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Tuesday 1 February 2022
Tulsa Man Sentenced to 7 Years in Prison for Receiving and Possessing Child PornographyRead the Press Release
A Tulsa man was sentenced in federal court Monday for receiving and possessing sexually explicit images and videos of minors, including children under the age of 12, announced U.S. Attorney Clint Johnson.
“Jack Brady Jr. possessed nearly 7,200 image and video files of child sexual abuse material, some of which depicted the sadomasochistic abuse of children,” said U.S. Attorney Clint Johnson. “Not only will he spend seven years in federal prison, but he will also financially compensate many of the victims for downloading and viewing the horrific abuse they were subjected to.”
Jack Clinton Brady Jr., 67, of Tulsa, was sentenced to seven years in federal prison followed by seven years of supervised release. As required by the Amy, Vicky, and Andy Child Pornography Victim Assistance Act of 2018, U.S. District Judge Gregory K. Frizzell ordered Brown to pay $39,000 in restitution to victims who were abused in the creation of the child sexual abuse material.
In August 2021, Brady pleaded guilty to receipt of child pornography and possession of child pornography in Indian Country.
Brady admitted that from Jan. 1, 2018, to March 4, 2021, he used electronic means to download multiple computer files containing child sexual abuse material. He further admitted to possessing the depictions of minors engaged in sexually explicit conduct, including depictions of prepubescent minors under the age of 12.
The defendant’s criminal actions came to light after a family member found a video of child pornography on Brady Jr.’s laptop and contacted authorities. The Tulsa Police Department responded to the call and immediately identified the material as child pornography. The family member said the defendant, a charter bus driver at the time, was scheduled to drive high school students to an event the following day.
During an interview with law enforcement, Brady Jr. indicated that he had child pornography on the laptop and on external hard drives in a computer bag located in his bedroom. Multiple files found on Brady Jr.’s electronic devises depicted the abuse of infants and toddlers and the sadomasochistic abuse of children younger than 12 years of age.
Brady Jr. is a citizen of the Osage Nation and the crimes occurred within the boundaries of the Muscogee Nation Reservation.
U.S. Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation. Assistant U.S. Attorney Christopher J. Nassar is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc
Three Defendants Arrested for Operating Narcotics Delivery Service Responsible for Three Overdose Deaths from Fentanyl-Laced CocaineRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, Tim Foley, the Acting Special Agent-in-Charge of the New York Division of the Drug Enforcement Administration (“DEA”), and Keechant Sewell, the Commissioner of the New York City Police Department (“NYPD”), announced that BILLY ORTEGA, a/k/a “Jason,” and KAYLEN RAINEY were charged in a criminal complaint unsealed today in Manhattan federal court with narcotics conspiracy resulting in the deaths of Julia Ghahramani, Ross Mtangi, and Amanda Scher in Manhattan, New York. WILLIAM DRAYTON was also charged in the complaint as a member of the conspiracy. ORTEGA, RAINEY, and DRAYTON, were arrested today and will be presented this afternoon before United States Magistrate Judge Stewart D. Aaron.
U.S. Attorney Damian Williams said: “As alleged, the defendants operated an on-demand delivery service for the distribution of highly addictive and dangerous drugs. The cocaine distributed by defendants Ortega and Rainey on behalf of their delivery service was laced with the deadly synthetic opioid fentanyl, and as alleged, caused the deaths of three victims on a single day. Thanks to the tireless efforts of law enforcement, the defendants’ deadly delivery service is out of business.”
NYPD Commissioner Keechant Sewell said: “As this federal complaint makes clear, our NYPD investigators will stop at nothing in their work to arrest anyone accused of selling illegal, fentanyl-laced narcotics without regard for their deadly consequences. I would like to thank the United States Attorney’s Office in the Southern District of New York, and all of our law enforcement partners, for achieving a measure of justice in this important case.”
DEA Acting Special Agent in Charge Timothy Foley said: “Allegedly, through this illegal drug distribution network, death was delivered to New Yorkers. Fentanyl has added additional danger to recreational drug use. DEA will continue to investigate those responsible for distributing illegal drugs throughout our communities in an effort to save lives.”
According to the allegations in the complaint[1]:
From at least in or about 2020 to at least in or about 2021, ORTEGA, RAINEY, and DRAYTON operated a narcotics delivery service (the “Delivery Service”) in the New York City area. ORTEGA was the central contact who, like a dispatcher, coordinated narcotics deliveries with his couriers and his customers. RAINEY and DRAYTON were two of ORTEGA’s drug couriers. In the course of a single day – March 17, 2021 – RAINEY, after being dispatched by ORTEGA, delivered fentanyl-laced cocaine to Ghahramani, Mtangi, and Scher at three separate locations in Manhattan. All three victims died after consuming the drugs distributed by ORTEGA and RAINEY. DRAYTON was another courier who delivered narcotics to Ghahramani and others, on other occasions, on behalf of the Delivery Service.
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BILLY ORTEGA, 35, of West Milford, New Jersey; KAYLEN RAINEY, 30, of Manhattan, New York; and WILLIAM DRAYTON, 30, of Hackensack, New Jersey, are each charged with conspiracy to distribute and possess with intent to distribute fentanyl and cocaine. ORTEGA and RAINEY are also charged with causing the deaths of the three victims in connection with the narcotics conspiracy, with carries a mandatory minimum sentence of 20 years in prison and a maximum sentence of life in prison. The statutory minimum and maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the NYPD, the Organized Crime Drug Enforcement Task Force (“OCDETF”) New York Strike Force, and the New York/New Jersey High Intensity Drug Trafficking Area (“HIDTA”) Intelligence Analysts for their support and assistance in this matter. The OCDETF New York Strike Force is a crime-fighting unit comprising federal, state, and local law enforcement agencies supported by OCDETF and HIDTA. The Strike Force is affiliated with the DEA’s New York Division and includes agents and officers of the DEA, NYPD, New York State Police, Homeland Security Investigations, U.S. Internal Revenue Service Criminal Investigation Division, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Customs and Border Protection, U.S. Secret Service, U.S. Marshals Service, New York National Guard, Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department, and New York State Department of Corrections and Community Supervision. Mr. Williams also thanked the West Milford Police Department for their invaluable assistance in this case.
This case is being handled by the Office’s Narcotics Unit. Assistant United States Attorneys Micah Fergenson and Michael Herman are in charge of the prosecution.
The charges contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the complaint, and the description of the complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Sturgis Nurse Charged with Tampering with Consumer ProductsRead the Press Release
GRAND RAPIDS, MICHIGAN - Alison Marshall, 46, of Sturgis, Michigan, has been charged by a federal grand jury with tampering with a consumer product, United States Attorney Andrew Birge announced today. Special Agent in Charge Lynda Burdelik, from the Food and Drug Administration’s (FDA) Office of Criminal Investigations, joined the announcement.
According to the indictment, while working as a registered nurse in the interventional radiology unit of a hospital in July and August of 2020, Marshall tampered with bottles of fentanyl by removing the fentanyl from the vials with a syringe and replacing it with another liquid, knowing that the diluted fentanyl was to be dispensed to patients. The indictment does not include other details of the offense.
The tampering offense is punishable by up to ten years in prison. If Marshall is convicted, a federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
An indictment is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
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Springfield Woman Sentenced for Social Security Benefit TheftRead the Press Release
BOSTON – A Springfield woman was sentenced today for stealing over $62,000 in Social Security benefits.
Patricia Shibles, 50, was sentenced by U.S. District Court Judge Mark Mastroianni to three years of probation, with the first six months to be served on home detention. Shibles was also ordered to pay $62,113 in restitution to the Social Security Administration (SSA). On September 22, 2021, Shibles pleaded guilty to one count of theft of public funds.
In April 2016, the father of Shibles’ fiancé, who was receiving Social Security benefits, passed away. The SSA was not informed of the death, and SSA continued to deposit monthly benefits into a bank account held by Shibles and the deceased beneficiary. From April 2016 through April 2020, Shibles stole approximately $62,113 in Social Security benefits from the account.
United States Attorney Rachael S. Rollins and John Cremonini, Acting Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement. Assistant U.S. Attorney Michelle Dineen Jerrett of Rollins’ Springfield Branch Office and Special Assistant U.S. Attorney Karen Burzycki of Rollins’ Major Crimes Unit prosecuted the case.
Springfield Woman Pleads Guilty to Unemployment Fraud Related to COVID-19 PandemicRead the Press Release
BOSTON – A Springfield woman pleaded guilty yesterday in connection with her involvement in a scheme to fraudulently obtain COVID-19-related unemployment assistance.
Audri Ford-Victory, 61, pleaded guilty to one count of wire fraud conspiracy. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for June 1, 2022. Ford-Victory was charged on Dec. 15, 2021.
In March 2020, in response to the global COVID-19 pandemic, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act created a temporary federal unemployment insurance program called Pandemic Unemployment Assistance (PUA), which in Massachusetts is administered by the Department of Unemployment Assistance. This program provides unemployment insurance benefits for individuals who are not eligible for other types of unemployment benefits.
Ford-Victory and her co-conspirator submitted more than 100 fraudulent PUA claims resulting in more than $1.2 million in payments. Approximately half of the PUA claims were made on behalf of individuals residing outside of Massachusetts. In some instances, Ford-Victory and her co-conspirator received kickback payments for doing so.
The charge of wire fraud conspiracy provides for a sentence of up to 20 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 other statutory factors.
United States Attorney Rachael S. Rollins; Frederick J. Regan, Special Agent in Charge of the U.S. Secret Service, Boston Field Office; and Jonathan Mellone, Special Agent in Charge of the Department of Labor, Office of Inspector General, Office of Investigations – Labor Racketeering and Fraud, New York Regional Office, made the announcement. The Massachusetts Department of Unemployment Assistance provided assistance in the investigation. Assistant U.S. Attorney Christopher J. Markham of Rollins’ Securities, Financial & Cyber Fraud Unit is prosecuting the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
South Florida Residents Who Defrauded Investors Sentenced to Federal Prison TermsRead the Press Release
Miami, Florida – A federal district judge has sentenced the last of four defendants involved in a mail and wire fraud scheme aimed at defrauding investors.
Miami-Dade County resident Jason Ganton, 50, was sentenced to 40 months in federal prison. In December 2021, co-defendant, Mason Newman, 52, was sentenced to 38 months in prison; co-defendant, James Cleary, 50, was sentenced to 33 months in prison; and co-defendant, Kevin Cardenas, 34, was sentenced to 24 months.
NIT Enterprises was a Palm Beach Gardens company that falsely marketed itself as being on the cusp of developing and producing radiation protective materials using an innovative technology. Ganton, Newman, Cleary and Cardenas who were not licensed securities sales agents, admitted to lying to investors by telling them that NIT was on the verge of making an initial public offering of stock. This created a false expectation that investors would double or triple their investments in a short amount of time. In fact, there was no IPO on the horizon for NIT. Ganton, Newman, Cleary and Cardenas admitted that they reached most of their victims through cold calls and that they personally profited from the investor funds.
Juan Antonio Gonzalez, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, FBI Miami, and Russell C. Weigel, III of the Office of Financial Regulation, announced the sentence imposed by U.S. District Judge Aileen M. Cannon.
FBI Miami and the Office of Financial Regulation investigated this case. The case was prosecuted by Assistant U.S. Attorney Lothrop Morris. Assistant U.S. Attorney Daren Grove is handling asset forfeiture.
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 20-cr-80095.
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South Florida Covid-19 Relief Fraudster Sentenced to Federal PrisonRead the Press Release
Miami, Florida – Today, a federal district judge in Fort Lauderdale sentenced Luke Pierre Jr., 36, of Port St. Lucie, Florida to 24 months’ imprisonment for fraudulently obtaining over $400,000 from the Paycheck Protection Program (PPP), a program funded under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide small businesses with financial relief during the Covid-19 pandemic. In addition, Pierre must pay close to $415,000 in restitution.
Pierre submitted a PPP loan application on behalf of his company, Most Wanted Bullyz LLC (“MWB”), a dog breeding business, in which he falsely represented that MWB had 21 employees and an average monthly payroll of $165,870. In reality, MWB had no employees and no monthly employee payroll. Pierre gave a large portion of the fraudulent loan proceeds he received to co-conspirators who helped obtain the loan, including one such payment of over $100,000 that was disguised in bank records as “stud fees.”
Pierre previously pleaded guilty to conspiracy to commit wire fraud. U.S. District Judge William P. Dimitrouleas imposed Pierre’s sentence.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida; Kenneth A. Polite Jr., Assistant Attorney General of the Justice Department’s Criminal Division; and George L. Piro, Special Agent in Charge, FBI Miami, announced the sentence.
FBI Miami investigated this case. IRS-Criminal Investigation, Miami Field Office assisted.
Assistant U.S. Attorney David A. Snider and Trial Attorney Philip Trout of the Fraud Section of the Department of Justice prosecuted the case. Assistant U.S. Attorney Nicole Grosnoff is handling asset forfeiture.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law designed to provide emergency financial assistance to millions of Americans who suffered financially from the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses through the Paycheck Protection Program (PPP).
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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 21-cr-60288.
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Sanpete County Man Charge with Operating a Fraudulent Farm Equipment BusinessRead the Press Release
SALT LAKE CITY – Ryan Palmer, 53, of Sanpete County, was indicted by a grand jury last December in the District of Utah for a fraudulent scheme related to his farm equipment company, known as Palmer Equipment, LLC. In the indictment, Palmer is charged with bank fraud, wire fraud, and two counts of money laundering. The indictment alleges that Palmer defrauded 25 victims out of more than $1.2 million dollars in total.
The indictment alleges that beginning in 2017, Palmer represented to his victims that he could sell or obtain farm equipment on their behalf, and that he entered into consignment contracts with his victims to sell their farm equipment and promised to pay the victims the proceeds from the sale of their equipment. It is alleged that Palmer also told victims that he could sell them functioning farm equipment that was free and clear of any liens. However, the indictment alleges that Palmer sold defective equipment to buyers; removed and replaced serial placards on the equipment; sold victims’ farm equipment which he did not own; did not deliver equipment to buyers; and did not pay, or only partially paid, proceeds to consignors for farm equipment which they had sold through Palmer. In some cases, it is alleged that Palmer encumbered consigners equipment by fraudulently stating the equipment was his own and then sold the same equipment as if it were his own. Additionally, it is alleged that Palmer fraudulently represented to banks that victims’ consigned equipment was his own and then obtained bank issued loans by using the victims’ consigned equipment as collateral.
The first count in the indictment charges Palmer with bank fraud for obtaining a loan from Utah Independent Bank for $51,000 by fraudulently representing that he owned a 1985 Allis-Chalmers 8050 tractor and using the tractor as collateral to obtain the loan. Additionally, it is alleged that Palmer failed to pay the original consignor of the tractor and the bank when the tractor was sold.
The second count alleges that Palmer committed wire fraud by accepting a wire transfer from a buyer of equipment in the amount of $19,450 into Palmer’s personal Mountain America Credit Union Account.
The third and fourth counts in the indictment allege that Palmer committed money laundering by transferring $25,000 obtained through a fraudulently acquired bank loan into a Palmer Equipment Checking Account, and by transferring $16,000 obtained through the sale of a tractor into Palmer’s personal checking account.
Assistant U.S. Attorneys from the Utah U.S. Attorney’s Office from the St. George branch office are prosecting the case. Special Agents from the FBI and IRS Criminal Investigations conducted the investigation.
Indictments are not findings of guilt. Defendants charged in indictments are presumed innocent unless or until proven guilty in court.
Rock Hill Man Sentenced to 15 Years in Federal Prison for Role in Fentanyl Pill DistributionRead the Press Release
COLUMBIA, SOUTH CAROLINA — Justin De Neko Cunningham, 27, of Rock Hill, has been sentenced to 15 years in federal prison after pleading guilty to conspiracy to possess with the intent to distribute a quantity of fentanyl.
Evidence presented to the court showed that, through an investigation into a major drug trafficking organization, the organization obtained fentanyl and other drugs from a source in California and had the drugs shipped to various addresses in Rock Hill and Charlotte, North Carolina. Members of the organization would then produce counterfeit Roxicodone pills containing fentanyl. Federal agents learned that Cunningham was responsible for purchasing and selling thousands of these counterfeit pills, fully aware the pills purchased and sold by him were made with fentanyl. The pills were later sold by Cunningham in Rock Hill, Myrtle Beach, and Charlotte.
United States District Judge Mary Geiger Lewis sentenced Cunningham to 180 months in federal prison, to be followed by a six-year term of court-ordered supervision. There is no parole in the federal system.
The case was investigated by the Federal Bureau of Investigation, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, Internal Revenue Service, Rock Hill Police Department, York County Sheriff’s Office, South Carolina Law Enforcement Division, and the Richland County Sheriff’s Department.
This sentencing is part of a major 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.
Assistant United States Attorneys William K. Witherspoon, T. DeWayne Pearson, and Elliott Daniels prosecuted the case.
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Repeat Offender Arrested with 14 Firearms Sentenced in Project Safe Neighborhoods CaseRead the Press Release
MACON, Ga. – A convicted felon with a lengthy criminal history who was found illegally in possession of 14 firearms and ammunition was sentenced to prison for his crime.
Devon Antonio Futrell, 28, of Macon, Georgia, was sentenced to serve 46 months imprisonment, to be followed by 3 years supervised release, after previously pleading guilty to possession of a firearm by a convicted felon. U.S. District Judge Tilman E. “Tripp” Self, III presided over the sentencing. There is no parole in the federal system.
“Repeat felons have no business illegally possessing one gun, let alone fourteen,” said U.S. Attorney Peter D. Leary. “Our office—alongside local, state, and federal law enforcement—is working to enforce federal law and hold repeat offenders guilty of illegally possessing guns accountable.”
According to court documents, Futrell was stopped by a Georgia State Patrol trooper for running a red light and failing to maintain his lane on Feb. 21, 2021, in Macon. Futrell was carrying a handgun and told the Trooper that he had it “for a while.” Law enforcement did not realize that Futrell was a convicted felon at that time, and he was released with the gun and traffic citations. The incident was reported to ATF, who determined that Futrell had four felony convictions in North Carolina, including possession of a firearm by a convicted felon, altering or removing a serial number from a gun, malicious conduct by a prisoner and breaking and entering an aircraft or trailer. It is illegal for a convicted felon to possess a firearm. ATF agents executed a search warrant on Futrell’s residence and found 14 firearms, including a .556 caliber semi-automatic rifle, as well as ammunition.
This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
The case was investigated by the Georgia State Patrol (GSP) and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
Assistant U.S. Attorney Joy Odom is prosecuting the case for the Government.
Ready Pharmacy agrees to $400,000 settlement relating to Controlled Substances Act claimsRead the Press Release
ALBUQERQUE, N.M. – Fred J. Federici, U.S. Attorney for the District of New Mexico, has announced that Ready Pharmacy has agreed to a $400,000 settlement relating to civil claims brought by the Department of Justice on behalf of the U.S. Drug Enforcement Administration’s (DEA) El Paso Division Regulatory Diversion Group.
Ready Pharmacy, which is no longer in operation, was registered with the DEA as a retail pharmacy and authorized to dispense controlled substances customers pursuant to the provisions of the Controlled Substances Act (CSA).
At issues in the civil claim was the failure to account for over 26,000 missing dosage units of controlled substances on March 15, 2016. Also, during an on-site inspection, controlled substances were discovered unsafeguarded and not properly stored.
By the terms of the settlement, the owners of Ready Pharmacy have agreed to pay $400,000 and the government will release Ready Pharmacy from any further civil or administrative monetary claims the United States has for the covered conduct under the CSA.
“In reaching this agreement, we emphasize the necessity of adherence to the Controlled Substances Act,” said U.S. Attorney Federici. “It is our duty to ensure that the conditions and responsibilities upon which that authority is based are upheld and that its limits are not abused by retail pharmacies registered with the DEA.”
“The Controlled Substances Act sets forth clear rules for all entities that dispense controlled substances,” said Greg Millard, Acting Special Agent in Charge of the Drug Enforcement Administration’s El Paso Division. “Our office will continue to use its oversight responsibilities to ensure registrants comply with the law.”
Ready Pharmacy must pay an initial amount of $50,000 within 30 days of the settlement date and must pay the remaining $350,000 over a five-year period.
Assistant U.S. Attorney Ruth F. Keegan represented the United States in the settlement agreement.
Portland Woman Sentenced to Federal Prison for Role in Bank Fraud SchemeRead the Press Release
PORTLAND, Ore.—A Portland woman was sentenced to federal prison today for her role in a fraud scheme whereby she and a co-conspirator stole mail from residential mailboxes and used stolen personal identification information to defraud local banks.
Latanya Jenkins, 51, was sentenced to 39 months in federal prison and five years’ supervised release.
According to court documents, beginning on an unknown date and continuing until at least July 7, 2020, Jenkins and an accomplice, Demontae Sanders, 48, also of Portland, conspired with one another to steal mail from residential mailboxes throughout the Portland Metropolitan Area. Jenkins and Sanders stole checks, credit cards, and other personal identity information that they used to impersonate victims and open accounts at several local credit unions and banks. The pair used the accounts to defraud these financial institutions.
To further their scheme, Jenkins and Sanders communicated with one another by text and used the internet at Jenkins’ residence to open several bank accounts using stolen information. Together, they collected hundreds of stolen financial documents including bank statements, checks, tax returns, U.S. Passports, and other government-issued identification documents. They also stole and cashed an Economic Impact Payment check issued by the U.S. Treasury.
On September 24, 2020, a federal grand jury in Portland returned an 18-count indictment charging Jenkins and Sanders with conspiracy to commit bank fraud, bank fraud, aggravated identity theft, and mail theft. On August 23, 2021, Jenkins pleaded guilty to conspiring to commit bank fraud, mail theft, and aggravated identity theft.
Sanders pleaded guilty to the same charges on May 4, 2021. On November 1, 2021, he was sentenced to 10 months in federal prison and five years’ supervised release.
U.S. Attorney Scott Erik Asphaug of the District of Oregon made the announcement.
This case was investigated jointly by Homeland Security Investigations and the U.S. Postal Inspection Service. Assistant U.S. Attorney Seth D. Uram prosecuted the case.
Ponte Vedra Man Convicted and Sentenced for Importing and Distributing Mislabeled Erectile Dysfunction DrugRead the Press Release
Jacksonville, Florida – U.S. Magistrate Judge Patricia D. Barksdale has sentenced Timothy Terrance DeJoris (42, Ponte Vedra) to six months’ probation and a $2,500 fine for importing from China a mislabeled erectile dysfunction drug and distributing it online and in the Jacksonville area. DeJoris had previously administratively forfeited $50,000 in proceeds from the offense. DeJoris had pleaded guilty on November 4, 2021.
According to the plea agreement, on June 18, 2019, agents from U.S. Customs and Border Protection intercepted two large packages that had been shipped from China. Each package was found to contain a barrel of blue capsules. An invoice for one of the barrels claimed that the capsules contained “Shiitake Mushroom Extract.” The packages were addressed to “Dr. Seltzer, LLC, Tim DeJoris” at an address in Ponte Vedra. The capsules were tested and found to contain sildenafil, the active ingredient in Viagra and other prescription medications used to treat erectile dysfunction in men. A search of a CPB database reflected that a similar shipment, described in the same way, had been delivered to DeJoris from the same supplier in China on June 11, 2019.
During the course of the investigation, investigators discovered a website with the address of “hardonhelper.com” that sold “Dr. Seltzer’s Hard-On Helper,” which was claimed to be a “100% Natural Male Enhancement Dietary Supplement.” Investigators also discovered that, in addition to being sold on that website, the capsules were also being sold on Amazon and eBay. The price on all three websites was the same, one capsule for $10.99, six capsules for $52.99, eight capsules for $61.99, and twelve capsules for $79.99. The product was also being sold at Adam and Eve adult stores in the Jacksonville area.
Records obtained from Amazon reflected that, for the period of January 1 through August 6, 2019, there were 8,043 sales of the capsules for a total of $453,413.07.
When investigators questioned DeJoris about the shipments, he said that he had paid $4,000 for each shipment of 50,000 capsules. Investigators seized over 25,000 capsules from DeJoris and his business partner.
“The importation of illegal, dangerous and/or mislabeled drugs is not only a crime, but it is a danger to the communities that we live in. This criminal thought he could circumvent our nation’s laws by doing just that,” said HSI Jacksonville Assistant Special Agent in Charge K. Jim Phillips. “Thanks to the law enforcement partnerships between HSI, U.S. Customs and Border Protection, the Tri-County Narcotics Task Force, and the U.S. Food and Drug Administration, this criminal was identified, investigated, and prosecuted, making our communities safer for everyone.”
This case was investigated by Homeland Security Investigations, Customs and Border Protection, the Food and Drug Administration – Office of Criminal Investigations, and the Florida Department of Law Enforcement HIDTA (High Intensity Drug Trafficking Area) Tri-County Narcotics Task Force. It was prosecuted by Assistant United States Attorney Arnold B. Corsmeier.
Pittsburgh Man Charged with Lying on a Firearms Purchase FormRead the Press Release
PITTSBURGH, PA - A resident of Pittsburgh, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of violating federal firearms laws, United States Attorney Cindy K. Chung announced today.
The one-count Indictment named Donald Anthony Ware, Jr., age 22, of the City’s Hill District neighborhood, as the sole defendant.
According to the Indictment, on or about November 3, 2021, in connection with the acquisition of a firearm from a licensed dealer, Ware falsely claimed on firearms purchase paperwork that he was purchasing the firearm for himself when he was actually purchasing it for another person.
The law provides for a maximum total sentence of ten years in prison, a fine of not more than $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Douglas C. Maloney is prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, and Firearms conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Pittsburgh Felon Charged with Illegally Possessing Drugs, a Gun and AmmunitionRead the Press Release
PITTSBURGH - A resident of Pittsburgh, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on charges of violating federal narcotics and firearms laws, United States Attorney Cindy K. Chung announced today.
The two-count Indictment named Kenneth Gaines, 31, formerly of Pittsburgh’s East Hills neighborhood, as the sole defendant.
According to the Indictment, on or about December 22, 2021, Gaines possessed with the intent to distribute crack cocaine and tramadol. The Indictment further alleges that Gaines possessed firearms and ammunition. His prior felony convictions make it unlawful for him to possess firearms and ammunition.
The law provides for a maximum total sentence of not more than 30 years, a fine of $3,000,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Michael R. Ball is prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, and Firearms and the City of Pittsburgh Bureau of Police conducted the investigation leading to the Indictment in this case.
This case is part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice's violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Pennsylvania Man Pleads Guilty to Sex Offense Involving MinorRead the Press Release
CHARLESTON, W.Va. – James Russell Loar, Jr., 40, of Washington, Pennsylvania, pleaded guilty today to traveling in interstate commerce to engage in sexual activity with a minor.
According to court documents and statements made during the plea hearing, on May 27, 2021, Loar traveled from Washington, Pennsylvania, to Clay County, West Virginia to have sex with a 14-year-old minor. Loar had been communicating with the minor via Snapchat for nearly a year, and his communications with her were sexual. The minor’s parents had learned about his communications, informed him of her age, but his communications continued. When Loar traveled to Clay County, he met with the minor and invited her into his truck. The minor’s mother happened to be driving by and intervened. After he was subsequently arrested, Loar admitted to sending a pornographic picture to the minor as well as telling her that he wanted to perform sex acts with her.
If the plea agreement is accepted by the Court, Loar will be sentenced to between 87 months to 108 months in prison to be followed by 15 years of supervised release when he is sentenced on May 4, 2022. He also will be required to register as a sex offender.
United States Attorney Will Thompson made the announcement and commended the investigative work of the West Virginia State Police and the Federal Bureau of Investigation’s West Virginia Child Exploitation and Human Trafficking Task Force.
Senior United States District Judge David A. Faber presided over the hearing. Assistant United States Attorney Ryan A. Keefe is handling the prosecution.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative of 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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:21-cr-00141.
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Owners and Employees of Summit Contracting, Inc., Indicted on Fraud and Conspiracy ChargesRead the Press Release
United States Attorney Richard G. Frohling of the Eastern District of Wisconsin announced that on February 1, 2022, a federal grand jury returned a ten-count indictment against Chad M. Schampers (age: 38) and Gina L. Schampers (age: 36), both of De Pere, Wisconsin; Nathaniel R. Smith (age: 39) of Oconto, Wisconsin; and Jeffrey M. O’Brien (age: 33) of Shawano, Wisconsin. All four defendants are charged with conspiracy to commit wire and bank fraud, in violation of Title 18, United States Code, Section 1349, and nine counts of wire fraud, in violation of Title 18, United States Code, Section 1343.
The conspiracy count carries a maximum of 30 years’ imprisonment and up to a $1,000,000 fine. The wire fraud counts each carry a maximum of 20 years’ imprisonment and up to a $250,000 fine.
The defendants operated and worked at a home remodeling business named Summit Contracting, Inc. The indictment alleges that the defendants induced Summit’s customers to unwittingly apply for high interest financing based on false information and sign forms which falsely stated that work on their remodeling projects had already been completed. It is further alleged that, contrary to the terms of these finance agreements, the defendants withdrew funds from customers’ finance accounts prior to performing any work or, in some cases, even prior to ordering the building supplies. The defendants are alleged to have caused a loss of $1,500,000 as a result of their fraud.
This case was investigated by the Brown County Sheriff’s Office and the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorneys Julie F. Stewart and Daniel R. Humble.
An indictment is only a charge and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government must prove them guilty beyond a reasonable doubt.
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Owner of two South King County pawn shops sentenced to prison for trafficking in stolen goods and possession of images of child rape and abuseRead the Press Release
Seattle – A 46- year-old Auburn, Washington man was sentenced today in U.S. District Court in Seattle to 6 years in prison and 15 years of supervised release for trafficking in stolen goods and possession of child pornography, announced U.S. Attorney Nick Brown. Aleksandr Pavlovskiy pleaded guilty in October 2021, following a lengthy investigation by the FBI and Auburn Police Department. At the sentencing hearing U.S. District Judge John C. Coughenour said, the sentence was driven in part by “the stunning amount of stolen material.”
“This case highlights the tremendous value we place in state and federal law enforcement teamwork. The investigation began through the patient, dedicated work of an Auburn Police detective, who reached out to the FBI. It is through this sort of teamwork that we can root out all manner of crimes,” said U.S. Attorney Nick Brown. “While the stolen property case is what brought us here, the possession of child pornography demonstrates the damage Mr. Pavlovskiy inflicted on the larger community.”
According to records filed in the case, between 2013 and 2016, Pavlovskiy operated two pawn shops: Thrift Electro in Renton, Washington and Innovation Best in Kent, Washington. At the shops, Pavlovskiy directed employees to purchase stolen retail goods from shoplifters and others. Employees paid the shoplifters cash for the items. Some of the items came from delivery drivers for online retailers who stole the packages and sold them to the pawn shops.
In 2016, Pavlovskiy established a warehouse in Kent where the stolen goods would be stored and repackaged for re-sale. At the warehouse employees would use heat guns and scrapers to remove any tags from the items. Employees photographed the items and listed them for sale on eBay and Amazon. Between January 2017 and July 2019, Pavlovskiy and his employees at the warehouse shipped hundreds of thousands of stolen items to purchasers across the United States. The business generated between $1.5 million and $3.5 million on the sale of stolen goods.
The law enforcement investigation began in the summer of 2018, when an alert Auburn police detective noticed the large number of stolen goods being sold at pawn shops owned and operated by Mr. Pavlovskiy. In July 2019, state and federal law enforcement served search warrants on Pavlovskiy’s home, cars, and business locations. At the warehouse they documented racks of stolen goods being processed for resale. They took a number of electronic devices for analysis. On Pavlovskiy’s devices, forensic analysis revealed more than 20,000 images or videos of minors engaged in sexually explicit conduct. Pavlovskiy used file sharing software to obtain and share the images.
In imposing the sentence, Judge Coughenour directed Pavlovskiy serve 24 months on the child pornography count and 48 months on the trafficking in stolen property count, with the sentences to run consecutively. Pavlovskiy is required to register as a sex offender. He was ordered to pay $12,000 in restitution. Of the 65 known sexual abuse victims identified during the investigation, six victims requested restitution to help defray costs of their ongoing mental health treatment, and for other crime-related expenses. Each victim will receive at least $2,000 in restitution. The stolen property recovered in the investigation is being returned to the victim retailers.
The case was investigated by the FBI and Auburn Police Department.
The case was prosecuted by Assistant United States Attorney Mike Lang.
Ohio man sentenced for wire fraudRead the Press Release
WHEELING, WEST VIRGINIA – Kenneth Werkau, of Clarington, Ohio, was sentenced today to three years of probation for wire fraud, United States Attorney William Ihlenfeld announced.
Werkau, 64, pleaded guilty in August 2021 to one count of “Wire Fraud.” Werkau was employed as an associate at Walmart in Moundsville. Beginning in September 2019 and ending in January 2020, Werkau stole $123,775 in gift cards and activating them without paying for them.
Werkau was ordered to pay $123,775 in restitution.
Assistant U.S. Attorney Dane DeMasi-Lemon prosecuted the case on behalf of the government. The FBI investigated.
U.S. District Judge John Preston Bailey presided.
Ohio man indicted on drug and firearms chargesRead the Press Release
WHEELING, WEST VIRGINIA – Deonte Raymond James, of Euclid, Ohio, was indicted today on drug and firearms charges, United States Attorney William Ihlenfeld announced.
James, 34, was indicted today on one count of “Possession with Intent to Distribute Methamphetamine” and one count of “Unlawful Possession of a Firearm.” James is accused of having methamphetamine in January 2022 in Marshall County. James, a person prohibited from having a firearm because of previous felony convictions, is also accused of having a .357 Magnum revolver.
James faces up to 20 years of incarceration and a fine of up to $1,000,000 for the drug count and faces up to 10 years of incarceration and fine of up to $250,000 for the firearms count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Shawn M. Adkins is prosecuting the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Moundsville Police Department investigated. The Marshall County Drug Task Force, a HIDTA-funded initiative, assisted.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Ohio County man sentenced for firearms chargeRead the Press Release
WHEELING, WEST VIRGINIA – Patrick A. Groves, of Wheeling, West Virginia, was sentenced today to 33 months of incarceration for a firearms charge, United States Attorney William Ihlenfeld announced.
Groves, 31, pleaded guilty in February 2021 to one count of “Unlawful Possession of a Firearm and Ammunition.” Groves, who is prohibited from having a gun, admitted to having a 9mm caliber pistol and ammunition in April 2020 in Ohio County.
Assistant U.S. Attorney David J. Perri prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Wheeling Police Department investigated.
U.S. District Judge John Preston Bailey presided.
Norwich Man Sentenced to More Than 14 Years in Prison for Dark Web Fentanyl Distribution, Firearm OffensesRead the Press Release
Leonard C Boyle, United States Attorney for the District of Connecticut, announced that BARRY DUCLOS, 43, of Norwich, was sentenced today by U.S. District Judge Victor A. Bolden in Bridgeport to 170 months of imprisonment, followed by three years of supervised release, for trafficking fentanyl analogues on the dark web and firearm offenses.
According to the evidence introduced during his trial, between approximately September 2017 and February 2018, Duclos operated a vendor page on the dark web “Dream Market.” Using the alias 1NOLEFB1, Duclos advertised the sale of fentanyl analogues on Dream Market. He then used the U.S. Mail to ship fentanyl analogues to customers who paid for the drugs using Bitcoin.
On September 21, 2017, a 39-year-old man in Tennessee fatally overdosed after using cyclopropyl fentanyl he ordered from Duclos.
Duclos was arrested on a federal criminal complaint on February 12, 2018. A search of his residence at the time of his arrest revealed a YHM rifle with multiple magazines, two of which were extended magazines. The firearm was loaded with a round in the chamber. Investigators also located and seized fentanyl and carfentanil from the residence, along with a computer used by Duclos to access Dream Market.
Duclos was convicted in state court, in February 2001, of sale of narcotics and, in March 2017, of larceny in the third degree. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
On July 30, 2021, a jury found Duclos guilty of seven counts of possession with intent to distribute and distribution of fentanyl analogues; one count of possession with intent to distribute fentanyl and carfentanil; one count of possession of ammunition by a convicted felon; and one count possession of a firearm in furtherance of a drug trafficking crime.
Duclos has been detained since his arrest.
This matter was investigated by the U.S. Postal Inspection Service and the Drug Enforcement Administration, with the assistance of Homeland Security Investigations, U.S. Customs and Border Patrol, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Connecticut State Police, the Norwich Police Department, and the Robertson County (Tenn.) Sherriff’s Office. The case was prosecuted by Assistant U.S. Attorneys Lauren C. Clark and Patrick J. Doherty.
North Carolina Psychologist Sentenced for Medicaid Fraud Scheme Involving MinorsRead the Press Release
RICHMOND, Va. – A Durham, North Carolina, clinical psychologist was sentenced today to 52 months in prison for defrauding Virginia Medicaid of at least $544,067.69 by creating false diagnoses and medical records for Medicaid recipients, mostly minors, and falsely representing to Medicaid that he was providing them mental health services.
According to court documents, Dr. Malik Muhammad, Ph.D., 46, obtained identifying information of Medicaid recipients from a co-conspirator and used that information to bill Virginia Medicaid for outpatient psychotherapy that never actually occurred. Muhammad, a licensed clinical psychologist, hired a co-conspirator to write patient medical records as if Muhammad had performed actual therapy and created inapplicable diagnoses—including depression, anxiety, attention deficit disorder, and post-traumatic stress disorder—to give the appearance of actual treatment. The mostly minor victims were unaware of the false diagnoses Muhammad was inventing and applying to them. Through this fraud scheme, Muhammad defrauded Virginia Medicaid of at least $544,067.69.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Maureen R. Dixon, Special Agent in Charge of the Office of Inspector General for the U.S. Department of Health and Human Services; and Virginia Attorney General Jason Miyares made the announcement after sentencing by U.S. District Judge David J. Novak.
Investigators with the North Carolina Attorney General’s Office Medicaid Fraud Control Unit provided significant assistance.
Assistant U.S. Attorney Shea Gibbons and Special Assistant U.S. Attorney David Tooker of the Virginia Attorney General’s Office prosecuted 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. 3:21-cr-34.
New Jersey Man Charged in the Southern District of Florida with Money LaunderingRead the Press Release
Miami, Florida – A 55-year-old resident of Jersey City, New Jersey, made his initial appearance before a federal magistrate judge in Key West, Florida to face money laundering charges.
According to the indictment, from about February to April 2020, in Monroe County, Florida, Naby Toure conspired with others to launder the proceeds of illegal activity: wire fraud. In addition to conspiracy, the indictment charges that Toure committed money laundering on March 31, 2020, when he deposited a $18,600 check into a bank account and on April 2, 2020, when he deposited a $17,000 check into a different bank account.
If convicted, Toure faces up to 10 years in federal prison, if convicted. Toure’s trial is set for February 28, before U.S. District Judge Roy K. Altman.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, FBI Miami, made the announcement.
FBI Miami Key West Resident Agency investigated the case with the assistance of the Key West Police Department. Assistant U.S. Attorneys Yisel Valdes and Lindsey Lazopoulos Friedman are prosecuting the case. Assistant U.S. Attorney Richard Brown is handling asset forfeiture.
An indictment contains mere allegations, and a defendant is presumed innocent unless and until found 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 21-cr-10015.
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Milwaukee Man Indicted for Armed CarjackingRead the Press Release
United States Attorney Richard G. Frohling of the Eastern District of Wisconsin announced today that a federal grand jury returned an indictment against Sidney Gentry (age: 26) of Milwaukee, Wisconsin, for armed carjacking. The carjacking occurred on October 13, 2021, near North 27th Street in Milwaukee.
Gentry is charged with one count of motor vehicle robbery, one count of brandishing a firearm in furtherance of a crime of violence, and one count of possession of a firearm by a felon. If convicted, Gentry would face up to 15 years in prison for the motor vehicle robbery, a mandatory minimum seven years to life in prison for brandishing the firearm, and up to ten years in prison for being a felon in possession of a firearm.
This case is being investigated and prosecuted under the Project Safe Neighborhoods (PSN) initiative. PSN is a federal, state, and local law enforcement collaboration to identify, investigate, and prosecute individuals responsible for violent crimes in our neighborhoods. The PSN strategy brings together all levels of law enforcement and community resources to reduce violent crime and improve the quality of life in all our neighborhoods.
This matter is being investigated by The Federal Bureau of Investigation and the Milwaukee Police Department. It is being prosecuted by Assistant United States Attorney Porchia S. Lewand
An indictment is only a charge and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government must prove them guilty beyond a reasonable doubt.
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(414) 297-1700
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Middleboro Financial Advisor Charged in Superseding Indictment with Investment Adviser Fraud and Money LaunderingRead the Press Release
BOSTON – A Middleboro financial advisor has been charged in a superseding indictment in connection with defrauding his elderly clients and stealing the victims’ retirement assets.
Paul R. McGonigle, 67, has been charged in a superseding indictment with one count of investment adviser fraud and two counts of money laundering. McGonigle was previously arrested and charged in June 2021 with three counts of wire fraud, one count of mail fraud and one count of aggravated identity theft.
According to the charging document, McGonigle served as a financial advisor for the elderly victims. Beginning no later than February 2015, McGonigle allegedly caused unauthorized withdrawals from victims’ annuities and induced victims to give him money to invest on their behalf, which he then used for personal and business expenses. To carry out his scheme, McGonigle allegedly posed as clients on calls with their annuity companies and signed their names on forms requesting withdrawals from their annuities.
The charge of investment adviser fraud provides for a sentence of up to five years in prison, three years of supervised release and a fine of up to $250,000 or twice the gross gain or loss from the offense, whichever is greater. The charges of money laundering provide for a sentence of up to 10 years in prison, three years of supervised release and a fine of up to $250,000 or twice the gross gain or loss from the offense, whichever is greater. The charges of mail and wire fraud provide for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $250,000 or twice the gross gain or loss from the offense, whichever is greater. The charge of aggravated identity theft provides for a mandatory consecutive sentence of two years in prison, up to one year of supervised release and a fine of $250,000 or twice the gross gain or loss from the offense, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Rachael S. Rollins and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement today. The Massachusetts Insurance Fraud Bureau provided valuable assistance with the investigation. Assistant U.S. Attorney Kristen A. Kearney of Rollins’ Securities, Financial & Cyber Fraud Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Martin County Registered Sex Offender Sentenced to over 37 Years in Federal Prison for Producing Child PornographyRead the Press Release
Miami, Florida – Today, a federal district judge in West Palm Beach sentenced a 47-year-old man from Stuart, Florida to 447 months in federal prison, followed by a lifetime of supervised release, for producing child pornography, possessing child pornography, and committing a felony offense involving a minor while being required to register as a sex offender.
Gernard Clark, Sr. first came to the attention of law enforcement after a minor reported to a school resource officer that Clark had sexually battered her. Law enforcement investigated and discovered on the SD card of Clark’s cellular telephone more than 500 sexually explicit images and more than 40 sexually explicit videos of the minor female taken when she was between 14 and 15 years old. Clark was previously convicted of Lewd and Lascivious Indecent Act with a Child Under 16 Years of Age in the 19th Judicial Circuit of the State of Florida, Martin County and, as a result, was required to register as a sex offender.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, FBI Miami Field Office, announced the sentence imposed by U.S. District Judge Robin L. Rosenberg.
FBI Miami -- in particular, FBI Miami’s Child Exploitation Task Force -- investigated this case, with the assistance of the Martin County Sheriff’s Office. Assistant U.S. Attorney Stacey Bergstrom is prosecuting the case.
This case was brought as part of Project Safe Childhood (PSC), 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 United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend and prosecute individuals, who sexually exploit children, and to identify and rescue victims. For more information about the Project Safe Childhood initiative and for information regarding Internet safety, please visit www.justice.gov/psc.
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 21-cr-14015.
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Marshall County man sentenced for firearms chargesRead the Press Release
WHEELING, WEST VIRGINIA – Demetrius Moore, of Benwood, West Virginia, was sentenced today to 63 months of incarceration for a firearms charges, United States Attorney William Ihlenfeld announced.
Moore, age 48, pled guilty to one count of “Prohibited Possession of a Firearm” and one count of “Possession of a Stolen Firearm” in December 2019. Moore, having previously been convicted for a felony, is accused of illegally having a 7.62 caliber rifle and a 9mm caliber pistol from July to August 2018 in Marshall County. The rifle was stolen.
Assistant U.S. Attorney David J. Perri prosecuted the case on behalf of the government. Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
U.S. District Judge John Preston Bailey presided.
Manchester Man Indicted for Bank RobberyRead the Press Release
CONCORD –Joshua Fields, 39, of Manchester was indicted by a federal grand jury on Monday and charged with bank robbery, United States Attorney John J. Farley announced today.
Fields is presently detained in Massachusetts on unrelated charges.
The indictment filed in court alleges that on December 29, 2021, Fields robbed a Citizens Bank branch located in Londonderry, New Hampshire.
An indictment is only an allegation. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the Londonderry Police Department and the Federal Bureau of Investigation.
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Luzerne County Man Sentenced to 15 Years’ Imprisonment for Trafficking 120 Kilograms of Pure MethamphetamineRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Emmanuel Roman-Figueroa, age 39, of Hazleton, Pennsylvania, was sentenced on January 28, 2022, to 180 months’ imprisonment by United States District Court Judge Malachy E. Mannion for possessing 120 kilograms of 100% pure methamphetamine for distribution. Roman-Figueroa had pleaded guilty to the offense on July 29, 2021.
According to United States Attorney John C. Gurganus, on October 8, 2020, Roman-Figueroa met his co-defendants, Julio Romero-Mancebo and David Jusino Ramirez, both of New Jersey, at a truck stop off interstate 80 in Sugarloaf Township. Romero-Mancebo and Jusino-Ramirez had transported the methamphetamine in the cab of a tractor trailer from California to the Hazleton area. When they arrived at the truck stop the 120 kilograms of methamphetamine was placed into Roman-Figueroa’s vehicle. The methamphetamine had a street value of over $2 million. Immediately after the methamphetamine was placed in the vehicle, law enforcement officers arrested all three individuals. It is noted that approximately three months earlier, on July 2, 2020, Roman-Figueroa was stopped by the Hazleton Police Department for a traffic violation and $371,500 in drug proceeds were seized from his vehicle.
Co-defendant David Jusino Ramirez was convicted by jury on October 29, 2021, on drug trafficking charges and is awaiting sentencing. Julio Romero-Mancebo pleaded guilty to drug trafficking charges and is awaiting sentencing.The case was investigated by the U.S. Drug Enforcement Administration (DEA) and the Hazleton Police Department. Assistant U.S. Attorney Jenny P. Roberts is prosecuting 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 works 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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Las Vegas Woman Sentenced to Prison for Stealing Social Security BenefitsRead the Press Release
LAS VEGAS – A Las Vegas woman was sentenced today to one year and one day in prison for using her late husband’s identity to steal over $40,000 in Social Security benefits while on supervised release for a prior crime.
Florence Faamaligi Levao (71) pleaded guilty in July 2021, to one count of theft of government funds. In addition to the term of imprisonment, U.S. District Judge Andrew P. Gordon sentenced Faamaligi Levao to three years of supervised release. Faamaligi Levao was also ordered to pay restitution.
According to court documents, from October 30, 2014 to March 6, 2018, Faamaligi Levao stole approximately $40,625 of her late husband’s Social Security benefits for her personal use. During a substantial portion of this timeframe, she was on supervised release following her previous conviction for stealing Social Security benefits in her late father’s name.
Acting U.S. Attorney Christopher Chiou for the District of Nevada and Inspector General Gail S. Ennis for the Social Security Administration Office of the Inspector General made the announcement.
This case was investigated by the Social Security Administration Office of the Inspector General. Assistant U.S. Attorney Jessica Oliva prosecuted the case.
If you suspect someone of committing fraud, waste, or abuse concerning Social Security Administration programs, please make a report to the Office of Inspector General at https://secure.ssa.gov/pfrf/home.
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Justice Department’s False Claims Act Settlements and Judgments Exceed $5.6 Billion in Fiscal Year 2021Read the Press Release
The Justice Department obtained more than $5.6 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year ending Sept. 30, 2021, Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division announced today. This is the second largest annual total in False Claims Act history, and the largest since 2014. Settlement and judgments since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $70 billion.
“Ensuring that citizens’ tax dollars are protected from fraud and abuse is among the department’s top priorities,” said Acting Assistant Attorney General Boynton. “The False Claims Act is one of the most important tools available to the department both to deter and to hold accountable those who seek to misuse public funds.”
Of the more than $5.6 billion in settlements and judgments reported by the Department of Justice this past fiscal year, over $5 billion relates to matters that involved the health care industry, including drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories and physicians. The amounts included in the $5 billion reflect recoveries arising from only federal losses, and, in many of these cases, the department was instrumental in recovering additional amounts for state Medicaid programs.
In addition to being used to combat health care fraud, the False Claims Act serves as the government’s primary civil tool to redress false claims involving a multitude of other government operations and functions. The act helps to support our military and first responders by ensuring that government contractors provide equipment that is safe, effective and cost efficient; to safeguard American businesses and workers by promoting compliance with customs laws, trade agreements, visa requirements and small business protections; and to protect other critical government programs ranging from the provision of disaster relief funds to nutrition benefits for needy families.
In 1986, Congress strengthened the act by increasing incentives for whistleblowers to file lawsuits alleging false claims on behalf of the government. These whistleblower, or qui tam, actions comprise a significant percentage of the False Claims Act cases that are filed. If the government prevails in a qui tam action, the whistleblower, also known as the relator, typically receives a portion of the recovery ranging between 15% and 30%. Whistleblowers filed 598 qui tam suits in fiscal year 2021, and this past year the department reported settlements and judgments exceeding $1.6 billion in these and earlier-filed suits.
Health Care Fraud
Health care fraud was once again the leading source of the department’s False Claims Act settlements and judgments this past year. The department’s health care fraud enforcement efforts restore funds to federal programs such as Medicare, Medicaid and TRICARE, the health care program for service members and their families. But just as important, the department’s vigorous pursuit of health care fraud prevents billions more in losses by deterring others who might try to cheat the system for their own gain. In many cases, the department’s efforts also protect patients from medically unnecessary or potentially harmful actions. The department investigates and resolves matters involving a wide array of health care providers, goods and services.
Combatting the Opioid Epidemic
Opioid abuse remains a serious problem for our nation, with tens of thousands of Americans dying from opioid overdoses each year. Civil enforcement actions against the parties responsible for triggering and fueling the opioid epidemic are a critical part of the department’s ongoing efforts to address this crisis.
Consistent with this focus, the largest False Claims Act settlements in the past year resulted from significant resolutions with prescription opioid manufacturers: Indivior Inc. and Indivior plc (Indivior), and Purdue Pharma (Purdue). As part of a $600 million global resolution of criminal and civil liability, the Indivior companies agreed to pay $209.3 million to the federal government to resolve civil allegations that the companies, among other things, promoted the opioid-addiction-treatment drug Suboxone to physicians who were writing prescriptions that were not for a medically accepted indication and were often diverted; and made false and misleading claims that Suboxone Film was less susceptible to diversion and abuse and to accidental pediatric exposure than other buprenorphine products.
As part of a global resolution of criminal and civil liability, in October 2020, Purdue agreed to an allowed, unsubordinated, general unsecured bankruptcy claim for $2.8 billion to resolve civil allegations that the company promoted its opioid drugs to health care providers it knew were prescribing opioids for uses that were unsafe, ineffective, and medically unnecessary, and that often led to abuse and diversion. The civil settlement also resolved allegations that Purdue paid kickbacks to doctors, certain specialty pharmacies and an electronic health records developer to increase prescriptions of Purdue’s opioid products. Purdue incorporated the civil settlement into its plan of reorganization, but the district court subsequently reversed a bankruptcy court order confirming the plan and litigation over the plan continues. Separately, certain individual members of the Sackler family who were shareholders and board members of Purdue agreed to pay $225 million to resolve civil False Claims Act allegations that they approved a new marketing program that intensified marketing of OxyContin to extreme, high-volume prescribers, causing opioid prescriptions for uses that were unsafe, ineffective and medically unnecessary, and that often led to abuse and diversion.
Medicare Advantage Program (Medicare Part C)
Another important priority for the department has been investigating and litigating a growing number of matters related to the Medicare Advantage program, also known as Medicare Part C, which is Medicare’s managed care program. Medicare Part C pays a capitated amount to private health insurance carriers for each patient enrolled in their plans, rather than a payment for each distinct patient admission or service. CMS adjusts the payments for various “risk” factors that affect expected healthcare expenditures to ensure that plans are paid more for enrollees who pose a greater risk. In 2021, more than 26 million Medicare beneficiaries were enrolled in Part C plans, and the Congressional Budget Office projected that CMS would pay more than $343 billion to private carriers who offered those plans.
The department has pursued plans and healthcare providers that manipulated the risk adjustment process by submitting unsupported diagnosis codes to make their patients appear sicker than they actually were. This year, Sutter Health, a California-based health care services provider, paid $90 million to resolve allegations that it knowingly submitted unsupported diagnosis codes for certain patient encounters, resulting in inflated payments to be made to the Medicare Advantage Plans and Sutter Health. In addition, Kaiser Foundation Health Plan of Washington, formerly known as Group Health Cooperative (GHC), paid $6.3 million to resolve allegations that it submitted invalid diagnoses and received inflated payments as a result. In addition, the department intervened and filed complaints in separate lawsuits against Independent Health Corporation and members of the Kaiser Permanente consortium alleging that those Medicare Advantage organizations submitted or caused the submission of inaccurate information about the health status of beneficiaries enrolled in their plans to increase reimbursement from Medicare.
Unlawful Kickbacks
Kickbacks in the healthcare industry are pernicious because of their potential to subvert medical decision-making and to increase healthcare costs. In addition to pursuing improper payments by drug manufacturers, the department resolved other schemes involving the willful solicitation or payment of illegal remuneration to induce the purchase of a good or service paid for by a federal health care program.
For example, mail-order diabetic testing supply company Arriva Medical LLC and its parent, Alere Inc., agreed to pay $160 million to settle allegations that Arriva paid kickbacks to Medicare beneficiaries by providing them “free” or “no cost” diabetic testing glucometers and by routinely waiving or not making reasonable efforts to collect their copayments for glucometers and diabetic testing supplies. In another example, the department resolved its claims against pain management clinics and urine drug testing (UDT) laboratories owned and operated by Daniel McCollum for paying unlawful kickbacks to providers to induce their referrals of urine drug tests, obtaining default judgments against the clinics and laboratories totaling more than $140 million and a $9 million civil consent judgment against McCollum.
Electronic health records (EHR) technology vendor Athenahealth Inc. paid $18.25 million to resolve allegations that it invited customers and prospective customers to lavish all-expense-paid sporting, entertainment, and recreational events to generate sales of its EHR product. Generic pharmaceutical manufacturers Taro, Sandoz, and Apotex paid over $400 million to resolve allegations that they paid and received compensation prohibited by the Anti-Kickback Statute through arrangements on price, supply and allocation of customers with other pharmaceutical manufacturers as part of a conspiracy to fix the price of certain generic drugs.
Other matters relating to kickback violations involved psychiatric hospitals and a substance abuse treatment facility (Oglethorpe Inc.), home health care agencies (BAYADA), hospitals (Akron General Health System, Texas Heart Hospital of the Southwest LLP, and Prime Healthcare Services), pharmaceutical companies (Biogen Inc.), diagnostic testing (Alliance Family of Companies LLC) and medical devices (Merit Medical Systems Inc).
Unnecessary Medical Services
As in years past, the department also resolved a number of matters in which providers billed federal health care programs for medically unnecessary services or services not rendered as billed. For example, SavaSeniorCare LLC and related entities agreed to pay $11.2 million for alleged false claims for rehabilitation therapy services provided as a result of aggressive corporate targets without regard for its patients’ actual clinical needs, resulting in the provision of medically unreasonable, unnecessary or unskilled services to Medicare patients. The settlement also resolved allegations that Sava provided grossly and materially substandard and/or worthless skilled nursing services.
Alere Inc. and Alere San Diego Inc. (collectively, Alere) paid $38.75 million to resolve allegations that they billed, and caused others to bill, for defective rapid point-of-care testing devices used by Medicare beneficiaries to monitor blood coagulation when taking anticoagulant drugs. In another matter, Apria Healthcare LLC paid $40.5 million to resolve allegations that it submitted false claims for the rental of costly non-invasive ventilators to program beneficiaries who did not need the devices or were not using them. St. Jude Medical Inc. paid $27 million to settle allegations that it knowingly sold defective, implantable heart devices and failed to disclose serious adverse health events in connection with premature battery depletion in those devices. Regency Inc. and its owner agreed to a civil settlement up to $20.3 million to resolve allegations that they falsified documentation to enable the billing of federal healthcare programs for medically unnecessary durable medical equipment. In addition, the department continues to focus on inadequate care and other fraud in nursing facilities, which provide care to a particularly vulnerable population (as reflected by the resolutions this year with SavaSeniorCare LLC, discussed above, and Select Medical Rehabilitation Services Inc).
Procurement Fraud
In the past year, the department also pursued a variety of fraud matters involving the government’s purchase of goods and services. In some cases, the department pursued allegations that government contractors falsified pricing data. For example, Navistar Defense LLC paid $50 million to resolve allegations that it fraudulently induced the U.S. Marine Corps to enter into a contract modification at inflated prices for a suspension system for armored vehicles known as Mine-Resistant Ambush Protected vehicles. In another case, Insitu Inc. paid $25 million to settle allegations that it knowingly submitted materially false cost and pricing data for contracts with the U.S. Special Operations Command and the Department of the Navy to supply and operate Unmanned Aerial Vehicles. The department also recovered $7.1 million from furniture maker Workrite Ergonomics LLC to resolve allegations that the company did not provide the General Services Administration with accurate information about its commercial sales practices during contract negotiations for office furniture, and subsequently violated the terms of its contract by failing to extend lower prices to government customers.
In other cases, the department pursued allegations that government contractors provided goods or services that did not comply with contract requirements. For example, United Airlines Inc. paid $32.1 million to resolve allegations relating to its execution of contracts to deliver mail internationally on behalf of the U.S. Postal Service. In another case, Cognosante LLC paid $18.9 million to resolve allegations that it used unqualified labor and overcharged the government for health care and IT services provided to federal agencies under two General Services Administration contracts. The department also recovered $11 million from AAR Corp. and its subsidiary, AAR Airlift Group Inc., to resolve allegations that AAR Airlift knowingly failed to maintain nine helicopters in accordance with Department of Defense contract requirements and that the helicopters, which were billed under two U.S. Transportation Command contracts to transport cargo and personnel in support of missions in Afghanistan and Africa, were not airworthy and should not have been certified as fully mission capable.
The department also resolved matters involving allegations of kickbacks in government contracts. For example, Level 3 Communications LLC paid $12.7 million to resolve allegations that the owner of two subcontractors paid kickbacks to Level 3 senior managers in return for favorable treatment for those subcontractors on government contracts. The United States also alleged that Level 3 managers misstated compliance with woman-owned small business subcontracting requirements and knowingly obtained protected competitor bid information on the government contract to gain an advantage in bidding on task orders. In another example, Schneider Electric Buildings Americas Inc. paid more than $9 million to resolve allegations that one of its senior project managers solicited kickbacks from subcontractors and that the company fraudulently charged the government for design costs by disguising those costs and spreading them across unrelated pricing components.
COVID-Related Fraud
In response to the COVID-19 crisis, Congress authorized historic levels of emergency funding for federal agencies to provide direct financial assistance to individuals, businesses and state, local, and Tribal governments. Since the start of the COVID-19 pandemic, the department has worked closely with various Inspector Generals and other agency stakeholders to identify, monitor and investigate the misuse of critical pandemic relief monies.
The department’s efforts in this area have included the pursuit of cases involving improper payments under the Paycheck Protection Program (PPP), which was enacted to provide loans guaranteed by the U.S. Small Business Administration (SBA) to eligible small businesses for payroll, rent, utility payments and other business-related costs. For example, the department has pursued small businesses that improperly received multiple PPP loans. Sandeep S. Walia and his medical practice paid a combined $70,000 to resolve allegations under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) that Dr. Walia, on behalf of his practice, falsely certified in an application for a second PPP loan that the medical practice had not previously received a PPP loan. The medical practice also agreed to repay the second PPP loan to the lender, relieving the SBA of liability for the federal guaranty of over $430,000 on the improper loan.
Sextant Marine Consulting LLC, a Florida-based duct cleaning company, paid $30,000 to settle allegations that it improperly obtained more than one PPP loan. Sextant also repaid the duplicative PPP funds in full to its lender, relieving the SBA of liability for the federal guaranty of approximately $170,000 on the improper loan. The department has also pursued cases against eligible borrowers who used PPP funds to pay for impermissible expenses. For example, Seth A. Bernstein, the owner of jet charter company All in Jets LLC dba JetReady, paid $287,055 to settle allegations that he diverted PPP funds to pay for personal, non-company related expenses.
Other Fraud Recoveries
The judgments and settlements announced during fiscal year 2021 reflect the diversity of fraud recoveries arising under the False Claims Act. For example, the United States leases federal lands for the production of natural gas in exchange for the payment of royalties on the value of the gas produced. The department recovered $6.15 million from oil and natural gas exploration and production company Devon Energy Corp. to resolve allegations that it underpaid and underreported royalties for natural gas from federal lands in Wyoming and New Mexico.
Stargate Apparel Inc., Rivstar Apparel Inc., and the chief executive officer of both companies paid $6 million to resolve allegations that they engaged in two schemes to fraudulently underpay customs duties owed to the United States in connection with the garments that they brought into the country.
Concept Schools NFP, agreed to pay $4.5 million for allegedly engaging in non-competitive bidding practices in connection with the Federal Communications Commission’s (FCC) E-Rate Program, which subsidizes eligible equipment and services to make internet access and internal networking more affordable for needy public schools and libraries. Concept Schools, a charter school management company, rigged the bidding for E-Rate contracts in favor of chosen technology vendors so that its network of charter schools could select those vendors without a meaningful, fair and open bidding process. Additionally, the government alleged that Concept Schools’ chosen vendors provided equipment at higher prices than other vendors approved by the FCC for equipment with the same functionality, and that Concept Schools failed to maintain sufficient control over equipment reimbursed by the FCC.
Educational services provider Innovative Educational Programs LLC paid $1.1 million to resolve allegations that it fraudulently obtained federal funds for tutoring services for underprivileged New York City students that it never provided. The New York City Department of Education had paid Innovative to tutor students using funds made available to New York State by the United States under the Elementary and Secondary Education Act of 1965, as amended by the No Child Left Behind Act of 2001.
Guild Mortgage Company paid $24.9 million to resolve allegations that it failed to maintain quality control programs to prevent and correct underwriting deficiencies and to self-report materially deficient loans insured by the Federal Housing Administration.
Cybersecurity Initiative
Malicious cyber activity threatens the health and safety of the American people, and the national and economic security of our country. On May 12, 2021, President Biden signed an Executive Order announcing that preventing, detecting, assessing and remediating cybersecurity incidents affecting federal government networks is a top priority, and set forth an expectation that all federal systems will meet the necessary thresholds for cybersecurity protections. On Oct. 6, 2021, the Deputy Attorney General announced the department’s Civil Cyber-Fraud Initiative to use the False Claims Act to combat new and emerging cyber threats.
Civil enforcement plays an essential role in the department’s cyber defense efforts. The department will pursue misrepresentations by companies in connection with the government’s acquisition of information technology, software, cloud-based storage and related services designed to protect highly-sensitive government information from cybersecurity threats and compromises.
Information on how to report cyber fraud can be found here: https://www.justice.gov/civil/report-fraud.
Holding Individuals Accountable
The department continued its commitment to use the False Claims Act to deter and redress fraud by individuals as well as corporations. In addition to the settlements noted above with certain members of the Sackler family and with corporate entities that included payments by senior executives or owners, the following are additional examples of recoveries involving individuals.
Dr. Ashish Pal, a cardiologist based in Orlando, Florida, paid $6.75 million to resolve allegations that he performed medically unnecessary ablations and vein stent procedures. The government alleged that Dr. Pal performed the ablations and stent procedures on veins that did not qualify for treatment under accepted standards of medical practice and falsified patient medical records to justify the procedures. In addition, many of the ablations were allegedly performed either exclusively or primarily by one or more ultrasound technicians outside their scope of practice.
Two Texas physicians, Robert Wills and Brannon Frank, paid a total of $3.9 million to resolve allegations that they billed federal health care programs for medically unnecessary urine drug testing. The settlements resolved allegations that the physicians, formerly co-owners of now-defunct Austin Pain Associates, knowingly ordered excessive and unnecessary urine drug testing for patients without any individualized assessment of clinical need.
Substance abuse treatment provider A.R.E.B.A.-Casriel Inc. dba Addiction Care Interventions Chemical Dependency Treatment Centers (ACI) and its primary owner and former CEO, Steven Yohay, agreed to pay a total of $6 million to resolve allegations that they provided kickbacks and engaged in fraudulent conduct in connection with the enrollment of Medicaid beneficiaries into ACI’s inpatient treatment program. The United States alleged that ACI offered food and cash to homeless individuals to induce them to enroll in ACI’s inpatient treatment program, offered sham employment to an individual to induce her to refer patients to ACI programs, and used medical admissions forms containing photocopied physician signatures to make it appear that new patients had been evaluated by a qualified health care professional. ACI agreed to pay $3 million, and Yohay agreed to pay an additional $3 million and divest himself of ownership and control of ACI.
Recoveries in Whistleblower Suits
Of the $5.6 billion in settlements and judgments reported by the government in fiscal year 2021, over $1.6 billion arose from lawsuits filed under the qui tam provisions of the False Claims Act. During the same period, the government paid out $237 million to the individuals who exposed fraud and false claims by filing these actions.
The number of lawsuits filed under the qui tam provisions of the Act has grown significantly since 1986, with 598 qui tam suits filed this past year – an average of over 11 new cases every week.
“Industry insiders are uniquely positioned to expose fraud and false claims and often risk their careers to bring these schemes to light,” said Acting Assistant Attorney General Boynton. “Our efforts to protect taxpayer funds benefit from the courageous actions of these whistleblowers, and they are justly rewarded under the False Claims Act.”
In 1986, Senator Charles Grassley and Representative Howard Berman led the successful efforts in Congress to amend the False Claims Act to, among other things, encourage whistleblowers to come forward with allegations of fraud. In 2009 and 2010, further improvements were made to the False Claims Act and its whistleblower provisions.
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Acting Assistant Attorney General Boynton expressed appreciation for all the work over the past year by the many public servants who supported the department’s efforts to protect the public: “We owe a debt of gratitude to the employees in the Civil Division, the U.S. Attorneys’ Offices, the agency Offices of Inspector General and Offices of General Counsel and the many other federal and state agencies who have worked tirelessly to protect the public fisc from fraud.”
Except where indicated, the government’s claims in the matters described above are allegations only and there has been no determination of liability. The numbers contained in this press release may differ slightly from the original press releases due to accrued interest.
Justice Department Announces National Strategy to Combat Human TraffickingRead the Press Release
MADISON, WIS. – U.S. Attorney General Merrick B. Garland yesterday released the Justice Department’s new National Strategy to Combat Human Trafficking pursuant to the Justice for Victims of Trafficking Act.
Rooted in the foundational pillars and priorities of the interagency National Action Plan to Combat Human Trafficking, which President Biden released on Dec. 3, 2021, the Justice Department's National Strategy is expansive in scope. It aims to enhance the department's capacity to prevent human trafficking; to prosecute human trafficking cases; and to support and protect human trafficking victims and survivors.
“Human trafficking is an insidious crime,” said Attorney General Garland. “Traffickers exploit and endanger some of the most vulnerable members of our society and cause their victims unimaginable harm. The Justice Department’s new National Strategy to Combat Human Trafficking will bring the full force of the Department to this fight.”
“Our office has dedicated resources to prosecute trafficking crimes and respond to the needs of the victims,” said Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin. “We are committed to working with our federal, state, and local partners to coordinate efforts to bring to justice those who use violence, intimidation, coercion, or fear to exploit their victims.”
Among other things, the Justice Department’s multi-year strategy to combat all forms of human trafficking will:
- Strengthen engagement, coordination, and joint efforts to combat human trafficking by prosecutors in all 94 U.S. Attorneys’ Offices and by federal law enforcement agents nationwide.
- Establish federally funded, locally led anti-human trafficking task forces that support sustained state law enforcement leadership and comprehensive victim assistance.
- Step up departmental efforts to end forced labor by increasing attention, resources and coordination in labor trafficking investigations and prosecutions.
- Enhance initiatives to reduce vulnerability of American Indians and Alaska Natives to violent crime, including human trafficking, and to locate missing children.
- Develop and implement new victim screening protocols to identify potential human trafficking victims during law enforcement operations and encourage victims to share important information.
- Increase capacity to provide victim-centered assistance to trafficking survivors, including by supporting efforts to deliver financial restoration to victims.
- Expand dissemination of federal human trafficking training, guidance, and expertise.
- Advance innovative demand-reduction strategies.
The department’s strategy will be implemented under the direction of the National Human Trafficking Coordinator designated by the Attorney General in accordance with the Abolish Human Trafficking Act of 2017.
If you believe that you or someone you know may be a victim of human trafficking, please contact the National Human Trafficking Resource Center Hotline at 1-888-373-7888, or Text 233733.
To read the National Strategy to Combat Human Trafficking click here.
Johnstown Man Sentenced to 63 Months in Prison and 5 Years’ Supervised Release for Possessing Child PornographyRead the Press Release
JOHNSTOWN, Pa. – A resident of Johnstown, PA, has been sentenced in federal court to a total of 63 months in prison followed by five years’ supervised release on his conviction for possessing material depicting the sexual exploitation of a minor, United States Attorney Cindy K. Chung announced today.
Senior United States District Judge Kim R. Gibson imposed the sentence on William Jay Clark, 34.
According to information presented to the court, on February 23, 2017, Clark knowingly possessed pictures and videos in individual computer graphic files which were produced using prepubescent minors engaging in sexually explicit conduct. The computer graphic files were shipped or transported in interstate or foreign commerce
Assistant United States Attorney Arnold P. Bernard Jr. prosecuted this case on behalf of the government.
Ms. Chung commended the Department of Homeland Security, Homeland Security Investigations for the investigation that led to the successful prosecution of Clark.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better 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.
Great Falls woman admits meth, fentanyl distribution that led to deathRead the Press Release
GREAT FALLS — A Great Falls woman admitted on Jan. 31 to distributing methamphetamine and fentanyl that led to the death of another individual, U.S. Attorney Leif M. Johnson said today.
Brandie Rae Fulbright, 40, pleaded guilty to distribution of controlled substances resulting in death. Fulbright faces a mandatory maximum of 20 years to life in prison, a $1 million fine and at least three years of supervised release.
Chief U.S. District Judge Brian M. Morris presided. The court will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Sentencing was set for May 5. Fulbright was detained pending further proceedings.
In court documents, the government alleged that on Aug. 23, 2020, Great Falls police officers were dispatched to a camper trailer where they found a man, identified as John Doe, deceased on a bed. Co-defendant Kent Fox was on the scene and told officers he was friends with Doe, had last seen Doe two days earlier and had driven Doe to his camper after seeing him use meth. Fulbright had sent Fox to check on Doe when she hadn’t heard from him, and Fox found Doe deceased. An investigation found evidence of communications among Fox, Fulbright and Doe about the use and distribution of various drugs. In an interview with law enforcement officers, Fox admitted to picking up Doe on Aug. 21, 2020 and taking him to his home so that Doe could buy meth from Fulbright. Doe traded an AR-15 rifle to Fulbright in exchange for some meth and two blue pills. Fulbright then gave the rifle to Fox, and Fox returned Doe to his camper. Investigators learned that Doe had the meth and two blue pills when he returned home and gave some of the meth to an individual. The individual saw Doe inject himself with meth obtained from Fox and Fulbright and then slump over on his bed. An autopsy determined that Doe died from an overdose of a combination of meth and fentanyl. Fox previously pleaded guilty to charges and is pending sentencing.
Assistant U.S. Attorney Jeffrey K. Starnes is prosecuting the case, which was investigated by the FBI and Great Falls Police Department.
This case is part of Project Safe Neighborhoods, a U.S. Department of Justice initiative to reduce violent crime. Through PSN, federal, tribal, state and local law enforcement partners in Montana focus on violent crime driven by methamphetamine trafficking, armed robbers, firearms offenses and violent offenders with outstanding warrants.
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Georgia Men Sentenced to Prison for Dog-Fighting and Drug DistributionRead the Press Release
Two Georgia residents convicted on dog-fighting and drug distribution charges resulting from an investigation into a significant multi-state dog-fighting and cocaine trafficking ring were sentenced to prison today.
Jarvis Lockett, 41, of Warner Robins, Georgia, was sentenced to serve 10 years’ imprisonment and three years’ supervised release after previously pleading guilty to conspiracy to participate in an animal fighting venture and cocaine distribution. Co-defendant Christopher Raines, 51, of Talbotton, Georgia, was sentenced to serve 135 months’ imprisonment, five years’ supervised release, and pay a fine of $10,000, after previously pleading guilty to conspiracy to participate in an animal fighting venture and conspiracy to possess with intent to distribute cocaine and cocaine base. U.S. District Judge Tilman E. “Tripp” Self III presided over both hearings. There is no parole in the federal system.
“Lockett and Raines were conspirators in a criminal enterprise that profited from the suffering of both animal and human victims,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “Dog-fighting is closely associated with other serious crimes, and today’s sentences show that those who engage in this cruel and inhumane practice face significant prison time.”
“This multi-state investigation began with Jarvis Lockett, who was an active and aggressive participant in the dog-fighting world,” said U.S. Attorney Peter D. Leary of the Middle District of Georgia. “Federal, state and local law enforcement meticulously followed every lead, and their unwavering commitment to justice has put an end to a complex and deadly dog-fighting and drug distribution network. Violent dog-fighting circles are proven breeding grounds for a wide-range of criminal activities that harm the well-being of our communities and will not be tolerated in the Middle District of Georgia.”
“We have investigated animal cruelty cases in the past, so initially when this information came in, we thought that it would involve a handful of local people fighting dogs for sport,” said Peach County Sheriff Terry Deese. “What started out as a local investigation soon turned into a complex investigation that included people from multiple states and all walks of life. It is impossible to comprehend just how cruel these dogs were being treated for the purpose of training them to kill. Our team rescued 168 pit bulls during the execution of the search warrants and not the first dog acted aggressively toward the officers. The dogs just wanted attention and love. Organized dog-fighting is a dark, sick and disgusting culture that has no place in our society.”
According to court documents, law enforcement investigated a criminal organization involved in both cocaine distribution and organized dog-fighting based out of Roberta, Georgia, which extended into North Georgia, Florida and Alabama from May 2019 until February 2020. In February 2020, law enforcement executed 15 residential search warrants and seized more than 150 dogs that were being used for organized dog-fighting.
During this time period, Lockett attended and had his dogs participate in dog fights in Melrose, Florida, and Macon, Georgia, where he also acted as a referee. In addition, he attended, participated and/or attempted to participate in dog fights in Taylor County, Georgia, Eastman, Georgia, and Shiloh, Georgia, where Lockett received $16,000 for his winning dog. Text messages obtained from a search warrant executed on Lockett’s cell phone detailed his dog-fighting ventures, including communications between Lockett and multiple defendants on subjects such as killing an unaggressive dog, planning a dog fight and soliciting a female dog for fighting for $10,000. Additional text messages discussed the purchases of large quantities of cocaine and spending $250,000 on narcotics from co-defendant Derrick Owens. A confidential informant (CI) purchased cocaine from Lockett at a Roberta, Georgia, family home on July 10, 2019 and Sept. 12, 2019.
On Feb. 26, 2020, law enforcement executed a search warrant at the Roberta residence recovering cash, cocaine and evidence of dog-fighting activities to include veterinary penicillin, break sticks, photos of fighting dogs, a dog weight training vest, a dog-fighting pit, a dog treadmill, and blood-stained carpet and walls. 14 dogs were recovered. The dogs had scarring consistent with dogs being used for dog-fighting activities. On the same day, investigators executed a search warrant at a Warner Robins property Lockett owned, where they found a pit bull terrier dog that was extremely injured and lethargic. The injuries had been stapled shut. The dog died two days later of his injuries. Agents found other evidence of dog-fighting activity including medicine and supplies to treat animals for injuries sustained from dog-fighting activities, a notepad containing dog names and dollar amounts, a 50-pound digital scale, paperwork from a veterinary clinic, a blender with dog food and medicine, dog breeding registration certificates and several bags of cash.
Co-defendant Raines’ drug distribution and dog-fighting activities were uncovered during the course of the investigation. Law enforcement executed a search warrant of Raines’ Talbotton property on Feb. 26, recovering 41 dogs used in dog-fighting. The dogs were malnourished with scars, hair loss and spliced ears. Agents seized many items used in dog-fighting including a skin stapler, IV kits, veterinary medical supplies and dog breeding certificates. In his plea agreement, Raines admitted that he was a manager or supervisor in the criminal organization and was responsible for drug transactions ranging from a quarter to 1.5 kilograms of cocaine.
The case was investigated by the Drug Enforcement Administration; The U.S. Department of Agriculture, Office of the Inspector General (USDA-OIG); U.S. Marshals Service; the Department of Justice, Environment and Natural Resources Division (ENRD); Georgia Bureau of Investigation (GBI); Bibb County Sheriff’s Office; Crawford County Sheriff’s Office; Houston County Sheriff’s Office; Merriweather County Sheriff’s Office; Peach County Sheriff’s Office; Taylor County Sheriff’s Office; Webster County Sheriff’s Office; Byron Police Department and the Fort Valley Police Department.
Assistant U.S. Attorney Will Keyes with the U.S. Attorney’s Office for the Middle District of Georgia and Trial Attorney Banu Rangarajan with the Department of Justice, Environmental Crimes Section prosecuted the case.
Note: View photos below:
Exhibit 1 – Picture of the dog that Lockett kept at his residence at 107 Stanton in Warner Robins. This is the dog that could not be saved by the veterinarian. It died two days after being seized. Its wounds had been stapled shut and it was extremely injured and lethargic.
Exhibit 2 – Picture of the blood-stained wall’s from behind Lockett’s property in Roberta, Georgia. The walls circling the room were all stained with dogs’ blood.
Georgia Men Sentenced to Prison for Dog-Fighting and Drug DistributionRead the Press Release
WASHINGTON – Two Georgia residents convicted on dog-fighting and drug distribution charges resulting from an investigation into a significant multi-state dog fighting and cocaine trafficking ring were sentenced to prison today.
Jarvis Lockett, 41, of Warner Robins, Georgia, was sentenced to serve 120 months imprisonment, 3 years supervised release after previously pleading guilty to conspiracy to participate in an animal fighting venture and cocaine distribution. Co-defendant Christopher Raines, 51, of Talbotton, Georgia, was sentenced to serve 135 months imprisonment, 5 years supervised release, and pay a fine of $10,000, after previously pleading guilty to conspiracy to participate in an animal fighting venture and conspiracy to possess with intent to distribute cocaine and cocaine base. U.S. District Judge Tilman E. “Tripp” Self, III presided over both hearings. There is no parole in the federal system.
“Lockett and Raines were conspirators in a criminal enterprise that profited from the suffering of both animal and human victims,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “Dog-fighting is closely associated with other serious crimes, and today’s sentences show that those who engage in this cruel and inhumane practice face significant prison time.”
“This multi-state investigation began with Jarvis Lockett, who was an active and aggressive participant in the dog-fighting world,” said U.S. Attorney Peter D. Leary of the Middle District of Georgia. “Federal, state and local law enforcement meticulously followed every lead, and their unwavering commitment to justice has put an end to a complex and deadly dog-fighting and drug distribution network. Violent dog-fighting circles are proven breeding grounds for a wide-range of criminal activities that harm the well-being of our communities and will not be tolerated in the Middle District of Georgia.”
“We have investigated animal cruelty cases in the past, so initially when this information came in we thought that it would involve a handful of local people fighting dogs for sport” said Peach County Sheriff Terry Deese. “What started out as a local investigation soon turned into a complex investigation that included people from multiple states and all walks of life. It is impossible to comprehend just how cruel these dogs were being treated for the purpose of training them to kill. Our team rescued 168 pit bulls during the execution of the search warrants and not the first dog acted aggressively toward the officers. The dogs just wanted attention and love. Organized dog-fighting is a dark, sick and disgusting culture that has no place in our society.”
According to court documents, law enforcement investigated a criminal organization involved in both cocaine distribution and organized dog fighting based out of Roberta, Georgia, which extended into North Georgia, Florida and Alabama from May 2019 until February 2020. In February 2020, law enforcement executed 15 residential search warrants and seized more than 150 dogs that were being used for organized dog-fighting.
During this time period, Lockett attended and had his dogs participate in dog fights in Melrose, Florida and Macon, Georgia, where he also acted as a referee. In addition, he attended, participated and/or attempted to participate in dog fights in Taylor County, Georgia, Eastman, Georgia, and Shiloh, Georgia, where Lockett received $16,000 for his winning dog. Text messages obtained from a search warrant executed on Lockett’s cell phone detailed his dog-fighting ventures, including communications between Lockett and multiple defendants on subjects such as killing an unaggressive dog, planning a dog fight and soliciting a female dog for fighting for $10,000. Additional text messages discussed the purchases of large quantities of cocaine and spending $250,000 on narcotics from co-defendant Derrick Owens. A confidential informant (CI) purchased cocaine from Lockett at a Roberta, Georgia, family home on July 10, 2019 and Sept. 12, 2019.
On Feb. 26, 2020, law enforcement executed a search warrant at the Roberta residence recovering cash, cocaine and evidence of dog fighting activities to include veterinary penicillin, break sticks, photos of fighting dogs, a dog weight training vest, a dog fighting pit, a dog treadmill, and blood-stained carpet and walls. 14 dogs were recovered. The dogs had scarring consistent with dogs being used for dog fighting activities. On the same day, investigators executed a search warrant at a Warner Robins property Lockett owned, where they found a pit bull terrier dog that was extremely injured and lethargic. The injuries had been stapled shut. The dog died two days later of his injuries. Agents found other evidence of dog fighting activity including medicine and supplies to treat animals for injuries sustained from dog fighting activities, a notepad containing dog names and dollar amounts, a 50-pound digital scale, paperwork from a veterinary clinic, a blender with dog food and medicine, dog breeding registration certificates and several bags of cash.
Co-defendant Raines’ drug distribution and dog-fighting activities were uncovered during the course of the investigation. Law enforcement executed a search warrant of Raines’ Talbotton property on Feb. 26, recovering 41 dogs used in dog-fighting. The dogs were malnourished with scars, hair loss and spliced ears. Agents seized many items used in dog-fighting including a skin stapler, IV kits, veterinary medical supplies and dog breeding certificates. In his plea agreement, Raines admitted that he was a manager or supervisor in the criminal organization and was responsible for drug transactions ranging from a quarter to 1.5 kilograms of cocaine.
The case was investigated by the Drug Enforcement Administration, The U.S. Department of Agriculture, Office of the Inspector General (USDA-OIG), U.S. Marshals Service, the Department of Justice, Environment and Natural Resources Division (ENRD), Georgia Bureau of Investigation (GBI), Bibb County Sheriff’s Office, Crawford County Sheriff’s Office, Houston County Sheriff’s Office, Merriweather County Sheriff’s Office, Peach County Sheriff’s Office, Taylor County Sheriff’s Office, Webster County Sheriff’s Office, Byron Police Department and the Fort Valley Police Department.
Assistant U.S. Attorney Will Keyes with the U.S. Attorney’s Office for the Middle District of Georgia and Trial Attorney Banu Rangarajan with the Department of Justice, Environmental Crimes Section prosecuted the case.
Fort Wayne, Indiana, Man Sentenced to 72 Months in PrisonRead the Press Release
FORT WAYNE – Derek B. Veazy, Jr., 24 years old, of Fort Wayne, Indiana, was sentenced by United States District Judge Holly A. Brady after pleading guilty to being a convicted felon in possession of a firearm, announced United States Attorney Clifford D. Johnson.
Veazy was sentenced to 72 months in prison followed by 3 years of supervised release.
According to documents in this case, in July of 2020, Fort Wayne Police Department Officers responded to a call involving Veazy shooting at a home. After Officers arrived, Veazy led them on a short vehicle pursuit and a foot chase before he was apprehended. Officers recovered a revolver that Veazy had thrown from his car, and located a semi-automatic pistol loaded with a high capacity magazine from Veazy’s vehicle. Officers also recovered a bullet inside the victim’s home which the Indiana State Police laboratory determined had been fired from the pistol in Veazy’s car. Veazy’s prior felony conviction was for robbery.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives with the assistance of the Fort Wayne Police Department and the Indiana State Police laboratory. The case was prosecuted by Assistant United States Attorney Anthony W. Geller.
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.
Former Waterbury Resident Sentenced to 8 Years in Federal Prison for Distributing Child PornographyRead the Press Release
Leonard C Boyle, United States Attorney for the District of Connecticut, today announced that JESSICA PICKERING, 28, formerly of Waterbury, was sentenced yesterday by U.S. District Judge Stefan R. Underhill in Bridgeport to 96 months of imprisonment, followed by five years of supervise release, for distributing child pornography through the Kik social media application.
According to court documents and statements made in court, in October 2020, Pickering joined a Kik group geared toward those with a sexual interest in children and then corresponded with an FBI Online Covert Employee (“OCE”) who was monitoring the group. Pickering stated that she had access to three minors, aged 7 and younger. On October 20, 2020, Pickering posted two live videos to the Kik group that depicted child pornography of a male toddler. Pickering later sent the OCE two additional videos that depicted child pornography of the same child. The next day, Pickering withdrew from the Kik group, stating that she “felt an immense amount of disgust for [her]self after what [she] did the other night.”
Pickering was arrested on a federal criminal complaint on October 27, 2020. She pleaded guilty to the offense on May 5, 2021.
Pickering, who is released on bond while residing with family in Queens, New York, is required to report to prison on March 16.
This matter was investigated by the Federal Bureau of Investigation with the assistance of the Wolcott Police Department. The case was prosecuted by Assistant U.S. Attorney Angel M. Krull.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
Former Store Owner Sentenced to 42 Months in Federal PrisonRead the Press Release
FLINT - Sohyl Halloun, former owner of Shorthorn Meats in Flint, Michigan, was sentenced today to 42 months in federal prison and ordered to pay more than $4,400,000 in restitution for conspiring to commit wire fraud, U.S. Attorney Dawn N. Ison announced today.
Ison was joined in the announcement by Salvador Gonzalez, Acting Special Agent in Charge of USDA-Office of Inspector General and Special Agent in Charge Sara Kull, Internal Revenue Service, Criminal Investigation.
U.S. District Judge Linda V. Parker sentenced Halloun to 42 months in federal prison. Halloun was also ordered to pay $4,424,692 in restitution to the USDA-Food and Nutrition Service.
According to court records, Halloun and other co-conspirators agreed to and provided Supplemental Nutritional Assistance Program (SNAP) users approximately 50 cents on the dollar in exchange for their food stamp benefits. Halloun or his employees either directly provided money to food stamp recipients in exchange for their benefits, or engaged in another scheme that involved other co-conspirators and a local car wash. The total loss resulting from the conspiracy was $4,424,692. The investigation also revealed other troubling aspects of the business. Agents discovered large amounts of expired food at the business when executing a search warrant at Shorthorn Meats. One of Halloun’s co-defendants admitted in a court filing that Halloun directed him to pour bleach water on a rotting chicken so that it could be sold. Halloun fled to Israel during the investigation and required extradition to force his return.
“SNAP uses federal tax dollars to help low-income individuals put food on their tables,” said US Attorney Ison. “This defendant’s actions not only stole from taxpayers but also diverted necessary assistance from those who truly need and benefit from this food assistance program. We hope this sentence will deter other store owners from engaging in this illegal conduct.”
“This investigation and prosecution should send a strong zero-tolerance message to those individuals engaged in the practice of defrauding taxpayer funded WIC and SNAP programs,” said Salvador Gonzalez, Acting Special Agent-in-Charge, USDA-Office of Inspector General. “It should also serve as a warning to all stores, that participate in the WIC and SNAP programs as vendors, that fraud and trafficking (purchasing those benefits for cash) will be vigorously investigated and prosecuted by the USDA-OIG, the U.S. Attorney's Office, and all its federal, state, and local partners that have a stake in ensuring that fraud is eliminated from taxpayer funded programs.”
The case was investigated by special agents from the United States Department of Agriculture-Office of Inspector General and the Internal Revenue Service, Criminal Investigation Division, with the assistance of the Genesee County Sheriff’s Department and the Michigan Department of Human Services. The case was prosecuted by Assistant United States Attorney Christopher Rawsthorne.
Former Muscogee County Deputy Clerk Convicted in Multimillion-Dollar Fraud, Co-Defendants Plead Guilty to Related ChargesRead the Press Release
COLUMBUS, Ga. – The former Deputy Clerk of Muscogee County Court pleaded guilty to bank fraud and tax evasion charges in a scheme that cost the county millions of dollars.
Willie Demps, 64, of Phenix City, Alabama, pleaded guilty to one count conspiracy to commit bank fraud and two counts tax evasion before U.S. District Judge Clay Land today. Demps faces a maximum sentence of 30 years imprisonment for the conspiracy charge to be followed by five years of supervised release and a $1,000,000 fine. Demps faces a maximum five years imprisonment for each tax evasion charge to be followed by three years of supervised release and a $100,000 fine. Demps will also pay restitution in an amount ordered by the Court at sentencing. Sentencing is scheduled for June 2, 2022.
“Rather than serve the people of Muscogee County, Willie Demps served only himself. Over the course of many years, Demps used his position of trust to steal millions of dollars from Muscogee County taxpayers to fund his gambling habit and pay for a variety of personal expenses,” said U.S. Attorney Peter D. Leary. “I want to commend the investigators with the FBI, IRS and Columbus Police Department for their meticulous and relentless effort to seek justice in this case.”
“Demps’s plea is the result of the hard work and determination of investigators and prosecutors who aggressively pursue allegations of bank fraud,” said Philip Wislar, Acting Special Agent in Charge of FBI Atlanta. “The FBI is determined to pursue anyone who would choose to take advantage of their trusted position of employment for their own personal greed, especially at the expense of honest tax paying citizens.”
“Willie Demps’ actions were egregious in nature,” said IRS-Criminal Investigation Special Agent in Charge James E. Dorsey. “In addition to abusing his position of trust, Mr. Demps perpetrated multiple schemes over a long period of time to steal from the public and evade payment of taxes. IRS-CI will continue to work with our law enforcement partners use our enforcement of the tax law and financial expertise to hold such individuals accountable for their actions.”
“I am pleased with the outcome of this case,” said Columbus Police Department Chief Freddie Blackmon. “Also, I am appreciative of hard work that our investigators and our federal partners put into this case. If anyone commits illegal acts, we are certainly going after them for an arrest and conviction.”
The following co-defendants pleaded guilty to conspiracy to commit bank fraud and will be subject to a statutory maximum of 30 years in prison to be followed by five years of supervised release and a $1,000,000 fine; in addition, each defendant will pay restitution in the amount of the checks cashed:
Curtis Porch, 48, of Columbus, pleaded guilty on Nov. 30, 2021, and sentencing is scheduled for June 2, 2022;
Dereen Porch, 43, of Columbus, pleaded guilty on Nov. 30, 2021, and sentencing is scheduled for June 2, 2022;
Terry McBride, 43, of Smiths Station, Alabama, pleaded guilty on Oct. 26, 2021, and sentencing is scheduled for June 2, 2022;
Samuel Cole, 72, of Columbus, pleaded guilty on Oct. 5, 2021, and sentencing is scheduled for June 2, 2022; and,
George Cook, 33, of Columbus, pleaded guilty on Sept. 21, 2021, and sentencing is scheduled for June 2, 2022.
The following co-defendant pleaded guilty to misprision of a felony and faces a maximum three years in prison to be followed by one year of supervised release and a $250,000 fine:
Lamarcus Palmer, 34, of Smiths Station, Alabama, pleaded guilty on Oct. 5, 2021, and sentencing is scheduled for June 2, 2022.
The following co-defendant has not pled guilty. Her trial is currently scheduled for February 28, 2022:
Rosalee Bassi is charged with conspiracy to commit bank fraud and faces a maximum sentence of 30 years imprisonment to be followed by five years of supervised release and a $1,000,000 fine. A criminal indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
According to court documents, Demps worked for the Muscogee County Clerk for approximately 30 years and supervised money deposits received by the Clerk’s Office. The Clerk’s Office received money from fines and condemnations, and payments were frequently made in cash. From at least 2010 to 2019, Demps maintained a safe in his office to store sums of cash that were collected by the Clerk’s Office. During the business day, this safe was rarely locked, even when Demps was away from his office. Demps (or his designee) was responsible for depositing cash received by the Clerk’s Office into an appropriate Clerk of Superior Court bank account. Records indicate that the Clerk’s Office received over $5.5 million in cash during the period of 2010-2019, yet only a single cash deposit of approximately $210 was made into official Columbus accounts in 2019. No cash deposits were made in other years.
From Oct. 19, 2010, to approximately Nov. 27, 2019, Demps issued at least 330 Clerk of Superior Court checks payable to the named co-defendants, and to some individuals not named, with a face value of at least $1.3 million. Bank records prior to Oct. 19, 2010, are not available, and the Muscogee County Clerk’s Office records prior to that date cannot be obtained. Demps would meet various co-defendants in locations away from his place of business at the Clerk’s Office to give the illicit checks to them to be cashed at banks in Columbus and in nearby Alabama. The co-defendants cashed the checks and returned the money to Demps, who would give the participating co-defendant a portion of the money. Demps admits he used the money for personal expenses, to send money to foreign countries and to spend at casinos.
Demps received cash deposits to his bank during the tax years 2018-2019, which he now admits were not the result of direct deposits from his lawful salary but rather proceeds from the money he stole from the Muscogee County Clerk’s Office. This money was not reported to the IRS and resulted in tax liability. Demps deposited $147,455 in cash in 2018 and $327,787 in cash in 2019 and fraudulently failed to account for these amounts as income on his tax returns. The IRS calculated Demps’s total amount of tax due from years 2015 to 2019 as $359,604.
FBI, IRS and the Columbus Police Department investigated the case.
Assistant U.S. Attorney Amy Helmick is prosecuting the case. Retired Assistant U.S. Attorney Mel Hyde initiated the prosecution of this case.
Former Louisville, Kentucky Police Officer Sentenced for Using Excessive ForceRead the Press Release
A former Louisville Metro Police Department (LMPD) officer was sentenced today in the U.S. District Court for the Western District of Kentucky for using excessive force on an arrestee. U.S. District Court Judge Rebecca Grady Jennings sentenced Cory P. Evans, 34, to two years’ imprisonment and two years’ supervised release.
Evans previously pleaded guilty to violating the Constitution by using objectively unreasonable force against an arrestee. When he entered his guilty plea, Evans admitted that on May 31, 2020, while he was working as a part of the LMPD Special Response Team, he followed a group of individuals around downtown Louisville to execute arrests for unlawful assembly and violations of curfew. At an intersection, a person in the group surrendered for arrest by getting on his knees and placing his hands in the air. While that person was kneeling in this position, Evans struck him in the back of the head with a riot stick, which created a wound on the back of the kneeling victim’s head. The victim fell forward and was taken into custody by other LMPD officers.
“Former officer Evans abused his authority by violently retaliating against a surrendering arrestee who had been exercising his First Amendment rights during a demonstration in Louisville, during the racial justice demonstrations in the spring of 2020,” said Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division. “The Justice Department will continue to hold accountable officers who violate their oath and the Constitution.”
“The FBI and LMPD’s Public Integrity Unit did outstanding work in this case,” said U.S. Attorney Michael A. Bennett for the Western District of Kentucky. “The effort of the assigned agents and detectives resulted in a successful prosecution and is a positive step toward strengthening trust and confidence between our citizens and the officers who protect them.”
“In order for the public to have full trust and confidence in the law enforcement officers who have sworn to protect them, those officers who choose to abuse their authority must be held accountable,” said Special Agent in Charge Jodi Cohen of the FBI’s Louisville Field Office. “Today’s sentencing reflects the FBI’s and the Department of Justice’s unwavering commitment to identify, investigate and prosecute law enforcement officials who break the law by violating a person’s Constitutional rights.”
The FBI and LMPD’s Public Integrity Unit jointly investigated the case through the Louisville Public Corruption Civil Rights Task Force. Assistant U.S. Attorney Amanda Gregory for the Western District of Kentucky and Civil Rights Division Trial Attorney Tim Visser prosecuted the case.
Former Louisville, Kentucky Police Officer Sentenced for Using Excessive ForceRead the Press Release
WASHINGTON – A former Louisville Metro Police Department (LMPD) officer was sentenced today in the U.S. District Court for the Western District of Kentucky for using excessive force on an arrestee. U.S. District Court Judge Rebecca Grady Jennings sentenced Cory P. Evans, 34, to two years’ imprisonment and two years’ supervised release.
Evans previously pleaded guilty to violating the Constitution by using objectively unreasonable force against an arrestee. When he entered his guilty plea, Evans admitted that on May 31, 2020, while he was working as a part of the LMPD Special Response Team, he followed a group of individuals around downtown Louisville to execute arrests for unlawful assembly and violations of curfew. At an intersection, a person in the group surrendered for arrest by getting on his knees and placing his hands in the air. While that person was kneeling in this position, Evans struck him in the back of the head with a riot stick, which created a wound on the back of the kneeling victim’s head. The victim fell forward and was taken into custody by other LMPD officers.
“Former officer Evans abused his authority by violently retaliating against a surrendering arrestee who had been exercising his First Amendment rights during a demonstration in Louisville, during the racial justice demonstrations in the Spring of 2020,” said Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division. “The Justice Department will continue to hold accountable officers who violate their oath and the Constitution.”
“The FBI and LMPD’s Public Integrity Unit did outstanding work in this case,” said U.S. Attorney Michael A. Bennett for the Western District of Kentucky. “The effort of the assigned agents and detectives resulted in a successful prosecution and is a positive step toward strengthening trust and confidence between our citizens and the officers who protect them.”
“In order for the public to have full trust and confidence in the law enforcement officers who have sworn to protect them, those officers who choose to abuse their authority must be held accountable,” said Special Agent in Charge Jodi Cohen of the FBI’s Louisville Field Office. “Today’s sentencing reflects the FBI’s and the Department of Justice’s unwavering commitment to identify, investigate, and prosecute law enforcement officials who break the law by violating a person’s Constitutional rights.”
The FBI and LMPD’s Public Integrity Unit jointly investigated the case through the Louisville Public Corruption Civil Rights Task Force. Assistant U.S. Attorney Amanda Gregory and Civil Rights Division Trial Attorney Tim Visser prosecuted the case.
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Former Engineering Executive Convicted of Rigging Bids and Defrauding North Carolina Department of TransportationRead the Press Release
A former executive of Contech Engineered Solutions LLC was convicted today in New Bern, North Carolina, for his participation in bid-rigging and fraud schemes targeting the North Carolina Department of Transportation (NCDOT).
Following a week-long trial in the U.S. District Court for the Eastern District of North Carolina, a jury convicted Brent Brewbaker, a former Contech executive, for participating in conspiracies to rig bids and submit false certifications of non-collusion for more than 300 aluminum structure projects funded by the state of North Carolina between 2009 and 2018. Evidence showed that Brewbaker instructed a co-conspirator to submit non-competitive bids to NCDOT and to hide his bid rigging and fraud by varying the amount of inflated bids submitted. He also made clear to a co-conspirator that he would hide illegal conduct by deleting text messages he received about the conspiracy.
“Today’s verdict reinforces the division’s commitment to hold accountable executives who target state and local governments with their bid-rigging and fraud schemes,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “With massive investments in infrastructure projects beginning soon, companies that manage those projects must know that the Justice Department and its Procurement Collusion Strike Force partners will have their eyes out for cheaters and schemers.”
“Activities related to collusion, bid rigging and fraud do not promote an environment conducive to open competition, which harms the consumer,” said Executive Special Agent in Charge Ken Cleevely of the U.S. Postal Service (USPS) Office of Inspector General. “Along with the Department of Justice and our federal law enforcement partners, the USPS Office of Inspector General will aggressively investigate those who would engage in this type of harmful conduct.”
“For nearly a decade Brent Brewbaker engaged in a scheme that compromised taxpayers’ investments in transportation projects in the State of North Carolina for commercial gain,” said Special Agent-in-Charge Craig Miles of the U.S. Department of Transportation Office of Inspector General, Mid-Atlantic Region. “Today’s verdict underscores our resolve to continue working with our prosecutorial and law enforcement partners toward protecting the Federally-funded infrastructure projects from fraud, waste and abuse.”
Brewbaker was convicted of conspiring to rig bids, conspiring to commit fraud, three counts of mail fraud and one count of wire fraud. He is scheduled to be sentenced on April 12. He faces a maximum penalty of 10 years in prison for conspiring to rig bids and 20 years in prison for each of the other counts.
Contech previously pleaded guilty to one count of bid rigging under Section One of the Sherman Antitrust Act and one count of conspiring to commit mail and wire fraud. Contech agreed to pay a criminal fine of $7 million and restitution to NCDOT in the amount of $1,533,988.
The Antitrust Division’s Washington Criminal I Section prosecuted this case, which was investigated with the assistance of the USPS Office of Inspector General and the U.S. Department of Transportation Office of Inspector General. The U.S. Attorney’s Office for the Eastern District of North Carolina also provided support throughout the investigation and trial.
In November 2019, the Justice Department created the Procurement Collusion Strike Force, a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact procurement and grant and program funding at all levels of government – federal, state, and local. To contact the Procurement Collusion Strike Force or to report information concerning market allocation, price fixing, bid rigging or other anticompetitive conduct related to federal, state or local transportation projects, visit https://www.justice.gov/procurement-collusion-strike-force.
Former AgGeorgia Loan Officer, Co-Conspirators, Plead Guilty to FraudRead the Press Release
MACON, Ga. – Co-defendants engaged in a scheme to defraud two agriculture-based financial institutions orchestrated by a former loan officer have pleaded guilty to their crimes.
Johnnie Farrow, 66, of Macon, pleaded guilty to conspiracy to defraud a financial institution today. Previously, co-defendants William Spigener, III, 33, of Columbus, Eary Fuller, 57, of Macon and Demetria Bell, 50, of Macon, pleaded guilty to conspiracy to defraud a financial institution. The defendants each face a maximum sentence of 30 years in prison and a $1,000,000 fine. U.S. District Judge Tilman E. “Tripp” Self, III is presiding over the case. Spigener’s sentencing is scheduled for March 9, 2022. Fuller’s sentencing is scheduled for April 5, 2022. Bell’s sentencing is scheduled for April 5, 2022. Farrow’s sentencing is scheduled for May 4, 2022.
“William Spigener recruited willing participants in a scheme to defraud two banks focused on supporting farmers and the agricultural industry, causing significant financial losses and harm,” said U.S. Attorney Peter D. Leary. “Our office will not hesitate to seek federal prosecution against fraudsters who take part in scams that hurt our local businesses, workers and consumers.”
“Spigener violated the trust placed in him by the bank he worked for and now will pay a significant price for his actions, with the potential of many years behind bars,” said Phillip Wislar, Acting Special Agent in Charge of FBI Atlanta. “The FBI will do everything in our power to get justice for companies that have been defrauded by corrupt individuals.”
According to court documents, Spigener orchestrated a scheme to defraud AgSouth Farm Credit and AgGeorgia Farm Credit in Perry, Georgia, where he was employed as a loan officer from Feb. 2012 until his resignation in Feb. 2019. During this time, Spigener recruited co-defendants Farrow, Fuller and Bell to pretend to be borrowers with both institutions. In exchange for using their personal information and appearing at the loan closings, Spigener provided Farrow, Fuller and Bell approximately 10% of the loan proceeds. Spigener would create documentation to ensure the loan applications were approved, even though Farrow, Fuller and Bell were not engaged in farming activity, nor did they have the collateral to back up the loans. Spigener made some repayments on the loans but was unable to repay the vast majority of the loans, and both financial institutions suffered losses. Spigener admits the intended loss amount was more than $550,000 but less than $1.5 million.
The case was investigated by FBI.
Assistant U.S. Attorney Elizabeth Howard is prosecuting the case.
Evansville Man Sentenced to 37 Months in Federal Prison for a Firearms Offense Related to His Shooting of Two VictimsRead the Press Release
EVANSVILLE – An Evansville man was sentenced to 37 months in federal prison today for a firearms offense related to his shooting of two individuals.
According to court documents, on June 13, 2020, the Evansville Police Department responded to the intersection of U.S. 41 and Covert Avenue on a report of a car crash and multiple gunshots being fired. When officers arrived, they located an overturned vehicle, as well as two victims – an unconscious adult male and a conscious juvenile female – who had sustained gunshot wounds. The juvenile female victim told law enforcement that Paje Capone Diaz, 24, of Evansville, had opened fire on them from the front passenger seat of another vehicle.
During their investigation, officers located spent rounds of Nosler 10mm ammunition at the scene of the shooting. Officers also found a half-empty box of Nosler 10mm ammunition inside a residence that the defendant visited the night of and morning after the shooting. Officers located the receipt for the purchase of that ammunition inside a vehicle associated with the defendant, and law enforcement subsequently obtained surveillance video footage of the defendant buying that ammunition two days before the shooting. At the defendant’s sentencing hearing, United States District Court Judge Richard L. Young found by a preponderance of the evidence that the defendant used or possessed that ammunition in connection with the shootings of the victims.
The defendant was previously convicted of a firearms-related felony in Vanderburgh County, and as a result, was legally prohibited from possessing firearms or ammunition.
Zachary A. Myers, U.S. Attorney for the Southern District of Indiana, and Evansville Police Chief Billy Bolin made the announcement.
The Evansville Police Department investigated the case. The Vanderburgh County Prosecuting Attorney’s Office and the Federal Bureau of Investigation also provided valuable assistance. As part of the sentence, Judge Young ordered that the defendant be supervised by the U.S. Probation Office for three years following his release from federal prison.
U.S. Attorney Myers thanked Assistant U.S. Attorney Kristian R. Mukoski who prosecuted this case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement, and the local community to develop effective, locally based strategies to reduce violent crime.
Easton Man Sentenced to 30 Years in Federal Prison for Recording His Repeated Sexual Abuse of a ChildRead the Press Release
Leonard C Boyle, United States Attorney for the District of Connecticut, announced that ROBERT McGUIRE, 42, of Easton, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to 30 years of imprisonment, followed by a lifetime term of supervised release, for producing photographs and videos of his sexual abuse of a young child.
According to court documents and statements made in court, between February 2019 and June 2020, McGuire repeatedly sexually abused a prepubescent child and took photographs and videos of the sexual assaults. The investigation also revealed that McGuire sexually assaulted a second prepubescent child on at least one occasion.
McGuire has been detained since his arrest by the Easton Police Department on related state charges on July 10, 2020. On June 8, 2021, he pleaded guilty in federal court to one count of production of child pornography.
The state charges against McGuire are pending.
This matter was investigated by the Federal Bureau of Investigation and the Easton Police Department. The case was prosecuted by Assistant U.S. Attorney Konstantin Lantsman.
U.S. Attorney Boyle thanked the State’s Attorney’s Office for the Judicial District of Fairfield for its close cooperation in the investigation and prosecution of this matter.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
District Man Sentenced to Seven Years in Prison for Shooting Innocent Bystander in Southeast WashingtonRead the Press Release
WASHINGTON – Jaz Pratt, 20, of Washington, D.C., was sentenced today to seven years in prison for a summertime shooting on a busy street in Southeast Washington that struck a 56-year-old woman, leaving her permanently paralyzed from the waist down.
The sentencing was announced by U.S. Attorney Matthew M. Graves and Robert J. Contee III, Chief of the Metropolitan Police Department (MPD).
Pratt pleaded guilty in June 2021, in the Superior Court of the District of Columbia, to aggravated assault while armed. He was sentenced by the Honorable Robert D. Okun. The judge sentenced Pratt to a total of 10 years in prison but suspended three years of that time on the condition that he successfully complete three years of probation after his release from prison.
The shooting took place on Aug. 21, 2020, in front of a gas station in the 3000 block of Martin Luther King Jr. Avenue SE. According to the government’s evidence, Pratt and co-defendant Davon Robinson approached a man at approximately 8 p.m. They began a conversation and, soon afterwards, Robinson stepped back, pulled out a pistol, and shot the man once in the hip at close range. The man then fled up the street.
Immediately after the shot, Pratt took a few steps back, still facing in the direction of the wounded man. He pulled out a pistol and aimed it at the man. He fired once, missing the man but hitting the victim, an innocent bystander, in the back as she was walking down the street. The entire incident was captured on surveillance video. At the time of the shooting Pratt was on pre-trial release in a separate gun possession case.
The victim has been hospitalized and/or living in a rehabilitation center on a near-continuous basis since the shooting.
Pratt was arrested on Sept. 2, 2020. He has been in custody since that time.
Robinson, 28, of Washington, D.C., pleaded guilty to charges in this case and in an unrelated armed robbery. He was sentenced in October 2020 to a 10 ½-year prison term.
In announcing the sentence, U.S. Attorney Graves and Chief Contee commended the work of those who investigated the case from the Metropolitan Police Department (MPD). They also acknowledged the efforts of those who handled the case for the U.S. Attorney’s Office, including Paralegal Specialist Alesha Matthews, Victim/Witness Program Specialist Latrice Washington-Williams, and former Assistant U.S. Attorney Vivien Cockburn. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Miles E. Janssen, who investigated and prosecuted the case.
District Judge Enters Order Approving Historic Change to the Uaw Constitution and System of Electing OfficersRead the Press Release
DETROIT – United States District Judge David M. Lawson approved the results of the referendum of the membership of the International United Auto Workers union and ordered the union to make a historic change to its constitution to provide for the direct election of the UAW’s officers, sometimes referred to as “one member, one vote,” pursuant to the process required under the Consent Decree between the United States and the UAW, United States Attorney Dawn N. Ison announced today.
Joining in the announcement were Irene Lindow, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General, Josh P. Hauxhurst, Acting Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation, and Sarah Kull, Special Agent in Charge of the Detroit, Michigan office of the Internal Revenue Service – Criminal Investigations, and Thomas Murray, District Director, U.S. Department of Labor – Office of Labor-Management Standards (“OLMS”).
Judge Lawson ordered the UAW to implement the change to its constitution and election system by June 30, 2022, which will be in time for the next election cycle for the UAW’s President and other members of the UAW’s International Executive Board. The UAW’s independent and Court-Appointed Monitor, Neil Barofsky, will design the new election system after consulting with the UAW.
The Consent Decree between the UAW and the United States had required that the union conduct the referendum, under the oversight of the independent Monitor and OLMS. Through the referendum, the UAW’s active and retired members were able to vote whether the union would adopt a direct election system for choosing International officers and Executive Board members. The Consent Decree required that the referendum take place by November 29, 2021. Once voting was closed, the vendor selected by the UAW Monitor began tabulating the votes. On December 2, 2021, the Monitor announced the final vote count: 89,615 members (or 63.7% of voters) in favor of the direct election system and 50,971 members (or 36.3% of voters) in favor of the current delegate system. With the Court’s order, the direct election system will now replace the UAW’s prior delegate-based system, which had been in place for decades. There was a total of 140,586 votes. The vote was conducted by secret, mail-in ballots. On January 19, 2022, OLMS endorsed the vote by the UAW membership finding that the referendum had complied with the Consent Decree and with federal labor law governing the conduct of union elections.
As outlined in the Consent Decree, the UAW must now amend its constitution to require the direct election system. At the same time, the UAW Monitor, in consultation with the UAW, will design the new election rules and procedures for the UAW under the direct election system. The new election system will be in place for the UAW’s next election cycle which will take place in 2022, starting at the UAW’s convention in July 2022.
The Consent Decree came about after the United States filed a civil lawsuit in December 2020 against the International UAW under the Anti-Fraud Injunction Act based on the criminal investigation of the UAW, FCA US LLC, and FCA’s executives. Subsequently, the United States and the International UAW entered into a Consent Decree to settle the lawsuit that was approved by the U.S. District Court. The Court appointed attorney Neil Barofsky to serve as the Independent Monitor of the UAW for the next six years. The Monitor is tasked with providing federal oversight of the UAW concerning fraud, corruption, and misconduct within the UAW.
U.S. Attorney Ison commended the hard work on the referendum of Monitor Barofsky, his staff, and the Office of Labor-Management Standards.
“We designed the Consent Decree so that the members of the UAW would be able to decide for themselves how they would choose their leaders going forward, rather than having the government impose one system or another,” said United States Attorney Dawn Ison. “Now that the members have spoken and chosen a system of direct elections, we will continue to work with the Monitor to ensure that the UAW is fully reformed, free of corruption and fraud, and that the union’s elections will be fair and in compliance with the will of the membership.”
“Today’s decision is an affirmation of our efforts with our law enforcement partners and the U.S. Department of Labor’s Office of Labor-Management Standards to pursue union-affiliated corruption investigations,” said Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.
"The UAW membership has voted for a significant change in how its leadership is selected, consisting of a system of direct elections. The FBI will continue to work alongside our law enforcement partners, the Monitor, and the UAW to ensure future elections, and the UAW as a whole, remain free from corrupt influence,” stated Acting Special Agent in Charge Hauxhurst.
“This Consent Decree gives power to the hard-working UAW members and is a step towards building trust in future UWA leadership, said Special Agent in Charge Sarah Kull, IRS-Criminal Investigation, Detroit Field Office.”
“With the completion of the UAW Referendum Election, the membership has overwhelmingly spoken, saying that they want a direct voice in deciding who will be the officers of the UAW International Union going forward,” stated Thomas Murray, District Director, U.S. Department of Labor, Office of Labor-Management Standards. “I commend the Monitor and his staff for working closely with OLMS to efficiently conduct the Referendum Election in accordance with the law. We will continue to work with the U.S. Attorney’s Office, our fellow law enforcement partners, and the Monitor to ensure that the UAW continues to represent its members in accordance with the law.”
The case is being prosecuted by Assistant U.S. Attorneys David A. Gardey and Steven Cares.
De Pere Man Indicted for Paycheck Protection Program FraudRead the Press Release
United States Attorney Richard G. Frohling of the Eastern District of Wisconsin announced that on February 1, 2022, a federal grand jury returned an indictment charging Chad M. Schampers (age: 38) of De Pere, Wisconsin, with one count of wire fraud, in violation of Title 18, United States Code, Section 1343, and one count of money laundering, in violation of Title 18, United States Code, Section 1957. The wire fraud count carries a maximum penalty of 20 years of imprisonment, and the money laundering count carries a maximum penalty of 10 years of imprisonment.
The indictment alleges that Schampers filed a fraudulent loan application seeking approximately $300,000 in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act is a federal law enacted on March 29, 2020, which is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic.
One source of relief provided by the CARES Act is 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.
Businesses must use PPP loan proceeds for 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 a set time period and use at least a certain percentage of the loan towards payroll expenses.
The indictment alleges that Schampers unlawfully used approximately $300,000 in PPP loan funds for personal expenses, including the purchase of a private residence and diverting funds into his personal account.
“Individuals engaging in PPP fraud not only cause loss to every taxpayer but also prevent the funds from helping small businesses and employees in need,” said U.S. Attorney Frohling. “Along with our law enforcement partners, the United States Attorney’s Office remains focused on holding anyone who engaged in this type of fraud accountable for their actions.”
Special Agent in Charge of the FBI Milwaukee Division Michael E. Hensle said, “Today’s announcement demonstrates the ongoing commitment and dedication of the FBI to work with our partners to aggressively hold individuals accountable who perpetrate fraud against the American people and assist the victims of fraud. This large scale home improvement fraud scheme took advantage and broke the trust of multiple homeowners and financial institutions. The FBI will continue to pursue and bring to justice those individuals who take advantage of others for profit and believe they are above the law.”
This case was investigated by the Brown County Sheriff’s Office and the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorneys Julie F. Stewart and Daniel R. Humble.
An indictment is only a charge and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government must prove them guilty beyond a reasonable doubt.
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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