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Friday 6 May 2022
Horse Doping Drug Seller Convicted in Manhattan Federal CourtRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced the conviction at trial of defendant LISA GIANNELLI, on one count of drug adulteration and misbranding, with intent to defraud and mislead, in connection with a nearly twenty-year scheme to create and distribute “untestable” performance enhancing drugs for use in professional horseracing. GIANNELLI was one of over thirty defendants charged in four separate cases in March 2020, each arising from this Office’s multi-year investigation of the abuse of racehorses through the use of performance enhancing drugs.
U.S. Attorney Damian Williams said: “For almost two decades, Lisa Giannelli peddled untestable performance-enhancing drugs to give racehorse trainers the tools to dope racehorses. As a former standardbred racehorse trainer, Giannelli knew firsthand the dangers of selling illegal, injectable performance-enhancing drugs to trainers who were recklessly injecting horses to gain a competitive edge. The jury’s swift conviction demonstrates the gravity of Giannelli’s criminal scheme. This Office remains committed to holding accountable those who would engage in the kind of fraud and animal abuse exemplified by Giannelli’s crimes.”
As established by the evidence at trial:[1]
GIANNELLI was charged in United States v. Navarro, 20 Cr. 160 (MKV), a case arising from an investigation of widespread schemes by racehorse trainers, veterinarians, PED distributors, and others to manufacture, distribute, and receive adulterated and misbranded PEDs and to secretly administer those PEDs to racehorses competing at all levels of professional horseracing. By evading PED prohibitions and deceiving drug regulators and horse racing officials, participants in these schemes sought to improve race performance and obtain prize money from racetracks throughout the United States and other countries, including in New York, New Jersey, Florida, Ohio, Kentucky, and the United Arab Emirates (“UAE”), all to the detriment and risk of the health and well-being of the racehorses. Trainers who participated in the schemes stood to profit from the success of racehorses under their control by earning a share of their horses’ winnings, and by improving their horses’ racing records, thereby yielding higher trainer fees and increasing the number of racehorses under their control. Indicted veterinarians profited from the sale and administration of these medically unnecessary, misbranded, and adulterated substances. GIANNELLI, a seller of customized PEDs designed specifically to evade anti-doping controls, personally earned hundreds of thousands of dollars in sales commissions from her sale and distribution of PEDs to trainers around the United States.
GIANNELLI marketed these drugs as “untestable” under typical anti-doping drug screens and extolled the virtues of these illegal drugs by describing their potency and untestability. In the course of over fifteen years during which Giannelli operated under the auspices of the company, Equestology, GIANNELLI deliberately lied to state investigators to cover up her crimes and sold vials with no or incomplete labels, with no hint as to the provenance of those unsafe and prohibited drugs.
The drugs GIANNELLI sold included intravenous and intramuscular injectables that she sold to laypeople for injection into the horses under their purported “care,” many of which were seized at premises throughout the country at the time of the original indictments in this case, including barns located in New York. Those included “blood building” drugs (for example, “BB3” and other Epogen-mimetic substances), vasodilators (for example, “VO2Max”), and bags filled with scores of “bleeder pills,” each designed to covertly increase performance in affected horses.
GIANNELLI was convicted of one count of conspiracy to commit misbranding and drug adulteration in connection with her work for Equestology. GIANNELLI faces up to five years in prison for her conviction.
The statutory maximum penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of GIANNELLI will be determined by the judge.
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Mr. Williams praised the outstanding investigative work of the FBI New York Office’s Eurasian Organized Crime Task Force and its support of the Bureau’s Integrity in Sports and Gaming Initiative. Mr. Williams also thanked Customs and Border Protection and the Food and Drug Administration for their assistance and expertise. This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant United States Attorneys Sarah Mortazavi, Benjamin A. Gianforti, and Anden Chow are in charge of the prosecution.
[1] As to Giannelli’s co-defendants, these facts, including the entirety of the texts of the Indictments and the descriptions of the Indictments set forth herein, constitute only allegations and every fact described should be treated as an allegation.
Greene County Commissioner of Revenue Resigns and Pleads GuiltyRead the Press Release
CHARLOTTESVILLE, Va. –The former Commissioner of Revenue for Greene County, Virginia, resigned from his elected position in connection with pleading guilty today in federal court to attempted witness tampering, a felony offense. His son also pleaded guilty today to a related charge of heroin distribution.
Larry Vernon Snow, 73, pleaded guilty to one count of attempted witness tampering related to his efforts to harass and dissuade a confidential informant from cooperating in a federal investigation of both himself and his son, as well as to prevent the confidential informant from aiding law enforcement in other investigations. Bryant Austin Snow, 33, pleaded guilty to one related count of distributing heroin.
“The former Commissioner of Revenue for Greene County, an elected official of over 30 years, broadcast information throughout his community about a witness having assisted law enforcement authorities, all in retaliation against that witness. The Department of Justice will hold accountable those who seek to harass, intimidate, or retaliate against any federal witnesses, and I am grateful for the result that was achieved today through our investigation,” said United States Attorney Christopher R. Kavanaugh.
“Elected officials should hold themselves to a higher standard and serve their community responsibly. Mr. Snow violated the faith entrusted to him, and with his son criminally used personal information of community members for their own gain,” said Stanley M. Meador, Special Agent in Charge of the FBI’s Richmond Division. “The FBI will continue to work with our partners to investigate instances of witness tampering and are happy with today’s change in plea.”
According to court documents, Bryant Snow was arrested and charged with two state drug charges in November 2017. The state charges stem from law enforcement’s use of a confidential informant who purchased methamphetamine and heroin from Bryant Snow. On April 20, 2018, Bryant Snow pleaded guilty to one count of distribution of methamphetamine in Greene County, Virginia.
While incarcerated in Central Virginia Regional Jail (CVRJ), Bryant Snow received documents and other evidence regarding his state case. This information included video and audio of the recorded narcotics buys by the confidential informant from Bryant Snow. Bryant Snow made numerous calls from jail to his father, Larry Snow, where they discussed their animosity towards confidential informants generally and Person A specifically. For example, Larry Snow stated to Bryant in one call that “[Person A]’s gonna get his, I promise you that.” Larry Snow then stated they should let “everybody know all about it” and “who he is, what he’s doing,” in reference to Person A.
On May 31, 2019, the U.S. Attorney’s Office for the Western District of Virginia notified Larry and Bryant Snow that they were targets of a federal investigation involving their conduct toward Person A. After receiving this notice, Larry Snow drafted and caused approximately 12,000 leaflets to be mailed in October 2019 to the residents of Greene County in an attempt to harass Person A and hinder, prevent, and dissuade Person A from causing or aiding in any federal prosecutions of the Snows or others. The leaflets described how the incumbent sheriff of Greene County used “drug dealers (who are also police informants).” The leaflet stated, “Specifically, this same drug dealer” was “caught twice,” and described the purportedly lenient sentence the individual received. These comments were references to Person A, who Larry Snow knew cooperated against his son, Bryant. Larry Snow placed his name at the bottom of the leaflets to identify himself as the sender.
In recorded jail calls following the distribution of the leaflets, Bryant Snow and Larry Snow discussed the known “drug dealer” in the leaflet and confirmed it was Person A. Larry Snow concluded the call by stating, “it’s out there now” because information about Person A’s cooperation with law enforcement had been disseminated in the county via the leaflets.
In connection with entering his guilty plea, Larry Snow resigned from his elected position as the Commissioner of Revenue in Greene County, a position he has held since 1987 and had been re-elected to while under federal indictment. As part of the plea agreement, Larry Snow agreed not to run for elected office during any sentence or period of court supervision.
The Snows are scheduled for sentencing on July 25, 2022 and August 1, 2022 before Senior United States District Court Judge Norman K. Moon.
The investigation of the case was conducted by the Federal Bureau of Investigation and the Virginia Department of Motor Vehicles.
Assistant United States Attorney Katie Burroughs Medearis and Ryan S. Faulconer, Senior Counsel with the Computer Crime and Intellectual Property Section of the Department of Justice’s Criminal Division, are prosecuting the case for the United States. Former Assistant United States Attorney Kathryn Rumsey assisted in the prosecution of the case.
Garysburg Man Sentenced to 72 Months for Firearm and Crack Cocaine ChargesRead the Press Release
RALEIGH, N.C. – Calvin McKinley Hughes, 39, of Garysburg, Northampton County, was sentenced today to 72 months in prison for possessing crack cocaine with intent to distribute and for possessing a firearm in furtherance of a drug trafficking crime. Hughes pled guilty to the charges on January 4, 2022.
According to court records and statements made during hearings, on August 11, 2018, a Northampton County Sheriff’s Office detective was on patrol in Garysburg, NC, when he observed a black Chrysler sedan stopped in the middle of Maple Street, near the intersection of Peach Street. Two people were standing by the car. The detective initiated a traffic stop for impeding traffic, and the two people walked away. The driver identified himself as defendant Calvin Hughes but said that he did not have a license or any identification. Central communications advised that Hughes had a suspended license.
Hughes denied that he had anything illegal in the car and told deputies that they could search his car. After being instructed to stand at the front of the patrol car with another deputy, Hughes took off running into a neighborhood. Deputies chased Hughes around several residences before they were able to apprehend him.
A search of Hughes’ car revealed a black M&P Shield 40 caliber pistol with a loaded magazine under the driver’s seat. They also found 14 plastic bags containing crack cocaine.
Hughes made bond on state charges but was arrested again on a firearm charge on May 14, 2019, when Halifax County Sheriff’s Office deputies responded to a drug complaint and recovered a shotgun from Hughes’ bedroom in a Weldon, North Carolina, residence where he had been staying.
Prior to his federal conviction, Hughes accrued ten North Carolina felony offenses, including multiple convictions for possessing and distributing cocaine, as well as larceny offenses.
Michael Easley, U.S. Attorney for the Eastern District of North Carolina, made the announcement after sentencing by U.S. District Judge Terrence W. Boyle. The Northampton County Sheriff’s Office and Halifax County Sheriffs Office conducted the investigation. Assistant U.S. Attorney Jake D. Pugh 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-0021-BO.
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Former Suring Trustee, Teacher, and Coach Sentenced to 25 Years’ Imprisonment for Sexually Abusing a ChildRead the Press Release
Richard G. Frohling, United States Attorney for the Eastern District of Wisconsin, announced that on May 5, 2022, John E. Fredenburgh (age: 37) of the Village of Suring, in Oconto County, Wisconsin, was sentenced to 25 years in federal prison by Senior District Judge William C. Griesbach.
In November of 2021, Fredenburgh pled guilty to “Transportation of a Minor with the Intent to Engage in Criminal Sexual Activity” and “Child Enticement.” The facts adduced at the sentencing hearing demonstrated that Fredenburgh sexually abused a Suring minor beginning when she was 12 years old. The abuse continued for another five and a half years. In February of 2021, the victim came forward and reported the abuse to Oconto authorities. In addition to the repeated sexual abuse, Fredenburgh supplied the minor with alcohol and illegal drugs. He also committed acts of violence against her.
During the sentencing hearing, Judge Griesbach noted the horrendous nature of the crimes and the need to deter Fredenburgh from engaging in further abuse. He stated his belief that a 25-year prison sentence was lengthy enough to protect the community while at the same time providing a measure of justice for the victim. Upon the completion of his federal prison sentence, the defendant will serve the remainder of his life on supervised release.
This case was investigated by the Oconto County Sheriff’s Office, the Marinette County Sheriff’s Office, the Menominee, Michigan Sheriff’s Office, the Menominee (Michigan) Police Department, and the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Daniel R. Humble.
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 U.S. Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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For further information contact:
Public Information Officer Kenneth Gales
(414) 297-1700
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Former Marblehead Postal Worker Indicted for Stealing Government MoneyRead the Press Release
BOSTON – A former U.S. Postal Service (USPS) employee has been indicted by a federal grand jury in connection with two schemes to steal USPS funds.
Zeon Johnson, 27, of Saugus, was indicted on one count of theft of government money. Johnson will appear in federal court in Boston on Monday, May 9, 2022, at 11:30 a.m. before U.S. District Court Magistrate Judge Marianne B. Bowler.
According to the indictment, beginning in approximately August 2018, Johnson worked as a Sales and Service Distribution Associate for USPS at the Marblehead Post Office. As part of his job, Johnson sold stamps and processed money order transactions for USPS customers. It is alleged that from approximately July 2019 through June 18, 2020, Johnson engaged in two schemes to convert USPS funds for personal use.
It is alleged that Johnson intentionally voided cash transaction sales of USPS stamps to customers, resulting in no records being made of cash payments for stamps, and then stole the cash for his own personal use. It is further alleged that Johnson stole USPS funds through fraudulent money orders, specifically by issuing himself blank money orders, money order refunds as well as money orders made payable to himself. In total, it is alleged that Johnson stole over $18,000 in USPS funds.
The charge of theft of government money provides for a sentence of up to 10 years in prison, up to three years of supervised release and a fine of $250,000. 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 and Matthew Modafferi, Special Agent in Charge of the United States Postal Service Office of Inspector General, Northeast Area Office, made the announcement today. Assistant U.S. Attorney Eugenia M. Carris, Deputy Chief of Rollins’ Public Corruption & Special Prosecutions Unit, is prosecuting the case.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Corvallis Lawyer Pleads Guilty to Wire Fraud and Identity TheftRead the Press Release
PORTLAND, Ore.—A former Corvallis, Oregon lawyer pleaded guilty today for perpetrating a scheme to defraud her clients and use their payments to fund personal expenses.
Megan Moeller, aka Megan Perry, 42, pleaded guilty to wire fraud and identity theft.
According to court documents, beginning in at least 2014, Moeller, whose legal practice purportedly involved family law, divorce, child custody and visitation, and adoption matters, knowingly and intentionally perpetrated a scheme to defraud her clients by accepting payment for various legal services, failing to perform those services, using fraudulent means to conceal her failure to perform the services, and using the proceeds to fund her own personal expenses.
In one instance, in June 2016, Moeller accepted payment from a client in a child visitation and support case. Moeller falsely claimed to have drafted and served an order to show cause regarding the enforcement of parenting time to her client’s former spouse. Despite Moeller’s claims to the contrary and her client’s repeated inquiries, the document was never received by the former spouse. On March 23, 2017, Moeller provided her client with a fraudulent affidavit of service of process and a fraudulent certified mail receipt on which Moeller had knowingly forged the signature of her client’s former spouse. Moeller also forged the signatures of a process server and a notary.
On March 1, 2018, Moeller submitted a Form B resignation to the Oregon State Bar. It was accepted on April 5, 2018.
On April 29, 2022, Moeller was charged by superseding criminal information with wire fraud and identity theft.
Wire fraud is punishable by up to 20 years in federal prison, $250,000 fine and 3 years supervised release. Identity theft is punishable by up to 15 years in federal prison, a $250,000 fine and 3 years supervised release.
Moeller will be sentenced on August 4, 2022, before U.S. District Court Judge Robert E. Jones.
U.S. Attorney Scott Erik Asphaug of the District of Oregon made the announcement.
This case was investigated by the U.S. Postal Inspection Service. It is being prosecuted by Claire M. Fay, Assistant U.S. Attorney for the District of Oregon.
Florida Tax Preparer Convicted of Fraud and Identity Theft for Filing False Tax ReturnsRead the Press Release
PHILADELPHIA – United States Attorney Jennifer Arbittier Williams announced that Guy Menard Charles, 51, of Naples, FL, was convicted after trial of 23 counts of fraud and identity theft for filing false federal income tax returns as part of a scheme to fraudulently reduce taxes and inflate the tax refund amounts claimed on tax returns he prepared for his clients.
The defendant owned and operated Menard Tax Services in Florida. A co-conspirator, based in Philadelphia, recruited clients for the business and purchased personal identifying information for dependents, which Menard used on a number of the clients’ federal tax returns. In addition to the false dependent information, the defendant also included on various returns false income, education credits, and federal fuel tax credits. As a result of the tax returns with false information being filed, the U.S. Treasury issued tax refunds to the taxpayers to which they were not entitled. The defendant and his co-conspirator split the preparation fee for their services.
“Our nation’s taxing system relies upon tax preparers to apply our tax laws honestly in order to help clients accurately report income and pay their fair share of federal taxes, not bend or ignore the rules,” said U.S. Attorney Williams. “The defendant manipulated his clients’ tax filings at the expense of honest taxpayers who take seriously their legal obligation to file complete and accurate federal income taxes each year.”
“Fraudsters like Guy Menard Charles give honest tax return preparers a bad name”, said IRS Criminal Investigation Special Agent in Charge Yury Kruty. “Guy Menard Charles had a duty to his clients to prepare tax returns that comply with the law and are complete and accurate. Evidence presented during this trial showed that he failed to do so. The guilty verdict returned by the jury is another reminder that there is no tolerance for such criminal conduct.”
The case was investigated by the Internal Revenue Service, Criminal Investigations, and is being prosecuted by Assistant United States Attorneys David Ignall and Christopher Mannion.
Fairbanks Man Sentenced to Six Years in Prison for Possession of Child PornographyRead the Press Release
ANCHORAGE – A Fairbanks man was sentenced to six years in prison followed by 20 years of supervised release for possession of child pornography involving minors ages 1 – 15. In handing down the sentence, U.S. District Court Judge Ralph R. Beistline noted the “lifelong impact” these crimes have on victims.
According to court documents, Antonio Sanchez, 25, pleaded guilty to possessing more than 60 videos and images depicting children as young as one year old forced to engage in sexually explicit conduct including intercourse and oral sex with adult males. While the child pornography files were on the defendant’s computer, a file sharing program allowed other computers to connect and download the files.
“Child pornography continually re-harms innocent children who were initially exploited to create these horrific videos and images,” said U.S. Attorney S. Lane Tucker for the District of Alaska. “Viewing child pornography is not a victimless crime – the children in these videos and photos are real children who were sexually abused on camera. Because the images are widely shared on the Internet, the children are re-victimized thousands of times as strangers watch and re-watch the sexual abuse. Together, with our law enforcement partners, we are committed to seeking justice for these children.”
“Obtaining and possessing child pornography is a federal crime. Sanchez will now spend the next six years in federal prison for possessing such despicable material,” said Special Agent in Charge Antony Jung of the FBI Anchorage Field Office. “The FBI is committed, working side by side with our state and local partners, to investigate and combat these horrific crimes against children.”
The FBI and Anchorage Police Department investigated this case as part of the FBI’s Child Exploitation and Human Trafficking Task Force.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices, Project Safe Childhood combines 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.
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Elkton Man Sentenced to 20 Years in Federal Prison for Producing Child Pornography of Minor FemalesRead the Press Release
Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced Johnny William Kyte, age 62, of Elkton, Maryland to 20 years in federal prison, followed by a lifetime of supervised release, for production of child pornography.
The sentence was announced by United States Attorney for the District of Maryland Erek L. Barron; Acting Special Agent in Charge Selwyn Smith of Homeland Security Investigations (HSI) Baltimore; the Cecil County State’s Attorney James Dellmyer; and Chief Carolyn Rogers of the Elkton Police Department.
According to his guilty plea, on September 10, 2020, the Elkton Police Department responded to a complaint regarding images of child pornography located within Kyte’s residence and initiated an investigation into Kyte’s criminal conduct in partnership with Homeland Security Investigations.
After the execution of numerous search warrants, investigators discovered several digital devices controlled and owned by Kyte that contained images of child pornography. Investigators were able to identify and locate the minor victims who were depicted in the images. Subsequent investigation revealed that from August 2014 to July 2017, Kyte produced numerous sexually explicit images of two prepubescent females, including close-up images displaying the lewd and lascivious display of the minor victim’s genitals. Kyte used a variety of devices to produce the images including at least two digital cameras, a cell phone camera, and other devices.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about Internet safety education, please visit www.justice.gov/psc and click on the "Resources" tab on the left of the page.
United States Attorney Erek L. Barron commended the HSI, the Office of the State’s Attorney for Cecil County, and the Elkton Police Department for their work in the investigation. Mr. Barron thanked Assistant U.S. Attorneys Christine Duey and Colleen McGuinn, who prosecuted the case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md/project-safe-childhood and https://www.justice.gov/usao-md/community-outreach.
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Eastern Shore Man Pleads Guilty to Stealing More Than $1.8 Million from a Salisbury Corporation Where He WorkedRead the Press Release
Baltimore, Maryland – Duane G. Larmore, age 47, of Salisbury, Maryland, pleaded guilty today to a wire fraud conspiracy and to aggravated identity theft in connection with the theft of more than $1.8 million from Shore Appliance Connection, where Larmore worked.
The guilty plea was announced by United States Attorney for the District of Maryland Erek L. Barron and Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office.
According to his plea agreement, from mid-September 2016 through about March 2020, Larmore conspired with others to steal more than $1.8 million from a Salisbury, Maryland company, Shore Appliance Connection, owned and operated by Owner #1 and Owner #2, that sold household appliances as well as mattresses and bedding. Larmore was an employee at Shore Appliance whose duties included maintaining the books and records for the company.
Specifically, Larmore and his co-conspirators stole over $1 million from Shore Appliance to use for their own purposes, including to make investments and to pay business expenses for the co-conspirator’s business, without the knowledge and consent of the owners of Shore Appliance. For example, Larmore invested in the following: in 2016, a $100,000 investment with T.H.; a $95,000 investment with GenFinance II, PLC, London, U.K., which then required an additional $300,000, and then additional funds for a surety bond and travel abroad; in 2018, an investment through W.S. of $35,000 and an investment through J.B. of $50,000; and in 2019 - 2020, investments and expenses through I.P. and E. P.-S. to obtain U.S. currency purportedly returned to the United States from humanitarian relief projects abroad, and other similar investments. The charges included wire transfers from Shore Appliance’s account to a co-conspirator’s business account and from there to banks in the U.K. and Hong Kong. No investment paid any return to the schemers.
To conceal how much money had been removed from Shore Appliance and to obtain cash, Larmore used the identities of the owners to enter into factoring contracts. Factoring is a means by which businesses, like Shore Appliance, can obtain cash quickly by leveraging accounts receivable. As detailed in the plea agreement, the factoring contracts purportedly between Shore Appliance and various factoring companies, provided cash deposits to Shore Appliance's bank accounts but encumbered the accounts receivable of Shore Appliance and required payments and interest of more than $725,000. In addition, Larmore used his position of trust with Shore Appliance and signature authority over its bank accounts to draw on Shore Appliance’s lines of credit with two separate financial institutions to obtain another $200,000 in cash to conceal his use of Shore Appliance’s funds.
To obtain contracts with factoring companies for Shore Appliance, Larmore used his own email address and cell phone number with factors but identified that email address and cell phone number as belonging to Owner #1. Larmore also allegedly provided the factors with details of the owners’ identities, including dates of birth, Social Security numbers, and Maryland drivers' licenses, without their permission.
To conceal the fact that the owners were not aware of and had not approved the factoring contracts, the signatures of the owners were forged and the fraudulent signatures were witnessed or notarized by the co-conspirator; and Larmore and a female employee of his co-conspirator posed as the owners in telephone conversations with representatives of the factoring companies. Finally, when the co-conspirator’s business was having financial difficulties, at the co-conspirator’s request, Larmore provided funds from Shore Appliance for his co-conspirator's companies.
In all, Larmore paid $739,295.28 of Shore Appliance’s funds, without the officers and owners’ knowledge or consent, to invest in fraudulent schemes that never paid any money back. Larmore caused an additional loss of $171,548.67 by transferring funds to his co-conspirator or the co-conspirator’s companies. Larmore caused Shore Appliance to lose an additional $731,250.07 in fees and other payments to factors and to factoring brokers. Larmore also caused Shore Appliance to draw on its bank lines of credit and pay extra interest to those banks in the amount $208,395. Thus, the factoring arrangements and advances on Shore Appliance's lines of credit in total caused Shore Appliance to lose in actual funds $939,645. However, Shore Appliance as of March 2020 still owed the factors almost $270,000. For all of Larmore’s conduct, actual cash losses to Shore Appliance totaled $1,850,488.94 and intended losses totaled $2,137,674.74.
As part of his plea agreement, Larmore will be required to pay restitution in the full amount of the victims’ losses, which the parties stipulate is $1,850,488.94
Larmore faces a maximum sentence of 20 years in federal prison for a wire fraud conspiracy and a mandatory sentence of two years in federal prison, consecutive to any other sentence imposed, for aggravated identity theft. U.S. District Judge Deborah K. Chasanow has scheduled sentencing for July 29, 2022 at 1:00 p.m.
United States Attorney Erek L. Barron commended the FBI for its work in the investigation. Mr. Barron thanked Assistant U.S. Attorney Joyce K. McDonald, who is prosecuting the federal case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach. For more information about resources available to report fraud, please visit https://www.justice.gov/usao-md/report-fraud.
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Dubuque Man Sentenced to Federal Prison for Possessing FirearmRead the Press Release
A Dubuque man that possessed a firearm while subject to a no-contact order and in connection with distributing marijuana was sentenced today to more than 2 years in federal prison.
Marcus McDaniel, age 24, from Dubuque, Iowa, received the prison term after a November 1, 2021, guilty plea to one-count of possession of a firearm while subject to an order of protection.
Information disclosed at sentencing and prior hearings showed that, on July 8, 2020, a no-contact order was issued against McDaniel following McDaniel’s arrest for domestic abuse assault. On August 29, 2020, while still subject to the no-contact order, law enforcement recovered a loaded Glock 19X, 9x19mm caliber pistol, with an extended magazine from McDaniel’s person outside of his apartment. Inside McDaniel’s apartment, law enforcement seized at least 33 pounds of marijuana.
McDaniel was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. McDaniel was sentenced to 31 months’ imprisonment. He must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
McDaniel is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Dillan Edwards and investigated by the Dubuque Police Department and the Bureau of Alcohol, Tobacco, Explosives, and Firearms.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 21-CR-01018.
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Dentist Pleads Guilty to Unlawfully Obtaining Medicaid Funds and Paying Recruiters to Refer Medicaid Beneficiaries to His Dental Office in Exchange for KickbacksRead the Press Release
Greenbelt, Maryland – Edward T. Buford III, age 70, of Silver Spring, Maryland, pleaded guilty on May 4, 2022, to conspiracy to commit mail fraud and healthcare fraud. As part of his guilty plea, Buford will be required to pay $1,267,630 in restitution.
The guilty plea was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Wayne Jacobs of the Federal Bureau of Investigation - Washington Field Office Criminal Division; Special Agent in Charge Maureen Dixon, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; Special Agent in Charge Michael McGill of the Social Security Administration - Office of Inspector General, Philadelphia Field Division; and Daniel W. Lucas, Inspector General for the District of Columbia.
According to his guilty plea, from January 2013 to May 2018, Buford and others devised and executed a scheme to defraud Medicaid for the District of Columbia by filing fraudulent Medicaid claims for dental services to Medicaid beneficiaries, receiving the fraudulently obtained funds from Medicaid, and recruiting Medicaid beneficiaries to fuel the scheme through the payment of kickbacks and bribes.
Buford was a licensed dentist in Washington, D.C. and the owner and Chief Executive Officer of International Dental Associates, Inc. (IDA), a dental clinic located in Washington, D.C. Before 2015, Buford was enrolled as a Medicaid provider, however, in April 2015, Medicaid suspended payments to Buford under his provider number.
After Buford’s provider number was suspended in 2015, Buford and his business partner/IDA manager (Co-conspirator 1) continued to submit claims to Medicaid through IDA’s provider number. In April 2016, Buford and Co-conspirator 1 re-enrolled IDA as a provider in Medicaid. Within IDA’s application, Buford and Co-conspirator 1 failed to disclose Buford’s suspension from Medicaid.
Buford and his co-conspirators caused the submission of Medicaid claims by Buford and IDA for a variety of dental services, including dentures. As part of the conspiracy, Buford and Co-conspirator 1 offered and paid kickbacks to Co-conspirator 2 and other patient recruiters in exchange for referring Medicaid beneficiaries to IDA for dental services, even though Medicaid would not pay claims had it known they were procured through kickbacks. Medicaid paid substantially more for dentures than for many other dental services, including dental cleanings, and Buford and Co-conspirator 1 paid Co-conspirator 2 larger cash kickbacks for beneficiaries that agreed to be fitted for dentures—approximately $50 per beneficiary—than for beneficiaries who only agreed to receive dental cleanings.
At Buford and Co-conspirator 1’s direction, Co-conspirator 2 offered Medicaid beneficiaries cash bribes to induce them to visit and accept dental services from IDA. Buford and his co-conspirators typically paid higher amounts to beneficiaries who agreed to be fitted for dentures than those who only agreed to receive cleanings. Even though dentures required multiple visits to fit and deliver, Buford and his co-conspirators paid the beneficiaries only for the initial visit—after which Buford and his co-conspirators could bill Medicaid for the dentures—and numerous beneficiaries never returned to IDA after receiving the cash bribe. Accordingly, Buford and his co-conspirators stored hundreds of undelivered dentures on IDA’s premises, many of which had been billed to and paid for by Medicaid.
As part of the scheme to defraud, Buford maintained a Post Office box in Silver Spring, Maryland as IDA’s billing address and received the fraudulently obtained funds at that location. For example, on September 21, 2017, Buford caused Medicaid to mail a check for $17,397 to the Maryland P.O. box for services purportedly provided to 11 Medicaid beneficiaries.
Based on the amount that Medicaid paid to Buford and IDA for dentures that were not delivered, the actual loss to Medicaid was at least approximately $1,267,630.
Buford faces a maximum sentence of 20 years in federal prison followed by 3 years of supervised release for conspiracy to commit mail fraud and healthcare fraud. U.S. District Judge Theodore D. Chuang has scheduled sentencing for August 3, 2022, at 9:00 a.m.
United States Attorney Erek L. Barron commended the FBI, HHS-OIG, the D.C. Office of the Inspector General’s Medicaid Fraud Control Unit, SSA-OIG for their work in the investigation. Mr. Barron thanked Assistant U.S. Attorneys Jessica C. Collins and Rajeev R. Raghavan, who are prosecuting the case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.
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Camden County Man Charged with Fraud in Connection with Unemployment Insurance BenefitsRead the Press Release
NEWARK, N.J. – A Camden County, New Jersey, man was arrested for his role in an unemployment insurance benefits fraud scheme, U.S. Attorney Philip R. Sellinger announced today.
Willie Carter, 22, of Bellmawr, New Jersey, is charged by complaint with one count of wire fraud. He was arrested on May 5, 2022, appeared by videoconference before U.S. Magistrate Judge Jessica S. Allen, and was released on $150,000 bond.
According to documents filed in this case and statements made in court:
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. The CARES Act expanded states’ ability to provide assistance to many workers impacted by COVID-19, including workers who are not ordinarily eligible for unemployment insurance benefits. The CARES Act provided for three new temporary programs: Pandemic Unemployment Assistance, Pandemic Emergency Unemployment Compensation and Federal Pandemic Unemployment Compensation.
Between July 2020 and October 2020, unemployment insurance applications in the name of Willie Carter were made to 10 different states. Each application used the same Internet Protocol Address. Between June 2020 and November 2020, the IP Address was associated with approximately 34 unemployment insurance benefits claims to various states, which paid out approximately $150,000. The investigation revealed that the IP Address is associated with Carter. Some of the more than $150,000 was transferred into two bank accounts in Carter’s name.
The charge of wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross profits or gross loss, whichever is greatest.
U.S. Attorney Sellinger credited special agents of the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Jonathan Mellone in Manhattan, with the investigation leading to the arrest. He also thanked the U.S. Postal Inspection Service in Newark; special agents of the FBI in Newark, and special agents of the Department of Homeland Security, Office of Inspector General, for their assistance.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Cybercrime Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
California man sentenced to more than 15 years for role in drug distribution operationRead the Press Release
CLARKSBURG, WEST VIRGINIA – Sixto Marquez, of Paramount, California, was sentenced today to 188 months of incarceration for his role in methamphetamine, crack cocaine, fentanyl, and heroin drug distribution operation, United States Attorney William Ihlenfeld announced.
Marquez, age 46, pleaded guilty in December 2021 to one count of “Conspiracy to Distribute Controlled Substances” and one count of “Unlawful Use of Communication Facility.” Marquez admitted to working with others to distribute methamphetamine, crack cocaine, fentanyl, and heroin from the spring of 2018 to October 2020 in Monongalia County and elsewhere.
Assistant U.S. Attorneys Zelda E. Wesley and Sarah E. Wagner prosecuted the case on behalf of the government. The FBI's Northern West Virginia Drug Task Force in partnership with the Mon Metro Drug Task Force, a HIDTA-funded initiative, investigated. The Task Forces have members from the Federal Bureau of Investigation; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; West Virginia State Police; Monongalia County Sheriff's Office; and the Morgantown, WVU, Granville and Star City Police Departments. The investigation was also assisted by the following law enforcement partners: the Monongalia County Prosecutor’s Office; the FBI in Houston, Texas; the Houston Police Department's Multi Agency Gang Initiative; the United States Postal Inspection Service in Houston; and the FBI and DEA in Los Angeles, California.
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Chief U.S. District Judge Thomas S. Kleeh presided.
CEO of Mining Capital Coin Indicted in $62 Million Cryptocurrency Fraud SchemeRead the Press Release
An indictment was unsealed yesterday charging the CEO of Mining Capital Coin (MCC), a purported cryptocurrency mining and investment platform, for allegedly orchestrating a $62 million global investment fraud scheme.
“Cryptocurrency-based fraud undermines financial markets worldwide as bad actors defraud investors and limits the ability of legitimate entrepreneurs to innovate within this emerging space,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “The department is committed to following the money — whether physical or digital — to expose criminal schemes, hold these fraudsters accountable, and protect investors.”
According to the indictment, Luiz Capuci Jr., 44, of Port St. Lucie, Florida, the CEO and founder of MCC, misled investors about MCC’s cryptocurrency mining and investment program, under which investors could invest in MCC by purchasing “Mining Packages.” Under this program, Capuci and his co-conspirators touted MCC’s purported international network of cryptocurrency mining machines as being able to generate substantial profits and guaranteed returns by using investors’ money to mine new cryptocurrency. Capuci also touted MCC’s own cryptocurrency, Capital Coin, as a purported decentralized autonomous organization that was “stabilized by revenue from the biggest cryptocurrency mining operation in the world.” As alleged in the indictment, however, Capuci operated a fraudulent investment scheme and did not use investors’ funds to mine new cryptocurrency, as promised, but instead diverted the funds to cryptocurrency wallets under his control.
“This office is committed to protecting consumers from unscrupulous fraudsters seeking to capitalize on the relative novelty of digital currency,” said U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida. “As with any emerging market, those who invest in cryptocurrency must beware of profit-making opportunities that appear too good to be true.”
The indictment further alleges that Capuci touted and fraudulently marketed MCC’s purported “Trading Bots” as an additional investment mechanism for investors to invest in the cryptocurrency market. Capuci claimed that MCC joined with “top software developers in Asia, Russia, and the U.S.A. to create an improved version of Trading Bot[s] that [were] tested with new technology never seen before.” Capuci further represented that MCC’s Trading Bots operated in “very high frequency, being able to do thousands of trades per second,” and that each of MCC’s Trading Bots would generate daily returns for investors. As he did with the Mining Packages, however, Capuci allegedly operated an investment fraud scheme with the Trading Bots and was not, as he promised, using MCC Trading Bots to generate income for investors, but instead was diverting the funds to himself and co-conspirators.
“Virtual currency markets are growing rapidly, and unfortunately so are crypto currency investment scams,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “The FBI and our law enforcement partners are committed to investigating financial fraud wherever it occurs, including in the virtual currency space.”
Capuci is also alleged to have recruited promoters and affiliates to promote MCC and its various investment programs through a multi-level marketing scheme, commonly known as a pyramid scheme. For successfully luring investors to invest, Capuci promised MCC’s network of promoters and affiliates a range of gifts, from Apple watches and iPads to luxury vehicles such as a Lamborghini, Porsche, and even Capuci’s personal Ferrari. Capuci further concealed the location and control of the fraud proceeds obtained from investors by laundering the funds internationally through various foreign-based cryptocurrency exchanges.
“This case should serve as a warning to any individuals who look to illegally capitalize on the perceived ambiguity of the emerging crypto market to take advantage of innocent investors” said HSI Miami Special Agent in Charge Anthony Salisbury. “HSI will continue to work with our partners to pursue anyone who utilizes these types of schemes to victimize would be customers.”
Capuci is charged with conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit international money laundering. If convicted of all counts, he faces a maximum total penalty of 45 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI Miami Field Office and HSI’s Miami Field Office are investigating the case.
Trial Attorneys Kevin Lowell and Sara Hallmark of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Yisel Valdes of the Southern District of Florida are 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.
CEO of Mining Capital Coin Indicted in $62 Million Cryptocurrency Fraud SchemeRead the Press Release
Miami, Florida – An indictment was unsealed yesterday charging the CEO of Mining Capital Coin (MCC), a purported cryptocurrency mining and investment platform, for allegedly orchestrating a $62 million global investment fraud scheme.
“This office is committed to protecting consumers from unscrupulous fraudsters seeking to capitalize on the relative novelty of digital currency,” said U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida. “As with any emerging market, those who invest in cryptocurrency must beware of profit-making opportunities that appear too good to be true.”
According to the indictment, Luiz Capuci Jr., 44, of Port St. Lucie, Florida, the CEO and of MCC, misled investors about MCC’s cryptocurrency mining and investment program, under which investors could invest in MCC by purchasing “Mining Packages.” Under this program, Capuci and his co-conspirators touted MCC’s purported international network of cryptocurrency mining machines as being able to generate substantial profits and guaranteed returns by using investors’ money to mine new cryptocurrency. Capuci also touted MCC’s own cryptocurrency, Capital Coin, as a purported decentralized autonomous organization that was “stabilized by revenue from the biggest cryptocurrency mining operation in the world.” As alleged in the indictment, however, Capuci operated a fraudulent investment scheme and did not use investors’ funds to mine new cryptocurrency, as promised, but instead diverted the funds to cryptocurrency wallets under his control.
“Cryptocurrency-based fraud undermines financial markets worldwide as bad actors defraud investors and limits the ability of legitimate entrepreneurs to innovate within this emerging space,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “The department is committed to following the money — whether physical or digital — to expose criminal schemes, hold these fraudsters accountable, and protect investors.”
The indictment further alleges that Capuci touted and fraudulently marketed MCC’s purported “Trading Bots” as an additional investment mechanism for investors to invest in the cryptocurrency market. Capuci claimed that MCC joined with “top software developers in Asia, Russia, and the U.S.A. to create an improved version of Trading Bot[s] that [were] tested with new technology never seen before.” Capuci further represented that MCC’s Trading Bots operated in “very high frequency, being able to do thousands of trades per second,” and that each of MCC’s Trading Bots would generate daily returns for investors. As he did with the Mining Packages, however, Capuci allegedly operated an investment fraud scheme with the Trading Bots and was not, as he promised, using MCC Trading Bots to generate income for investors, but instead was diverting the funds to himself and co-conspirators.
“Virtual currency markets are growing rapidly, and unfortunately so are crypto currency investment scams,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “The FBI and our law enforcement partners are committed to investigating financial fraud wherever it occurs, including in the virtual currency space.”
Capuci is also alleged to have recruited promoters and affiliates to promote MCC and its various investment programs through a multi-level marketing scheme, commonly known as a pyramid scheme. For successfully luring investors to invest, Capuci promised MCC’s network of promoters and affiliates a range of gifts, from Apple watches and iPads to luxury vehicles such as a Lamborghini, Porsche, and even Capuci’s personal Ferrari. Capuci further concealed the location and control of the fraud proceeds obtained from investors by laundering the funds internationally through various foreign-based cryptocurrency exchanges.
“This case should serve as a warning to any individuals who look to illegally capitalize on the perceived ambiguity of the emerging crypto market to take advantage of innocent investors” said HSI Miami Special Agent in Charge Anthony Salisbury. “HSI will continue to work with our partners to pursue anyone who utilizes these types of schemes to victimize would be customers.”
Capuci is charged with conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit international money laundering. If convicted of all counts, he faces a maximum total penalty of 45 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI Miami Field Office and HSI’s Miami Field Office are investigating the case.
Assistant U.S. Attorney Yisel Valdes of the Southern District of Florida and Trial Attorneys Kevin Lowell and Sara Hallmark of the Criminal Division’s Fraud Section are prosecuting the case. Assistant U.S. Attorney Joshua Paster of the Southern District of Florida is handling asset forfeiture.
An indictment is merely an allegation, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 22-cr-20173.
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Broken Arrow Man Pleads Guilty for Taking Part in a Child Exploitation EnterpriseRead the Press Release
A Broken Arrow man who sexually exploited a young child and was an administrator for a transnational child exploitation chat group pleaded guilty Thursday in federal court, announced U.S. Attorney Clint Johnson.
The investigation into Cameron Kelly McAbee, 32, and the chat group led to the identification of 20 other alleged child predators from the United States, Australia, Canada, and Norway and the rescue of more than 20 children.
“Through an extensive investigation by the FBI and our task force partners, Cameron McAbee and a group of 20 other predators have been identified and will face justice in their respective jurisdictions for the trauma they have caused to children,” said U.S. Attorney Clint Johnson. “The U.S. Attorney’s Office and our partners in Oklahoma and across the nation will continue to identify, track, arrest and prosecute pedophiles who harm the most vulnerable among us.”
“This predator participated in a child exploitation enterprise that, through shocking and heartbreaking means, caused irreparable harm to many child victims,” said Special Agent in Charge Edward Gray of the FBI Oklahoma City Field Office. “The vile actions committed by the defendant and his cohort of predators will no longer go undetected, and thanks to the painstaking, tireless efforts of this investigative and prosecution team, the defendant will be held accountable to the fullest extent.”
McAbee pleaded guilty to child exploitation enterprise, sexual exploitation of a child by a parent; receipt and distribution of child pornography; and possession of child pornography in Indian Country.
In his plea agreement, McAbee admitted that from July 1, 2019, to July 26, 2021, he knowingly engaged in a child exploitation enterprise, taking part in a series of felony violations comprised of more than three separate incidents, involving more than one victim, and in concert with more than three other people.
McAbee admitted to being an administrator of online messenger platform group chats where members of the group exchanged numerous images and videos depicting the rape and molestation of children. He stated that the groups involved at least 21 members and at least eight child victims. As part of gaining access to one of the groups, members were required to show proof of access to a child victim and were expected to share images and videos of the sexual abuse of that child to maintain access to the group, as well as other images and videos of child sexual abuse obtained elsewhere. McAbee admitted to being partly responsible for confirming a prospective member’s access to a child victim and admitting them to the group. McAbee also admitted that from July 1, 2019, to July 26, 2021, he had a minor engage in sexually explicit conduct for the purpose of producing visual depictions that he would sometimes share in the group chats.
On July 13, 2021, the FBI discovered the online chat group and began an investigation. According to court documents, the FBI believed a specific account, later linked to McAbee, was an administrator and observed that gaining membership in the group required showing photographic proof of having access to a child for the suspected purpose of sharing child sexual abuse material. Continued access to the group required members to produce and share images and videos of the members sexually abusing children. On July 24, 2021, McAbee posted a “live photo” to the group depicting the sexual abuse of a child he had access to.
On July 26, 2021, the FBI linked the administrator account to McAbee and his Broken Arrow address and executed a search warrant at the residence. He was taken into custody the same day.
The FBI Oklahoma City Field Office (Tulsa Resident Agency), FBI Atlanta Field Office, Broken Arrow Police Department, and Tulsa Police Department conducted the investigation. Assistant U.S. Attorney Christopher J. Nassar is prosecuting the case.
See previous press release announcing charges here
This case is being prosecuted as part of Project Safe Childhood. Led by United States Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Bowie County Man Guilty of $5 Million COVID-Relief FraudRead the Press Release
TEXARKANA, Texas– A Maud, Texas, man has pleaded guilty to COVID-relief fraud in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.
Samuel Yates, 32, pleaded guilty to two counts of wire fraud today before U.S. Magistrate Judge Caroline Craven. Yates admitted to seeking millions of dollars in forgivable loans guaranteed by the Small Business Administration (SBA) from two different banks by claiming to have over 400 employees earning wages when, in fact, no employees worked for his purported business.
According to court documents, on April 14, 2020, Yates submitted two fraudulent applications to two different lenders fraudulently seeking more than $5 million in forgivable loans guaranteed by the SBA under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. In the application submitted to the first lender, Yates sought $5 million in PPP loan proceeds by fraudulently claiming to have over 400 employees with an average monthly payroll of more than $2 million. In the second application, Yates claimed to employ over 100 individuals and was able to obtain a loan over $500,000. With each application, Yates submitted a list of purported employees that he obtained from a publicly available random name generator on the internet. He also submitted forged tax documents with each application.
“These Government loans, funded by taxpayers, were designed to aid businesses in weathering the pandemic-related economic storm,” said U.S. Attorney Brit Featherston. “Yates chose to fraudulently take advantage of the good-will of the American people by attempting to steal CARES Act funding. Those who seek to misappropriate these vital funds should tread carefully as they will be identified, investigated, and prosecuted . . . period.”
The CARES Act is a federal law enacted on March 29, 2020, 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 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 allows qualifying small-businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within eight weeks of receipt and use at least 75 percent of the forgiven amount for payroll.
A federal grand jury returned an indictment charging Yates with federal violations on Jan. 14, 2021. He faces up to 20 years in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing 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 U.S. Probation Office.
This case is being investigated by the Treasury Inspector General for Tax Administration’s Cybercrime Investigations Division; SBA Office of Inspector General’s (OIG) Central Region; and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Dallas.
Trial Attorney Louis Manzo and Brandon Burkart of the Criminal Division’s Fraud Section and Criminal Chief Frank Coan and Assistant U.S. Attorney Jonathan R. Hornok for the Eastern District of Texas are prosecuting the case.
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 Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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Bladenboro Woman Sentenced to 60 Months for Drug Offenses Arising from Tabor City Pill MillRead the Press Release
NEW BERN, N.C. – A Bladen County woman who helped a former doctor operate a “pill mill” in Columbus County, where opioids and other controlled substances were improperly prescribed, was sentenced today to 60 months in prison for unlawfully distributing Oxycodone, Hydrocodone, Methadone, and Marijuana.
“The defendant helped to illegally distribute opioids, jeopardizing the safety of the community,” said Michael Easley, U.S. Attorney for the Eastern District of North Carolina. “My office will continue to collaborate with law enforcement at all levels to dismantle criminal organizations that are contributing to the drug problems in eastern North Carolina.”
According to court documents, Tammy Lynn Thompson, 57, and co-defendant and former doctor, Jong Kim, were charged with violating federal drug trafficking laws. The co-defendant, Kim, pled guilty to multiple counts and was sentenced earlier this year to 78 months. On July 12, 2021, Thompson pled guilty to Conspiracy to Unlawfully Distribute Oxycodone, Hydrocodone, Methadone, and Marijuana, in violation of 21 U.S.C. §846; multiple counts of Distribution of Marijuana and Aiding and Abetting, in violation of 21 U.S.C. §841(a)(1) and 18 U.S.C. §2; Distribution of Hydrocodone, in violation of 21 U.S.C. §841(a)(1); and Unlawful Dispensation and Distribution of Hydrocodone and Marijuana and Aiding and Abetting, in violation of 21 U.S.C. §841(a)(1) and 18 U.S.C. §2.
In 2017, Thompson helped Kim—who had previously been forced to resign from an area medical practice due to concerns over his opioid prescribing practices—to open his own clinic in Tabor City, NC. From October 2017 to June 28, 2018, Thompson helped Kim unlawfully and improperly prescribe opioids and other controlled substances by bringing in “patients” who paid $200 cash at each appointment. The investigation revealed that Kim wrote controlled substance prescriptions to virtually every patient he saw and often failed to meet the basic standards of legitimate medical care. Word spread quickly and the pill mill drew people from across Eastern North Carolina and other states. The volume of patients and associated activity in the parking lot of the clinic created safety concerns for the adjacent Tabor City Elementary School, which was forced to restrict outdoor activities for students until a privacy fence was constructed. Additionally, Thompson sold marijuana and hydrocodone on multiple occasions at both the clinic and the residence she shared with Kim.
In January 2018, a confidential source began conducting a series of controlled purchases from Kim and Thompson, which were audio and video recorded. On June 29, 2018, search warrants were executed at Kim’s clinic and residence and Kim and Thompson were arrested. A medical expert who reviewed Kim’s records found no evidence that Kim was providing real medical care and concluded that Kim was merely exchanging prescriptions for money.
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 Drug Enforcement Administration’s Charlotte Tactical Diversion Squad, Columbus County Sheriff’s Office, and the North Carolina State Bureau of Investigation, DECU investigated the case and Assistant U.S. Attorneys Nick Miller, Tim Severo, and Bryan Stephany 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. 7:18-CR-00200-FL.
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Albuquerque man sentenced to four years and three months in prison for federal firearms violationsRead the Press Release
ALBUQUERQUE, N.M. – Devan Andrew Martinez, 34, of Albuquerque, was sentenced in federal court on May 5 to four years and three months in prison for being a felon in possession of firearms and ammunition. Martinez pleaded guilty on Oct. 12, 2021.
According to the plea agreement and other court records, on July 18, 2018, a law enforcement officer observed a vehicle parked inside a gated entrance to the Sedillo Range Unit on the south side of Interstate 40, which is on the Pueblo of Laguna. They did not have a title or bill of sale for the car, and the officer checked for a vehicle identification number. While checking the vehicle, the officer observed a loaded Taurus .45 caliber handgun on the floorboard under the front passenger seat.
After the officer found the firearm, Martinez and the other person were taken into custody. A search warrant was obtained for the vehicle and resulted in the discovery of nine rifles, four shotguns and two handguns, among other items including ammunition. In his plea, Martinez acknowledged that he knew that as a previously convicted felon he could not legally possess firearms or ammunition.
In the days prior to his arrest, Martinez went on a crime spree through communities west of Albuquerque, including the Pueblo of Laguna. He broke into a home, vehicles, a trailer, and gun safes to steal the fifteen firearms he possessed on July 18, 2018, as well as other personal effects. The State of New Mexico prosecuted Martinez for aggravated burglary (armed after entering), burglary of a vehicle, and residential burglary, all of which arose out of this crime spree. For those crimes, Martinez was sentenced to seven years in prison followed by five years of supervised probation. The sentence handed down today will be adjusted to account for time served for the state convictions. Because Martinez has been incarcerated since July of 2018, and accounting for this adjustment, his release from his federal term of imprisonment is forecast for October of this year.
Upon his release from prison, Martinez will be subject to three years of supervised release.
The Bureau of Indian Affairs investigated this case with assistance from the Laguna Pueblo Police Department. Assistant U.S. Attorney Alexander F. Flores is prosecuting the case.
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Thursday 5 May 2022
“Career Fraudster” Sentenced to Ten Years in Federal PrisonRead the Press Release
PROVIDENCE, R.I. – A Providence man described in court documents as a career with a propensity to engage in obstructive and violent behavior toward law enforcement, was sentenced today to ten years in federal prison for bilking food distributors out of more than $830,000 and for assaulting federal officers, announced United States Attorney Zachary A. Cunha.
As reflected in prior court filings and proceedings, Paul Diogenes, a/k/a Paul Dejullio, 50, orchestrated a sophisticated and elaborate scheme in which he used stolen banking information from various businesses and a fictitious catering company to fraudulently obtain $831,572 worth of lobster, sea bass, shrimp, scallops, filet, rib eye steak, and wild boar, most of which he resold to area businesses. In some instances, Diogenes sold the ill-gotten products to the same business whose stolen banking information he used to gain credit from food distributors.
On August 3, 2021, as FBI agents, FBI Task Force officers, and Rhode Island State Police attempted to arrest Diogenes behind an East Providence business, he rammed his car into two FBI task force vehicles, one with a task force officer and State Police trooper still inside; drove his vehicle toward an FBI agent who narrowly avoided serious injury; and rammed his car into a delivery van parked nearby before speeding away. The defendant was located by the U.S. Marshals Service and the FBI nine days later at a Middleborough, MA., hotel. He was in possession of a briefcase containing $116,404 in cash, which is to be forfeited to the government.
Diogenes pled guilty on December 17, 2021, to wire fraud and assault of a federal officer. He was sentenced today by U.S. District Court Chief Judge John J. McConnell, Jr., to 120 months in federal prison; three years of federal supervised release; and ordered to pay restitution totaling $831,572.
Diogenes, described in court documents as “an unrepentant and compulsive fraudster,” has been, according to court records, convicted in various courts and jurisdictions thirty-four times, including multiple convictions for fraud-related criminal activity and for charges brought as a result of his violent behavior toward law enforcement.
The case was prosecuted by Assistant U.S. Attorney Lee H. Vilker.
Diogenes’s fraud activity was investigated by the FBI’s Rhode Island Complex Financial Crimes Task Force, with the assistance of Rhode Island State Police and the Providence, Woonsocket, East Providence, Bourne, and Fall River Police Departments.
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Waldorf Air Force Lieutenant Sentenced to 11 Years in Federal Prison for Transportation of Child PornographyRead the Press Release
Greenbelt, Maryland – U.S. District Judge Theodore D. Chuang sentenced Jason Daniel Ort, age 36, of Waldorf, Maryland, late yesterday to 11 years in federal prison, followed by 15 years of supervised release, for transportation of child pornography, specifically videos Ort had surreptitiously recorded using a hidden camera in a bathroom, as well as other images and videos he possessed. Judge Chuang also ordered that, upon his release from prison, Ort must register as a sex offender in the places where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office; and Brigadier General Terry Bullard, Commander Air Force Office of Special Investigations.
According to his guilty plea, between September 28, 2020, and October 1, 2020, Ort knowingly transported videos containing child pornography from Maryland to New York.
As stated in his plea agreement, on October 2, 2020, the Onondaga County Sheriff’s Office in New York (OCSO) received a complaint from an adult (Individual 1) that Ort had placed a black spy camera in Individual 1’s bedroom while visiting the individual’s home. On October 1, 2020, Individual 1 located the camera, which contained an SD card. Upon review of the SD card’s contents, Individual 1 discovered a video of a minor female using the bathroom and lifting up her dress to wipe herself. Individual 1 observed a video of Ort entering the bathroom and adjusting the camera. According to military records, Ort was a First Lieutenant in the U.S. Air Force stationed in Maryland and was scheduled for leave during that time to visit Individual 1’s residence in New York.
In an interview with OCSO officers, Ort admitted to placing the camera in Individual 1’s bedroom and that he placed the camera in several other locations, including in a bathroom at another residence in Pocomoke City, Maryland. Ort said that he watched the videos for sexual pleasure and knew that his actions were wrong.
As a result of their investigation, OCSO seized multiple electronic items in New York, including the spy camera containing the SD card and Ort’s laptop. A subsequent forensic review of the SD card revealed at least 10 video files depicting minor females using the bathroom and bathing. Ort recorded these videos using the spy camera placed in the bathroom of the Pocomoke City, Maryland residence in and around December 2019 and January 2020. The camera appeared to be positioned under the sink, facing the toilet and the shower. Throughout the videos, four minor females were recorded with their genitals exposed while either showering or using the toilet.
A forensic review of the Ort’s laptop revealed hundreds of files constituting child pornography. Some of the files depicted prepubescent minors engaged in sex acts.
As detailed in his plea agreement, on November 16, 2020, law enforcement executed a search warrant at Ort’s Waldorf, Maryland residence and recovered numerous electronic devices including a 1 TB digital hard drive, a 500 GB hard drive, and a second laptop with a 1 TB hard drive.
Upon review of one of the hard drives, law enforcement found video files that were duplicates of or compilations of clips from the videos found on the SD card depicting the minor victims. Further, a forensic review of the second laptop located at Ort’s residence revealed a search for “production of child pornography charge” and “Citizen’s Guide to U.S. Federal Law on Child Pornography” on October 7, 2020.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about Internet safety education, please visit www.justice.gov/psc and click on the "Resources" tab on the left of the page.
United States Attorney Erek L. Barron commended the FBI and the Air Force Office of Special Investigations for their work in the investigation and thanked the Onondaga County Sheriff’s Office for its assistance. Mr. Barron thanked Assistant U.S. Attorney Jessica Collins who is prosecuting the federal case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md/project-safe-childhood and https://www.justice.gov/usao-md/community-outreach.
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Virginia Beach Man and Woman Sentenced for Fentanyl Trafficking and Firearm ChargesRead the Press Release
NORFOLK, Va. – A Virginia Beach man and woman were sentenced to more than 23 years in prison combined for possessing with intent to distribute 14,000 tablets of fentanyl and possession of a firearm during a drug trafficking crime.
According to court documents, Marcus Hughes, 32, along with his co-conspirator Deshowna Corprew, 30, were pulled over for a traffic stop after exiting the Chesapeake Bay Bridge Tunnel. The police discovered in their vehicle 14,000 tablets of fentanyl, one kilogram of cocaine, and a loaded .40 caliber handgun. They were returning from Rhode Island where they had picked up the drugs from the source of supply. There were also two small children in the vehicle, ages 4 and 7.
Hughes was sentenced to 20 years in prison on April 29. Corprew was sentenced today to 44 months in prison.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, and Jarod Forget, Special Agent in Charge for the Drug Enforcement Administration’s Washington Division, made the announcement after sentencing by Senior U.S. District Judge Rebecca Beach Smith.
Virginia Beach Police Department provided significant contributions to this case.
Assistant U.S. Attorney Bill Muhr is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:21-cr-90.
Virginia Beach Man Charged with Dealing Illegal MachinegunsRead the Press Release
NORFOLK, Va. – A federal grand jury returned an indictment today charging a Virginia Beach man with possessing and selling unregistered machineguns.
According to the indictment, between approximately October 2021 and April 2022, Patrick Tate Adamiak, 28, was obtaining illegal machine guns that were not registered and he was selling these machine guns online. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) purchased eight machine guns from him through a confidential source. They then executed a search warrant at Adamiak’s residence and recovered 25 additional unregistered machineguns.
Adamiak is charged with receiving, possessing, and transferring unregistered machineguns, and for selling firearms without a federal firearms license. If convicted of these charges, Adamiak faces a maximum sentence of 10 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, and Charlie J. Patterson, Special Agent in Charge of the ATF’s Washington Field Division made the announcement.
Assistant U.S. Attorney Bill Muhr is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:22-cr-47.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty.
United States Attorney’s Office Joins in Recognizing Missing and Murdered Indigenous Persons Awareness DayRead the Press Release
Spokane, Washington – In a May 4, 2022 Proclamation, President Joseph R. Biden proclaimed today, May 5, 2022, as Missing and Murdered Indigenous Persons Awareness Day. In doing so, the President called on all Americans to support Tribal governments and Tribal communities’ efforts to increase awareness of missing and murdered Indigenous People.
The U.S. Attorney’s Office for the Eastern District of Washington fully supports these efforts, and our Office reaffirms its commitment to each of the Tribes in Eastern Washington to address this significant issue. “Recognizing and honoring missing and murdered Indigenous people is a top priority for the Department of Justice, and the U.S. Attorney’s Office for the Eastern District of Washington,” U.S. Attorney Vanessa R. Waldref stated. “It remains unacceptable that Native Americans experience some of the highest rates of violence in the country, a situation that is all the more tragic in light of the generations of trauma already suffered by Indigenous people.”
“The Department of Justice and the U.S. Attorney’s Office will continue to address the causes and symptoms of this difficult problem.” U.S. Attorney Waldref continued, “During the past year, the Department has sought the help and input from Tribal leaders and Tribal communities to develop sustainable protocols to help our communities respond when a tribal member is reported missing. The U.S. Attorney’s Office supports these initiatives, and we are fully committed to working closely with Tribal leaders, law enforcement partners, and community stakeholders to implement Savanna’s Act, as we strive to keep Eastern Washington communities safe and strong for everyone.”
If you or someone you know has information about a missing or murdered Indigenous person, please contact the FBI Seattle Field Office by calling (206) 622-0460 or by visiting tips.fbi.gov.
U.S. Attorney's Office Joins in Recognizing Missing and Murdered Indigenous Persons Awareness Day, May 5, 2022Read the Press Release
PORTLAND, Ore.—On May 4, 2022, President Joseph R. Biden Jr. proclaimed today, May 5, 2022, as Missing and Murdered Indigenous Persons Awareness Day.
The proclamation reaffirmed the nation’s commitment to solving all missing and murdered Indigenous persons cases and addressing the underlying causes of these crimes, including sexual violence, human trafficking, domestic violence, other violent crime, systemic racism, economic disparities, and substance use and addition.
The U.S. Attorney’s Office for the District of Oregon joins its Tribal, federal, state, and local law enforcement partners in taking this opportunity to highlight the importance of supporting Tribal crime victims and synthesizing investigative leads and information across government and law enforcement agencies.
“Supporting and enhancing public safety in Tribal communities is a top priority for the U.S. Attorney’s Office and the Justice Department. As such, we are fully committed to implementing Savanna’s Act and bolstering the collection and reporting of data on missing or murdered Native people. Despite great progress we have made with our Indian Country partners, we know there is much more the Justice Department and federal government can do to support these communities. We will continue to work diligently toward safety, justice, and healing for all,” said Scott Erik Asphaug, U.S. Attorney for the District of Oregon.
In June 2020, the U.S. Attorney’s Office announced the hiring of its first Missing and Murdered Indigenous Persons (MMIP) program coordinator. In February 2021, the office released its first annual MMIP program report, summarizing what is known about missing and murdered Indigenous people in Oregon and outlining the office’s plans and goals. The U.S. Attorney’s Office is expected to release its second annual report this summer.
If you or someone you know have information about missing or murdered Indigenous people in Oregon, please contact the FBI Portland Field Office by calling (503) 224-4181 or by visiting tips.fbi.gov.
If you have questions about the U.S. Attorney’s Office MMIP program, please contact MMIP program coordinator Cedar Wilkie Gillette by emailing [email protected] or by calling (503) 727-1000.
U.S. Attorney's Office EDNY and Other Law Enforcement Officials to Hold Press Conference on Extradition of Dairo Antonio Úsuga David "Otoniel"Read the Press Release
BROOKLYN – Today, May 5, Breon Peace, United States Attorney for the Eastern District of New York will lead a press conference with Anne Milgram, Administrator for the Drug Enforcement Administration, Ricky J. Patel, Acting Special Agent in Charge, Homeland Security Investigations, New York Office, Michael Driscoll, Assistant Director in Charge, FBI New York Field Office, Captain Thomas Kelly, Commanding Officer of the Drug Enforcement Task Force New York City Police Department, Lieutenant Tim Mannix and Senior Investigator Fabricio Plaskocinski, New York State Police to discuss the extradition of Dairo Antonio Úsuga David “Otoniel,” the leader of the Clan del Golfo drug trafficking organization.
WHEN: Today, Thursday, May 5, at 2 p.m.
WHERE: Attend in-person at the U.S. Attorney’s Office library 271-A Cadman Plaza East, Brooklyn, New York 11201 or via videoconference, details on the following page.
PRESS: All media must present government-issued photo I.D. (such as driver’s license) as well as valid media credentials. In-person press should arrive at 1:30 p.m.
NOTE: COVID-19 safety protocols will be observed – face coverings must be worn at all times.
Press attending via livestream can ask questions through the chat function of the video conferencing.
Press inquiries regarding logistics should be directed to 347-988-4580 or [email protected] and [email protected]
Please silence all cell phones and electronic devices before the start of the proceeding.
LIVESTREAM INFORMATION:
Event Number: 2764 060 7803
Event Password: EDNYpc22
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To join this online event:
1. Go to https://usao.webex.com/usao/j.php?MTID=ef033c01c22f290d3158a3cddd1cf6388
2. Enter the event password: EDNYpc22
3. Click "Join Now".
4. Follow the instructions that appear on your screen to join the teleconference.
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To only join the audio conference
To receive a call back, provide your phone number when you join the event, or call the number below and enter the access code.
US Toll: +1-415-527-5035
Global call-in numbers: https://usao.webex.com/usao/globalcallin.php?MTID=e722dac8d1f4faed4e65c97d00e57b3c4
Access code: 2764 060 7803
Two USAO-EDPA Civil Healthcare Fraud Investigative Teams Honored by HHS-OIGRead the Press Release
PHILADELPHIA – United States Attorney Jennifer Arbittier Williams announced that two separate investigative teams working in the Civil Division of the United States Attorney’s Office for the Eastern District of Pennsylvania were honored for their exemplary service to the U.S. Department of Health and Human Services (HHS) by recovering millions of dollars in healthcare fraud matters.
The first team, comprised of Assistant U.S. Attorneys Anthony Scicchitano, Landon Y. Jones III, and Rebecca Melley, received the 2022 Department of Health and Human Services Office of the Inspector General (“HHS-OIG”) Award for “Excellence in Promoting Quality, Safety, and Value” for their investigation and resolution with several companies concerning alleged generic drug price fixing.
The second team, comprised of Assistant U.S. Attorneys Deborah Frey, Matt Howatt, Civil Division Chief Gregory David, Auditor Dawn Wiggins, Investigator Frank O’Connor, and former Assistant U.S. Attorney John Crutchlow, received a 2022 HHS-OIG Honor Award for “Advancing Excellence and Innovation in recognition of outstanding teamwork and excellence for investigations, recoveries, and cost savings identified through P-Stim investigations.”
Generic Drug Price Fixing Investigations
This family of investigations into generic drug prix fixing led to three generic pharmaceutical manufacturers, Taro Pharmaceuticals USA, Inc., Sandoz Inc., and Apotex Corporation, paying a total of $447.2 million to resolve alleged violations of the False Claims Act (“FCA”) arising from conspiracies to fix the price of various generic drugs. These conspiracies allegedly resulted in higher drug prices for federal health care programs and beneficiaries.
Between 2013 and 2015, all three companies allegedly paid and received compensation prohibited by the Anti-Kickback Statute through arrangements on price, supply, and allocation of customers with other pharmaceutical manufacturers for certain generic drugs manufactured by the companies. Taro Pharmaceuticals USA, Inc., headquartered in New York, paid $213.2 million to the government to settle these claims. The Taro drugs allegedly implicated in this scheme address a wide variety of health conditions, and include etodolac, a nonsteroidal anti-inflammatory drug used to treat pain and arthritis, and nystatin-triamcinolone cream and ointment, a combination of an antifungal medicine and steroid used to treat certain kinds of skin infections. Sandoz Inc., headquartered in New Jersey, paid a settlement of $185 million. The Sandoz drugs at issue include benazepril HCTZ, used to treat hypertension, and clobetasol, a corticosteroid used to treat skin conditions. Apotex Corporation, headquartered in Florida, paid a $49 million settlement in connection with its sale of pravastatin, a drug used to treat high cholesterol and triglyceride levels.
P-Stim Investigations
Through a proactive data analysis, this team helped uncover a scheme of improper billings involving electro-acupuncture devices, branded among other names as P-Stim and Stivax. These devices are applied with an adhesive and insertion of a limited number of needles; they do not involve surgery, anesthesia, or take place in an operating room. Federal healthcare programs do not reimburse at all for them, but the devices were marketed and billed as reimbursable as surgically implanted neuro-stimulators. This team led the national Department of Justice effort to apply analytics to healthcare claims data to identify providers who inappropriately billed federal healthcare programs for P-Stim devices, and to investigate and hold accountable responsible marketers and distributors. This effort resulted in several resolutions with responsible parties and coordination with dozens of other U.S. Attorney’s Offices as to other provider investigations for a total recovery of over $25 million.
“Proactive efforts, relationship-building with other DOJ components and government agencies, and data analytics were the foundation for the excellent results of these two investigative teams,” said U.S. Attorney Williams. “We thank the Inspector General for recognizing their work and we thank the HHS OIG case agents who made these results possible.”
“Congratulations and thank you to our partners at the U.S. Attorney’s Office for the Eastern District of Pennsylvania,” said Maureen R. Dixon, Special Agent in Charge, Office of the Inspector General, U.S. Department of Health and Human Services. “These awards recognize the outstanding teamwork and support provided by the DOJ-EDPA Civil Division’s attorneys, support staff, and analysts which resulted in the recovery of millions of dollars in HHS health care funds. HHS-OIG looks forward to continued collaboration with our Civil Division partners, as we work together, to protect the integrity of the Medicare and Medicaid programs from financial harm.”
Two Puerto Rico Mayors Charged with Accepting BribesRead the Press Release
WASHINGTON – A federal grand jury in San Juan, Puerto Rico returned an indictment yesterday charging Javier García-Pérez, the Mayor of Aguas Buenas, with conspiracy, soliciting bribes, and extortion. In a separate indictment, Reinaldo Vargas-Rodriguez, the Mayor of Humacao was also charged with conspiracy, soliciting bribes, and extortion.
According to court documents, Javier García-Pérez, 46, of Aguas Buenas, was involved in a bribery conspiracy in which, from 2017 through 2021, he received and accepted cash payments from two businessmen in exchange for awarding municipal contracts for waste disposal services, asphalt and paving services, and debris removal and paying outstanding invoices on the contracts. The indictment alleges that García-Pérez received at least $32,000 in cash payments from August 2020 through September 2021 from the two businessmen.
A second indictment returned yesterday alleges that Reinaldo Vargas-Rodriguez, 48, of Humacao, was involved in a bribery conspiracy in which, from January to July 2021, he received and accepted cash payments from two businessmen in exchange for awarding municipal contracts for waste disposal and asphalt and paving services, and for paying outstanding invoices on the contracts. The indictment alleges that Vargas-Rodriguez received at least $15,000 in cash payments from March 18, 2021 through April 15, 2021 from the two businessmen.
If convicted of all counts, García-Pérez and Vargas-Rodriguez face a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney W. Stephen Muldrow for the District of Puerto Rico, and Assistant Director Luis M. Quesada of the FBI’s Criminal Investigative Division made the announcement.
The investigation was conducted by the FBI’s San Juan Field Office.
The cases are being prosecuted by Trial Attorney Nicholas W. Cannon of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Scott H. Anderson for the District of Puerto Rico.
The cases are part of the Justice Department’s ongoing efforts to combat public corruption by municipal officials in Puerto Rico. In addition to the above matters, the Public Integrity Section and the U.S. Attorney’s Office for the District of Puerto Rico have recently obtained convictions against other former public officials and contractors in the District of Puerto Rico for soliciting and accepting bribes related to municipal contracts. See United States v. Luis Arroyo-Chiques, 21-485 (SCC); United States v. Eduardo Cintron-Suarez, 22-151 (SCC); United States v. Felix Delgado-Montalvo, 21-463 (RAM); United States v. Oscar Santamaria-Torres, 21-464 (RAM); United States v. Raymond Rodriguez, 21-465 (RAM).
Additionally, the department recently obtained indictments charging several former officials and contractors with bribery related to municipal contracts, and those cases are still pending. See United States v. Mario Villegas-Vargas, 21-468 (FAB); United States v. Angel Perez-Otero, 21-474 (ADC); and United States v. Radames Benitez-Cardona, 21-475 (PAD).
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Two Men Arrested, Charged for Carjacking a Woman in a Mall Parking LotRead the Press Release
ST. PAUL, Minn. – Two men have been charged in a federal criminal complaint for their roles in the armed carjacking of a woman in a mall parking lot, announced U.S. Attorney Andrew M. Luger.
According to court documents, on February 16, 2022, Leon Kismit Bell, 48, and Jack Mitchell Piche, 22, were walking around the parking lot of the Rosedale Center Mall. The two men followed a vehicle, waiting for the driver, a 67-year-old woman, to park. Surveillance video from the mall’s parking lot shows Bell and Piche approach the woman as she was standing outside of her vehicle. Bell flashed a gun in his waistband and demanded her keys. The woman gave Bell her purse, which contained her wallet and keys, and ran from the vehicle. Bell initially ran after the woman, but then returned to the vehicle, got in the driver’s seat, and drove to pick up Piche, who was several rows away in the parking lot. The two men then fled the parking lot.
According to court documents, officers with the Roseville Police Department were able to track the vehicle heading south on I-35W. The vehicle was driving erratically and due to safety concerns, officers stopped their pursuit. Further investigation led law enforcement to a location in south Minneapolis where Piche was taken into custody. The stolen vehicle was found a few blocks away from where Piche was arrested. On May 3, 2022, law enforcement located and arrested Bell.
Bell is charged with one count of carjacking. Piche is charged with one count of aiding and abetting carjacking. On April 29, 2022, Piche appeared in U.S. District Court before Magistrate Judge Tony N. Leung and was ordered to remain in detention pending further proceedings. Bell made his initial appearance yesterday in U.S. District Court before Magistrate Judge John F. Docherty. Bell was ordered temporarily detained pending a formal detention hearing on May 6, 2022.
This case is the result of an investigation conducted by the FBI, the Roseville Police Department, and the Minneapolis Police Department.
Assistant U.S. Attorney Harry M. Jacobs is prosecuting the case.
A complaint is merely an allegation and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Two Drug Conspiracies Land Little Rock Man in Federal Prison for 18 YearsRead the Press Release
LITTLE ROCK—A Little Rock man’s involvement in two separate drug conspiracies will end with him spending 18 years in federal prison. Desmond Kelley, aka “Trell,” 28, was sentenced yesterday to 151 months in prison for his role in a conspiracy to distribute fentanyl, with that sentence to run consecutive to a 65-month sentence he recently received for being involved in a heroin distribution conspiracy. United States District Judge Brian S. Miller handed down the sentence.
In May 2017, Kelley was named in a 33-defendant indictment that charged him with conspiracy to distribute heroin, distribution of heroin, and use of a telephone to facilitate a drug trafficking crime. In that case, Kelley worked with Aaron “Black” Clark to distribute heroin in Little Rock. In 2016 and 2017, Clark supplied Kelley with multiple ounces of heroin at a time, which Kelley then resold.
The FBI arrested Kelley in that case on May 31, 2017, and Kelley was released on pretrial bond on January 30, 2018. At that point, the Drug Enforcement Administration (DEA) developed evidence that Kelley immediately went back to selling drugs, including both heroin and fentanyl, to a new group of people. This time, Kelley was at the top of the 17-defendant conspiracy and supplied significant amounts of fentanyl to multiple people who were also indicted.
Kelley was then indicted for the second time and arrested by the DEA on October 15, 2019, and this time charged with conspiracy to distribute fentanyl. The next day, Kelley pleaded guilty conspiracy to distribute between 400-700 grams of heroin in the 2017 case. Kelley received a 65-month sentence from United States District Judge James M. Moody, Jr., on October 13, 2020. On February 1, 2021, Kelley pleaded guilty to conspiracy to distribute between 1.2 and 4 kilograms of fentanyl in the 2019 case.
In addition to the prison sentence, which totals 216 months combined, Judge Miller sentenced Kelley to five years of supervised release. There is no parole in the federal prison system.
The 2017 case was investigated by the FBI’s Met Rock Task Force, in coordination with the LRPD and NLRPD, and prosecuted by Assistant United States Attorney Benecia Moore. The 2019 case was investigated by the DEA, in coordination with the LRPD and NLRPD, and prosecuted by Assistant United States Attorney Chris Givens.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available online at
https://www.justice.gov/edar
Twitter:
@EDARNEWS
Two Charged for Illegal Cockfighting in Violation of the Animal Welfare Act in BakersfieldRead the Press Release
FRESNO, Calif. — Today, a federal grand jury charged Jorge Calderon-Campos, 41, and Horacio Ortega-Martinez, 35, both Mexican nationals residing in Bakersfield, in separate indictments with unlawful possession of animals for an animal fighting venture, U.S. Attorney Phillip A. Talbert announced.
According to court documents, Calderon-Campos and Ortega-Martinez communicated frequently throughout February 2022 about illegal cockfighting events, including an event Calderon-Campos attended on February 12 at which 15 roosters fought to win a $5,000 purse. On April 26, 2022, numerous law enforcement agencies served a search warrant at Ortega-Martinez’s residence and discovered approximately 250 roosters, approximately 250 “gaffs” (razor-sharp steel blades that are tied to the birds’ legs), training mitts commonly used for training and fighting roosters, and miscellaneous antibiotics, vitamins, and supplements that are commonly used for breeding and training roosters for fighting.
Calderon-Campos and Ortega-Martinez were arrested on April 26, 2022, along with six other Kern County residents who were also charged with various drug trafficking offenses in a separate indictment returned today.
This case is the product of an investigation by Homeland Security Investigations, the Drug Enforcement Administration, the Kern County Sheriff’s Office, the Kern County High Intensity Drug Trafficking Area, the U.S. Marshals Service, the U.S. Customs and Border Protection, the Bakersfield Police Department, the Kern County Probation Department, the California Department of Corrections and Rehabilitation, the U.S. Secret Service, the U.S. Department of Agriculture Office of Inspector General and the California Highway Patrol. Assistant U.S. Attorney Christopher D. Baker is prosecuting the case.
If convicted, Calderon-Campos and Ortega-Martinez face a statutory maximum penalty of five years in prison and a $250,000 fine. Any sentence, however, would 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. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Trina A. Higgins Sworn in as United States Attorney for the District of UtahRead the Press Release
SALT LAKE CITY- On Wednesday, May 4, 2022, Trina A. Higgins was sworn in as United States Attorney for the District of Utah by U.S. District Court Chief Judge Robert J. Shelby. President Biden nominated Higgins on January 31, 2022, and she was confirmed by the United States Senate on April 27, 2022.
As United States Attorney, Higgins will serve as the top-ranking federal law enforcement official in Utah. She is the first woman to be presidentially appointed to the position. Higgins leads all federal criminal prosecutions and civil litigation within the District of Utah.
“It is both my honor and privilege to serve as the United States Attorney for the District of Utah. I look forward to working with the dedicated public servants in the U.S. Attorney’s Office. And I am eager to work collaboratively with our federal, state, local, and tribal law enforcement and community partners in pursuit of justice and equity.”
Since 2002, Higgins has served as an Assistant United States Attorney for the District of Utah, holding several leadership positions, including Senior Litigation Counsel and Violent Crime Section Chief. She recently returned to Utah from a detail as the Mediterranean Legal Advisor for the Department of Justice Office of Overseas Prosecution Development and Training at the U.S. Embassy in Valletta, Malta. Prior to joining the Department of Justice, Higgins served as a Salt Lake County Deputy District Attorney.
Higgins served as an Adjunct Professor at the S.J. Quinney College of Law for ten years. She is a past President of the Salt Lake County Bar Association and a current Fellow in the American College of Trial Lawyers, where she has served as the state Vice Chair and Diversity Coordinator. Higgins earned a B.A. from Weber State University and a J.D. from the University of Utah S.J. Quinney College of Law.
A formal investiture ceremony will be scheduled at a future date.
Three Sentenced in Loan Scheme to Defraud Four Churches and DeveloperRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced that JEFFERY N. CROSSLAND was sentenced yesterday to 51 months in prison, RAYMOND E. ROBINSON, a pastor, was sentenced on March 18, 2022 to 42 months in prison and STEPHEN C. PARENTE was sentenced on March 19, 2022 to 33 months in prison for conspiring to defraud four churches and a real estate development company out of more than $3.5 million.
U.S. Attorney Damian Williams said: “Crossland, Robinson, and Parente abused the trust of four churches and Crossland and Robinson victimized a real estate development company as well. All the victims were seeking financing for building projects. The defendants induced them to enter into loan agreements requiring the victims to transfer “deposit” money into a bank account by falsely representing that the deposit money would be safe from loss. Based on those false representations, the victims transferred their deposits. But the money did not remain in the account safe from loss. Instead, the victims lost their money and their ability to fund their building construction projects. For their crime, Crossland, Robinson, and Parente will serve a substantial sentence in prison.”
According to the allegations contained in the Indictment, court filings, and statements made during court proceedings:
CROSSLAND was a managing member of Crossland Capital Partners, LLC, a purported broker dealer focused on “real estate related capital raising,” located in Santa Monica, California. He also controlled JC Funding Group, also located in Santa Monica, which was represented to be a corporate entity overseeing various subsidiary lending companies under the JC Funding name. PARENTE controlled Eagle Capital Investment Partners, LP (“Eagle Capital”), a purported private financial advisory consultancy practice based in Georgia. ROBINSON was a minister. He was employed by a church-building company based in Missouri and he ran Ray Robinson Ministries – a purported consulting firm for churches. ROBINSON, along with PARENTE, had an ownership interest in Eagle Capital.
In or about early 2013, the defendants met in California and planned their strategy, which was to target churches and market to them by capitalizing on ROBINSON’s background as a minister and church builder. They represented that they were in the business of providing “unconventional loans” for churches and that CROSSLAND funded loans through capital he obtained from other clients who invested in his projects. To effectuate the scheme to defraud, the three defendants drafted and modified term sheets and loan agreements that required the Victims to provide “deposits” as security for their loans. To induce the Victims to enter into the loan agreements and provide these deposits, they agreed to and then made various other false representations about the Victims’ deposit money. Through their communications with the Victims and language they drafted together and included in loan documents, they led the Victims to believe the deposit money would be held in a bank account (the “Account”) and that it would be safe from loss. As the Victims ultimately learned, that was false and their money was not actually being used as the “deposit” they thought it was. Instead, it was being invested in what the defendants understood to be “trading programs” involving overseas investors.
In order to perpetuate the scheme and conceal the fraud, CROSSLAND had others transfer some of Victims’ deposit money to other Victims and falsely represented that these money transfers were loan draw payments. In actuality, CROSSLAND never had the money to fund the Victims’ loans. In addition to providing certain Victims with funds the defendants claimed to be loan draw payments, in order to perpetuate the scheme and conceal the fraud, CROSSLAND and ROBINSON had communications with the Victims, with the intention of (a) lulling them into believing that their loans would be funded and/or their deposits returned, and (b) preventing them from reporting their conduct to law enforcement authorities and/or taking legal action against them.
In this way, from April 2013 through March 2015, CROSSLAND, ROBINSON, and PARENTE fraudulently induced Victims to transfer more than $3.5 million to the Escrow Account. The purported loans were never funded and millions of dollars in deposits were lost.
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In imposing CROSSLAND’S sentence, U.S. District Judge Kenneth M. Karas noted that the crime was “really serious and it required a great deal of planning and heartlessness.”
CROSSLAND, 65, of Glendale, California, ROBINSON, 70, of Leander, Texas, and PARENTE, 54, of Buford, Georgia, each pled guilty to a one count Indictment charging them with conspiracy to commit wire fraud. CROSSLAND previously pled guilty to the one count Indictment on September 17, 2021. ROBINSON and PARENTE previously pled guilty on September 8, 2021 and July 15, 2021, respectively.
In addition to the prison terms, CROSSLAND was sentenced to three years of supervised release and ordered to pay forfeiture of $37,873 and restitution of $3,226, 950. ROBINSON was also sentenced to three years of supervised release and ordered to pay forfeiture of $17,750 and restitution of $3,226, 950. PARENTE was sentenced to three years of supervised release and ordered to pay forfeiture of $33,230 and restitution of $2,986,950.
Mr. Williams praised the outstanding investigative work of the U.S. Postal Inspection Service and Special Agents of the United States Attorney’s Office. Mr. Williams also thanked the United States Attorney’s Office for the Eastern District of Tennessee, the Knoxville, Tennessee, field office of the Federal Bureau of Investigation, and the Westchester County District Attorney’s Office for their assistance.
The case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys Margery Feinzig and Derek Wikstrom are in charge of the prosecution.
Super PAC and its President Plead Guilty to Dark Money Scheme to File False Reports with the FECRead the Press Release
A Super PAC and its president pleaded guilty today to scheming to lie to the Federal Election Commission (FEC) about the true identities of donors.
According to court documents, Joseph Fuentes-Fernandez, 62, of Arlington, Virginia, and the Super PAC for which he served as president and treasurer, Salvemos a Puerto Rico, pleaded guilty today before U.S District Judge Joseph N. Laplante to one count of scheming to falsify and conceal material facts.
According to the admissions made in connection with their pleas, Fuentes was the president and treasurer of Salvemos a Puerto Rico, which was organized to raise funds to support the 2020 election campaign of Public Official-1, then a candidate for office in the executive branch of the government of Puerto Rico. Soon after Salvemos a Puerto Rico was organized, Fuentes and others also formed two shell § 501(c)(4) nonprofit social welfare organizations. These two § 501(c)(4) entities were registered within seven minutes of each other, listed the same mailing address, and shared some of the same officers.
Fuentes and others solicited hundreds of thousands of dollars of donations to the two shell nonprofit entities, which rapidly sent most of those funds on to Salvemos a Puerto Rico. Fuentes and Salvemos a Puerto Rico then reported to the FEC that the nonprofit organizations were the donors of those funds, rather than reporting the true source of the funds. The purpose of routing these donor funds through the nonprofit organizations was exclusively to conceal the true identities of the donors to Salvemos a Puerto Rico. For example, in October 2020, Fuentes sent this text message to a potential donor: “You can use a third party to not disclose the true donor.” By ensuring that many of the true donors to Salvemos a Puerto Rico remained anonymous, Fuentes and Salvemos a Puerto Rico deprived the people of the Commonwealth of Puerto Rico and the FEC of information about the true source of hundreds of thousands of dollars flowing into the Commonwealth of Puerto Rico’s political system.
In connection with its plea, Salvemos a Puerto Rico has agreed to pay a fine of $150,000 and file amended Reports and Receipts and Disbursements with the FEC containing the true identity of all donors to Salvemos a Puerto Rico from 2020 to the present.
Fuentes and Salvemos a Puerto Rico are scheduled to be sentenced on Aug.15. Fuentes faces a maximum of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney W. Stephen Muldrow for the District of Puerto Rico, and Special Agent in Charge Joseph González of the FBI’s San Juan Field Office made the announcement.
The FBI’s San Juan Field Office is investigating the case.
Trial Attorney Jonathan E. Jacobson of the Justice Department’s Public Integrity Section and Assistant U.S. Attorney Seth A. Erbe for the District of Puerto Rico are prosecuting the case.
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Super PAC and its President Plead Guilty to Dark Money Scheme to File False Reports with the FECRead the Press Release
A Super PAC and its president pleaded guilty today to scheming to lie to the Federal Election Commission (FEC) about the true identities of donors.
According to court documents, Joseph Fuentes-Fernandez, 62, of Arlington, Virginia, and the Super PAC for which he served as president and treasurer, Salvemos a Puerto Rico, pleaded guilty today before U.S District Judge Joseph N. Laplante to one count of scheming to falsify and conceal material facts.
According to the admissions made in connection with their pleas, Fuentes was the president and treasurer of Salvemos a Puerto Rico, which was organized to raise funds to support the 2020 election campaign of Public Official-1, then a candidate for office in the executive branch of the government of Puerto Rico. Soon after Salvemos a Puerto Rico was organized, Fuentes and others also formed two shell § 501(c)(4) nonprofit social welfare organizations. These two § 501(c)(4) entities were registered within seven minutes of each other, listed the same mailing address, and shared some of the same officers.
Fuentes and others solicited hundreds of thousands of dollars of donations to the two shell nonprofit entities, which rapidly sent most of those funds on to Salvemos a Puerto Rico. Fuentes and Salvemos a Puerto Rico then reported to the FEC that the nonprofit organizations were the donors of those funds, rather than reporting the true source of the funds. The purpose of routing these donor funds through the nonprofit organizations was exclusively to conceal the true identities of the donors to Salvemos a Puerto Rico. For example, in October 2020, Fuentes sent this text message to a potential donor: “You can use a third party to not disclose the true donor.” By ensuring that many of the true donors to Salvemos a Puerto Rico remained anonymous, Fuentes and Salvemos a Puerto Rico deprived the people of the Commonwealth of Puerto Rico and the FEC of information about the true source of hundreds of thousands of dollars flowing into the Commonwealth of Puerto Rico’s political system.
In connection with its plea, Salvemos a Puerto Rico has agreed to pay a fine of $150,000 and file amended Reports and Receipts and Disbursements with the FEC containing the true identity of all donors to Salvemos a Puerto Rico from 2020 to the present.
Fuentes and Salvemos a Puerto Rico are scheduled to be sentenced on Aug.15. Fuentes faces a maximum of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney W. Stephen Muldrow for the District of Puerto Rico, and Special Agent in Charge Joseph González of the FBI’s San Juan Field Office made the announcement.
The FBI’s San Juan Field Office is investigating the case.
Trial Attorney Jonathan E. Jacobson of the Justice Department’s Public Integrity Section and Assistant U.S. Attorney Seth A. Erbe for the District of Puerto Rico are prosecuting the case.
Statement of U.S. Attorney Breon Peace on United States v. Úsuga DavidRead the Press Release
"Good afternoon, I’m Breon Peace, the United States Attorney for the Eastern District of New York. Thank you all for being here this afternoon in person and online.
With me today are: Anne Milgram, Administrator for the Drug Enforcement Administration, Ricky J. Patel, Acting Special Agent in Charge, Homeland Security Investigations, New York office, from the FBI New York field office, we have Michael Driscoll, Assistant Director in Charge, from the NYPD we have Captain Thomas Kelly, Commanding Officer of the Drug Enforcement Task Force, Chief Marshal Vincent DeMarco from the United States Marshals Service, Captain Michael Sumnick from New York State Police; and my US Attorney’s Office team, AUSAs Gillian A. Kassner Tara B. McGrath and paralegal Sophia Cronin
We are here today to announce the extradition from Colombia of one of the most dangerous, most-wanted drug kingpins in the world, Dairo Antonio Úsuga David (also known as “Otoniel”), to whom murder was meaningless, and violence the ultimate currency.
For the last decade, Úsuga David has been the principal leader of the Clan Del Golfo, or CDG, the most powerful paramilitary and drug trafficking cartel in Colombia. He is responsible for trafficking vast amounts of cocaine—measured in tons, not pounds or kilograms; for earning enormous profits, measured in billions, not millions; and for overseeing an army of henchmen who murdered, kidnapped and tortured victims—including Colombian law enforcement and military personnel—to maintain control of the cartel and the regions where it operates.
His direct orders to his thousands of military-clad followers sent a ripple effect of drugs, death, and destruction to every community his cocaine shipments touched, from Colombia to right here in the Eastern District of New York. Today, he will finally face justice in a federal courtroom in Brooklyn for charges based on his role as the supreme leader of the cartel.
Úsuga David is charged in a three-count superseding indictment with leading a Continuing Criminal Enterprise from June 2003 through October 2021 and participating in an international conspiracy to manufacture and distribute cocaine, knowing and intending that the narcotics would be illegally imported into the United States.
Those are the charges, and the details about Úsuga David and his lethal organization are chilling. The CDG is one of the largest distributors of cocaine in the world.
Also known as “Los Urabeños” or “Clan Úsuga,” they are based in the Urabá region of Antioquia, Colombia, with an army of thousands of members (at its peak, around 6,000). To put that in perspective, he had more employees than the Boston and Miami police departments combined.
On the screen is a map of Colombia and a corridor of countries ultimately leading to the United States. In red, you can see the expansive territory under CDG control, much of which consisted of coastline. Within the territory under CDG control, you can see the Antioquia region, which served as the CDG’s base. You can see the Gulf of Uruba and three important port cities along the Pacific Ocean to the left and the Caribbean Sea to the right. You can see that the CDG territory is in the northwest part of the country, in closer proximity to the United States, and that these port cities provided direct access to waterways from which vessels could depart. And by the blue dotted lines, you can see some of the cocaine export routes departing from these areas that the CDG utilized to smuggle drugs into the United States.
Úsuga David’s cartel imported outrageous quantities of cocaine into the United States. The indictment charges more than 40 instances—40—where his cartel exported a ton or more of cocaine from Colombia. The CDG exports and coordinates the production, purchase, and transfer of weekly, multi-ton shipments of cocaine from Colombia into Central America and Mexico for ultimate importation into the United States. Law enforcement has intercepted some of these shipments, including over 10 tons of cocaine seized on boats off the coast of Panama and within a jungle region in Colombia.As a high-ranking leader within the CDG since its inception and its CEO for the past decade, Úsuga David directed his army to commit brutal acts of violence, terror, and retaliation; to exert control over vast territorial regions of Colombia and its people; and to export staggering quantities of cocaine destined for the United States. This was incredibly lucrative and earned Úsuga David and his cartel billions in drug proceeds.
The illicit drugs that were sent into the United States caused addiction, violence and death, and tragically eroded the quality of life for residents of the communities affected, including many within the greater New York City area, and the nation more broadly.
The CDG’s drug trafficking activities funded and enabled Úsuga David’s rise to power. The CDG has used military tactics and weapons to control the most lucrative cocaine trafficking region within Colombia. Úsuga David’s paramilitary organization—thousands of soldiers, including “sicarios,” or hitmen - murdered, assaulted, kidnapped, tortured, and assassinated at Usuga David’s direction. and the CDG imposed a “tax” on any drug traffickers operating in its territory, charging fees for every kilogram of cocaine manufactured, stored, or transported through the region.
Úsuga David’s violence included public demonstrations of his power and repression of innocent civilians. He imposed mandatory shutdowns or “strikes,” a kind of Martial law where he ordered that all businesses in CDG-controlled territory remain closed and Colombian citizens within those regions had to remain at home. He ordered CDG soldiers to execute anyone who disobeyed the shutdowns’ rules.
At Úsuga David’s direction, the CDG also carried out organized campaigns (which they called “Plan Pistolas”) to kill Colombian law enforcement and military personnel using military-grade weapons, including grenades, explosives, and assault rifles, and to assassinate individuals who were believed to be cooperating with law enforcement. On numerous occasions, Úsuga David personally ordered the murder and torture of individuals deemed to be enemies of the CDG.
For years, Úsuga David evaded capture by moving through a web of rural safe houses in the jungles of Colombia and avoiding modern technology - living off the grid. At the same time, with an army of ruthless sicarios at his command, Úsuga David was able to expand the CDG’s territory and power. He believed he was essentially untouchable. Until now.
Úsuga David’s capture was the result of an extensive joint campaign by the Colombian National Police, Colombian Air Force, and National Army of Colombia that began in 2016. Prior to Úsuga David’s arrest, the Colombian government offered a $800,000 reward for information regarding his whereabouts and the United States offered a $5 million bounty for information leading to his arrest. Úsuga David was ultimately captured on October 23, 2021, in a rural hideout in Antioquia province, Colombia, near the Colombia-Panama border, following an operation involving 500 soldiers and 22 helicopters. President Ivan Duque of Colombia described the operation as “the biggest penetration of the jungle ever seen in the military history of our country.”
A case like this one requires an army of its own, and I am grateful to the work of my office and our partners, for putting an end to his reign of terror, and giving hope to the people of Colombia for a better, safer future.
To the people of Colombia: we are committed to seeking the truth about Úsuga David’s crimes and those who helped him, ensuring that they face consequences for those crimes, and recovering ill-gotten gains to return to the victims and their families.
I’d like to give special thanks to the DEA, HSI, NYPD and FBI Agents on this case; and to the United States Marshals Service for taking the lead in ensuring that the defendant is held securely and safely in the district while he awaits trial.
I’d like to extend my deep gratitude to the President of Colombia, the Colombian Attorney General’s Office, the Colombian National Police, the Ministry of National Defense, the Ministry of Justice, and the Ministry of Foreign Affairs. The Republic of Colombia and its law enforcement officers have risked, and too often lost, their lives in the pursuit of this evildoer. And the Colombian people have suffered greatly at the hands of Úsuga David and the CDG. We will honor their sacrifice and honor Colombia’s commitment to combat narco-trafficking by pursuing justice in this case for the victims and their families.
I’d also like to acknowledge the tremendous work by the Justice Department’s Office of International Affairs and the Criminal Division’s Narcotic and Dangerous Drug Section (NDDS) Judicial Attachés in Bogotá, Colombia and DOJ Narcotic and Dangerous Drug Section Special Operations Division Trial Attorneys.
Finally, I’d like to thank the U.S. Attorney’s Offices in the Southern District of Florida, the Middle District of Florida, the Eastern District of Texas, and the Southern District of New York, for collaborating with us in this case. Prosecutors from those offices have demonstrated extraordinary professionalism and dedication by offering their assistance in furtherance of the case here in the Eastern District of New York."
Watch the video of the press conference here.
South Hills Pharmacist Sentenced to Prison for Prescription Drug Fraud SchemeRead the Press Release
PITTSBURGH, PA - A resident of Venetia, Pennsylvania, has been sentenced in federal court to one year in prison, two years of supervised release, a fine of $10,000, and ordered to pay $649,524 in restitution on his conviction of obtaining controlled substances by fraud, misbranding of drugs, and health care fraud conspiracy, United States Attorney Cindy K. Chung announced today.
Senior United States District Judge David Steward Cercone imposed the sentence on Timothy W. Forester, 46.
Forester pled guilty on September 17, 2021. Forester owned and operated four pharmacies in the Pittsburgh region. Forester would order scheduled narcotics, mostly oxycodone and hydrocodone, from suppliers, intercept those deliveries, falsify pharmacy inventories and transport the drugs to his residence, where he would consume them. In addition, Forester would place labels for brand named drugs on bottles of generic drugs, and bill insurance companies and customers as if the drugs were the higher priced brand drugs. Finally, he would change the computer billing codes for drugs to falsely represent to payors that the drugs were brand, resulting in a much higher reimbursement.
Assistant United States Attorney Robert S. Cessar prosecuted this case on behalf of the government.
The investigation leading to the filing of charges in this case was conducted by the Western Pennsylvania Opioid Fraud and Abuse Detection Unit, which combines personnel and resources from the following agencies to combat the growing prescription opioid epidemic: Federal Bureau of Investigation, U.S. Health and Human Services – Office of Inspector General, Drug Enforcement Administration, Internal Revenue Service-Criminal Investigations, Pennsylvania Office of Attorney General - Medicaid Fraud Control Unit, United States Postal Inspection Service, U.S. Attorney’s Office – Criminal Division, Civil Division and Asset Forfeiture Unit, Department of Veterans Affairs-Office of Inspector General, Food and Drug Administration-Office of Criminal Investigations and the Pennsylvania Bureau of Licensing.
Scranton Man Sentenced to 60 Months’ Imprisonment for Drug TraffickingRead the Press Release
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Cory O’Connor, age 33, of Scranton, Pennsylvania, was sentenced yesterday to 60 months’ imprisonment to be followed by 4 years of supervised release by United States District Court Judge Robert D. Mariani for drug trafficking.
According to United States Attorney John C. Gurganus, O’Connor previously pleaded guilty to possessing with the intent to distribute over 50 grams of methamphetamine. During an October 2020 execution of a search warrant at O’Connor’s residence, approximately 112 grams of methamphetamine was seized. O’Connor also admitted that he had earlier possessed a firearm in connection with this case.
The matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Lackawanna County District Attorney’s Office, and the Scranton Police Department. Assistant United States Attorney James Buchanan and Special Assistant United States Attorney Brian Gallagher prosecuted the case.
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.
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Recognizing Missing and Murdered Indigenous Persons Awareness Day in AlaskaRead the Press Release
ANCHORAGE – Today the U.S. Attorney’s Office for the District of Alaska joins with communities across Alaska in shining a spotlight on Missing and Murdered Indigenous Persons (MMIP) Awareness Day.
“Generations of Alaska Natives have experienced violence or mourned a murdered or missing loved one for far too long,” said U.S. Attorney S. Lane Tucker of the District of Alaska. “Today we reaffirm our commitment to Tribes across Alaska to help find lasting solutions to the MMIP challenge in our state. Working in partnership with Tribal, federal, state and local agencies, we can and must find a way to address the disproportionately high number of missing or murdered Indigenous people as well as help bring answers and justice for the victims and families.”
U.S. Attorney Tucker is spending today in Kotzebue joining the Maniilaq Association and Northwest Arctic Tribes in recognizing National MMIP Awareness Day. She also will join the MMIP Working Group in listening to the local concerns and needs.
“The FBI commemorates Missing and Murdered Indigenous Persons Awareness Day, recognizing the violence that affects Alaska Native and American Indian communities throughout the nation, and reaffirms our commitment to enhancing public safety in those communities,” said Antony Jung, Special Agent in Charge of the FBI Anchorage Field Office. “Today’s observance reminds us of the importance of this critical mission and the challenging work still to be done, as we are fully committed to continued and increased collaboration with our federal, state, local and tribal counterparts to support those impacted by these horrific crimes, and to protect those we serve.”
“Unfortunately, an unacceptable number of Alaska’s Indigenous persons are murdered or go missing across the state, never to be heard from again. To combat this trend earlier this year, we brought back retired Alaska State Trooper Anne Sears to work as the state’s first MMIP investigator and have dedicated six major crimes investigators to rural Alaska,” stated Alaska Department of Public Safety Commissioner James Cockrell. “While there is much more work to do, know that your Alaska Department of Public Safety is dedicated to doing our part to improve the outcomes of missing and murdered Indigenous persons investigations across Alaska. Alaska’s first people deserve nothing less.”
“Many Indigenous people throughout Alaska mourn a missing or murdered loved one without clear answers. Today, we remember the victims and honor their lives,” said Anchorage Police Chief Michael Kerle. “The Anchorage Police Department remains deeply engaged with our law enforcement partners to combat the violence that impacts our communities.”
During the last year the Alaska MMIP Working Group has continued to meet every month on a wide variety of topics ranging from challenges with MMIP data to victim services to training and recruitment of law enforcement. A priority of the Working Group is participating in listening and consultation sessions with Tribes across Alaska. So far, the group has met with 170 of Alaska’s 229 federally recognized Tribes in 11 Regions. During these sessions Tribal members share their stories, experiences and needs. This input is feeding directly into the development of the Savanna’s Act Guidelines for Alaska.
Savanna’s Act directs the U.S. Department of Justice to develop guidelines to continually improve communication and coordination among the Tribal, federal, state and local law enforcement agencies in response to MMIP situations. It also provides guidance on the collection, reporting and analysis of MMIP data, offers resource information for Tribal governments and provides best practices for culturally appropriate victim services and in returning a loved one home. These guidelines are evergreen with ongoing opportunities for input and recommendations.
The Departments of the Interior and Justice are working to implement the Not Invisible Act, sponsored by Secretary Haaland during her time in Congress. The law established the Not Invisible Act Commission, a cross jurisdictional advisory committee composed of law enforcement, Tribal leaders, federal partners, service providers, family members of missing and murdered individuals, and most importantly survivors. Today, the Department announced the Not Invisible Act Commission members.
Additionally, in March President Joe Biden signed into law the Violence Against Women Act (VAWA) Reauthorization Act of 2022 as part of a $1.5 trillion omnibus spending package. This important law expands special criminal jurisdiction of Tribal courts to cover non-Native perpetrators of sexual assault, child abuse, stalking, sex trafficking and assaults on Tribal law enforcement officers on Tribal lands and supports the development of a pilot project to enhance access to safety for survivors in Alaska Native villages. The Office of VAWA will continue to work with Tribes to address challenges in protecting survivors and responding to offenders in their communities and encourage Tribal leaders and designees to attend the 17th Annual Government-to-Government Violence Against Women Tribal Consultation in Anchorage in September.
If you know someone who is missing, it’s critical that you report it right away to 9-1-1 or your closest law enforcement. The first hours of someone missing can be vitally important. If you have questions about the U.S. Attorney’s Office MMIP program, please contact MMIP Program Coordinator, Ingrid Cumberlidge at [email protected] or [email protected] or call 907-271-3314.
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BACKGROUND:
Presidential Proclamation on Missing and Murdered Indigenous Persons Awareness Day, 2022
Justice Department and the Department of the Interior Take Important Step in Addressing Missing and Murdered Indigenous People Crisis
Not Invisible Act Commission
MMIP Information and Resources from the Human Trafficking Capacity Building Center
In July 2020, the U.S. Attorney’s Office announced hiring its first MMIP Program Coordinator. In September 2020, the Alaska MMIP Working Group was launched to address the complexities of MMIP response in Alaska. The group is a multi-disciplinary team led by the United States Attorney’s Office MMIP Coordinator, Ingrid Cumberlidge, and comprised of law enforcement, Alaska Native Tribes, and victim service representatives, including:
Tribal Members
- Central Council of Tlingit and Haida Indian Tribes of Alaska VPSO supervisors
- Tanana Chief’s Conference VPSO supervisors
- Representatives from the Alaska Department of Law
- Tanana Chief’s Conference
- Tribal representatives from Ahtna Region, Orutsararmiut Native Council, Sun’aq Tribe of Kodiak, Arctic Slope Native Association, Central Council of Tlingit and Haida Indian Tribes of Alaska, Native Village of Kotzebue, Maniilaq Association, Native Village of White Mountain Village
- MMIP Tribal Community Response Plan Pilot Sites: Curyung Tribal Council of Dillingham, the Native Village of Unalakleet and Koyukuk Native Village
Law Enforcement
- U.S. Attorney’s Office
- FBI
- U.S. Marshals
- BIA Missing and Murdered Unit
- U.S. Coast Guard
- Alaska State Troopers (MMIP Investigator, Missing Persons and Cold Case Clearinghouse and VPSOs)
- Anchorage Police Department
- Fairbanks Police Department
- Kotzebue Police Department
- Nome Police Department
- North Slope Police Department
Victim Service Providers
- Advocates from Victims for Justice
- Alaska Native Women’s Resource Center
- BIA Health and Human Services
Readout of U.S. Attorney General Merrick B. Garland’s Meeting with Five Eyes Partners and Ukraine’s Prosecutor GeneralRead the Press Release
U.S. Attorney General Merrick B. Garland met virtually yesterday with Ukraine’s Prosecutor General, Iryna Venediktova, together with the Attorneys General of the Five Eyes countries: the United Kingdom’s Attorney General, Suella Braverman; Australia’s Attorney General, Michaelia Cash; Canada’s Minister of Justice and Attorney General, David Lametti; and New Zealand’s Attorney General, David Parker.
The leaders received an update from Prosecutor General Venediktova, affirmed their solidarity with the Ukrainian people, and discussed their coordinated efforts to hold accountable individuals whose criminal actions are enabling war crimes in Ukraine. They committed to continued close consultation and coordination.
“America, and the world, are watching very closely what is happening in Ukraine. Every day, we see the heartbreaking images and read the horrific accounts of brutality,” said Attorney General Merrick B. Garland. “But there is no hiding place for war criminals. The Justice Department has a long history of holding accountable those who perpetrate war crimes. Our commitment to working with our international partners, including Ukraine’s Prosecutor General, to investigate and prosecute those responsible for atrocities in Ukraine remains steadfast. We will be relentless in our efforts to bring to justice those who facilitate the death and destruction we are witnessing in Ukraine.”
In the meeting, Attorney General Garland underscored America’s support for Ukraine’s sovereignty and territorial integrity in the face of Russia’s brutal aggression. He highlighted how the United States is continuing to surge security, humanitarian, economic, and legal assistance to Ukraine. He updated Prosecutor General Venediktova and Five Eyes partners on the actions the Justice Department is taking in coordination with international partners to further raise the costs on Russia, including through the Justice Department’s Task Force KleptoCapture. Attorney General Garland also discussed the $33 billion supplemental budget request to support Ukraine and package of legislative proposals that President Biden sent to Congress on April 28, which would enhance the Justice Department’s ability to hold the Kremlin and Russian oligarchs accountable for the ongoing invasion of Ukraine.
Providence Man Sentenced in Wide-Ranging Bank Fraud and COVID Small Business Loan SchemesRead the Press Release
PROVIDENCE, R.I. – A Providence resident was sentenced today to five years in federal prison for using the stolen personal identifying information (PII) of unsuspecting individuals to defraud banks and retailers, and for fraudulently seeking more than $3.3 million dollars in small business loans earmarked for businesses impacted by the pandemic, announced United States Attorney Zachary A. Cunha.
Courtney Hilaire, 29, pled guilty on December 20, 2021, to conspiracy to commit wire fraud, fourteen counts of wire fraud, and two counts of aggravated identity theft. He was sentenced today by U.S. District Court Judge William E. Smith to 60 months in federal prison to be followed by three years of federal supervised release.
Hilaire’s involvement in bank fraud and credit card fraud schemes was discovered by Warwick Police on July 3, 2020, when officers found Hillaire and two other men sleeping inside a stolen vehicle in the parking lot of a Warwick hotel. Inside the vehicle, officers discovered eighteen cell phones and other electronic devices; a list of identities and corresponding stolen PII; equipment used to transfer information to credit card magnetic strips; 44 counterfeit credit cards and numerous fraudulent drivers’ licenses from multiple states; and approximately $13,000 in crisp, clean $100 and $50 dollar bills.
A forensic audit of the electronic devices by Homeland Security Investigations revealed links to folders containing templates to create credit cards, fraudulent driver’s licenses, currency, and a link to lists of PII available for purchase on the “dark web.”
One month after being arrested by Warwick Police, Pawtucket Police encountered Hilaire in a rented vehicle; on this occasion, he was found to be in possession of three cell phones, nearly $3,000 in cash, and eight debit cards linked to fraudulently obtained Pennsylvania unemployment benefit accounts. A forensic audit of the cell phones revealed numerous sets of stolen PII and evidence of involvement in Small Business Administration loan fraud.
As a result of their continuing investigation into Hilaire’s fraudulent activity, Homeland Security Investigations arrested Hilaire in April 2021. During a search of his residence, agents seized $47,119 in cash; eleven cell phones and two laptop computers; and devices used to create fraudulent credit cards. When agents arrived at his residence, Hilaire was online filing a fraudulent COVID-related unemployment benefits claim with the state of Alabama. A forensic audit of the cell phones and computers found in his residence revealed that Hilaire had filed 60 fraudulent COVID Economic Injury Disaster Loan applications with eight states, including Rhode Island, with an intended loss to the program of $3,328,695. Loans totaling $328,700 were issued.
Forensic auditors also uncovered evidence that Hilaire spent time online collaborating with and counseling other would-be fraudsters, and provided them with materials and advice on committing economic fraud.
The case was prosecuted by Assistant United States Attorney William J. Ferland.
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Prison sentence for perjurer wraps up prosecution of Middle Georgia drug trafficking conspiracyRead the Press Release
MACON, GA: Thirteen defendants have been sentenced to terms of up to 15 years in prison after an extensive operation that targeted a middle Georgia drug trafficking conspiracy.
Eight men and four women were indicted in February 2021 under Operation Breaking the Bond, an Organized Crime Drug Enforcement Task Force investigation centered in the Bibb County area, said David H. Estes, U.S. Attorney for the Southern District of Georgia. The U.S. Attorney’s Office for the Middle District of Georgia was recused from the case, which was prosecuted by the Southern District of Georgia U.S. Attorney’s Office. All 12 of the indicted defendants entered guilty pleas to felony charges related to the conspiracy, and a 13th pled guilty to perjury related to the case.
Middle District of Georgia Judge Marc T. Treadwell sentenced the operation’s lead defendant, Prentice Bond, a/k/a “P,” a/k/a “Peze,” 36, of Macon, to 180 months in prison, followed by five years of supervised release, after Bond pled guilty to Conspiracy to Possess with Intent to Distribute and to Distribute Cocaine, Crack Cocaine, and Marijuana, and Possession of a Firearm in Furtherance of a Drug Trafficking Crime.
After sentencing all 12 defendants in the conspiracy, Judge Treadwell also sentenced Tommie Lanardo Holloway, a/k/a “Kane,” 36, of Kathleen, Ga., to 15 months in prison after Holloway pled guilty to Perjury, admitting that he lied during a hearing in District Court when he claimed ownership of four firearms found in Bond’s residence when he knew Bond owned and possessed the guns.
“Operation Breaking the Bond is an outstanding example of a complex, meticulous investigation aimed at identifying and eliminating drug trafficking and the violent criminal activity it spawns,” said U.S. Attorney Estes. “Our office was honored to serve on behalf of the citizens of the Middle District of Georgia to take these felons off the streets.”
As described in court documents and testimony, Operation Breaking the Bond started in mid-2019 to target sources of illegal drugs brought into and distributed in the Macon area. The investigation led to a series of searches in which large amounts of cocaine, crack cocaine, oxycodone, and marijuana were seized, along with nearly $97,000 in cash, a machine for pressing kilo-sized “bricks” of cocaine, money counters, scales, and drug packaging materials. Investigators also seized 39 illegally possessed firearms, ranging from pistols and shotguns to assault-style rifles.
In addition to Bond, defendants who pled guilty in the case and have been sentenced include:
- Travis Robinson, a/k/a “T-Roc,” 46, of Fairburn, Ga., sentenced to 80 months in prison, followed by three years of supervised release, after pleading guilty to Conspiracy to Possess with Intent to Distribute and to Distribute Cocaine;
- Xavier Cross, a/k/a “Ro,” a/k/a “Kairo,” 46, or Macon, sentenced to 100 months in prison followed by three years of supervised release after pleading guilty to Conspiracy to Possess with Intent to Distribute and to Distribute Cocaine, Crack Cocaine, and Marijuana; and Possession of Firearms by a Convicted Felon;
- Charles Seang, 29, of Lilburn, Ga., sentenced to 37 months in prison followed by two years of supervised release after pleading guilty to Conspiracy to Possess with Intent to Distribute and to Distribute Marijuana;
- Chester Hall, a/k/a “Cheeseburger,” a/k/a “Cheese,” 41, of Macon, sentenced to 60 months in prison followed by three years of supervised release after pleading guilty to Conspiracy to Possess with Intent to Distribute and to Distribute Cocaine, Crack Cocaine, and Marijuana;
- Geneva Harvey, 40, of Macon, sentenced to 57 months in prison followed by two years of supervised release after pleading guilty to Conspiracy to Possess with Intent to Distribute and to Distribute Cocaine, Crack Cocaine, and Marijuana;
- Shaneka Jackson, 44, of Macon, sentenced to 12 months plus one day in prison followed by one year of supervised release after pleading guilty to Misprision of a Felony;
- Rodreco Jones, a/k/a “Freako,” a/k/a “Rico,” 40, of Macon, sentenced to 84 months in prison followed by three years of supervised release after pleading guilty to Conspiracy to Possess with Intent to Distribute and to Distribute 50 Kilograms or More of Marijuana;
- Earnest Milline, a/k/a “Rome,” a/k/a “Jerome,” 63, of Macon, sentenced to 24 months in prison after pleading guilty to Conspiracy to Possess with Intent to Distribute and to Distribute Cocaine, Crack Cocaine, and Marijuana;
- Morgan Allison, 23, of Macon, sentenced to 14 months in prison followed by three years of supervised release after pleading guilty Possession with Intent to Distribute Cocaine;
- George Leverett, 29, Macon, was sentenced to two years of probation after pleading guilty to Conspiracy to Possess with Intent to Distribute, and to Distribute, Cocaine, Crack Cocaine, and Marijuana; and,
- Tawana Daniels, 41, of Fairburn, Ga., was sentenced to three years of probation after pleading guilty to Misprision of a Felony.
“The convictions of those poison peddlers convicted as a result of Operation Breaking the Bond will have an impact on the drug trade in Middle Georgia,” said Bibb County Sheriff David J. Davis. “These convictions should be a message to anyone thinking of engaging in drug trafficking that they will be made to face justice. We can all be proud of the hard work of the investigators and prosecutors to put these criminals behind bars.”
“This poly-drug distribution network was responsible for distributing a vast amount of illegal drugs to countless numbers of drug users,” said Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Field Division. “Thanks to the dedicated efforts between DEA and its law enforcement partners, these defendants will spend well-deserved time in prison.”
“As this exhaustive investigation comes to a close, the FBI would like to thank our federal, state, and local law enforcement partners for all of their hard work and commitment to ending this drug trafficking conspiracy,” said Keri Farley, Special Agent in Charge of FBI Atlanta. “With the removal of drugs, weapons, and 13 defendants from the streets, the citizens of Bibb County will be immediately safer.”
“Illegal drugs and illegally possessed firearms have no place in Georgia. They are dangerous and threaten the safety of our communities,” said Vic Reynolds, Director of the Georgia Bureau of Investigation. “We will continue to work diligently along with our local and federal partners to investigate and dismantle drug trafficking organizations.”
The operation was conducted by the U.S. Drug Enforcement Administration, the FBI, the Georgia Bureau of Investigation, the Bibb County Sheriff’s Office Narcotics Unit, the Peach County Sheriff’s Office, the Braselton Police Department and the Union City Police Department, with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives and the U.S. Marshals Service, and prosecuted for the United States by Southern District of Georgia Assistant U.S. Attorneys Noah J. Abrams and OCDETF Coordinator Marcela C. Mateo.
The case was investigated under the Organized Crime Drug Enforcement Task Forces 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.
Pittsburgh Man Pleads Guilty to Illegal Gun Possession a Gun and Dealing Fentanyl/Cocaine MixtureRead the Press Release
PITTBURGH, PA - A resident of Pittsburgh, Pennsylvania, pleaded guilty in federal court to charges of violating federal narcotic and firearms laws, United States Attorney Cindy K. Chung announced today.
Hazeon Kidd, age 21 of the City’s Highland Park neighborhood, pleaded guilty to three counts before United States District Judge Cathy Bissoon.
In connection with the guilty plea, the court was advised that on May 13, 2021, there was a shooting in Clairton, and Allegheny County Police detectives responded. They were following a separate vehicle, which had a brief interaction with a red Kia automobile occupied by four individuals. When the detectives drove by the Kia, which was parked, one of the detectives saw Jamiel Green and recognized him as someone who was wanted. Green had two outstanding warrants. The detectives then got out of their car and approached the Kia on foot. As they approached, Green got of the vehicle and began to run. A detective tased him and found a gun on his person. Green is a felon and therefore precluded under federal law from possessing a firearm.
When the detectives went back to the vehicle, they observed multiple firearms in plain view. Each of the three remaining occupants of the red Kia had a loaded firearm. Kidd was not a felon, but he admitted that he is a regular user of marijuana and was smoking on the day of the arrest. Users of illegal narcotics are not permitted under federal law to possess firearms.
Also found on Kidd’s person was what later laboratory results confirmed was thirteen grams of a fentanyl and cocaine mixture. The detectives also found more than $10,000 in the vehicle and other evidence indicating that the occupants were involved in drug trafficking. Kidd was arrested that day and he was released on bond. The conditions of bond included, among other conditions, that the defendant not violate any federal law.
Despite that condition, the defendant continued to sell fentanyl and cocaine. The North Huntington Police Department developed a confidential informant who indicated that he regularly purchased drugs from an individual later identified as the defendant. The confidential informant, working under the direction of the North Huntington Police Department contacted the defendant via cell phone and arranged for a three-gram purchase for $600. Ultimately, the transaction occurred outside of a hotel room and the detective was able to observe the transaction. Directly after the transaction, officers arrested Kidd. Kidd was in possession of the pre-recorded buy money and the cell phone he used to arrange for the transaction. The State Police laboratory determined that substance purchase from Kidd was a fentanyl and cocaine mixture, and that the weight was approximately three grams.
Judge Bissoon scheduled sentencing for August 24, 2022, at 1:45 p.m.. The law provides for a term of imprisonment not more than 45 years in prison, a fine of $2,250,000, or both.
Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court remanded to the custody of the U.S. Marshals Service.
Assistant United States Attorney Brendan T. Conway is prosecuting this case on behalf of the government.
The Allegheny County Police Department and the North Huntington Police Department conducted the investigation that led to the prosecution of Kidd.
Owner of St. Paul Staffing Agency Sentenced to Prison for $1 Million Tax FraudRead the Press Release
ST. PAUL, Minn. – A Woodbury woman was sentenced to 15 months in prison and ordered to pay $1,019,572.12 in restitution to the IRS for filing false federal income tax returns, announced United States Attorney Andrew M. Luger.
According to court documents, during tax years 2017 through 2018, Shoua Isabelle Yang, 45, the owner and operator of Atwork Staffing Inc., a staffing agency that provided temporary workers for multiple business clients, caused the agency not to properly withhold, account for, and pay over accurate payroll taxes, including federal income taxes and Social Security and Medicare taxes. Yang caused quarterly IRS Forms 941 to be completed and filed that were willfully and deliberately false, in that they did not report all employees employed by Atwork Staffing and did not report all payroll taxes owed by Atwork Staffing. Yang also caused Atwork Staffing to pay a portion of its employees’ salaries in cash and not report the true payroll on the Forms 941 filed on behalf of Atwork Staffing. Yang also filed IRS Forms 1120 corporate tax returns that were false in that they underreported her agency’s gross receipts as well as the true amount of payroll expenses for the wages paid to her employees. Yang’s tax fraud resulted in a total tax loss of $1,019,572.12.
On November 10, 2021, Yang pleaded guilty to two counts of filing a false federal income tax return. Yang was sentenced earlier today by U.S. District Judge Eric C. Tostrud.
This case is the result of an investigation by IRS Criminal Investigation Division.
This case was prosecuted by Assistant U.S. Attorney Matthew S. Ebert.
Owner of St. Cloud Press Bar Pleads Guilty to ArsonRead the Press Release
ST. PAUL, Minn. – Andrew Charles Welsh has pleaded guilty to intentionally setting fire to the Press Bar and Parlor as part of a scheme to obtain insurance money, announced U.S. Attorney Andrew M. Luger.
According to court documents, Welsh, 42, owner and operator of the Press Bar and Parlor located in St. Cloud, maintained a business owner’s insurance policy on the business. On February 17, 2020, as part of a scheme to fraudulently obtain insurance money, Welsh used gasoline to set a fire in his office located in the basement of the Press Bar. The fire eventually spread and resulted in the total destruction of the building as well as other losses.
On February 24, 2020, Welsh retained a Public Insurance Adjuster to assist in the preparation, presentation, and adjustment of insurance claims related to the fire at Press Bar. On February 26, 2020, Welsh, through the Public Insurance Adjuster, claimed that he was entitled to payment from the insurance company in the amount $1,430,123.28 for property damage and other losses related to the February 17, 2020, fire. Welsh admitted that in submitting the insurance claim, he falsely stated that “said loss did not originate by any act, design, or procurement on the part of your insured,” when, as Welsh knew, his arson of the Press Bar caused the loss for which he sought compensation.
Welsh pleaded guilty today before U.S. District Judge Eric C. Tostrud to one count of arson. A sentencing date has not been set.
This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the St. Cloud Police Department, the St. Cloud Fire Department, and the Minnesota State Fire Marshals, Stearns County Sheriff’s Office, with assistance from the Stearns County Attorney’s Office.
Assistant U.S. Attorneys Nathan H. Nelson and Evan B. Gilead are prosecuting the case.
Omaha Man Sentenced to 84 Months for Distribution and Possession of Child PornographyRead the Press Release
United States Attorney Jan Sharp announced that Kevin Watson, age 43, of Omaha, Nebraska, was sentenced today in federal court in Omaha for distribution and possession of child pornography. United States District Court Judge Brian C. Buescher sentenced Watson to 84 months of imprisonment. There is no parole in the federal system. After completing his term of imprisonment, Watson will begin a 5-year term of supervised release. Watson must also pay $3,000 in restitution.
On April 28, 2020, law enforcement partially downloaded a torrent file containing child pornography from Watson’s residence in Omaha. Watson had made the child pornography available for downloading. On May 8, 2020, officers executed a search warrant at Watson’s Omaha residence and obtained his laptop computer. Officers located at least 12 images and 15 videos of child pornography on the laptop. Watson admitted to possessing the child pornography on the laptop and to using FrostWire and Limewire to locate child pornography.
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.
The case was investigated by the Nebraska State Patrol.
Oil Tanker Owner and Operator Sentenced for Obstructing Justice and Concealing Deliberate PollutionRead the Press Release
Liquimar Tankers Management Services Inc. and Evridiki Navigation Inc. were sentenced after being convicted at trial on all charges, including violating the Act to Prevent Pollution from Ships, falsifying ships’ documents, obstructing a U.S. Coast Guard inspection and making false statements to U.S. Coast Guard inspectors.
U.S. District Court Judge Richard G. Andrews for the District of Delaware sentenced the corporations to a total of $3 million criminal fine, and a five-year period of probation. Evridiki was fined $2 million and Liquimar was fined $1 million.
In March 2019, the Evridiki was inspected by the Coast Guard in Big Stone Anchorage, within Delaware Bay after a delivery of crude oil. The jury found that during the inspection, Liquimar, Evridiki and the ship’s Chief Engineer, Nikolaos Vastardis, tried to deceive Coast Guard inspectors regarding the use of the ship’s oily water separator (OWS) and oil content meter (OCM), a required pollution prevention device. Chief Engineer Vastardis used a hidden valve to trap fresh water inside the sample line so that the OCM sensor registered zero parts per million concentration of oil instead of what was really being discharged overboard. The Coast Guard and government experts were able to prove that the OCM was being tricked with fresh water by analyzing historic data recovered from the machine’s memory chip. When the Coast Guard opened the OWS, they found it was inoperable and fouled with copious amounts of oil and soot. Vastardis’ conviction was upheld in December 2021 by the Third Circuit Court of Appeals, which rejected a challenge to U.S. jurisdiction over foreign vessels.
“Ocean outlaws and polluters such as these will continue to be vigorously prosecuted to the full extent of the law,” said Assistant Attorney General Todd Kim for the Justice Department’s Environment and Natural Resources Division.
At sentencing today, the government provided new evidence, based on a forensic examination of the ship’s computers, that Liquimar was also making and using fake and forged certificates regarding safety and environmental requirements. Fake certificates and fake seals, to imprint on the certificates, were e-mailed to the ship by senior shore side employees including the Designated Person Ashore – a required manager under international law who is charged with ensuring the vessel and its crew abide by the law. At least three senior employees of Liquimar were involved with creating and sending the fake certificates. The fake certificates related to the calibration of the OCM and whether pressure relief valves for the cargo were actually tested properly. A fake OCM certificate was used during the Coast Guard inspection and Vastardis was specifically asked about the validity of the certificate. The Coast Guard further discovered that the data stored on the OCM indicated the OCM was not energized on the date that the fake certificate claimed the OCM was calibrated. In addition, the certificate for the pressure relief valves was noted to be false because it had claimed that the system was tested on a date that the cargo tanks were full, which is impossible. Referring to the forged documents as the “elephant in the room” which the defendants asked judge to ignore, federal prosecutors told the court that the companies “failure to address, let along mention this willful misconduct, demonstrates that these defendants are willfully blind if not completely unrepentant.”
Senior Litigation Counsel Richard A. Udell and Senior Trial Attorney Kenneth E. Nelson, both of the Environmental Crimes Section of the Department of Justice, represented the government at trial. Assisting in the prosecution were Trial Attorney Joel La Bissonniere with the Environmental Crimes Section, and Lieutenant Commander Ben Robinson, attorney with the Coast Guard’s Office of Maritime and International Law. The Coast Guard’s Investigative Service investigated the case with assistance from the Coast Guard’s Sector Delaware Bay and Marine Safety Detachment in Lewes, Delaware.
Missouri Man Charged with Federal Hate Crime and Arson for Burning Down a ChurchRead the Press Release
The Justice Department announced that Christopher Scott Pritchard, 46, has been charged with hate crime and arson violations for burning down the Church of Jesus Christ of Latter-day Saints in Cape Girardeau, Missouri.
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, U.S. Attorney Sayler A. Fleming for the Eastern District of Missouri and Acting Special Agent in Charge Akil Davis for the FBI St. Louis Field Office made the announcement.
According to court documents, Pritchard is charged with intentionally obstructing parishioners of the church in the enjoyment of their free exercise of religious beliefs and using fire to commit a federal felony. If convicted, Pritchard faces up to 20 years in prison for obstructing the parishioners and a mandatory minimum of 10 years in prison, consecutive to any other sentence, for using fire to commit a federal felony. Pritchard also faces a fine of up to $250,000 with respect to each charge.
These charges are the result of an investigation by the Cape Girardeau County Sheriff’s Office, the FBI, the Missouri State Fire Marshal’s Office and the Bureau of Alcohol, Tobacco, Firearms & Explosives. The case is being prosecuted by Trial Attorneys Shan Patel and Noah Coakley of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Paul Hahn for the Eastern District of Missouri.
For more information and resources on the department’s efforts to combat hate crimes, visit www.justice.gov/hatecrimes.
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Mexican Man Pleads Guilty to Illegal ReentryRead the Press Release
A man who illegally re-entered the United States pled guilty May 4, 2022, in federal court in Sioux City.
Miguel Rodriguez-Chavez, 38, from Mexico, was convicted of illegal re-entry as an aggravated felon.
At the plea hearing, Rodriguez-Chavez admitted that on April 21, 2021, he was arrested in O’Brien County, Iowa. Further investigation conducted by law enforcement revealed Rodriguez-Chavez as a citizen of Mexico and was previously removed from the United States on five (5) occasions; May 28, 2003, April 30, 2004, January 01, 2016, October 14, 2016, and March 19, 2020. Rodriguez-Chavez further admitted at the plea hearing that, on July 17, 2006, he was convicted in the Superior Court of Arizona, Yuma County, of Aggravated Assault with a Deadly Weapon or Dangerous Instrument, an aggravated felony.
Sentencing before United States District Court Chief Judge Leonard T. Strand will be set after a presentence report is prepared. Rodriguez-Chavez remains in custody of the United States Marshal pending sentencing. Rodriguez-Chavez faces a possible maximum sentence of 20 years’ imprisonment, a $250,000 fine, and not more than 3 years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Patrick T. Greenwood and was investigated by Homeland Security Investigations and the O’Brien County Sheriff’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 21-4043. Follow us on Twitter @USAO_NDIA.