentanyl and a loaded 9mm firearm along with Anthony’s identification card. Anthony was arrested on state charges and released on bond. While out on bond, Anthony was encountered again by the Edenton Police Department in a traffic stop in which he was a passenger. Officers found him in possession of cocaine and a stolen .380 caliber firearm. He was subsequently taken into federal custody and detained.
Anthony qualifies as a Career Offender under federal law, having two prior felony drug convictions: sell and deliver a Schedule II controlled substance and possession with intent to distribute cocaine. His other convictions include a prior felon in possession of a firearm, possession of marijuana, maintaining a dwelling for controlled substances, possession of drug paraphernalia, and driving while license revoked.
Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge Louise W. Flanagan. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Edenton Police Department, the Chowan County Sheriff’s Office, and the North Carolina State Bureau of Investigation (SBI) investigated the case and Assistant U.S. Attorney Robert J. Dodson prosecuted the case.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 2:21-CR-00004-FL.
Federal Jury Convicts Leader of Large Meth, Fentanyl Trafficking NetworkRead the Press Release
ALBANY, Ga. – A documented member of a criminal street gang organization who led a drug distribution network responsible for trafficking more than 150 kilograms of methamphetamine, fentanyl, heroin and other illegal drugs into Southwest Georgia and an associate were found guilty Monday evening on multiple drug charges by a federal jury following a week-long trial.
Jamie Keith aka JGottiDaBoss aka Cocho, 40, of Albany, was convicted of conspiracy to possess with intent to distribute controlled substances and possession with intent to distribute methamphetamine. Artarious Davis aka Showboat aka Boat, 41, of Albany, was convicted of possession with intent to distribute methamphetamine and possession with intent to distribute fentanyl. The verdict was reached following a trial that began on Tuesday, June 20 and ended on Monday, June 27 before U.S. District Judge Leslie Gardner. Keith and Davis each face a maximum term of life imprisonment. Sentencing has not been scheduled.
“The U.S. Attorney’s Office is committed to holding individuals caught trafficking large quantities of the deadliest narcotics accountable for crimes that damage the safety of our communities,” said U.S. Attorney Peter D. Leary. “The success in putting an end to this significant methamphetamine and fentanyl network that was pushing some of the most addictive illegal drugs into Southwest Georgia was achieved with the cooperation of federal, state and local law enforcement in a significant Organized Crime and Drug Enforcement Task Force operation.”
“These criminals once profited by spreading this insidious poison throughout a number of communities in Southwest Georgia, but the DEA and our law enforcement partners are in the business of protecting lives and serving those communities,” said Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Field Division. “Justice was served thanks to strong and strategic partnerships between the DEA and its local law enforcement counterparts.”
“This case demonstrates the commitment of law enforcement agencies at every level to end an epidemic in our society that is killing our citizens,” said Keri Farley, Special Agent in Charge of FBI Atlanta. “The FBI will continue to work diligently along our partners in the Organized Crime Drug Enforcement Task Force to investigate and dismantle drug trafficking organizations.”
“These convictions illustrate that drug trafficking will not be tolerated in Georgia. The GBI is committed to investigating and dismantling large scale drug trafficking organizations such as this one operating in Southwest Georgia, in coordination with our local and federal partners,” said GBI Director Vic Reynolds.
“The Albany Police Department will continue working with our local, state and federal law enforcement partners to combat drug trafficking and its associated crimes in Albany, Dougherty County and Southwest Georgia. This verdict warns those seeking fortune from this illicit trade that ill-gotten gains lead to harsh consequences,” said Albany Police Department Chief Michael Persley.
“The Lee County Sheriff’s Office is working with all of our law enforcement partners at every level to combat criminal activity in our community and ultimately put a dent in crime,” said Lee County Sheriff Reggie Rachals.
“The Worth County Sheriff’s Office has and will continue to work diligently with local, state and federal law enforcement and community partners across the area to find, investigate and prosecute criminals trafficking drugs in Worth County and the Southwest Georgia area,” said Worth County Sheriff Don Whitaker. “Drugs are a multi-billion-dollar criminal enterprise that targets our vulnerable populations, our neighbors and even our family members. Because of this, we can’t slow down, we must aggressively pursue this criminal element. We have found that by taking down these drug distributors, it also helps in the reduction of other crimes. With this in mind, we welcome a partnership with all agencies to fight this problem and make our communities safer.”
According to court documents and evidence presented at trial, Keith and Davis were criminally involved in a large drug trafficking network responsible for distributing more than 150 kilograms of methamphetamine, more than 2000 fentanyl tablets pressed to resemble Percocet, more than one kilogram of heroin, more than five kilograms of cocaine and other drugs in the metro Albany area in 2019. Trial testimony revealed that now-deceased co-defendant Demarcus Cook, of Sylvester, Georgia, was a documented member of the Piru set of the Bloods criminal street gang organization. Keith, a member of a rival organization and the leader of this drug trafficking organization, bonded Cook—who was ill—out of jail in exchange for access to Cook’s drug sources of supply and customers. Using Cook’s sources and Keith’s cash and distribution network, the two began delivering large quantities of drugs to Albany and Sylvester to be sold at locations including 122 Moultrie Road, Albany; 214 Albany Avenue, Sylvester, and 610 Johnson Road, Albany. Cook has since died of cancer. Keith was the manager of the drug network; Davis’ primary roles were protecting the drug loads on behalf of the organization and serving a subsidiary customer base of drug users and redistributors in the Albany area.
The other 29 defendants federally prosecuted as part of this investigation have pleaded guilty for their crimes.
This effort is part of an Organized Crime Drug Enforcement Task Force (OCDETF) operation. OCDETF identifies, disrupts and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The case was investigated by FBI, DEA, GBI, the Albany Police Department, Lee County Sheriff’s Office and Worth County Sheriff’s Office.
Assistant U.S. Attorney Leah McEwen prosecuted the case.
Federal Indictment Charges Thomson Penitentiary Inmate with Murder in Connection with Death of Fellow InmateRead the Press Release
ROCKFORD — An inmate at the United States Penitentiary in Thomson, Ill., was indicted today by a federal grand jury on charges of murder, assault, and possession of a weapon in connection with the death of a fellow inmate.
HOUSTON A. CLYDE, 25, was charged with second-degree murder, assault resulting in serious bodily injury, and possession of a weapon, according to an indictment returned in U.S. District Court in Rockford. Arraignment has not yet been scheduled.
The three-count indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI. The government is represented by Assistant U.S. Attorney Jessica S. Maveus.
According to the indictment, Clyde and the victim were cellmates at USP Thomson. On Nov. 27, 2020, Clyde stabbed the victim numerous times with a weapon, resulting in fatal injuries.
Second-degree murder carries a maximum sentence of life imprisonment, while the maximum sentence for the assault charge is ten years imprisonment, and the maximum sentence for the possession of a weapon is five years imprisonment. If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Distributing child pornography videos results in heavy prison time for local manRead the Press Release
CORPUS CHRISTI, Texas – A 42-year-old Nueces County man has been ordered to federal prison for distributing child pornography, announced U.S. Attorney Jennifer B. Lowery.
Michael Aaron Galvan, Corpus Christi, pleaded guilty April 5.
Today, U.S. District Judge Drew B. Tipton sentenced Galvan to 210 months in prison. At the hearing, the court heard an emotional victim impact statement detailing the negative impact of Galvan’s criminal actions. Galvan will serve 10 years on supervised release following completion of his prison term. During that time, he will have to comply with numerous requirements designed to restrict his access to children and the internet. Galvan will also be ordered to register as a sex offender. Restitution to the victims will be determined at a later date.
The investigation began June 14, 2021, when authorities discovered Galvan had distributed multiple videos of child pornography via social media. Galvan was later apprehended at the U.S./Mexico border where authorities discovered he possessed a cellphone containing child pornography. Forensic analysis of that device and others seized from Galvan’s residence showed he possessed hundreds of videos and images depicting the sexual abuse of prepubescent children. There was also evidence of how Galvan created surreptitious recordings of young children at play in his neighborhood and children walking to an elementary school near his home.
Galvan has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Homeland Security Investigations conducted the investigation with assistance of the Corpus Christi Police Department.
Assistant U.S. Attorneys Molly K. Smith and Dennis E. Robinson prosecuted the case, which was brought as part of Project Safe Childhood (PSC), a nationwide initiative the Department of Justice (DOJ) launched in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section leads PSC, which marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children and identifies and rescues victims. For more information about PSC, please visit. For more information about internet safety education, please visit the resources link on that page.
Dominican Republic Brothel Owner Pleads Guilty to Transporting Illegal Aliens for the Purpose of ProstitutionRead the Press Release
ST. THOMAS, USVI – United States Attorney Delia L. Smith announced that Ramona Rivera Luna, 65, a Dominican Republic national, pleaded guilty on June 27, 2022 before United States Magistrate Ruth Miller to one count of transporting an individual in foreign commerce for the purpose of prostitution, and three counts of bringing illegal aliens to the United States for financial gain.
According to court documents, Rivera Luna owned and operated The Embers Guest House as a house of prostitution and arranged for female illegal aliens from the Dominican Republic and Venezuela to be smuggled into St. Thomas, VI, to live and work as prostitutes at her establishment. Rivera Luna admitted that she lured some of the women into coming to St. Thomas under the false pretense of providing them with legitimate employment as bartenders. Rivera Luna further admitted that she financially benefitted from this arrangement by requiring the women to pay her for their trips to St. Thomas and charging them rent and a percentage of the money they earned from performing commercial sex acts at The Embers.
The investigation of this case was led by Homeland Security Investigations, and assisted by the Federal Bureau of Investigation, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives and United States Postal Inspection Service. Assistant United States Attorney Meredith Edwards prosecuted the case.
DC Solar Owner Sentenced to over 11 Years in Prison for Billion Dollar Ponzi SchemeRead the Press Release
SACRAMENTO, Calif. — U.S. District Judge John A. Mendez sentenced Paulette Carpoff, 51, of Martinez, to 11 years and three months in prison for her role in the biggest criminal fraud scheme in the history of the Eastern District of California, U.S. Attorney Phillip A. Talbert announced.
On Nov. 9, 2021, Paulette Carpoff pleaded guilty to conspiracy to commit an offense against the United States and money laundering. According to court documents, Carpoff played a key role in the fraud as Chief Operating Officer of DC Solar and the owner and operator of its so-called distribution arm.
Between 2011 and 2018, DC Solar manufactured mobile solar generators (MSG) that were mounted on trailers. The company touted the versatility and environmental sustainability of the mobile solar generators and claimed that they were used to provide emergency power to cellphone towers and lighting at sporting and other events. A significant incentive for investors were generous federal tax credits due to the solar nature of the MSGs. Investors would buy the MSGs without ever taking possession of them, paying a percentage of the sales price and financing the balance with DC Solar. Then the investors leased the MSGs back to DC Solar, which in turn purported to lease them to third parties. A portion of the lease revenue was supposed to go to the investors and a portion would be used to pay the investors’ debts to DC Solar.
But in fact, when the third‑party leases generated little income, the company paid early investors with funds contributed by later investors, and DC Solar became a Ponzi-like scheme. They sold solar generators that did not exist to investors, making it appear that solar generators existed in locations that they did not, creating false financial statements, and obtaining false lease contracts, among other efforts to conceal the fraud.
In reality, at least half of the approximately 17,000 solar generators claimed to have been manufactured by DC Solar did not exist. Contrary to what investors were told, approximately 94% of the revenue claimed by DC Solar Distribution from supposed third-party leasing actually came instead from transfers of new investor cash.
Paulette Carpoff controlled the Ponzi-like payments that hid the company’s lack of third-party lease revenue, caused fake engineering reports for MSGs that the company sold but never built, and helped fool investors into thinking that DC Solar was a success. Eventually, DC Solar simply stopped building the mobile-solar generators that it claimed to be selling to investors.
While carrying out the fraud, Carpoff and her husband enjoyed an excessive accumulation of wealth that included luxury real estate in Lake Tahoe, Las Vegas, the Caribbean, and Cabo San Lucas, over 150 luxury and collector vehicles, a private subscription jet service, and lavish jewelry. When search warrants were executed in this case in December 2018, law enforcement found over $18,000 cash in Carpoff’s purse, another over $18,000 cash in the master bedroom, over $22,000 cash in a safe in the master bedroom closet, and over $9,000 cash in the Carpoffs’ vehicles parked at their residence.
“Paulette Carpoff played an integral part in a massive criminal fraud scheme. Knowing that DC Solar at best could only expect to lease a tiny fraction of its mobile solar generators, she continued the lie about the high demand for DC Solar’s products,” said U.S. Attorney Talbert. “Thanks to the hard work of attorneys in this Office and agents in the investigating agencies, this fraud was stopped and millions of dollars have been recouped. It is my hope that Carpoff’s sentence will afford adequate deterrence to criminal conduct and the need to protect the public from further crimes of the defendant and promote respect for the law.”
“Mrs. Carpoff participated in and enjoyed the spoils of an egregious, complex fraud scheme that provided the Carpoff family and associates with a luxurious lifestyle and esteemed position in the community at the expense of their community and business contacts,” said Acting Special Agent in Charge Dennis Guertin of the FBI Sacramento Field Office. “Complex cases like these are truly a team effort. I am grateful to the dedicated FBI special agents, forensic accountants and professional staff who worked tirelessly to investigate this case in concert with our equally dedicated partners at IRS Criminal Investigation, FDIC Office of Inspector General, and U.S. Attorney’s Office. Our office is deeply committed to identifying and investigating financial fraud. We encourage anyone who is aware of fraud to reach out to our office or submit a tip by calling 1-800-CALL-FBI or submitting information online at tips.fbi.gov.”
“The Chief Operating Officer of DC Solar, Paulette Carpoff, who indulged herself in luxury goods while engaged in lies and deceit, is not an innocent spouse but rather an active conspirator who played a significant and integral role in the largest Ponzi scheme in the Eastern District of California,” said IRS Criminal Investigation Special Agent in Charge Mark H. Pearson. “Her lies and deception finally caught up to her, as her hunger to amass ill-gotten wealth and material goods led her astray. Today’s sentencing sends a clear message of ‘you will be held accountable’ to those involved in schemes to defraud. This case and the outcome is representation of the great work being accomplished when collaborating with our federal partners: the Federal Bureau of Investigation, the Federal Depository Insurance Corporation Office of Inspector General, and the United States Attorney’s Office, EDCA.”
“Today, Paulette Carpoff was sentenced and held accountable for conspiring with others to carry out a Ponzi scheme that defrauded investors of approximately $1 billion and funded her and her husband’s lavish lifestyle,” said Special Agent in Charge Jeffrey D. Pittano of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG). “The FDIC OIG is committed to working with our law enforcement partners to bring to justice those who undermine the integrity of the Nation’s financial system.”
This case was the product of an investigation by the Federal Bureau of Investigation, IRS Criminal Investigation, and the Federal Deposit Insurance Corporation Office of Inspector General. Assistant U.S. Attorneys Christopher S. Hales and Kevin C. Khasigian prosecuted the case.
On Nov. 9, 2021, Jeff Carpoff was sentenced to 30 years in prison and ordered to pay $790.6 million in restitution for conspiracy to commit wire fraud and money laundering.
On Nov. 16, 2021, Joseph W. Bayliss, 46, of Martinez, was sentenced to three years in prison and ordered to pay $481.3 million in restitution for securities fraud and conspiracy in connection with the DC Solar scheme. On April 12, 2022, DC Solar CFO Robert A. Karmann, 55, of Clayton, was sentenced to six years in prison and ordered to pay $624 million in restitution. On May 31, 2022, former DC Solar employee Alan Hansen was sentenced to eight years in prison and ordered to pay $619 million in restitution.
Two defendants have pleaded guilty to criminal offenses related to the fraud scheme and are scheduled for sentencing: Ryan Guidry, 45, of Pleasant Hill, is scheduled to be sentenced on July 26, 2022, and Ronald J. Roach, 55, of Walnut Creek, is scheduled to be sentenced on Sept. 13, 2022. Guidry faces a maximum statutory penalty of 15 years in prison. Roach faces a maximum statutory penalty of 10 years prison. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Convicted Sex Offender Pleads Guilty to Possession of Child PornographyRead the Press Release
HUNTINGTON, W.Va. – A convicted sex offender residing at a Charleston homeless facility pleaded guilty today to possessing child pornography.
According to court documents and statements made in court, on April 25, 2020, James Gipson, 59, was in the common room of a homeless facility on Leon Sullivan Way when facility staff observed Gipson looking at child pornography on a laptop he possessed. The staff summoned police, who recovered the laptop. A forensic analysis found more than 300 images depicting child pornography on Gipson’s laptop. Gipson admitted that the laptop was his and that he knew he should not have possessed it.
Gipson was previously convicted of possession of child pornography in United States District Court for the Southern District of West Virginia and was sentenced to 10 years and six months in prison on March 5, 2012. Gipson was on lifetime supervised release as a result of that conviction when he committed this new crime. Gipson was also a registered sex offender at the time of this incident as a result of the 2012 conviction.
Gipson is scheduled to be sentenced on September 26, 2022, and faces a mandatory minimum of 10 years and up to 20 years in prison as well as at least five years of supervised release and a $250,000 fine.
United States Attorney Will Thompson made the announcement and commended the Charleston Police Department and the South Charleston Police Department for conducting and assisting in the investigation. Thompson also credited the shelter staff for being vigilant in protecting their facility and its residents.
United States District Judge Robert C. Chambers presided over the hearing. Assistant United States Attorney Kristin F. Scott is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:21-cr-92.
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Convicted Felon Sentenced to More Than 8 Years in Federal Prison for Firearm and Cocaine Distribution OffensesRead the Press Release
Ocala, Florida – Senior United States District Judge John Antoon II has sentenced Jeffrey Walt Boston (45, Orlando) to 8 years and 8 months in federal prison for possessing a firearm as a convicted felon and for possessing with the intent to distribute a mixture and substance containing cocaine. He was also required to forfeit the firearm and ammunition used in the offense. Boston had pleaded guilty on February 15, 2022.
According to the plea agreement, Boston is a felon who had previously been convicted in state court of resisting arrest with violence, battery on a law enforcement officer, delivery of cocaine, and possession of cocaine. On June 4, 2021, while in Lake County, Boston tossed a cigarette box containing cocaine from the window of the car he was driving. A nearby deputy retrieved the box, recognized the contents, then pursued and stopped Boston. During the pursuit, Boston discarded a bag of marijuana that hit the deputy’s windshield.
A subsequent search of the car revealed another cigarette box containing cocaine, a stolen pistol under the driver’s seat loaded with ammunition, 13 bags of cocaine, 5 alprazolam pills, and marijuana. Boston later admitted that all of the drugs and the loaded firearm belonged to him. He also confirmed that his fingerprints would be on the firearm. As a convicted felon, Boston is prohibited from possessing firearms and ammunition under federal law.
This case was investigated by the Lake County Sheriff’s Office, the Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant United States Attorney Robert E. Bodnar, Jr.
This case was 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.
Colorado Man Sentenced for Impeding the Internal Revenue ServiceRead the Press Release
United States Attorney Alison J. Ramsdell announced that a Longmont, Colorado, man convicted of Impeding the Internal Revenue Service was sentenced on June 21, 2022, by U.S. District Judge Lawrence L. Piersol.
Loren Brown, age 86, was sentenced to three years of probation, a $3,000 fine, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Brown was indicted by a federal grand jury on July 17, 2017. He pled guilty on August 10, 2020.
The conviction stemmed from incidents beginning in April of 2004 when Theodore Nelson and his son, Steven Nelson, created over 25 sham trusts to hide their income and assets from the Internal Revenue Service (IRS), thus evading the assessment and payment of federal income taxes. The Nelsons used forms created by Brown. The trusts were designed, in part, to make it difficult for the IRS to determine the Nelsons’ federal income tax liability. The Nelsons appointed John Sheridan and Loren Brown as trustees and successor trustees for the trusts until Sheridan’s death in 2011. In this manner, the Nelsons were able to put many layers between themselves and their assets/income. Brown’s agreement to act as successor trustee helped the Nelsons hide their income and assets from the IRS.
The Nelsons reside in Letcher, South Dakota. Loren Brown and his co-defendant, Randy L. Garriss, acted as signors for South Dakota bank accounts associated with Nelson trusts and performed most of their actions on behalf of the Nelsons’ tax evasion in South Dakota.
Among other acts, Brown and Garriss corruptly endeavored to obstruct and impede the due administration of the internal revenue laws by mailing to the IRS a Protest and Demand for Administrative Review on behalf of the Nelsons. Garriss signed on his own behalf and that of Brown as trustees for Steve Nelson and the Nelsons’ trusts. The letter was received by the IRS on January 5, 2016.
This case was investigated by IRS Criminal Investigation. Assistant U.S. Attorney Ann M. Hoffman prosecuted the case.
Colorado Couple Indicted for Fraud and Illegally Obtaining COVID-19 PPP FundsRead the Press Release
DENVER – The U.S. Attorney’s Office for the District of Colorado announces Ronald Philip Wallace, age 65, and Stace Yater Wallace, age 67, of Basalt, Colorado, were indicted by a federal grand jury on June 22, 2022 on charges of wire fraud, money laundering, and bank fraud. Both defendants appeared in front of U.S. District Court Magistrate Judge Nina Wang on June 27, 2022 and were released on bond.
According to information contained in the indictment, it is alleged Wallace made false and misleading statements to obtain nearly $1.5 million in investments from individuals for the purpose of funding, production, and marketing of CBD products. Additionally, it is alleged the couple worked together to obtain over $200,000 in COVID-19 Paycheck Protection Program funds through the inclusion of false information on the loan applications.
Ronald Wallace faces nine counts of wire fraud, 31 counts of money laundering, three counts of bank fraud, and one count of conducting a monetary transaction in criminally derived property greater than $10,000.
Stace Wallace faces 31 counts of money laundering, three counts of bank fraud, and one count of conducting a monetary transaction in criminally derived property greater than $10,000.
Each count of wire fraud carries a penalty of not more than 20 years in prison and a fine of not more than $250,000. Each count of money laundering carries a penalty of not more than 20 years in prison and a fine of not more than $500,000. Each count of bank fraud carries a penalty of not more than 30 years in prison and a fine of not more than $250,000. Conducting a transaction greater than $10,000 in criminally derived proceeds carries a penalty of not more than 10 years in prison and a fine of not more than $250,000.
This case is being investigated by Internal Revenue Service – Criminal Investigation and the Federal Bureau of Investigation. This case is being prosecuted by Assistant United States Attorney Robert Brown.
The charges contained in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty.
CASE NUMBER: 22-cr-00211
Cock-fighter receives hefty sentence for local drug traffickingRead the Press Release
CORPUS CHRISTI, Texas – A 33-year-old man has been ordered to federal prison following his conviction of conspiracy to possess with the intent to distribute 34 kilograms of meth, announced U.S. Attorney Jennifer B. Lowery.
Jeffrey Justice Dale Williams, Gray Court, South Carolina, pleaded guilty Jan. 5.
Today, US. District Judge Drew B. Tipton ordered Williams to serve 156 months in prison to be immediately followed by five years of supervised release. At the hearing, the court heard additional testimony that detailed how Williams recruited other individuals to transport a large quantity of meth from Texas to Georgia. In handing down the sentence, the court noted that this drug trafficking venture would not have happened if not for Williams’ involvement.
The investigation revealed Williams recruited Doug Allen Navy and Noah Michael Hiler in the narcotics scheme. They were to pick up meth in McAllen and transport it to Atlanta, Georgia, for distribution.
Authorities discovered the co-conspirators referred to bundles of meth as roosters because Williams participated in cock-fighting in South Carolina. At the time of his arrest, law enforcement discovered hundreds of brutalized animals and evidence of cock-fighting at his property.
On Jan. 25, 2020, law enforcement arrested Navy and Hiler at the Border Patrol (BP) checkpoint near Falfurrias. A search of the vehicle revealed 12 bundles of meth hidden in speaker boxes located inside of Navy’s vehicle.
Navy and Hiler also pleaded guilty for their roles in the scheme. They later received 96 and 70 month sentences, respectfully.
Williams 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 Laurens County, South Carolina, Sherriff’s Office. Assistant U.S. Attorney Molly K. Smith prosecuted the case.
Citizen of Dominican Republic Sentenced to 20 Months for Immigration OffensesRead the Press Release
SYRACUSE, NEW YORK – Wascar Javier, age 37, a citizen of the Dominican Republic, was sentenced today to serve 20 months in prison following his conviction for illegally reentering the United States, and fraud and misuse of a nonimmigrant visa, announced United States Attorney Carla B. Freedman; Thomas Brophy, Buffalo Field Office Director of Immigration and Customs Enforcement (ICE), Enforcement and Removal Operations (ERO); Keith Byrne, Special Agent in Charge, U.S. Department of State - Diplomatic Security Service; and New York State Police Superintendent Kevin P. Bruen.
Javier was removed from the United States in October 2020 following a felony conviction in New York state court. As part of his previous guilty plea, Javier admitted that sometime after his removal, he unlawfully reentered the United States without permission. On September 30, 2021, a New York State Trooper stopped a car Javier was driving and Javier presented to the Trooper a document that purported to be a passport issued by the Dominican Republic. The passport contained a fraudulent United States nonimmigrant visa and Javier admitted knowing that it was fraudulent.
Chief United States District Judge Glenn T. Suddaby also sentenced Javier to a three-year term of supervised release to begin after he serves his term of imprisonment.
This case was investigated by Immigration and Customs Enforcement (ICE), Enforcement and Removal Operations (ERO) and the U.S. Department of State-Diplomatic Security Service, with assistance from the U.S. Drug Enforcement Administration (DEA), U.S. Department of Homeland Security-Homeland Security Investigations (HSI), and the New York State Police. The case was prosecuted by Assistant U.S. Attorney Thomas Sutcliffe.
Career Offender Sentenced to 20 Years in Federal Prison for Firearms ViolationRead the Press Release
FAYETTEVILLE – A Fayetteville man was sentenced today to 240 months in prison followed by five years of supervised release on one count of Possession of a Firearm in Furtherance of a Drug Trafficking Offense. The Honorable Judge Timothy L. Brooks presided over the sentencing hearing in the United States District Court in Fayetteville.
According to court documents, in January of 2021, law enforcement officers made contact with Troy Dale Franklin, 39, after he ran a stop sign in a stolen vehicle. The vehicle was searched, and officers located a distribution amount of methamphetamine, cocaine, and marijuana. In addition, Franklin was in possession of a loaded pistol, after having been convicted of multiple felony offenses. Franklin was arrested and released on bond the same day. In February and March of 2021, detectives with the Fourth Judicial District Drug Task Force (DTF) made a series of controlled purchases of methamphetamine from Franklin in Fayetteville, Arkansas.
After the last purchase, Franklin was arrested by detectives and searched. The search resulted in detectives locating and recovering DTF buy money. A search of Franklin’s vehicle resulted in detectives locating, approximately 269 grams of methamphetamine, a loaded handgun and drug paraphernalia. Franklin was also in possession of $2,093.00 dollars cash, which was seized by detectives. Under Federal law, Franklin is considered a Career Criminal, subject to enhanced penalties.
U.S. Attorney David Clay Fowlkes of the Western District of Arkansas made the announcement.
The Fourth Judicial District Drug Task Force investigated the case.
Assistant U.S. Attorney David Harris prosecuted the case.
This case was prosecuted as part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Camden County Woman Sentenced to Year and a Day in Prison for Witness TamperingRead the Press Release
CAMDEN, N.J. – A Camden County, New Jersey, woman was sentenced today to 12 months and one day in prison for attempting to bribe a witness to steal a gun from a car that was in the custody of the Camden County Police Department, pending the execution of a search warrant, U.S. Attorney Philip R. Sellinger announced.
Saidah A. Davis, aka “Sacha,” 42, of Woodlynne, New Jersey, previously pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an indictment charging her with witness tampering.
According to documents filed in this case and statements made in court:
Davis admitted that on April 16, 2021, she and codefendant Anthony D. Parker, aka “Papa Smurf,” 38, of Camden, went to the home of an individual who she knew worked at a Camden tow lot that impounded vehicles that were seized by the Camden County Police Department for criminal investigations. Davis, an acquaintance of a relative of the tow lot employee, explained that Parker had a problem, and she asked the employee if he could help Parker. Parker said that his vehicle had been seized by the police pending a search warrant application, and that there was a gun and cash inside the vehicle. Parker offered the tow lot employee $2,000 to break into the vehicle and remove the gun and cash. The tow lot employee refused the bribe, and Davis took the employee’s phone number and said, “we’ll be in touch.”
Parker was convicted of possession of a firearm by a previously convicted felon and is scheduled to be sentenced July 12, 2022.
In addition to the prison term, Judge Kugler sentenced Davis to three years of supervised release.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge Jacqueline Maguire in Philadelphia; the Camden County Prosecutor’s Office, under the direction of Acting Prosecutor Grace C. MacAulay; and officers of the Camden County Police Department, under the direction of Chief Gabriel Rodriguez; with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Kristen M. Harberg of the Criminal Division in Camden.
Camden County Woman Admits Fraudulently Obtaining 30 Loans Meant to Help Small Businesses During COVID-19 PandemicRead the Press Release
CAMDEN, N.J. – A Camden County, New Jersey, resident today admitted conspiring to fraudulently obtain 30 Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL) totaling more than $3 million, and to laundering the proceeds, U.S. Attorney Philip R. Sellinger announced.
Rhonda Thomas, 38, of Sicklerville, New Jersey, pleaded guilty by videoconference before U.S. District Judge Karen M. Williams to an information charging her with one count of bank fraud conspiracy and one count of money laundering.
According to documents filed in this case and statements made in court:
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted in March 2020 and was designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. The CARES Act also authorized the Small Business Administration to provide EIDL of up to $2 million to eligible small businesses that were experiencing substantial financial disruption due to the COVID-19 pandemic.
To obtain a PPP or EIDL loan, a qualifying small business was required to apply and provide information on its operations, including the number of employees and expenses. In addition, businesses generally had to provide supporting documentation.
In 2020 and 2021, Thomas submitted at least 10 PPP application and three EIDL applications for companies she controlled. She represented to the lenders that her companies had employees and payroll expenses that they did not have. In fact, many of her companies were nominal businesses with no employees or payroll expenses.
Thomas also conspired with other purported business owners to submit at least 20 fraudulent PPP and EIDL loan applications. She prepared and submitted these loan applications, which falsely stated the number of employees, payroll, and expenses of the businesses.
Thomas forged tax forms and altered bank statements that she submitted to the lenders as part of the loan applications.
Based on Thomas’s misrepresentations, lenders approved approximately 30 PPP and EIDL loans and disbursed more than $3.1 million in federal COVID-19 emergency relief funds meant for distressed small businesses to Thomas and her conspirators. Thomas personally received more than $330,000 from lenders based on the fraudulent loan applications for her companies and received kickbacks of more than $700,000 from other business owners for her role in preparing and submitting fraudulent loan applications.
Thomas used the fraudulently obtained PPP and EIDL loan proceeds to pay for personal expenses. In March 2022, Thomas withdrew approximately $60,000 of the loan proceeds in cash at a credit union in Camden County.
The charge of bank fraud conspiracy carries a maximum penalty of 30 years in prison and a fine of $1 million. The count of money laundering is punishable by a maximum of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. As part of her guilty plea, Thomas agreed to make restitution in the full amounts of the PPP and EIDL loans. Sentencing is scheduled for Nov. 1, 2022.
U.S. Attorney Sellinger credited special agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, under the direction of Patricia Tarasca, Special Agent-in-Charge, New York Regional Office; special agents of the Social Security Administration, Office of the Inspector General, New York Field Division, under the direction of Special Agent in Charge Sharon MacDermott; special agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Jacqueline Maguire in Philadelphia; special agents of the U.S. Department of Labor, Office of the Inspector General, New York Region, under the direction of Special Agent in Charge Jonathan Mellone, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Daniel A. Friedman of the U.S. Attorney’s Office’s Criminal Division in Camden and Senior Litigation Counsel Jason M. Richardson of the U.S. Attorney’s Office Civil Rights Division in Camden.
Bronx Man Sentenced for His Role in Large-Scale Fentanyl and Heroin Trafficking Ring in SpringfieldRead the Press Release
BOSTON – A Bronx, N.Y., man has been sentenced in federal court in Springfield for his role in a large-scale drug conspiracy that trafficked dozens of kilos of heroin and fentanyl into Springfield from New York City and the Dominican Republic every month.
Marvin Ortega, 35, was sentenced on June 23, 2022 by U.S. District Court Judge Mark G. Mastroianni to 30 months in prison and two years of supervised release. In March 2019, Ortega pleaded guilty to one count of conspiring to distribute and possess with intent to distribute heroin.
“The impact of drug trafficking can be felt by everyone. Mr. Ortega was involved in an organization that funneled heroin and fentanyl into the Springfield area – profiting off of people’s pain,” said United States Attorney Rachael S. Rollins. “Drug trafficking activities, specifically those involving fentanyl, pose an immeasurable threat to public safety. The opioid crisis has taken the lives of over two thousand people last year in our Commonwealth. They were mothers, children, fathers, siblings, and loved ones and they are gone. Forever. We cannot allow ourselves to grow numb to this epidemic and become complacent. My office will not look the other way. Narcotics dealers will be identified, prosecuted and held accountable.”
“DEA is committed to investigating and dismantling Drug Trafficking Organizations and individuals like Mr. Ortega who are responsible for distributing lethal drugs like heroin and fentanyl to the citizens of Massachusetts” said Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration’s New England Division. “Let this arrest be a warning to those traffickers who distribute this poison in order to profit and destroy people’s lives. DEA’s top priority is combating the opioid epidemic by working with our local, county, state and federal partners to bring to justice anyone who distributes deadly drugs.”
“Opioid-related overdoses and deaths affect our community on a daily basis. The increase of fentanyl on our streets has only increased how deadly these drugs have become. This sentence will hopefully send a message to those individuals looking bring heroin and fentanyl into our city and region that we have a team of law enforcement partners working together to investigate and ultimately convict those responsible. I’d like to thank U.S. Attorney Rollins, her team and our local, regional and federal partners for their work on this investigation,” said Springfield Police Superintendent Cheryl C. Clapprood.
Ortega transported heroin to Springfield and the proceeds from the sale to New York for a drug trafficking organization (DTO) based in Springfield, which was run by Alberto Marte. Marte had direct contact with heroin suppliers in the Dominican Republic and members of his DTO transported between eight and 20 kilograms of heroin, with a street value of approximately $1.6 million and $4 million, respectively, into the Springfield area every month. When law enforcement authorities executed federal search warrants in September 2016, they recovered approximately $140,000 in cash and over six kilograms of heroin.
U.S. Attorney Rollins; DEA SAC Boyle; Superintendent Clapprood; Matthew B. Millhollin, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; Hampden County District Attorney Anthony D. Gulluni; Chicopee Police Chief Patrick Major; Holyoke Police Chief David Pratt; and West Springfield Police Chief Paul Connor made the announcement. Assistant U.S. Attorneys Neil L. Desroches of Rollins’ Springfield Branch Office and Stephen W. Hassink of Rollins’ Narcotics & Money Laundering Unit prosecuted the case.
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Brockton Man Pleads Guilty in Sophisticated Drug Trafficking Conspiracy that Operated Using the Dark WebRead the Press Release
BOSTON – A Brockton man pleaded guilty today in federal court in Boston to his role in a highly sophisticated drug trafficking operation that manufactured and distributed a multitude of controlled substances using the Dark Web.
Steven McCall, 26, pleaded guilty to conspiracy to manufacture, distribute and possess with intent to distribute MDMA, commonly known as ecstasy, Ketamine and Alprazolam (Xanax). U.S. Senior District Court Judge Rya W. Zobel scheduled sentencing for Sept. 28, 2022.
McCall was indicted in June 2019 along with co-conspirators Binh Thanh Le and Allante Pires. Le, who was the ringleader of the drug-trafficking operation, created and operated a vendor site called “EastSideHigh” in marketplaces on the Dark Network, more commonly known as the Dark Web. The Dark Web is any portion of the internet that can only be accessed with specific software, configurations or authorization that anonymize internet traffic. Le used these Dark Web markets to advertise various drugs for sale, including cocaine, MDMA, Ketamine and Xanax. Le ordered and received wholesale quantities of the drugs he and the others were distributing in the mail, principally from foreign sources in Canada and Europe. McCall and Pires then processed and manufactured those controlled substances at an office space Le rented in Stoughton. After receiving the orders and payment via Bitcoin, the men mailed the drugs to customers throughout the United States.
At the time of his arrest, McCall had been manufacturing and packaging controlled substances at the co-conspirators’ stash location in Stoughton and was wearing latex gloves and a respirator.
Over 19 kilograms of MDMA, almost seven kilograms of Ketamine, nearly one kilogram of cocaine, more than 10,000 counterfeit Xanax pills and over $114,000 in cash were seized by authorities during the investigation. Investigators also recovered a computer with the “EastSideHigh” vendor page open, numerous packages containing MDMA and Ketamine, various shipping and packaging materials and a pill press from the office space in Stoughton.
On March 10, 2022, Le was sentenced to eight years in prison and three years of supervised release. Le was also ordered to forfeit more than 59 Bitcoin (currently worth more than $1.2 million), $114,680 in cash, $42,390 representing the proceeds from the sale of a 2018 BMW M3, along with other items including a pill press and currency counter. On June 3, 2022, Pires pleaded guilty to his role in the conspiracy and is scheduled to be sentenced on Sept. 8, 2022.
The charge of conspiracy to manufacture, distribute and possess with intent to distribute MDMA, commonly known as ecstasy, Ketamine and Alprazolam (Xanax) provides for a sentence of up to 20 years in prison, at least three years and up to a lifetime of supervised release and a fine of up to $1 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.
United States Attorney Rachael S. Rollins; Ketty Larco-Ward, Inspector in Charge of the U.S. Postal Inspection Service’s Boston Division; Matthew B. Millhollin, Special Agent in Charge for the Homeland Security Investigations in Boston; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; Norfolk County District Attorney Michael W. Morrissey; and Jennifer De La O, Director of Field Operations of U.S. Customs and Border Protection, Boston Field Office made the announcement. Special assistance with the investigation was provided by the Homeland Security Investigations in Colorado; Postal Inspectors from around the country; and the Stoughton, Norwood and Brockton Police Departments. Assistant U.S. Attorney James E. Arnold of Rollins’ Narcotics & Money Laundering Unit is prosecuting the case.
Bridgeport Man Involved in Murder and Arson Scheme Sentenced to 10 Years in Federal PrisonRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, announced that JASON SCOTT, also known as “Hood,” 39, of Bridgeport, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to 120 months of imprisonment, followed by three years of supervised release, for his role in a plan to murder an individual and set fire to the Bridgeport business where he worked.
According to court documents and statements made in court, in early morning hours of April 2, 2018, Bridgeport Police patrolling the west side of Bridgeport attempted to stop a car that was operating with unlit taillights. The car fled from police and, during the police pursuit, officers observed several items being thrown from its windows. After the car stopped several blocks away, officers arrested Luis Mercado, who was driving the car, and Dominick Gonzalez, and recovered two loaded handguns and a quantity of marijuana that had been thrown from the car. A search of the car also revealed a black ski mask, a pair of binoculars, and a container of gasoline. The investigation revealed that Mercado, Gonzalez, Scott, Luis Mejias and George Rivera were involved in a plan to murder an individual and set fire to the Wood Avenue Body Shop in Bridgeport where the individual worked.
Scott, Mejias and Rivera were arrested later that morning at a hotel in Milford. A search of a hotel room revealed a loaded Smith and Wesson model M&P 15-22 caliber rifle, a loaded Taurus “Judge” revolver, a loaded Anderson Manufacturing AR 15 multi-caliber rifle, a loaded 12-gauge shotgun, additional ammunition, brass knuckles, binoculars, gloves and a knit mask. Investigators also located a seized packaged heroin, ecstasy pills, marijuana, a digital scale and other items in the room, and ammunition and shotgun shells in the trunk of their car.
Each defendant has a criminal history that includes multiple felony convictions. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
On March 28, 2022, Scott pleaded guilty to possession of a firearm by a felon.
Mercado, Gonzalez, Mejias and Rivera also pleaded guilty. On June 27, 2022, Mercado and Mejias were each sentenced to 10 years of imprisonment. Gonzalez and Rivera await sentencing.
This matter has been investigated by the FBI’s Bridgeport Safe Streets Task Force and the Bridgeport and Milford Police Departments. The case is being prosecuted by Assistant U.S. Attorney Karen L. Peck.
Bothell, Washington, man sentenced to 5 years in prison for dealing drugs hidden in computer hard drivesRead the Press Release
Seattle – A 34-year-old Bothell, Washington, man was sentenced today to five years in prison, announced U.S. Attorney Nick Brown. Ryan Kane pled guilty to Possession of Methamphetamine with Intent to Distribute on March 22, 2022. At the sentencing hearing U.S. District Judge James L. Robart said, addressing Kane, “This isn’t about you…. This is about what you did to the community …sending drugs not just into our community, but the world. What you did is decidedly wrong.”
“Mr. Kane was distributing nearly pure and addictive methamphetamine across the world, concealed in computer hard drives,” said U.S. Attorney Brown. “He used the Dark Web to conceal his identity and make dangerous drugs available as far away as Australia and New Zealand.”
Kane first came to the attention of law enforcement because he was mailing packages with methamphetamine hidden inside. Kane used a Dark Web vendor account to take orders for the methamphetamine shipments; he then packaged the drugs and mailed them through the U.S. Postal Service to various locations in the United States, Australia, and New Zealand. In April of 2021, he attempted to mail two packages to Australia. However, these packages were intercepted by law enforcement and found to contain over three kilos of methamphetamine hydrochloride concealed in computer hard drives.
Meth in hard driveIn asking for a six-year sentence, Assistant United States Attorney Casey Conzatti said, “This recommendation takes into account Mr. Kane’s struggle with addiction, but it also takes into account the large volume of drugs involved.”
When Kane’s residence was searched on June 7, 2021, law enforcement seized a glass jar and 16 additional hollowed out computer hard drives containing over three kilos of methamphetamine hydrochloride. Agents found packing materials, a notebook containing shipping labels to Australia and artwork related to Kane’s Dark Web vendor account. Additionally, agents discovered a loaded 9mm handgun on the couch in the apartment.
“Mr. Kane’s conviction and today’s sentence demonstrates how smugglers cannot hide behind the perceived veil of secrecy associated with Dark Web marketplaces,” said Special Agent in Charge (SAC) Robert Hammer, who oversees Homeland Security Investigations (HSI) operations in the Pacific Northwest. “HSI through its transnational law enforcement footprint will doggedly pursue these cases with our law enforcement partners within the U.S. and abroad.”
“With Mr. Kane’s sentencing today, we show a clear and united front, not only here in the United States but abroad, in the effort to combat the distribution of these dangerous and potentially lethal narcotics,” said Inspector in Charge Anthony Galetti with the U.S. Postal Inspection Service (U.S.P.I.S.). “We remain steadfast in our mission to remove illegal narcotics from the U.S. Mail and will continue to do so to ensure our communities remain safe. We thank our law enforcement partners for their assistance in bringing Kane to justice.”
The case was investigated by Homeland Security Investigations (HSI) with assistance from the U.S. Postal Inspection Service (U.S.P.I.S.) and the Australian Border Force (ABF).
This case was prosecuted by Assistant United States Attorney Casey S. Conzatti.
Australian Tech Entrepreneur Sentenced to More Than 8 Years for Multimillion Dollar Consumer Fraud SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that EUGENI TSVETNENKO, a/k/a “Zhenya,” a dual citizen of Australia and Russia, was sentenced to 98 months in prison by U.S. District Judge Analisa Torres. TSVETNENKO pled guilty on February 18, 2022, for his role in a consumer fraud scheme to charge mobile phone customers millions of dollars in monthly fees for unsolicited, recurring text messages about topics such as horoscopes, celebrity gossip, and trivia facts, without the customers’ knowledge or consent—a practice referred to as “auto-subscribing.” The portion of the fraudulent scheme that TSVETNENKO and his co-conspirators orchestrated defrauded mobile phone users of approximately $41.3 million and netted TSVETNENKO and his co-conspirators more than $20 million in proceeds. TSVETNENKO personally earned approximately $15.4 million in connection with the scheme, which he repaid prior to sentencing.
U.S. Attorney Damian Williams said: “Eugeni Tsvetnenko and his co-defendants made a fortune by fraudulently charging their customers for text messages they didn’t need or approve, in a practice called ‘auto-subscribing,’ then laundering the proceeds through shell companies. Tsvetnenko is paying a steep price for his mobile scam, as he has already paid back over $15 million in forfeiture, and will now spend 98 months in federal prison.”
According to allegations in the Superseding Indictment against TSVETNENKO, evidence presented at the trial of co-conspirators Darcy Wedd (Wedd) and Fraser Thompson (Thompson), and other public filings:
From at least in or about 2012 through in or about 2013, TSVETNENKO, Wedd, Thompson, and others engaged in a multimillion-dollar scheme to defraud consumers by placing unauthorized charges for premium text messaging services on consumers’ cellular phone bills through a practice known as auto-subscribing. TSVETNENKO owned and operated several content provider companies and mobile industry companies in Australia that, among other things, created and sold premium text messaging content to consumers. Wedd operated Mobile Messenger, a U.S. aggregation company in the mobile phone industry that served as a middleman between content providers (such as some of TSVETNENKO’s companies) and mobile phone carriers. Mobile Messenger was responsible for assembling monthly charges incurred by a particular mobile phone customer for premium text-messaging services and placing those charges on that customer’s cellular phone bill.
Beginning in or about early 2012, Wedd, Thompson, who was the Senior Vice President of Strategic Operations for Mobile Messenger, and two other senior executives of Mobile Messenger (CC-3 and CC-4) recruited TSVETNENKO to their auto-subscribing scheme to increase revenues at Mobile Messenger. TSVETNENKO agreed and established two new content providers based in Australia, CF Enterprises and DigiMobi, to auto-subscribe on Mobile Messenger’s aggregation platform. CC-3 furnished lists of phone numbers to TSVETNENKO, along with an auto-subscribing “playbook,” which provided TSVETNENKO with guidance on how to auto-subscribe without being caught. The “playbook” described how to conceal the fraud scheme by making it appear as if the customers had, in fact, elected to purchase the text-messaging services, when in truth they had not.
The consumers who received the unsolicited text messages typically ignored or deleted the messages, often believing them to be spam. Regardless, the consumers were billed for the receipt of the messages, at a rate of $9.99 per month, through charges that typically appeared on the consumers’ cellular telephone bills in an abbreviated and confusing form, such as with nonsensical billing descriptors that often consisted of random letter and numbers. The $9.99 charges recurred each month unless and until consumers noticed the charges and took action to unsubscribe. Even then, consumers’ attempts to dispute the charges and obtain refunds from CF Enterprises or DigiMobi were often unsuccessful. Wedd, to whom CC-3, CC-4, and Thompson all reported, oversaw the scheme at Mobile Messenger.
TSVETNENKO, with the assistance of Wedd, Thompson, CC-3, and CC-4, started auto-subscribing consumers in approximately April of 2012. TSVETNENKO’s auto-subscribing activities, which continued into 2013, victimized hundreds of thousands of mobile phone customers, who were auto-subscribed through Mobile Messenger and charged a total of approximately $41,389,725 for unwanted text messaging services. Wedd, Thompson, CC-3, and CC-4 agreed that TSVETNENKO would keep approximately 70% of the auto-subscribing proceeds generated by CF Enterprises and DigiMobi, and that the remaining 30% of the auto-subscribing proceeds would be divided evenly among Wedd, Thompson, CC-3, and CC-4.
After obtaining proceeds of the fraud scheme, TSVETNENKO worked with other co-conspirators to launder the proceeds. TSVETNENKO and his co-conspirators distributed the proceeds of the fraud scheme among themselves and others involved in the scheme by, among other things, causing funds to be transferred through the bank accounts of a series of shell companies and companies held in the names of third parties. This was done to conceal the nature and source of the payments and TSVETNENKO and his co-conspirators’ participation in the fraud.
* * *
In addition to his prison sentence, TSVETNENKO, 41, of Australia, was ordered to pay forfeiture in the amount of approximately $15.4 million dollars, which he has repaid.
Mr. Williams praised the outstanding investigative work of the Internal Revenue Service – Criminal Investigation and the Federal Bureau of Investigation. In addition, Mr. Williams thanked law enforcement partners in Australia, especially the Australian Attorney-General Department’s International Crime Cooperation Central Authority and the Australian Federal Police, as well as the U.S. Department of Justice’s Office of International Affairs, for their significant support and assistance with the defendant’s extradition from Australia.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Jilan Kamal and Olga I. Zverovich are in charge of the prosecution.
American Ex-Pat Sentenced to 8 Years for Panamanian Wire Fraud ConspiracyRead the Press Release
Tampa, Florida – U.S. District Judge Thomas P. Barber today sentenced Jeffrey Jedlicki (51, Panama City, Panama) to eight years in federal prison for wire fraud conspiracy. As part of his sentence, the court also ordered Jedlicki to forfeit $700,000 and a South Florida residence worth in excess of $2 million. The court also ordered Jedlicki to pay $3,244,592.00 in restitution to the victims. Jedlicki had pleaded guilty on September 16, 2021.
According to court documents, Jedlicki and his coconspirators operated international boiler rooms in Panama and elsewhere that used high-pressure sales techniques to defraud individuals who invested substantial amounts of money in what they believed were regulated financial products or markets, such as options in commodities and stocks. The majority of the victims that the boiler rooms targeted were located in Canada, the United Kingdom, Australia and New Zealand.
Jedlicki and his co-conspirators then transferred fraud proceeds generated by the boiler rooms through several money laundering rings, and then on to overseas accounts, with the launderers receiving a percentage of the funds they had moved. Jedlicki himself received a 2% referral fee for referring victims’ funds to a money laundering ring. Jedlicki used the funds to perpetuate the conspiracy, and for his own personal enrichment. In total, Jedlicki and his co-conspirators wired or caused to be wired approximately $3,244,592 in victims’ funds to money laundering accounts in furtherance of the wire fraud conspiracy.
“This sentence reflects the serious nature of the offense,” said HSI Tampa Assistant Special Agent in Charge John Dumas. “HSI, working closely with Internal Revenue Service – Criminal Investigation and our international partners, is committed to stopping transnational criminal organizations that target the elderly with investment fraud schemes.”
“Boiler rooms use high-pressure sales techniques to rope unsuspecting individuals into bogus investment schemes,” said Brian Payne, Special Agent in Charge of the IRS Criminal Investigation Tampa Field Office. “Today, justice was served. Jedlicki will spend nearly a decade in prison, and he has been ordered to repay the victims of his scheme the $3.2 million he stole from them.”
This case was investigated by Homeland Security Investigations and the Internal Revenue Service – Criminal Investigation. It was prosecuted by Assistant United States Attorney David W.A. Chee. The forfeiture is being handled by Assistant United States Attorney Suzanne Nebesky.