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8 March 2022
Texas Woman Sentenced for Unemployment Fraud Related to COVID-19 PandemicRead the Press Release
BOSTON – A Texas woman was sentenced today for her involvement in a scheme to fraudulently claim COVID-19-related unemployment assistance.
Donna Wasson, 37, of San Antonio, Texas, was sentenced by U.S. District Court Chief Judge F. Dennis Saylor IV to 18 months in prison and two years of supervised release. Wasson was also ordered to pay restitution and forfeiture in the amount of $5,437. On Nov. 8, 2021, Wasson pleaded guilty to three counts of wire fraud.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) created a temporary federal unemployment insurance program called Pandemic Unemployment Assistance (PUA). PUA, administered by the Massachusetts Department of Unemployment Assistance, provides unemployment insurance benefits for individuals who are not eligible for other types of unemployment benefits (e.g., the self-employed, independent contractors, or gig economy workers).
Wasson applied for Massachusetts unemployment benefits despite residing in Texas and receiving unemployment benefits via the Texas Workplace Commission. In addition, Wasson carried out instructions concerning other fraudulent unemployment claims from a former Massachusetts Department of Unemployment Assistance (DUA) employee, and accessed unemployment claims under multiple stolen identities to fraudulently obtain benefits to which she was not entitled.
The investigation is being conducted by Homeland Security’s Investigation’s Document and Benefit Fraud Task Force (DBFTF), a specialized field investigative group comprised of personnel from various local, state, and federal agencies with expertise in detecting, deterring, and disrupting organizations and individuals involved in various types of document, identity, and benefit fraud schemes.
United States Attorney Rachael S. Rollins; Matthew B. Millhollin, Special Agent in Charge of Homeland Security Investigations in Boston; and Jonathan Mellone, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigations made the announcement today. Special assistance was provided by the Massachusetts Department of Unemployment Assistance, Program Integrity Unit. Assistant U.S. Attorneys William Abely, Chief of Rollins’ Criminal Division, and Dustin Chao, Chief of Rollins’ Public Corruption & Special Prosecutions Unit, prosecuted 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.
Texas Man Sentenced to 48 Months in Prison for Laundering Proceeds of Multimillion Dollar Business Email Compromise SchemeRead the Press Release
Damian Williams, the United States Attorney for the Southern District of New York, announced today that TERRY FORMER was sentenced this afternoon to 48 months in prison in connection with the laundering of more than $2.2 million in proceeds of a business email compromise scheme. FORMER pled guilty to conspiring to commit wire fraud on April 2, 2021, before U.S. District Judge P. Kevin Castel, who imposed today’s sentence.
U.S. Attorney Damian Williams said: “Terry Former played an essential role in a scheme to defraud businesses, by organizing a team of co-conspirators to open shell company bank accounts to accept the victims’ funds and clandestinely transfer them to the fraudsters. Today’s sentence demonstrates the severe consequences that will befall those who facilitate criminal conduct by laundering its proceeds.”
According to the Indictment and other public filings in the case:
From at least in or about October 2018 through at least in or about October 2019, TERRY FORMER participated in a scheme to defraud businesses and by impersonating individuals and businesses in the course of otherwise ordinary financial transactions, thereby fraudulently inducing counterparties to those transactions to transfer funds to bank accounts controlled by FORMER and his co-conspirators (the “Scheme”). FORMER was one of the primary individuals responsible for coordinating the money side of the Scheme. In particular, he directed co-conspirators to open up bank accounts in the names of shell companies, which were purposefully chosen to mirror the names of the true counterparties in the business transactions that were targeted by the Scheme. FORMER also coordinated between the individuals involved in impersonating the true counterparties and the individuals holding the bank accounts to let them know when the accounts would be funded and to funnel the money out of those accounts once received .
In reliance on the foregoing false and misleading misrepresentations, one of the victims of the Scheme wired more than $2.2 million into a fraudulent bank account opened at FORMER’s direction. FORMER and his co-conspirators, knowing the money represented fraud proceeds, transferred a portion of those fraud proceeds out of the fraudulent bank account in transactions designed to conceal and disguise their source, ownership, and control. FORMER’s efforts to drain the account completely were stopped only when the bank froze the funds.
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FORMER, 46, of Texas, was also sentenced to three years of supervised release.
Mr. Williams praised the work of Homeland Security Investigations for their investigative efforts and ongoing support and assistance with the case. The prosecution of this case is being handled by the Money Laundering and Transnational Criminal Enterprises Unit. Assistant United States Attorneys Emily Deininger and Tara La Morte are in charge of the prosecution.
Texan caught smuggling over $30,000Read the Press Release
LAREDO, Texas – A 36-year-old man has been charged with bulk cash smuggling, announced U.S. Attorney Jennifer B. Lowery.
A federal grand jury has returned an indictment against Modesto Zepeda for smuggling $30,025 into the United States from Mexico.
Originally charged by criminal complaint, he made his first appearance before U.S. Magistrate Judge Christopher dos Santos Feb. 16. He is expected to appear for his initial appearance on the indictment in the near future.
On Feb. 14, Zepeda attempted to enter United States through the Gateway to the Americas Port of Entry in Laredo as a pedestrian, according to the charges. There, he allegedly gave a negative declaration for possessing currency over $10,000.
The charges allege law enforcement searched him and found a total of $30,025 hidden inside his wallet, pants pocket and underwear.
If convicted, Zepeda faces up to five years in prison as well as a possible $250,000 maximum fine.
Homeland Security Investigations conducted the investigation. Assistant U.S. Attorney Matthew Isaac is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Tewksbury Woman Charged in Superseding Indictment with Tax and Unemployment FraudRead the Press Release
BOSTON – A Tewksbury woman has been charged in a superseding indictment for allegedly embezzling more than $1.8 million from her employer and collecting unemployment assistance while employed fulltime.
Joanne Dinoto a/k/a Joanne Mara, 47, was charged in a superseding indictment with an additional count of wire fraud and one count of filing a false tax return. In November 2021, Dinoto was indicted on one count of bank fraud, two counts of wire fraud and one count of aggravated identity theft.
According to the charging document, between December 2013 and April 2020, Dinoto stole more than $1.8 million from her employer, a flooring company based in Acton, by falsely inflating her compensation, using her employer’s corporate credit card for personal expenses, and forging at least two checks to herself from her employer’s checking account. To hide her scheme, Dinoto allegedly modified her employer’s accounting records. It is also alleged that during the period August 2020 through May 2021, Dinoto collected unemployment benefits from the Massachusetts Department of Unemployment Assistance under her true Social Security number, while also working full time for a lighting company based in Wilmington under a fake Social Security number. The superseding indictment further alleges that, between 2015 and 2020, Dinoto did not report more than $1 million in funds she embezzled from the Acton company nor her wages from the Wilmington company on her federal income tax returns.
The charge of bank fraud provides for a sentence of up to 30 years in prison, five years of supervised release and a fine of up to $1 million or twice the gross gain or loss. The charge of wire fraud provides 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. The charge of filing a false tax return provides for a sentence of up to three years in prison, one year of supervised release and a fine of up to $250,000. The charge of aggravated identity theft provides a mandatory sentence of two years in prison, up to one year of supervised release and a fine of up to $250,000 or twice the gross gain or loss. 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; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Office; Joleen D. Simpson, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; and Jonathan Mellone, Special Agent in Charge of Department of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigations, made the announcement today. The Acton Police Department and Middlesex District Attorney’s Office also provided assistance. Assistant U.S. Attorney Kristen A. Kearney of Rollins’ Securities, Financial & Cyber Fraud Unit is prosecuting the case.
The details contained in the charging document are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Tennessee Man Indicted in Erie on Wire Fraud and ID Theft ChargesRead the Press Release
ERIE, Pa. - A resident of Knoxville, Tennessee has been indicted by a federal grand jury in Erie on charges of wire fraud and aggravated identity theft, United States Attorney Cindy K. Chung announced today.
The four-count Indictment named Justin Edward Zadorozny, 30, 10245 Boston Lane, Knoxville, Tennessee, as the sole defendant.
According to the Indictment presented to the court, Zadorozny used a stolen identity to apply online for and obtain a $10,000 loan, open a bank account, and attain various credit accounts.
The law provides for a maximum total sentence of 62 years in prison, a fine of $1,000,000, 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 Christian A. Trabold is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Millcreek Police Department 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.
Tangipahoa Parish Man Pleads Guilty to Violating the Federal Controlled Substances ActRead the Press Release
NEW ORLEANS, LOUISIANA – JAMES WATTS, age 50, a resident of Amite, Louisiana, pled guilty before U.S. District Judge Mary Ann Vial Lemmon yesterday to a one count superseding bill of information charging him with possession with intent to distribute five grams or more of methamphetamine, announced U.S. Attorney Duane A. Evans.
According to court documents, on March 8, 2021, Tangipahoa Sheriff’s Office deputies initiated a traffic stop on WATTS in Independence, Louisiana after they received a report that WATTS had assaulted a female victim. Upon stopping WATTS, deputies saw drug paraphernalia in plain view in the rear passenger seat. A subsequent search of the vehicle revealed 397 grams of methamphetamine.
During a subsequent interview with agents from the United States Drug Enforcement Administration, WATTS acknowledged the methamphetamine found during the search of the vehicle was his. He further admitted that he had sold approximately one pound of methamphetamine between March 6th and March 8th, 2021, and that he obtained two pounds of methamphetamine from his source of supply approximately every two weeks.
WATTS faces a mandatory minimum term of five years, up to forty years imprisonment, a fine of up to $5,000,000, at least four years of supervised release following any term of imprisonment, and a $100 mandatory special assessment fee.
This case was investigated by the U.S. Drug Enforcement Administration and Tangipahoa Parish Sheriff’s Office. The prosecution is being handled by Assistant United States Attorney J. Benjamin Myers.
Stephens County Man to Serve Life in Federal Prison for Sexual Abuse of a Child Under 12Read the Press Release
OKLAHOMA CITY – LAWRENCE JUNIOR LOFTIS, 65, of Stephens County, was sentenced to serve life in federal prison for abusive sexual contact with a child under 12 years old, announced Robert J. Troester, United States Attorney for the Western District of Oklahoma.
"Sexual abuse of children will not be tolerated because it exploits the most vulnerable members of our society and inflicts devastating and long-lasting trauma to the lives of victims," said U.S. Attorney Troester. "It is impossible to restore the innocence that was so callously stolen away from the child victim in this case. Our hope is that the life sentence of imprisonment for Mr. Loftis will bring some solace to the victim and the family because it ensures that he will never be able to abuse and exploit another child. I commend the FBI and Stephens County Sheriff’s Office who diligently investigated this case, the Stephens County District Attorney’s Office who provided valuable assistance, and the prosecutors who held this defendant accountable."
"The FBI is dedicated to ensuring the safety and security of Oklahoma’s youth, and yesterday’s sentence sends a clear message that crimes against children, in both urban and rural Oklahoma, will never be tolerated" said Edward Gray, Special Agent in Charge of the FBI Oklahoma City Division. "I am proud of the diligent work of our agents and law enforcement partners to identify and investigate sexual perpetrators and bring them to justice so they can’t victimize anyone again."
On April 20, 2021, a federal grand jury returned a three-count Indictment against Loftis, charging him with aggravated sexual abuse and abusive sexual contact with a child under 12 years old.
On August 13, 2021, after a four-day trial, a federal jury found Loftis guilty of abusive sexual contact with a child under 12 years old. Evidence at trial showed that, between early 2018 and late 2019, Loftis knowingly engaged in and caused sexual contact with a child, who was then eight to ten years old. The jury heard testimony from witnesses who had helped bring the sexual abuse to light, from the child victim, and from the Stephens County Sheriff’s Office investigator who interviewed Loftis. Finally, the jury heard the testimony of another victim who had been sexually abused by Loftis for many years when that person was a child. The jury did not reach a verdict on the two counts charging Loftis with aggravated sexual abuse of a child.
On March 7, 2022, Judge Wyrick sentenced Loftis to serve life in federal prison. In imposing the sentence, Judge Wyrick noted the nature and circumstances of Loftis’s sexual abuse, his history and characteristics, the need to adequately deter related conduct, and the need to protect the public from further crimes of Loftis. Loftis has been in custody since February 28, 2020.
Federal jurisdiction existed in this case because the crime was committed in Indian Country and Loftis was Native American. This was the first McGirt Indian Country case to go to trial in the Western District of Oklahoma.
This case is the result of an investigation by the Federal Bureau of Investigation’s Oklahoma City Field Office and the Stephens County Sheriff’s Office, with assistance from the Stephens County District Attorney’s Office. Assistant U.S. Attorneys Bow Bottomly and Brandon Hale are prosecuting the case.
This case is part of Project Safe Childhood, a nationwide initiative by the Department of Justice (DOJ) to combat child sexual exploitation and abuse. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Reference is made to court filings for further information.
Spring Hill Sisters Charged in Tax Fraud ConspiracyRead the Press Release
NASHVILLE – A federal indictment unsealed today, charges two Spring Hill, Tennessee women with conspiracy to commit tax fraud and 12 counts of employment tax fraud, announced U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee.
Ketura Oden, 46, and Consuela Oden, 51, were arrested by IRS Criminal Investigation agents earlier today.
According to the indictment, between February 2015 and February 2022, Ketura Oden and Consuela Oden, who are sisters, conspired to defraud the IRS with respect to employment taxes. The indictment alleges that beginning in 2004, Ketura Oden owned and operated a home health care business, Complete Care Choice, in Spring Hill, Tennessee. Between 2006 and 2012, the IRS initiated two collections actions because Ketura Oden had withheld taxes from her employees’ paychecks while failing to pay those taxes to the IRS. Ketura Oden entered into two installment agreements with the IRS.
In January 2013, the IRS opened another collection action on Complete Care Choice because Ketura Oden had again withheld employment taxes from her employees’ paychecks while failing to pay those taxes to the IRS. In December 2014, the IRS notified Ketura Oden that if she did not pay the employment taxes, the IRS would recommend her for civil injunction or criminal prosecution. Two months later, Ketura Oden opened her business under a new name, Complete Home Care Services of TN, Inc. (Complete Home Care), and registered the business in the State of Tennessee, listing Consuela Oden as the owner.
A few days after opening the business under the new name, Ketura Oden told the IRS that she was closing Complete Care Choice and going to work at another home health agency as a wage-earning employee. Ketura Oden also falsely told the IRS that Complete Home Care provided different services than Complete Care Choice. In fact, Ketura Oden continued to run the business, and Complete Home Care continued to operate just as Complete Care Choice had done, with the same employees, clients, customers, and vendors. Consuela Oden held herself out to the IRS and others as the “owner” of the business.
In January 2017, the IRS initiated a collection action against Complete Home Care for unpaid employment taxes. During the collection action, both women held Consuela Oden out to be the owner of the business.
In October 2017, Consuela Oden filed a personal income tax return, on which she claimed a loss from the business. That loss reduced her tax liability and caused Consuela Oden to receive a tax refund in the amount of $14,534, which the IRS applied to reduce a previously assessed tax debt against her.
In January 2018, a Special Agent with IRS-Criminal Investigation issued a summons to Consuela Oden that required her to provide the IRS with records related to Complete Home Care. Consuela Oden did not comply with the summons.
A federal district court judge in the Middle District of Tennessee issued an order for Consuela Oden to show cause why she had not complied with the summons. Consuela Oden eventually provided some records in response to the summons.
In addition to conspiracy, both Ketura Oden and Consuela Oden are also charged with twelve counts of employment tax fraud. The indictment alleges that the sisters withheld federal income taxes, Medicare taxes, and Social Security taxes from their employees’ paychecks, but did not pay those taxes over to the IRS as they were required to do. Ketura Oden and Consuela Oden allegedly withheld and failed to pay to the IRS approximately $640,789 in employment taxes that they withheld from Complete Home Care employees’ paychecks.
If convicted, both defendants face up to five years in prison and a $250,000 fine on each count.
This case was investigated by IRS-Criminal Investigation. Assistant U.S. Attorney Kathryn W. Booth is prosecuting the case.
An indictment is merely an accusation. The defendants are presumed innocent until proven guilty in a court of law.
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South Florida Sex Trafficker Sentenced to 25 Years’ ImprisonmentRead the Press Release
Miami, Florida – A Miami man who forced a woman and a 16-year-old girl into selling themselves for sex was sentenced today in Miami, Florida to 25 years’ imprisonment.
According to court documents, Julius Dwight Mozie met the minor after she had run away from home. Mozie coerced the minor into taking lewd photographs and then subsequently posted the photographs on a website to advertise the minor victim for commercial sex acts. Then, Mozie forced the minor to perform commercial sex acts. Around the same time, Mozie also forced an adult victim to perform commercial sex acts for several months. If the victims failed to comply with Mozie’s instructions, he would subject them to his “Torture Chamber” to punish them. In the “Torture Chamber,” Mozie handcuffed, beat, raped, and waterboarded his victims. He also urinated and defecated on them.
United States Senior District Court Judge Beth Bloom imposed the 25-year sentence, which also included a term of 15 years of supervised release following incarceration.
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 the U.S. Attorney’s Offices and the Criminal Divisions Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida; George L. Piro, Special Agent in Charge, FBI Miami; Anthony Salisbury, Special Agent in Charge, Homeland Security Investigations (HSI), Miami Field Office; W. Howard Harrison, Chief of Plantation Police Department; and George A. Perez, Interim Director of the Miami-Dade Police Department (MDPD) announced the sentence.
This case was investigated by the FBI’s Crimes Against Children Human Trafficking Task Force, in partnership with Homeland Security Investigations, Plantation Police Department, MDPD’s Human Trafficking Squad, the South Florida Human Trafficking Task Force, and the National Center for Missing and Exploited Children. This case was prosecuted by Assistant U.S. Attorneys Lacee Monk and Manolo Reboso.
To report suspected human trafficking or to obtain resources for victims, please call 1-888-373-7888; text “BeFree” (233733), or live chat at HumanTraffickingHotline.org. The toll-free phone, SMS text lines, and online chat function are available 24 hours a day, 7 days a week, 365 days a year. Help is available in English, Spanish, Creole, or in more than 200 additional languages. The National Hotline is not managed by law enforcement, immigration or an investigative agency. Correspondence with the National Hotline is confidential and you may request assistance or report a tip anonymously.
To learn more about the National Resource Hotline visit www.humantraffickinghotline.org. To learn more about the U.S. Department of Justice’s efforts to combat human trafficking visit www.justice.gov/humantrafficking.
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 no. 20-cr-20087.
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Six Augusta-area defendants indicted on separate firearms, drug chargesRead the Press Release
AUGUSTA, GA: Three Augusta men face felony gun charges while three others also faces drug trafficking charges as Richmond County law enforcement officials pursue individuals associated with an increase in gang-related violent crime.
Federal indictments returned in the March term of the Southern District of Georgia U.S. District Court Grand Jury charge all six defendants with Possession of a Firearm by a Convicted Felon, a charge that carries a statutory sentence upon conviction of up to 10 years in federal prison – with a possible sentence of up to life in prison for defendants with a significant record of criminal convictions.
“Law enforcement agencies throughout the Southern District need assistance in battling the increase in violent crime and illegal firearms, and our office continues to answer the call to help,” said David H. Estes, U.S. Attorney for the Southern District of Georgia. “We stand with Richmond County Sheriff Richard Roundtree in protecting the law-abiding citizens of the Augusta area by removing those who would threaten the community’s safety.”
Defendants charged in the Augusta area include:
- Reginald DeMarco Smith, a/k/a “Gunslinger,” 48, of Augusta, charged with Possession with Intent to Distribute 500 Grams or More of Cocaine, and An Amount of Fentanyl, “Crack” Cocaine, and Marijuana; Possession of a Firearm in Furtherance of a Drug Trafficking Crime; and Possession of a Firearm by a Convicted Felon. Smith sped away from an attempted traffic stop Feb. 12, 2021, by a Richmond County Sheriff’s deputy, then abandoned his vehicle and ran into the woods. Investigators found a loaded pistol, a significant amount of drugs, and more than $18,000 in cash at the scene, and Smith was located and arrested nine months later.
- Robert Lewis Coney Jr., 50, of North Augusta, S.C., and Donnie Lee Curtis Jr., 37, of Tunnel, Ga., each charged with Conspiracy to Possess with Intent to Distribute, and To Distribute, 50 Grams or More of Methamphetamine; Possession with Intent to Distribute 50 Grams or More of Methamphetamine; two counts of Possession of a Firearm in Furtherance of a Drug Trafficking Crime; and Possession of a Firearm by Convicted Felon. The two were identified during a drug trafficking investigation in early 2021, and arrested May 19, 2021, in the parking lot of a motel in Columbia County.
- Lyondo Larell Ware, a/k/a “China,” 41, of Augusta, charged with Possession of a Firearm by a Convicted Felon. Ware was on felony probation when Richmond County deputies searching his residence Sept. 22, 2021, found a loaded pistol.
- Willie Liddell, 38, of Augusta, charged with Possession of a Firearm by a Convicted Felon. Richmond County Sheriff’s deputies were assisting the U.S. Marshals Service in arresting Liddell on an outstanding warrant when they discovered a pistol in Liddell’s jacket pocket.
- Elijawan Leysath Rhodes, 29, of Augusta, charged with Possession of a Firearm by a Convicted Felon. Richmond County Sheriff’s Office investigators responding to gunfire at a Wrightsboro Road motel Dec. 31, 2021, arrested Rhodes after a brief chase when they found a pistol in Rhodes’ vehicle.
Criminal indictments contain only charges; defendants are presumed innocent unless and until proven guilty.
The cases are being investigated by the Richmond County Sheriff’s Office, the U.S. Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshals Service, and the Columbia County Sheriff’s Office, and prosecuted for the United States by Assistant U.S. Attorneys Patricia G. Rhodes, Henry W. Syms Jr., and Jeremiah L. Johnson.
Sherwood Woman Sentenced to 96 Months in Prison for Bank Fraud and Stealing from Social SecurityRead the Press Release
LITTLE ROCK—A Sherwood woman was sentenced today for bank fraud and theft of government funds. Kelli Hogue, formerly known as Kelli Cashion, 59, was sentenced to 96 months in federal prison by United States District Judge Lee P. Rudofsky.
Hogue was charged by a federal grand jury in October 2019, and the indictment alleged that she had been employed as a clerk and paralegal at the Herrod Law Firm in North Little Rock from 2009 until 2018. Hogue had previously been a licensed attorney in Arkansas from 1996 until 2001 but was prohibited from practicing law after a state forgery conviction.
While working for the law firm, Hogue was also employed as the bookkeeper for Runyan Sanitary Sewer District 211, a non-profit entity that owned and operated a sewage plant for the North Little Rock Water Department, from October 2010 until November 2018. From 2011 until 2018, Hogue wrote checks payable to herself from the Runyan bank account and deposited them into accounts she controlled, and she hid these checks by making false entries in QuickBooks, where they appeared as business expenses. She issued approximately 180 unauthorized checks to herself from Runyan’s bank account, held at National Bank of Arkansas and later at Arvest Bank, totaling approximately $669,599.71.
Hogue also falsified information in order to receive Social Security disability payments by informing the Social Security Administration (SSA) she had stopped working for the law firm in 2008 or 2009, which she had not. She did not report her work as a bookkeeper for Runyan, either, and she received additional disability payments during the time she worked as a bookkeeper. In this way, she stole approximately $120,523 in Social Security disability payments.
Hogue pleaded guilty in August 2021. In January 2022, Hogue submitted four letters to the Court in preparation of her sentencing in support of her request for a reduced sentence. Three letters purported to be from her doctors, and one letter claimed to be from her pastor. Federal investigators interviewed those whose signatures were on the letters, but all four people said they did not write the letters in support of Hogue and that Hogue had falsified them. Judge Rudofsky revoked Hogue’s pre-sentencing release and ordered her to remain in custody pending sentencing.
At today’s sentencing hearing, it became public that Hogue had already repaid $120,000 to the SSA and $669,000 to Runyan, but she did so with money she obtained after falsifying her federal tax returns and receiving over $4 million. The investigation regarding her false tax returns is ongoing.
“This defendant has spent years defrauding her employer as well as the government out of hundreds of thousands of dollars,” stated United States Attorney Jonathan D. Ross. “Her brazen theft is an injustice to those who pay into the system as well as those who truly need its assistance, and today’s sentence indicates the seriousness of her greed-fueled crimes.”
“For more than 10 years, Kelli Hogue committed fraud by continuing to receive Social Security disability insurance benefits while working. This sentence demonstrates that my office will continue to protect the integrity of the SSA and hold accountable those who defraud its programs,” said Gail S. Ennis, Inspector General for the SSA. “I want to thank the U.S. Attorney’s Office for prosecuting this case.”
In addition to the term of imprisonment, Judge Rudofsky also sentenced Hogue to five years of supervised release following her term of imprisonment and a fine of $100,000.00. The investigation was conducted by the United States Secret Service and the Social Security Administration – Office of the Inspector General, and the case was prosecuted by Assistant United States Attorney Pat Harris.
Santa Paula Doctor and Lancaster Patient Recruiter Arrested in Hospice Fraud Scheme that Received over $30 Million from MedicareRead the Press Release
LOS ANGELES – Authorities today arrested a physician and a marketer on federal charges stemming from a scheme that bilked Medicare out of more than $30 million for medically unnecessary hospice services provided to patients who were obtained through illegal kickbacks.
Dr. Victor Contreras, 66, of Santa Paula, and Callie Jean Black, 63, of Lancaster, are scheduled to be arraigned this afternoon in United States District Court.
A 14-count indictment unsealed today also names the former Pasadena resident who controlled the hospices, Juanita Antenor, 59, who remains at large and is believed to be in the Philippines.
According to court documents, Antenor owned a Pasadena hospice company called Arcadia Hospice Provider, Inc., and she controlled a second, Saint Mariam Hospice, Inc., that billed Medicare and Medi-Cal for hospice services for patients who were not terminally ill. In some case, the companies submitted bills for services that were never provided.
Contreras, who was on probation imposed by the California Medical Board while he was part of the scheme, provided fraudulent certifications for some of these patients, including patients he claimed to have examined, but never actually saw, according to the indictment.
Antenor allegedly paid marketers, including Black, illegal kickbacks for the patients referred to Arcadia and Saint Mariam.
From approximately September 2014 until April 2019, Arcadia submitted to Medicare nearly $23 million in claims for hospice services provided to beneficiaries and was paid approximately $18,853,757 for those claims, according to the indictment. Between February 2015 and April 2019, St. Mariam submitted to Medicare approximately $13,742,116 in claims for hospice services and was paid approximately $11,395,849 for those claims. Contreras is linked to about $5.1 million of the total claims paid by Medicare.
Additionally, Arcadia and St. Mariam submitted more than $5.5 million in claims to Medi-Cal, which paid the companies a total of just over $1.35 million.
Antenor and Contreras are charged in the indictment with health care fraud – six counts name Antenor, and Contreras is charged with five counts. Additionally, Antenor is charged with four counts of paying illegal kickbacks for health care referrals, and Black is charged with four counts of receiving illegal kickbacks.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proved guilty beyond a reasonable doubt.
If convicted of the charges in the indictment, Contreras would face a statutory maximum sentence of 50 years in prison, while Black would face up to 40 years. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The United States Department of Health and Human Services, Office of the Inspector General; the FBI; and California Department of Justice investigated this matter.
Assistant United States Attorney Kristen A. Williams of the Major Frauds Section is prosecuting this case.
San Antonio Man Sentenced to 20 Years in Prison for Child Pornography ChargesRead the Press Release
SAN ANTONIO – A San Antonio man was sentenced today to 20 years in prison for distribution of child pornography.
According to court documents, in 2019, Lynn Maxwell Gerstner, 72, befriended a minor in South Carolina. The online relationship became sexual in nature when Gerstner began talking openly about sex and asked the minor to send nude photos. The minor produced and shared nude photos and sexually explicit videos. When the minor tried to break the relationship off, Gerstner contacted the minor’s employer stating he had videos of the minor that were “extremely sexual in nature,” and thought the minor’s employment should be terminated. Instead, the employer contacted law enforcement in San Antonio.
On April 23, 2019, Bexar County Sheriff’s Office executed a search warrant at Gerstner’s residence and recovered cell phones that belonged to Gerstner. Numerous images of child pornography were found on the phones including sexually explicit photos of children as young as four.
On June 11, 2020, Gerstner pleaded guilty to one count of distribution of child pornography. In addition to the prison sentence, Gerstner was ordered to pay $20,000 in restitution and a lifetime of supervised release after prison.
“This defendant spent the majority of his life as a predator, exploiting young children for his own sexual gratification,” said U.S. Attorney Ashley C. Hoff. “Even after law enforcement agents seized his devices, he immediately went out and obtained new devices so he could continue to have access to child sexual abuse materials. He not only sexually exploited minors, but he also actively attempted to cause additional harm if they didn’t comply with his sexual demands. The court recognized the increased danger he presented to our society and sentenced him appropriately.”
“Every day, our nation’s children are being abused and exploited by child predators,” said FBI Acting Special Agent in Charge Jason Hudson. “But thankfully, now there will be one less violent offender on the streets, harming the children of our community. The FBI and our law enforcement partners will continue to relentlessly pursue and prosecute those who would commit heinous acts against our most precious treasure – our children.”
The FBI, along with invaluable assistance from the Bexar County Sheriff’s Office, investigated the case.
Assistant U.S. Attorney Tracy Thompson prosecuted 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.
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San Antonio Man Sentenced for Bank FraudRead the Press Release
SAN ANTONIO – A San Antonio man was sentenced today to 30 months in prison for stealing mail and cashing fraudulent checks.
According to court documents, Zachary Wayne Crowell, 35, was part of a group who broke into mailboxes to steal checks, credit cards, identification documents, bank statements and other financial statements. Checks were “washed” to remove the original payee’s name so that they could be deposited into accounts controlled by Crowell or his codefendant Brandon James Waggoner. Funds were then withdrawn before the checks were returned as fraudulent. Crowell also used stolen debit and credit cards to purchase firearms illegally in other people’s names.
On May 18, 2021, Crowell pleaded guilty to one count of Bank Fraud. In addition to the prison sentence, Crowell was ordered to pay $39,743.62 in restitution and complete five years of supervised release after serving his sentence.
“Mailbox break-ins and postal theft are serious crimes that can create havoc as they often lead to further affronts such as fraud, financial loss and identity theft, as happened here,” said U.S. Attorney Ashley C. Hoff. “It is striking that Zachary Crowell illegally purchased guns as a result of breaking into mailboxes in this case. We will continue to work closely with our partners to investigate and prosecute these matters to the fullest extent of federal law.”
“Mail and Identity theft investigations remain a top priority for the Secret Service in our mission to protect the nation’s financial institutions and victims of fraud,” said U.S. Secret Service Special Agent in Charge Paul Duran. “The success in this case demonstrates our commitment to that mission and the collaborative efforts with our law enforcement partners.”
“One of the top priorities of the U.S. Postal Inspection Service (USPIS) is to protect and maintain the integrity of the U.S. Mail,” said Scott Fix, Inspector in Charge of the Houston Division of the USPIS. “Postal Inspectors will work tirelessly to identify and arrest individuals like Zachary Wayne Crowell who choose to steal mail and use it to commit further crimes. Today’s sentencing is the culmination of many hours of hard work by Postal Inspectors and our local law enforcement partners including the Texas Department of Public Safety, Bexar County Sheriff’s Office and San Antonio Police Department, to identify and bring these individuals to justice.”
On October 5, 2021, codefendant Brandon James Waggoner pleaded guilty to one count of Bank Fraud. He was sentenced on February 1, 2022, to time served, a five-year supervised release and ordered to pay $4,992 in restitution.
The U.S. Secret Service and U.S. Postal Inspection Service investigated the case.
Assistant U.S. Attorney William R. Harris prosecuted the case.
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Rapid City Man Sentenced to Four Years in Federal Prison for Drug Trafficking ConspiracyRead the Press Release
United States Attorney Dennis R. Holmes announced that a Rapid City, South Dakota, man convicted of Conspiracy to Distribute a Controlled Substance was sentenced on February 24, 2022, by U.S. District Judge Jeffrey L. Viken.
Melvin Corbine, age 44, was sentenced to four years in federal prison, followed by three years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Corbine was indicted for Conspiracy to Distribute a Controlled Substance by a federal grand jury on July 23, 2020. He pleaded guilty on September 24, 2021. While involved in the conspiracy, Corbine distributed methamphetamine in the Rapid City area to others for use and distribution.
This case was investigated by the Unified Narcotics Enforcement Team (UNET), Drug Enforcement Agency, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. UNET is comprised of law enforcement from the Pennington County Sheriff’s Office, Rapid City Police Department, South Dakota Division of Criminal Investigation, South Dakota National Guard, and the South Dakota Highway Patrol. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.
Corbine was immediately returned to the custody of the U.S. Marshals Service.
Rapid City Man Indicted on Child Pornography ChargesRead the Press Release
United States Attorney Dennis R. Holmes announced that a Rapid City, South Dakota, man has been indicted by a federal grand jury for two counts of Receipt of Child Pornography and two counts of Possession of Child Pornography.
Titus Amiotte, age 21, was indicted on February 17, 2022. He appeared before U.S. Magistrate Judge Daneta Wollmann on February 25, 2022, and pleaded not guilty to the Indictment.
The maximum penalty upon conviction is a mandatory minimum of five years up to 20 years in federal prison and/or a $250,000 fine, lifetime supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
Amiotte was federally indicted following a Cybertip from the National Center for Missing and Exploited Children. The charges relate to Amiotte receiving and possessing child pornography between 2020 and 2022. The charges are merely accusations and Amiotte is presumed innocent until and unless proven guilty.
The investigation is a joint effort between the Internet Crimes Against Children Taskforce, Homeland Security Investigations, South Dakota Division of Criminal Investigation, Rapid City Police Department, and the Pennington County Sheriff’s Office. Assistant U.S. Attorney Heather Sazama is prosecuting the case.
Amiotte was remanded to the custody of the U.S. Marshals Service pending trial, which has been set for May 3, 2022.
Purveyor of fake COVID-19 vaccines sentencedRead the Press Release
Seattle – A Redmond, Washington, man who held himself out as a biotech expert was sentenced today in federal court for introducing misbranded drugs into interstate commerce, announced U.S. Attorney Nick Brown. Johnny T. Stine, 57, was sentenced to 5 years of probation and $246,986 in restitution. Stine claimed to be Founder & President of North Coast Biologics. In a variety of online postings from as early as March 2, 2020, Stine claimed to have developed a COVID-19 vaccine that he offered to inject in customers for $400-$1000 each. At the sentencing hearing Magistrate Judge Brian A. Tsuchida said, “This is a difficult and troubling case…. It would be completely reasonable to send you to jail, but I’m going to give you a longer probation sentence so we can keep an eye on you.”
“This wasn’t just a COVID related scheme. From 2018-2020, Mr. Stine made more than $200,000 selling cancer patients his ‘vaccines’ that he said would cure their disease,” said U.S. Attorney Nick Brown. “He truly preyed on those who were desperate for any glimmer of hope, injecting people with unapproved substances developed in his rented garage, with no assurance of safety or purity.”
According to records filed in the case, in early March 2020, the Food and Drug Administration - Office of Criminal Investigation (FDA-OCI), was alerted to Stine’s posts on social media. An investigator contacted Stine in an undercover capacity, and Stine represented that he had a COVID-19 vaccine for sale. Stine claimed that his main biotech effort was creating vaccines that attack cancer tumors. He indicated that he had used a similar method to develop his COVID-19 vaccine. On March 27, 2020, even as the undercover investigation was ongoing, FDA-OCI received a complaint from an area resident about Stine injecting a friend of the complainant with a “vaccine” for COVID-19.
In early April 2020, investigators met with Stine in undercover roles. Stine represented to the agents that he traveled across the U.S. giving his vaccine. Stine indicated he would make a trip to Oregon and California to vaccinate family members of the undercover agents.
In late April, responding to complaints from the public, the Washington State Attorney General issued a ‘cease and desist’ letter to Stine, telling him to stop making claims and offering his “vaccine” for COVID-19. Rather than be deterred, Stine indicated it had just increased demand for his injections which he now called an “immunogen” instead of a vaccine. In June, Stine signed a Consent Decree with the Washington State Attorney General wherein he agreed not to promote or sell his COVID-19 vaccine.
Still, in August 2020, Stine again communicated with an undercover agent and traveled to Idaho to “vaccinate” the agent. Law enforcement contacted Stine in Idaho and seized the “vaccine.” Agents also executed a court-authorized search warrant on the Redmond warehouse where Stine claimed to conduct his research.
In asking for a custodial sentence prosecutors wrote to the court, “Mr. Stine is dangerously arrogant or overwhelmingly greedy, or both. Time and again, he placed his misguided confidence and personal interest ahead of the wellbeing of the people whose health he endangered by providing them unapproved, and most likely ineffective, medical treatment; medical treatment that dissuaded them from pursuing actual effective treatment and/or from acting in ways that would protect them from infection.”
“The FDA works tirelessly to identify and neutralize threats to consumers, including halting the sale of products with unproven claims to treat, prevent, or cure COVID-19 and other conditions, such as these unapproved injectable drugs that were purported to be ‘vaccines’,” said Special Agent in Charge Lisa L. Malinowski, FDA Office of Criminal Investigations Los Angeles Field Office. “We will continue to investigate and bring to justice those whose actions threaten the public’s health in this time of heightened risks.”
“It’s important for consumers to know when someone is trying to take advantage of them, and the old adage that if it’s it too good to be true then it isn’t true certainly applies here,” said Special Agent in Charge (SAC) Robert Hammer, who oversees HSI operations in the Pacific Northwest. “Legitimate businesses do not evade law enforcement agencies and they do not evade consumer safety rules. HSI Seattle appreciates the work done by the U.S. Food and Drug Administration and Seattle Police Department, and we will continue utilizing all of our partnerships to ensure the health and safety of our communities.”
The case was investigated by the FDA Office of Criminal Investigations, Homeland Security Investigations, and the Seattle Police Department.
The case is being prosecuted by Assistant United States Attorneys Brian Werner and Andrew Friedman. Mr. Werner serves as the COVID-19 fraud coordinator for the U.S. Attorney’s Office.
Poca Man Pleads Guilty to Transporting Child PornographyRead the Press Release
HUNTINGTON, W.Va. – A Poca man pleaded guilty today to transportation of child pornography.
According to court documents and statements made in court, Keegan Shane Stanley, 31, uploaded videos of child pornography to Dropbox, an online file sharing website. A search of his residence revealed over 1,600 images of child pornography
Stanley is scheduled to be sentenced on June 16, 2022 and faces a mandatory minimum of five years and up to 20 years in prison.
United States Attorney Will Thompson made the announcement and commended the investigative work of the Homeland Security Investigations (HSI) and the Putnam County Sheriff’s Department.
United States District Judge Robert C. Chambers presided over the hearing. Assistant U.S. Attorney Julie White is prosecuting the case.
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. 3:21-cr-00208.
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Pittsburgh Man Indicted on Drug and Gun Law ViolationsRead the Press Release
PITTSBURGH, PA—A resident of Pittsburgh, PA has been indicted by a federal grand jury in Pittsburgh on charges of violating federal drug laws and gun laws, United States Attorney Cindy K. Chung announced today.
The two-count Indictment named Ryan Moore-Daniels, 37 of the City’s Beechview neighborhood, as the sole defendant.
According to Indictment presented to the court, on December 9, 2021, the defendant, Ryan Moore-Daniels, did knowingly, intentionally and unlawfully possess with intent to distribute a quantity of a mixture and substance containing a detectable amount of cocaine, a Schedule II controlled substance. Additionally, on the same date, Moore-Daniels, knowingly possessed a firearm, in furtherance of a drug trafficking crime for which he may be prosecuted.
The law provides for a maximum total sentence of 25 years in prison, a fine of $1,250,000 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 Katherine C. Jordan is prosecuting this case on behalf of the government.
The Drug Enforcement Administration, Pennsylvania Office of Attorney General, Internal Revenue Service, City of Pittsburgh Bureau of Police, Pennsylvania State Police, New Castle Police Department, Allegheny County Police Department, Robinson Township Police Department, Monessen Police Department conducted the investigation leading to the Indictment in this case.
This prosecution is a result of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles high-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten communities throughout the United States. OCDETF uses a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Pine Ridge Man Pleads Not Guilty to Sexual Abuse of a MinorRead the Press Release
United States Attorney Dennis R. Holmes announced that a Pine Ridge, South Dakota, man has been indicted by a federal grand jury for Sexual Abuse of a Minor and Abusive Sexual Contact.
Howard Blue Bird, age 44, was indicted on November 18, 2021. He appeared before U.S. Magistrate Judge Daneta Wollmann on March 2, 2022, and pleaded not guilty to the Indictment.
The maximum penalty upon conviction is 15 years in federal prison and/or a $250,000 fine, up to life of supervised release, and a $200 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to Blue Bird knowingly engaging in a sexual act with a minor in 2018 near Porcupine, South Dakota.
The charges are merely accusations and Blue Bird is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Oglala Sioux Tribe Department of Public Safety and the Federal Bureau of Investigation. Assistant U.S. Attorney Heather Sazama is prosecuting the case.
Blue Bird was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has been set for May 10, 2022.
Pikeville Man Sentenced for Wire Fraud and Healthcare FraudRead the Press Release
PIKEVILLE, Ky.- Eugene Sisco, III, 36, of Pikeville, Ky., was sentenced Tuesday to serve 125 months in prison by U.S. District Judge Robert E. Wier, after a jury convicted him in November 2021 of wire fraud and health care fraud.
According to the trial evidence, Sisco operated several medication assisted treatment (“MAT”) clinics in Pike, Floyd, and Harlan Counties that offered treatment to patients suffering from opioid addiction. These clinics were enrolled as providers in the Kentucky Medicaid program, and under Kentucky law were required to bill that insurance program for MAT services rendered to Medicaid patients. The evidence demonstrated that Sisco deceived patients into paying $200-$300 per month in cash for treatment at his clinics, despite having Medicaid insurance, by falsely claiming his clinics were not eligible to bill Medicaid for certain services they provided. The evidence at trial showed that the cash payments from patients totaled around $5 million between May 2016 and October 2019, most of it from Medicaid beneficiaries for whom the services should have cost nothing. At the same time, Sisco caused his clinics to bill Medicaid for MAT services, receiving millions in reimbursements from that program as well.
The jury also found that Sisco engaged in a health care fraud scheme, by causing his laboratory, Toxperts, LLC, to bill for medically unnecessary urine drug testing of samples collected from patients at his clinics. The physician witnesses at trial testified that they did not order this urine drug testing, and that some of it was done at Sisco’s direction for billing purposes, as opposed to any medical reason. Sisco is not a doctor or medical professional. At sentencing, Judge Wier found that this fraud caused a loss of more than $2 million to the Medicaid and Medicare programs.
Under federal law, Sisco must serve 85 percent of his prison sentence. In addition, Sisco was ordered to pay $5.7 million in restitution. Sisco will be under the supervision of the U.S. Probation Office for three years, following his release from prison.
Carlton S. Shier, IV, United States Attorney for the Eastern District of Kentucky; Jodi Cohen, Special Agent in Charge, FBI, Louisville Field Office; Daniel Cameron, Attorney General of Kentucky; and Col. Phillip Burnett, Jr., Commissioner, Kentucky State Police; announced the sentence.
The investigation was conducted by FBI, KSP, and the Office of the Attorney General, Office of Medicaid Fraud and Abuse. The United States was represented in the case by Assistant U.S. Attorney Paul McCaffrey.
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Pharmacy Owner Convicted of Unlawfully Dispensing 1.5 Million Doses of Controlled SubstancesRead the Press Release
A federal jury in the Southern District of Texas convicted a Texas pharmacy owner yesterday for unlawfully distributing controlled substances and laundering money from his now-shuttered pharmacies.
According to court documents and evidence presented at trial, Clint Carr, 32, of Cypress, co-owned and operated CC Pharmacy in Houston, and CC Pharmacy 2 and CC Pharmacy 3 in the Austin area with co-conspirator Dustin Curry. In just 18 months, Carr, Curry and their co-conspirators unlawfully distributed over 1.5 million dosage units of controlled substances, including over 1.1 million pills of oxycodone and hydrocodone. Trial evidence showed that CC Pharmacy unlawfully dispensed controlled substances — mostly oxycodone and hydrocodone — in bulk for cash, based on mostly forged or stolen prescriptions brought in by drug couriers posing as staff of long-term care facilities. CC Pharmacy brought in over $5.5 million from the unlawful sale of these controlled substances, cash proceeds which Carr and his co-conspirators structured to avoid reporting requirements. Evidence at trial showed that Carr used these drug proceeds to finance a lavish lifestyle, including the down payment on a $100,000 Ford pickup truck.
“Carr’s conviction is a reminder that the Department of Justice will hold accountable those who have helped fuel the country’s opioid epidemic,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “This includes pharmacy owners who have effectively poisoned our communities.”
“This case is another example of the DEA’s continued commitment to combat our nation’s opioid crisis to reduce the diversion of controlled substances that drives drug overdose deaths and violent crime in our communities,” said Special Agent in Charge Daniel C. Comeaux of the Drug Enforcement Administration (DEA), Houston Division. “This conviction is a credit to the tireless work of our investigators and prosecutors to make our communities safer.”
Carr was convicted of one count of conspiracy to unlawfully distribute and dispense controlled substances, four counts of unlawfully distributing and dispensing controlled substances, one count of conspiracy to launder monetary instruments, and two counts of engaging in monetary transactions in property derived from specified unlawful activity. He faces a maximum total penalty of up to 140 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Sentencing is scheduled for May 27.
To date, five other co-conspirators, including Curry, have pleaded guilty to unlawfully distributing controlled substances.
DEA Houston, including the DEA Austin Resident Office, investigated the case.
Trial Attorneys Devon Helfmeyer and Courtney Chester of the Criminal Division’s Fraud Section are prosecuting the case. Assistant U.S. Attorney Kristine Rollinson of the Southern District of Texas is handling forfeiture.
Owners and Operators of Online Cryptocurrency Companies Indicted for Defrauding InvestorsRead the Press Release
An 11-count indictment was unsealed today in federal court in Brooklyn charging Dwayne Golden, Gregory Aggesen, and Marquis Demacking Egerton, the owners and operators of the web-based virtual currency companies EmpowerCoin, ECoinPlus and Jet-Coin, with conspiracy to commit wire fraud and money laundering, and related substantive counts, in connection with a sophisticated scheme to steal assets from investors. Golden, Aggesen and William White were also charged with conspiracy to obstruct justice, obstructing justice and tampering with evidence. The defendants were arrested this morning and will be arraigned in the Eastern District of New York at a later date.
Breon Peace, United States Attorney for the Eastern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the arrests and charges.
“As alleged, the defendants engaged in a sophisticated scheme that preyed on unsuspecting investors nationwide with false promises of guaranteed returns and virtual currency trading opportunities. When the companies collapsed and their criminal conduct was about to be exposed, the defendants attempted to cover their tracks and destroy evidence,” stated United States Attorney Peace. “The scams may have been online and virtual, but these charges are very real. This Office is committed to protecting the public from criminals who view cryptocurrency as a new frontier to perpetrate old fashioned crimes of fraud and money laundering.”
Mr. Peace also thanked the Commodity Futures Trading Commission for their assistance in this matter.
“Whether we’re dealing with virtual currency or cold-hard cash, schemers continue to capitalize on investors’ best intentions and pocket their ill-gotten gains,” stated FBI Assistant Director-in-Charge Driscoll. “As alleged, those charged today defrauded their victims and generated more that $40 million for their own benefit. This office remains committed to rooting out fraud in all its forms.”
According to the indictment, between April 2017 and August 2017, Golden, Aggesen, and Egerton, together with others, operated a series of web-based virtual currency companies known as EmpowerCoin, ECoinPlus and Jet-Coin. The websites for EmpowerCoin, ECoinPlus and Jet-Coin fraudulently promised investors and potential investors guaranteed fix returns on virtual currency investments. They falsely promised investors and potential investors that these returns were made possible through overseas virtual currency trading operations. Investors and potential investors were encouraged to invest in the companies with either cash or Bitcoin. In reality, the assets were used to repay other investors or simply stolen, including by Golden, Aggesen and Egerton. Golden maintained exclusive access to the Bitcoin and often siphoned Bitcoin funds off the top before paying any investors. The companies collapsed shortly after receiving the investors’ assets, without having engaged in trading activity. In total, EmpowerCoin, ECoinPlus and Jet-Coin received more than $40 million from investors.
The indictment further alleges that, from July 2017 to the present, Golden, Aggesen and White conspired to obstruct a Federal Trade Commission (“FTC”) investigation and a federal criminal grand jury investigation into the fraudulent schemes. Golden, Aggesen and White allegedly destroyed evidence, and White, on Aggesen’s behalf, provided false and misleading information to the FTC and in response to a federal grand jury subpoena.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants face up to 20 years in prison.
If you were an EmpowerCoin.com, ECoinPlus.com and/or Jet-Coin.com customer and would like to file a complaint, please visit www.iC3.gov. Please reference “EmpowerCoin,” “ECoinPlus” or “Jet-Coin” in your complaint.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Alixandra E. Smith, Catherine M. Mirabile and Nick M. Axelrod are in charge of the prosecution, with the assistance of Assistant United States Attorney Claire Kedeshian of the Office’s Asset Recovery Section who is handling forfeiture matters.
The Defendants:
DWAYNE GOLDEN
Age: 57
Harrisburg, PennsylvaniaGREGORY AGGESEN
Age: 58
Stanfordville, New YorkMARQUIS DEMACKING EGERTON (also known as “Mardy Eger”)
Age: 58
Washington, North CarolinaWILLIAM WHITE
Age: 54
Harrisburg, PennsylvaniaE.D.N.Y. Docket No. 21-CR-88 (MKB)
Owner of Rust Rare Coin Sentenced to 19 Years in Prison for Running Fraudulent Silver Trading ProgramRead the Press Release
SALT LAKE CITY – Gaylen Dean Rust, 62, of Layton, was sentenced to 19 years in federal prison by a U.S. District Court Judge on Tuesday, after being convicted of conspiracy to commit wire fraud, conspiracy to commit money laundering, and securities fraud. Rust was ordered to pay over $153 million dollars to the 568 victims of his criminal scheme, and an order of forfeiture in the same amount was entered against Rust for all money and assets owned by Rust and traceable to the criminal scheme. Rust has been ordered to report to federal prison on Wednesday, March 9, 2022.
In the plea agreement with federal prosecutors, Rust admitted that he was the owner and operator of Rust Rare Coin, Inc. (RRC) in Utah, from 2002 until 2018, and that he had previously worked as the manager of the business. Rust admitted that beginning in 2008, he began a scheme to defraud investors by inducing them to invest in RRC's fraudulent “silver trading program.” However, Rust’s “silver trading program” operated as a Ponzi scheme. Rust admitted to selling investments in the fraudulent program to approximately 500 investors located throughout the United States in amounts totaling $225 million dollars. Rust admitted that he paid out money from later investors to earlier investors to create the impression that his “silver trading program” was profitable and to keep the scheme operating.
Rust carried out the fraudulent scheme by explaining to victims that RRC's silver trading program was a lucrative investment that involved the buying and selling of actual silver bullion; that 100% of investor funds would be used to buy actual silver; that all the silver bullion purchased would be stored at Brinks Global Services in Salt Lake City or Los Angeles; and, that RRC was storing almost $80 million dollars of silver bullion at Brinks.
Rust further told investors that all of the silver trades were conducted through an RRC account at HSBC Bank; that profit generated in trades would be used to repurchase a larger amount of silver at a lower price, thereby continually increasing the amount of silver for investors; and, that by using algorithms, the silver trading program had never experienced a losing month, much less a losing year, and that the worst year had generated a 12 percent return, and that the average rate of return was 20 percent to 25 percent per year.
However, Rust had little to no silver stored at Brinks; Rust had not stored silver bullion at Brinks since 2016, and no meaningful investor funds were ever used to purchase silver bullion during the scheme; RRC had no mechanism to generate meaningful returns on silver trading; and HSBC Bank had never maintained an account on behalf of RRC. Rust diverted nearly all investor funds to other businesses, personal uses, and to making payments to previous investors. Rust also admitted that in January of 2016, he opened three personal accounts at Zions bank and used these accounts to launder approximately $18 million dollars from the fraudulent trading scheme.
“We hope that a 19-year prison sentence and an order to pay over $153 million dollars sends a message to the community that the U.S. Attorney’s Office is committed to prosecuting financial crimes,” said United States Attorney Andrea T. Martinez. “Those who defraud their family, friends, and associates out of their hard-earned savings will be held accountable. Unfortunately, the reality of these cases is that victims’ money is nearly always spent by the perpetrator of the crime or paid out to other victims. This should be a stark reminder to all Utahns that it is imperative to vet your financial advisor or anyone who attempts to persuade you to invest in their business or financial dealings.”
“Gaylen Rust betrayed the trust of his hundreds of clients, many of them his own family, friends and members of his church. For years, he lived his life on their hard-earned money,” said Special Agent in Charge Dennis Rice of the Salt Lake City FBI. “Mr. Rust’s deceit has now caught up to him and he will face the consequences for his fraudulent actions. The FBI encourages anyone looking to invest to do their due diligence and be wary of promises of investment returns that seem too good to be true.”
“IRS-Criminal Investigation specializes in finding and exposing financial fraud. Our agents working with our law enforcement partners continually strive to put a stop to this kind of fraud and send a message to those who may be considering defrauding others,” said IRS-Criminal Investigation Special Agent in Charge Albert Childress. “This case was a significant fraud in the community and left an impact affecting hundreds of lives. Through the efforts of our agents combined with those of our law enforcement partners, we have been able to bring some measure of justice.”
“The actions of Mr. Rust represent some of the biggest consumer harm we’ve seen,” said Department of Commerce Executive Director Margaret Busse. “Ponzi schemes absolutely destroy trust in the investment industry. Without trust, individuals aren’t willing to participate in future opportunities and that affects our entire economy.”
"We're proud to have been able to partner with the U.S. Attorney's office and other agencies in uncovering this awful scam,” said Division of Securities Director Jason Sterzer. “The most common sign that an investment is a scam is an offer of high returns with little or no risk. Education remains the best defense against securities fraud.
Assistant U.S. Attorneys Jacob Strain, Carl LeSueur, and Tyler Murray in Salt Lake City prosecuted the case. Securities Investigator Elizabeth Blaylock of the Utah Division of Securities and Special Agents Jason Henrikson and James Malpede (retired) of the FBI investigated the case along with agents on the FBI’s White Collar Task Force, including Special Agent Jeff Kirkwood of IRS-Criminal Investigation. Related civil cases were filed by the Securities Exchange Commission, the Commodity Futures Trading Commission, and the Utah Attorney General’s Office.
Out of state man pleads guilty to possessing over 53 kilos of methRead the Press Release
LAREDO, Texas – A 31-year-old Phoenix, Arizona, man has admitted he attempted to bring $242,325 worth of narcotics into the country via a Laredo-area port of entry, announced U.S. Attorney Jennifer B. Lowery.
Jose Correjudo-Trinidad, 31, pleaded guilty to possession with intent to distribute 53.5 kilograms of meth.
As part of his plea, Correjudo-Trinidad admitted that on Dec. 15, 2021, he attempted to drive a vehicle through the Border Patrol (BP) checkpoint located on Texas State Highway 16 near Hebbronville. At that time, authorities searched inside his trunk and found a large speaker box, which Correjudo-Trinidad admitted did not work. Further inspection yielded approximately 14.7 kilograms of crystal meth, 39.15 kilograms of liquid meth and nearly 300 rounds of ammunition.
Correjudo-Trinidad admitted he had been recruited to transport the drugs from McAllen to Dallas in exchange for $12,000. He purchased the ammunition for himself and planned on smuggling it to Mexico.
The combined meth had a total weight of 53.5 kilograms with an approximate value of $242,325.
Sentencing will be set for a later date before U.S. District Judge Marina Garcia Marmolejo. At that time, Correjudo-Trinidad faces up to life in prison and a possible $10 million fine.
He has been and will remain in custody pending that hearing.
The Drug Enforcement Administration conducted the investigation with the assistance of Border Patrol. Assistant U.S. Attorney Paul A. Harrison is prosecuting the case.
Northborough Nurse Pleads Guilty to Tampering with Liquid MorphineRead the Press Release
BOSTON – A registered nurse pleaded guilty today in federal court in Worcester in connection with tampering with morphine prescribed to a nursing home resident in her care.
Gwen Rider, 42, of Northborough, pleaded guilty to one count of tampering with a consumer product and one count of obtaining a controlled substance by fraud and deception. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for Aug. 15, 2022. Rider was arrested and indicted in April 2021.
Rider was a registered nurse employed by a Worcester County nursing home. From approximately 11:00 p.m. on Nov. 6, 2020 until 7:00 a.m. the following morning, Rider was on duty in a unit specializing in care for residents suffering from dementia. During her shift and while entrusted with the care of a resident suffering from dementia, Rider tampered with a bottle of morphine sulfate prescribed to the patient by removing some of the morphine and adding water to the remaining supply. Morphine sulfate is a Schedule II controlled substance under federal law. A nurse on a subsequent shift administered the adulterated morphine to a patient before the tampering was discovered.
The charge of tampering with a consumer product provides for a sentence up to 10 years in prison, up to three years of supervised release and a fine of $250,000. The charge of obtaining a controlled substance by fraud and deception provides for a sentence of up to four years in prison, up to one year 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; Jeffrey Ebersole, Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations; Margret R. Cooke, Commissioner of the Massachusetts Department of Public Health; and Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General made the announcement today. Valuable assistance was also provided by the Northborough Police Department. Assistant U.S. Attorney John T. Mulcahy and Kristen M. Noto of Rollins’ Criminal Division are prosecuting the case.
New York Man Arrested at the Cyril E. King Airport with Carry-On Suitcase Containing 3.8 Kilograms of Marijuana Pleads Guilty in Federal CourtRead the Press Release
ST. THOMAS, USVI – United States Attorney Gretchen C.F. Shappert announced today that Christopher Turnbull of New York pleaded guilty Tuesday, March 8, 2022, to possession with intent to distribute marijuana.
According to court documents, U.S. Customs and Border Protection (CBP) officers were conducting screenings of arriving passengers at the Cyril E. King Airport on November 11, 2020, when Turnbull disembarked an American Airlines flight from Charlotte, NC. He was selected for inspection. Upon searching a black carry-on suitcase in Turnbull’s possession, officers discovered approximately eight different sealed packages containing a green leafy substance that tested positive for the presence of marijuana. The packages weighed approximately 5 kilograms. A laboratory exam confirmed the presence of approximately 3.8 kilograms of marijuana.
Turnbull, who originally departed from the Ronald Reagan National Airport in Washington, D.C., claimed that while he was waiting at the gate for his connecting flight in Charlotte, N.C, an unknown man approached him and offered him $15,000 to transport the black carry-on suitcase to St. Thomas.
Turnbull is scheduled to be sentenced by a federal district court judge on June 23, 2022.
The Department of Homeland Security-Homeland Security Investigations and CBP investigated the case. It is being prosecuted by Assistant United States Attorney Kyle Payne and is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
New Orleans Man Indicted for Violations of the Federal Gun Control Act, the Controlled Substances Act, and Possession of Body ArmorRead the Press Release
NEW ORLEANS, LOUISIANA – SIDNEY SIMON, age 37, a resident of New Orleans, was charged on March 4, 2022 in a five-count indictment by a federal grand jury for being a felon in possession of a firearm, possessing a firearm after being convicted of a misdemeanor crime of domestic violence, possessing body armor after being convicted of a violent felony, possessing with the intent to distribute marijuana, and possessing a firearm in furtherance of a drug trafficking crime, announced U.S. Attorney Duane A. Evans.
If convicted of being a felon in possession of a firearm, SIMON faces a maximum term of imprisonment of ten (10) years, a fine of up to $250,000, and up to three (3) years of supervised release following any term of imprisonment.
If convicted of possessing a firearm after being convicted of a misdemeanor crime of domestic violence, SIMON faces a maximum term of imprisonment of ten (10) years, a fine of up to $250,000, and up to three (3) years of supervised release following any term of imprisonment.
If convicted of possessing body armor after being convicted of a violent felony, SIMON faces a maximum term of imprisonment of three (3) years, a fine of up to $250,000, and up to one (1) year of supervised release following any term of imprisonment.
If convicted of possessing with the intent to distribute marijuana, SIMON faces a maximum term of imprisonment of five (5) years, a fine of up to $1,000,000, and at least two (2) years of supervised release following any term of imprisonment.
If convicted of possessing a firearm in furtherance of a drug trafficking crime, SIMON faces a minimum term of imprisonment of five (5) years, and a maximum term of imprisonment of life, to be served consecutively to all other charges, a fine of up to $250,000, and up to five (5) years of supervised release following any term of imprisonment. SIMON must also pay a $100 mandatory special assessment fee for each charge.
U. S. Attorney Evans reiterated that the indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
This case is 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 Federal Bureau of Investigation and the New Orleans Police Department. The case is being prosecuted by Assistant U. S. Attorney Mike Trummel.
New Mexico Man Sentenced for Travel with Intent to Engage in Illicit Sexual Conduct with MinorRead the Press Release
MADISON, WIS. – Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin, announced that Matthew Engelhardt, 33, of Roswell, New Mexico, was sentenced today by U.S. District Judge James Peterson to 51 months in prison for traveling from New Mexico to Wisconsin with the intent to engage in illicit sexual conduct with minor. This term of imprisonment is to be followed by 20 years of supervised release. Engelhardt pleaded guilty to this charge on December 6, 2021.
In April 2019, an undercover officer posing as a 14-year-old girl received a Facebook Messenger message from Engelhardt asking her to be his girlfriend. Later in the initial conversation, Engelhardt asked “the girl” whether she would have sex with him.
Over the next two years, conversations continued on and off. In April 2021, Engelhardt told the undercover persona that he would be coming to Wisconsin to visit his sister at the end of June and asked if she would see him. The two arranged to meet at a retail store in Janesville, Wisconsin to have sex in the bathroom.
On June 30, 2021, undercover officers saw Engelhardt leave a motel in Janesville and run to the retail store where he was arrested. Agents found a condom in his pocket.
Judge Peterson indicated that a sentence of more than four years was sufficient to ensure the defendant knew that what he did was wrong.
The charge against Engelhardt was the result of an investigation conducted by the Wisconsin Department of Justice Division of Criminal Investigation, Janesville Police Department, and U.S. Immigration and Custom Enforcement’s Homeland Security Investigations. Assistant U.S. Attorney Elizabeth Altman prosecuted this case.
New Jersey Man Pleads Guilty to Making Threatening Interstate Communications to Black Maryland Woman and Her FamilyRead the Press Release
Michael Marotta, 26, of Sewell, New Jersey, pleaded guilty today to making threatening interstate communications. Marotta admitted that he used an anonymizing text message service to threaten physical harm to a Black woman and her family in Maryland.
According to Marotta’s plea agreement, on April 14, 2020, Marotta used an anonymizing mobile phone application to send a threatening message to a Black Maryland woman. In the message, Marotta used racial epithets to describe the Maryland woman and her family, and he threatened to come to their home and do physical harm. As detailed in the plea agreement, Marotta wrote, among other things, “I know where you live now, I’m coming to rape your family” and “eat my bullets.” As detailed in his plea agreement, Marotta claims he does not know the recipient-victim of the message, nor does the recipient-victim know Marotta.
“The vile threats issued by this defendant have no place in civilized society,” said Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division. “The department, and specifically the Civil Rights Division, will use all tools at our disposal to ensure that people who interfere with the rights of others will be brought to justice.”
“We at the U.S. Attorney’s Office take seriously our obligation to protect the civil rights of all individuals,” said U.S. Attorney Erek L. Barron of the District of Maryland. “We will not tolerate racially based threats and will prosecute such crimes to the fullest extent of the law.”
“The FBI takes threats of violence seriously,” said Special Agent in Charge Thomas J. Sobocinksi of the FBI’s Baltimore Field Office. “We encourage anyone who believes their civil rights were violated to report it to their local police department or FBI field office.”
Marotta faces a maximum sentence of five years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors. U.S. District Judge Stephanie A. Gallagher has scheduled sentencing for Marotta on May 25.
Assistant U.S. Attorney Michael Cunningham the District of Maryland and Trial Attorney Thomas Johnson of the Justice Department’s Civil Rights Division are prosecuting the case.
New Jersey Man Pleads Guilty to Making Threatening Interstate Communications to Black Maryland Woman and Her FamilyRead the Press Release
Baltimore, Maryland – Michael Marotta, age 26, of Sewell, New Jersey, pleaded guilty today to making threatening interstate communications. Marotta admitted that he used an anonymizing text message service to threaten physical harm to a Black woman and her family in Maryland.
The guilty plea was announced by United States Attorney for the District of Maryland Erek L. Barron; Assistant Attorney General Kristen M. Clarke of the U.S. Department of Justice’s Civil Rights Division; and Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office.
“We at the U.S. Attorney’s Office take seriously our obligation to protect the civil rights of all individuals,” said United States Attorney for the District of Maryland Erek L. Barron. “We will not tolerate racially based threats and will prosecute such crimes to the fullest extent of the law.”
“The vile threats issued by this defendant have no place in civilized society,” said Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division. “The department, and specifically the Civil Rights Division, will use all tools at our disposal to ensure that people who interfere with the rights of others will be brought to justice.”
“The FBI takes threats of violence seriously,” said Thomas J. Sobocinksi, Special Agent in Charge of the FBI Baltimore Field Office. “We encourage anyone who believes their civil rights were violated to report it to their local police department or FBI field office.”
According to Marotta’s plea agreement, on April 14, 2020, Marotta used an anonymizing mobile phone application, to send a threatening message to a Black Maryland woman. In the message, Marotta used racial epithets to describe the Maryland woman and her family, and he threatened to come to their home and do physical harm. As detailed in the plea agreement, Marotta wrote, among other things, that “I know where you live now, I’m coming to rape your family” and “eat my bullets.” As detailed in his plea agreement, Marotta claims he does not know the recipient-victim of the message, nor does the recipient-victim know Marotta.
Marotta faces a maximum sentence of five years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors. U.S. District Judge Stephanie A. Gallagher has scheduled sentencing for Marotta on May 26, 2022.
United States Attorney Erek L. Barron and Assistant Attorney General Kristen M. Clarke commended the FBI for its work in the investigation. Mr. Barron thanked Assistant U.S. Attorney Michael Cunningham and Trial Attorney Thomas Johnson of the Justice Department’s Civil Rights Division, who are prosecuting the case.
For more information on the Maryland U.S. Attorney’s Office and its Civil Rights Unit, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/civil-rights.
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New Jersey Doctor Convicted of Multimillion-Dollar Health Care FraudRead the Press Release
A federal jury convicted a New Jersey rheumatologist today for defrauding Medicare and other health insurance programs by billing for services that patients never received.
According to court documents and evidence presented at trial, Alice Chu, 64, of Fort Lee, owned and operated a rheumatology practice in Clifton. From 2010 through 2019, Chu billed Medicare and other health insurance programs for expensive infusion medication that her practice never purchased. Chu also fraudulently billed millions of dollars for allergy services that patients never needed or received.
Chu was convicted of one count of conspiracy to commit health care fraud and five counts of health care fraud. She is scheduled to be sentenced on July 14 and faces a maximum penalty of 10 years in prison for each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; Special Agent in Charge George M. Crouch Jr. of the FBI’s Newark Field Office; Special Agent in Charge Scott J. Lampert of the Department of Health and Human Service Office of the Inspector General (HHS-OIG); and Special Agent in Charge Patrick J. Hegarty of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DOD-OIG) made the announcement.
The FBI, HHS-OIG and DOD-OIG investigated the case.
Acting Assistant Chief Rebecca Yuan and Trial Attorney Nicholas Peone of the Justice Department’s Fraud Section are prosecuting the case.
New Haven Residents Charged with Trafficking Cocaine and FentanylRead the Press Release
Leonard C Boyle, United States Attorney for the District of Connecticut, Ketty Larco-Ward, Inspector in Charge of the U.S. Postal Inspection Service, Boston Division, and Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration for New England, today announced that WILLIE FRANCO, 33, and DANIELLA FOX, 31, both of New Haven, were arrested yesterday and charged with conspiracy to possess with intent to distribute cocaine and fentanyl.
As alleged in a criminal complaint, the U.S. Postal Inspection Service’s Narcotics and Bulk Cash Trafficking Task Force and Drug Enforcement Administration have been investigating Franco and Fox’s narcotics trafficking activities since 2021. On March 2, 2022, investigators intercepted a USPS parcel destined for an address in East Haven associated with Franco and Fox. A court-authorized search of the parcel revealed approximately one kilogram of cocaine and one kilogram of fentanyl. Investigators also identified other suspicious parcels, which originated in Arizona and California, that had been mailed to the address, and another address associated with Franco and Fox, since July 2021.
On March 7, 2022, law enforcement made a controlled delivery of the intercepted parcel to the East Haven address. Franco and Fox, who were waiting in a car that was parked on the street, were arrested after Fox retrieved the package. A subsequent search of Franco and Fox’s New Haven residence resulted in the seizure of approximately one kilogram of fentanyl, a quantity of crack cocaine, digital scales and other narcotics packaging paraphernalia, a loaded Glock .40 pistol with an obliterated serial number, a drum extended magazine for a high-capacity rifle, a bulletproof vest, ammunition, and more than $300,000 in cash.
Franco and Fox appeared yesterday before U.S. Magistrate Judge Robert M. Spector in New Haven and were ordered detained.
If convicted of the charge, Franco and Fox face a maximum term of imprisonment of 20 years.
U.S. Attorney Boyle stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This ongoing investigation is being conducted by the U.S. Postal Inspection Service’s Narcotics and Bulk Cash Trafficking Task Force and the Drug Enforcement Administration, with assistance from the New Haven Police Department, East Haven Police Department and Connecticut State Police. The Task Force includes members from the U.S. Postal Inspection Service, the U.S. Postal Service – Office of the Inspector General, the Connecticut Army National Guard, and the Hartford, New Britain, Meriden and Town of Groton Police Departments.
The case is being prosecuted by Assistant U.S. Attorneys Tara E. Levens and Konstantin Lantsman.
New Hampshire Man Pleads Guilty to Drug and Firearm OffensesRead the Press Release
BOSTON – A New Hampshire man pleaded guilty today in federal court in Boston to drug and firearm offenses.
Brandon Ortiz, 25, of Manchester, N.H., pleaded guilty to possession with intent to distribute fentanyl and cocaine, and one count of possession of a firearm after being convicted of a misdemeanor crime of domestic violence. U.S. District Court Judge Richard G. Stearns scheduled sentencing for July 27, 2022.
On June 6, 2019, law enforcement responded to a 911 call about a motor vehicle incident involving a firearm. During the investigation, officers seized fentanyl, cocaine, a loaded semi-automatic pistol and ammunition from Ortiz. Ortiz is prohibited from possessing a firearm and ammunition due to a prior 2018 domestic violence conviction.
The charge of possession with intent to distribute fentanyl and cocaine provides for a sentence of up to 20 years in prison, at least three years of supervised release and a fine of $1 million. The charge of possession of a firearm after being convicted of a misdemeanor crime of domestic violence provides for a sentence of up to 10 years in prison, 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; James Ferguson, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; Essex County District Attorney Jonathan W. Blodgett; and Lawrence Police Chief Roy P. Vasque made the announcement. Assistant U.S. Attorney Philip C. Cheng of Rollins’ Organized Crime & Gang Unit is prosecuting the 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.
Nampa Man Pleads Guilty to Federal Firearms ViolationRead the Press Release
BOISE – A Nampa man pleaded guilty to unlawful possession of a firearm.
According to court records, on June 29, 2021, during arrest on an outstanding warrant, David Valdez, 40, of Nampa, was found in possession of a loaded 9mm caliber pistol. At the time of the arrest, Valdez was prohibited from possessing firearms due to a 2018 felony conviction for possession of a controlled substance.
Valdez is scheduled to be sentenced on June 1, 2022. He faces a maximum penalty of ten years in federal prison, up to three years of supervised release, and a maximum fine of $250,000. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Rafael M. Gonzalez, Jr., of the District of Idaho made the announcement and commended the cooperative efforts of the Middleton Police Department and the Treasure Valley Metro Violent Crimes Task Force, which led to charges. The Task Force is comprised of federal, state, and local agencies, including the Federal Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; Ada County Sheriff’s Office; Boise Police Department; Caldwell Police Department; Canyon County Sheriff’s Office; Meridian Police Department; Nampa Police Department; and Idaho Department of Correction.
This case was prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership and the State of Idaho to address gang crimes. The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth. For more information, visit www.treasurevalleypartners.org.
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Mountain Home Man Sentenced to over 24 Years for Distributing and Possessing Child PornographyRead the Press Release
BOISE – A Mountain Home man was sentenced to 292 months in federal prison for distribution and possession of child pornography.
According to court records, the Federal Bureau of Investigation (FBI) determined that Matthew Eric Cairns, 39, of Mountain Home, was a member of several social media groups where child pornography was being discussed or shared. The FBI determined that Cairns was the administrator of one of the groups, which gave him the authority to create rules of conduct for the group, remove members from the group, and facilitate discussions. While participating in one of the groups, Cairns shared a link to a file folder containing numerous files of child pornography, including a video depicting a toddler engaged in sexually explicit conduct.
The FBI obtained a federal search warrant for Cairns’ residence in Mountain Home to search for evidence of the possession of child pornography. When the FBI executed the search warrant, Cairns attempted to conceal his cellphone in an air conditioning vent in his bedroom. The FBI seized the cellphone and located over 500 images and 48 videos of child pornography. The FBI also located evidence that Cairns had been communicating online with a 10-year-old child and had requested that she send him explicit videos of herself. The FBI located several videos of child pornography depicting the 10-year-old child on Cairns’ cellphone.
Senior U.S. District Judge B. Lynn Winmill also ordered Cairns to serve ten years of supervised release following his prison sentence and to pay $18,000 in restitution to victims in the images he possessed. Judge Winmill also ordered Cairns to forfeit the cellphone that was used to commit the offense. As a result of the conviction, Cairns will be required to register as a sex offender.
U.S. Attorney Rafael M. Gonzalez, Jr., of the District of Idaho made the announcement and commended the cooperative efforts of the FBI, United States Marshals Service, and the Mountain Home Police Department, which led to charges. “The collaboration between city and federal partners in this case shows our joint commitment to protecting Idaho’s children and holding predators accountable to the full extent of the law,” said Gonzalez.
"Our children should be protected, not preyed on by criminals like Matthew Cairn," said Special Agent in Charge Dennis Rice of the Salt Lake City FBI. "He not only helped proliferate this deplorable crime but subjected young victims to emotional and physical harm that they may never get over in their lifetime. The well-deserved sentence should send a strong message to those who sexually exploit children that the FBI and our law enforcement partners will track down and prosecute these criminals to fullest extent."
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.
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Mission Woman Sentenced for Assaulting a Federal OfficerRead the Press Release
United States Attorney Dennis R. Holmes announced that a Mission, South Dakota, woman convicted of Assaulting, Resisting, and Impeding a Federal Officer was sentenced on March 7, 2022, by U.S. Magistrate Judge Mark A. Moreno.
Carlianna Erickson, a/k/a Carlianna Erickson-Redday, age 25, was sentenced to nine months in federal prison, followed by one year of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $25.
Erickson was indicted by a federal grand jury on June 8, 2021. She pled guilty on January 31, 2022.
The conviction stemmed from an incident that occurred on May 4, 2021, in Todd County, South Dakota. On that date, Erickson assaulted a corrections officer at the Rosebud Sioux Tribe Adult Correctional Facility.
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Kirk Albertson prosecuted the case.
Erickson was immediately turned over to the custody of the U.S. Marshals Service.
Minneapolis Man Sentenced to Prison for Impersonating an FBI Agent, Lying to Victim about a Fake Terrorism InvestigationRead the Press Release
MINNEAPOLIS – A Minneapolis man has been sentenced to 10 months in prison followed by one year of supervised release for impersonating a federal officer. Acting U.S. Attorney Charles J. Kovats made the announcement after U.S. District Judge Eric C. Tostrud sentenced the defendant.
According to court documents, on July 24, 2017, Bernard Holmes, 67, pretended to be a Special Agent of the Federal Bureau of Investigation (FBI). Holmes spoofed his telephone number to make it appear that he was calling his victim from the FBI’s Minneapolis Field Office. Holmes provided the victim with a fake name, “FBI Special Agent John Tidwell,” and a fake FBI badge number. Holmes falsely stated that he was investigating terrorism-related conduct involving the victim's household, including terrorism evidence that supposedly originated from a computer and IP address at the victim's house. In his fake capacity, Holmes asked questions of the victim using highly charged words, like “ISIS,” “terroristic,” and the “Patriot Act,” in furtherance of the supposed terrorism investigation.
On October 20, 2021, Holmes pleaded guilty to one count of impersonating a federal officer.
This case was the result of an investigation conducted by the FBI and the Bloomington Police Department.
Assistant U.S. Attorney Matthew S. Ebert prosecuted the case.
Memphis Man Pleads Guilty to Calling-in a Bomb Threat and Being a Felon in Possession of a FirearmRead the Press Release
Memphis, TN- Christopher Cobb, 33, pled guilty to communicating a threat against a federal agency and being a felon in possession of a firearm. Joseph C. Murphy Jr., United States Attorney, announced the guilty plea today.
According to information presented in court, on the afternoon of April 22, 2021, Christopher Cobb called the United States Social Security Administration ("SSA") office in Memphis, Tennessee to inquire about the status of his claim. Cobb became irate when the official informed him that his claim had been denied and he would need to file an appeal. The call was terminated by the SSA when Cobb began irate and began using profanity. Several minutes later, Cobb called back and threatened to "blow up" the social security building the next day.
A search of the defendant’s home revealed a M-1 rifle and ammunition. After being advised of and waiving his Miranda rights, Cobb admitted to making the threat and to also possessing the M-1 rifle and ammunition.
Cobb was previously convicted for aggravated assault, convicted felon in possession of a firearm, failure to appear in a felony case and robbery. As a result of his prior felony convictions, Cobb is prohibited by federal law from possessing firearms and ammunition.
On March 2, 2022, Cobb pled guilty to communicating a threat and to being a felon in possession of a firearm. Sentencing is set for June 9, 2022, before United States District Judge Thomas L. Parker where he faces up to ten years in federal prison. There is no parole in the federal system.
"The safety of our citizens and communities is a top priority of HSI and threats against government facilities must be taken seriously," said HSI Nashville Special Agent in Charge Jerry C. Templet, Jr. "The investigative efforts of our agents in this case, working with their law enforcement partners, resulted in a guilty plea by this convicted felon and seizure of his illegally possessed firearms and ammunition."
This case was investigated by the Social Security Administration Office of the Inspector General and Homeland Security Investigations.
Assistant United States Attorneys Greg Wagner and Steven Hall are prosecuting this case on behalf of the government.
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Medical Services Contractor Pays $930,000 to Settle False Claims Act Allegations Relating to Medical Services Contracts at State Department and Air Force Facilities in Iraq and AfghanistanRead the Press Release
Comprehensive Health Services LLC (CHS), located in Cape Canaveral, Florida, has agreed to pay $930,000 to resolve allegations that it violated the False Claims Act by falsely representing to the State Department and the Air Force that it complied with contract requirements relating to the provision of medical services at State Department and Air Force facilities in Iraq and Afghanistan. This is the Department of Justice’s first resolution of a False Claims Act case involving cyber fraud since the launch of the department’s Civil Cyber-Fraud Initiative, which aims to combine the department’s expertise in civil fraud enforcement, government procurement and cybersecurity to combat new and emerging cyber threats to the security of sensitive information and critical systems.
CHS is a provider of global medical services that contracted to provide medical support services at government-run facilities in Iraq and Afghanistan. Under one of the contracts, CHS submitted claims to the State Department for the cost of a secure electronic medical record (EMR) system to store all patients’ medical records, including the confidential identifying information of United States service members, diplomats, officials and contractors working and receiving medical care in Iraq. The United States alleged that, between 2012 and 2019, CHS failed to disclose to the State Department that it had not consistently stored patients’ medical records on a secure EMR system. When CHS staff scanned medical records for the EMR system, CHS staff saved and left scanned copies of some records on an internal network drive, which was accessible to non-clinical staff. Even after staff raised concerns about the privacy of protected medical information, CHS did not take adequate steps to store the information exclusively on the EMR system.
The State Department and Air Force contracts also required CHS to provide medical supplies, including controlled substances, that were approved by the U.S. Food and Drug Administration (FDA) or European Medicines Agency (EMA) and manufactured in accordance with federal quality standards. The United States alleged that, between 2012 and 2019, CHS falsely represented to the State Department and Air Force that certain substances provided under those contracts were approved by the FDA or EMA. CHS lacked a Drug Enforcement Agency license necessary for exporting controlled substances from the United States to Iraq. CHS obtained controlled substances by having CHS physicians based in Florida send letters requesting that a South African physician prescribe the controlled substances. A South African shipping company then received controlled substances that were not approved by the FDA or EMA and sent them to CHS in Iraq, where CHS supplied the unapproved controlled substances to patients under the State Department and Air Force contracts.
“This settlement demonstrates the department’s commitment to use its civil enforcement tools to pursue government contractors that fail to follow required cybersecurity standards, particularly when they put confidential medical records at risk,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to ensure that those who do business with the government comply with their contractual obligations, including those requiring the protection of sensitive government information.”
“Protecting the health and safety of servicemembers, diplomats, and other government employees working abroad is of utmost importance,” said U.S. Attorney Breon Peace for the Eastern District of New York. “The defendants were required to maintain personal health information securely and provide only approved pharmaceuticals to patients. This settlement serves notice to federal contractors that they will be held accountable for conduct that puts private medical records and patient safety at risk. We are grateful for the support of our colleagues in the Middle District of Florida, the State Department and the Air Force for their assistance in investigating these important claims.”
“Government contractors should never disregard their obligations when providing medical care to members of the military,” said U.S. Attorney Roger B. Handberg for the Middle District of Florida. “We thank our colleagues in the Eastern District of New York, as well as the investigative agencies who supported this effort, for their steadfast pursuit of this important investigation.”
“This settlement demonstrates the commitment State Department, Office of Inspector General, Special Agents have to protect the safety, well-being, and personal information of State Department personnel,” said Special Agent in Charge Elisabeth “Elli” Kaminsky of the U.S. Department of State OIG, Office of Investigations. “Our hope is that this outcome will send a clear message that cutting corners on State Department contracts has significant consequences.”
“The Department of the Air Force Office of Special Investigations (OSI) is undeterred in its approach to hunting down fraud within our Foreign Military Sales programs and ensuring the offenders are held accountable,” said Special Agent in Charge Nicholas J. Groesbeck of OSI Procurement Fraud Detachment 4, Wright-Patterson AFB, OH. “We applaud the complainant for coming forward, which allowed our joint partners to protect the governments procurement process and carry out the warfighting mission.”
The civil settlement includes the resolution of two actions brought under the qui tam or whistleblower provisions of the False Claims Act against CHS. Under the qui tam provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government takes over the case and reaches a monetary agreement with the defendant. The qui tam cases are captioned United States ex rel. Lawler v. Comprehensive Health Servs., Inc. et al., Case No. 20-cv-698 (E.D.N.Y.), and United States ex rel. Watkins et al. v. CHS Middle East, LLC, Case No. 17-cv-4319 (E.D.N.Y.).
The investigation and resolution of this matter illustrates the government’s emphasis on combatting cyber-fraud. On October 6, 2021, the Deputy Attorney General announced the department’s Civil Cyber-Fraud Initiative, which aims to hold accountable entities or individuals that put U.S information or systems at risk by knowingly providing deficient cybersecurity products or services, knowingly misrepresenting their cybersecurity practices or protocols, or knowingly violating obligations to monitor and report cybersecurity incidents and breaches. Information on how to report cyber fraud can be found here.
The resolutions obtained in this matter were the result of a coordinated effort between the Fraud Section of the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of New York, the U.S. Attorney’s Office for the Middle District of Florida, the U.S. Department of State Office of Inspector General and the U.S. Air Force.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
Medical Services Contractor Pays $930,000 to Settle False Claims Act Allegations Relating to Medical Services Contracts at State Department and Air Force Facilities in Iraq and AfghanistanRead the Press Release
Comprehensive Health Services LLC (CHS), located in Cape Canaveral, Florida, has agreed to pay $930,000 to resolve allegations that it violated the False Claims Act by falsely representing to the State Department and the Air Force that it complied with contract requirements relating to the provision of medical services at State Department and Air Force facilities in Iraq and Afghanistan. This is the Department of Justice’s first resolution of a False Claims Act case involving cyber fraud since the launch of the department’s Civil Cyber-Fraud Initiative, which aims to combine the department’s expertise in civil fraud enforcement, government procurement and cybersecurity to combat new and emerging cyber threats to the security of sensitive information and critical systems.
CHS is a provider of global medical services that contracted to provide medical support services at government-run facilities in Iraq and Afghanistan. Under one of the contracts, CHS submitted claims to the State Department for the cost of a secure electronic medical record (EMR) system to store all patients’ medical records, including the confidential identifying information of United States service members, diplomats, officials and contractors working and receiving medical care in Iraq. The United States alleged that, between 2012 and 2019, CHS failed to disclose to the State Department that it had not consistently stored patients’ medical records on a secure EMR system. When CHS staff scanned medical records for the EMR system, CHS staff saved and left scanned copies of some records on an internal network drive, which was accessible to non-clinical staff. Even after staff raised concerns about the privacy of protected medical information, CHS did not take adequate steps to store the information exclusively on the EMR system.
The State Department and Air Force contracts also required CHS to provide medical supplies, including controlled substances, that were approved by the U.S. Food and Drug Administration (FDA) or European Medicines Agency (EMA) and manufactured in accordance with federal quality standards. The United States alleged that, between 2012 and 2019, CHS falsely represented to the State Department and Air Force that certain substances provided under those contracts were approved by the FDA or EMA. CHS lacked a Drug Enforcement Agency license necessary for exporting controlled substances from the United States to Iraq. CHS obtained controlled substances by having CHS physicians based in Florida send letters requesting that a South African physician prescribe the controlled substances. A South African shipping company then received controlled substances that were not approved by the FDA or EMA and sent them to CHS in Iraq, where CHS supplied the unapproved controlled substances to patients under the State Department and Air Force contracts.
“This settlement demonstrates the department’s commitment to use its civil enforcement tools to pursue government contractors that fail to follow required cybersecurity standards, particularly when they put confidential medical records at risk,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to ensure that those who do business with the government comply with their contractual obligations, including those requiring the protection of sensitive government information.”
“Protecting the health and safety of servicemembers, diplomats, and other government employees working abroad is of utmost importance,” said U.S. Attorney Breon Peace for the Eastern District of New York. “The defendants were required to maintain personal health information securely and provide only approved pharmaceuticals to patients. This settlement serves notice to federal contractors that they will be held accountable for conduct that puts private medical records and patient safety at risk. We are grateful for the support of our colleagues in the Middle District of Florida, the State Department and the Air Force for their assistance in investigating these important claims.”
“Government contractors should never disregard their obligations when providing medical care to members of the military,” said U.S. Attorney Roger B. Handberg for the Middle District of Florida. “We thank our colleagues in the Eastern District of New York, as well as the investigative agencies who supported this effort, for their steadfast pursuit of this important investigation.”
“This settlement demonstrates the commitment State Department, Office of Inspector General, Special Agents have to protect the safety, well-being, and personal information of State Department personnel,” said Special Agent in Charge Elisabeth “Elli” Kaminsky of the U.S. Department of State OIG, Office of Investigations. “Our hope is that this outcome will send a clear message that cutting corners on State Department contracts has significant consequences.”
“The Department of the Air Force Office of Special Investigations (OSI) is undeterred in its approach to hunting down fraud within our Foreign Military Sales programs and ensuring the offenders are held accountable,” said Special Agent in Charge Nicholas J. Groesbeck of OSI Procurement Fraud Detachment 4, Wright-Patterson AFB, OH. “We applaud the complainant for coming forward, which allowed our joint partners to protect the governments procurement process and carry out the warfighting mission.”
The civil settlement includes the resolution of two actions brought under the qui tam or whistleblower provisions of the False Claims Act against CHS. Under the qui tam provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government takes over the case and reaches a monetary agreement with the defendant. The qui tam cases are captioned United States ex rel. Lawler v. Comprehensive Health Servs., Inc. et al., Case No. 20-cv-698 (E.D.N.Y.), and United States ex rel. Watkins et al. v. CHS Middle East, LLC, Case No. 17-cv-4319 (E.D.N.Y.).
The investigation and resolution of this matter illustrates the government’s emphasis on combatting cyber-fraud. On October 6, 2021, the Deputy Attorney General announced the department’s Civil Cyber-Fraud Initiative, which aims to hold accountable entities or individuals that put U.S information or systems at risk by knowingly providing deficient cybersecurity products or services, knowingly misrepresenting their cybersecurity practices or protocols, or knowingly violating obligations to monitor and report cybersecurity incidents and breaches. Information on how to report cyber fraud can be found here.
The resolutions obtained in this matter were the result of a coordinated effort between the Fraud Section of the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of New York, the U.S. Attorney’s Office for the Middle District of Florida, the U.S. Department of State Office of Inspector General and the U.S. Air Force.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
Massachusetts Man Pleads Guilty to Firearms ConspiracyRead the Press Release
CONCORD - Edwin Quezada, 33, of Lawrence, Massachusetts pleaded guilty in federal court to conspiracy to transfer firearms to an out-of-state resident by unlicensed persons, United States Attorney John J. Farley announced today.
According to court documents and statements made in court, a New Hampshire resident agreed to sell firearms to a resident of Massachusetts. Quezada agreed to act as an intermediary for the Massachusetts resident. On multiple occasions, Quezada traveled to New Hampshire to pick up firearms to deliver to the Massachusetts resident. None of the individuals involved were licensed importers, manufacturers, dealers or collectors of firearms. As part of the scheme, Guzman obtained at least six handguns.
Quezada is scheduled to be sentenced on June 15, 2022.
“To protect citizens from violent crime, it is important to enforce federal laws regarding firearms,” said U.S. Attorney Farley. “Those who seek to buy guns unlawfully often are planning to use them to commit crimes. In our effort to protect public safety and prevent violence, we are working closely with our law enforcement partners to identify and prosecute those who participate in unlawful gun trafficking.”
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case is being prosecuted by Assistant U.S. Attorney Debra Walsh.
The case is part of ATF’s Project Safe Neighborhoods initiative, which is a federally-funded program intended to reduce gun violence through law enforcement training, public education, and aggressive law enforcement efforts to investigate and prosecute gun-related crimes.
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Marstons Mills Man Sentenced for Child PornographyRead the Press Release
BOSTON – A Marstons Mills man was sentenced today in federal court in Boston on charges of distributing, receiving and possessing child pornography.
Steven Carme, 33, was sentenced by U.S. District Court Judge Richard G. Stearns to 63 months in prison and five years of supervised release. On Nov. 3, 2021, Carme pleaded guilty to one count of distribution of child pornography, one count of receipt of child pornography and one count of possession of child pornography involving a prepubescent minor and a minor who had not attained 12 years of age.
Between Feb. 2, 2017 and Feb. 5, 2019, Carme downloaded and distributed numerous image and video files depicting child pornography via peer-to-peer file sharing software. During a search of Carme’s residence, a laptop and an external hard drive were seized. Forensic review of the external hard drive revealed approximately 7,881 images and 616 videos of child pornography. During an onsite interview at his residence, Carme admitted that the laptop and hard drive were his and that he downloaded, stored and distributed child pornography.
United States Attorney Rachael S. Rollins; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; and Barnstable Police Chief Matthew Sonnabend made the announcement today. Assistant U.S. Attorney Elianna J. Nuzum of Rollins’ Major Crimes Unit prosecuted the case.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
Manderson Man Sentenced to 10 Years in Federal PrisonRead the Press Release
United States Attorney Dennis R. Holmes announced that a Manderson, South Dakota, man convicted of Failure to Register as a Sex Offender was sentenced on March 3, 2022, by Judge Jeffrey L. Viken, U.S. District Court.
James Shawn Jumping Eagle, age 46, was sentenced to 10 years in federal prison, followed by five years of supervised release, and ordered to pay $100 in special assessments to the Federal Crime Victims Fund.
Jumping Eagle was indicted for the charge by a federal grand jury on March 2, 2021, and pleaded guilty on April 7, 2021.
The conviction stemmed from Jumping Eagle failing to register as a sex offender as required by federal law between February 9, 2021, and February 20, 2021. Jumping Eagle had previously been convicted of a sex offense in federal court, which required him to register for the rest of his life.
This case was investigated by the U.S. Marshals Service. Assistant U.S. Attorney Heather Sazama prosecuted the case.
Jumping Eagle was immediately turned over to the custody of the U.S. Marshals Service.
Methamphetamine Ring Sentenced for Drug Conspiracy Across the State of WyomingRead the Press Release
United States Attorney Bob Murray announced today that the United States District Court for the District of Wyoming has sentenced four defendants charged in a drug distribution case. ROLAND BRAUBURGER, 42, of Cheyenne Wyoming; KIRSTEN KAY SARRATT, 26 of Cheyenne Wyoming; HENRY GUITIEREZ III, 36, incarcerated at Wyoming Medium Correctional Institute in Torrington, Wyoming; and JOHN OLIVER CLARK, 43, of Casper, Wyoming were all convicted and sentenced related to their involvement in a conspiracy to distribute methamphetamine.
In the fall of 2020, law enforcement became aware of Roland Brauburger’s distribution of controlled substances in multiple Wyoming cities. Through the cooperative work of the Federal Bureau of Investigation and Wyoming Division of Criminal Investigation on the Safe Trails Task Force, the investigation soon revealed that Brauburger, accompanied by his wife Kirsten Sarratt, made regular trips trafficking narcotics mainly in Cheyenne, Casper, Riverton, the Wind River Reservation, and Green River. As his operation continued, Brauburger enlisted the help of Henry Gutierrez and John Clark. Brauburger was also charged with possession of a firearm in furtherance of a drug trafficking crime.
The United States Attorney’s Office for the District of Wyoming prosecuted four individuals involved in the scheme, including: Brauburger, sentenced to 180 months of imprisonment; Sarratt, sentenced to 70 months of imprisonment; Gutierrez sentenced to 71 months and 8 days of imprisonment; and Clark, sentenced to 77 months of imprisonment.
“This case demonstrates our commitment to stopping the flow of methamphetamines into our communities, especially those with vulnerable populations who face addiction,” said United States Attorney Bob Murray. “Our strategy is to reduce the availability of methamphetamine throughout Wyoming by using a prosecutor-led, multi-agency approach to combat drug trafficking. We do this by targeting suspicious activity, using top-notch investigative work and tirelessly pursuing tips from the local community.”
"The case involving Roland Brauburger is a prime example of local, state and federal law enforcement working in unison towards a common goal of reducing illegal narcotics in Wyoming,” said Interim Director of Wyoming Division of Criminal Investigation Forrest Williams. “In 2020, Wyoming DCI became members of the Safe Trails Task Force (STTF) and works hand in hand with the FBI on narcotics cases that have a nexus to the Wind River Indian Reservation. With this partnership, Wyoming DCI remains dedicated to curbing the flow of illegal narcotics throughout Wyoming and the Wind River Indian Reservation."
“Today’s sentences are a direct result of the dedicated work of the FBI and our federal, state, local and tribal partners to combat criminal organizations that distribute methamphetamine, fentanyl and other dangerous drugs in our communities,” said Special Agent in Charge Michael Schneider. “The Rocky Mountain Safe Trails Task Force will continue to investigate and prosecute individuals and groups who attempt to further the scourge of drugs and violence in the areas we serve. The FBI thanks the Green River Police Department, the Wyoming Division of Criminal Investigation, and the U.S. Attorney's Office for their diligence and collaboration.”
This crime was investigated by the Federal Bureau of Investigation and the Wyoming Division of Criminal Investigation’s Safe Trails Joint Task Force, Green River Police Department. The United States was represented by Assistant United States Attorney Christyne M. Martens.
This case was brought as part of Project Safe Neighborhoods (PSN), a nationwide initiative that brings together federal, state, local, and tribal law enforcement officials, prosecutors, community leaders, and other stakeholders to identify the most pressing violent crime problems in a community and develop comprehensive solutions to address them. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN so that it is built on newly articulated core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results of our efforts.
Case Number: 0:21-cr-00075-SWS
Latin Dragon Nation Member Sentenced to 420 Months in Prison on Conviction for Racketeering Conspiracy Including MurderRead the Press Release
HAMMOND- Justin Anaya, 21, of Chicago, Illinois, was sentenced by United States District Court Judge Philip P. Simon following his guilty plea to conspiracy to participate in racketeering activity as a member of the Latin Dragon Nation street gang, announced United States Attorney Clifford D. Johnson.
Anaya was sentenced to 420 months in prison followed by 2 years of supervised release.
According to documents in the case, Anaya had been a member of the Latin Dragon Nation (LDN) since 2017. As a member of the gang, Anaya conspired to conduct and participated in the affairs of the LDN street gang. As part of his involvement in the gang, he participated with other LDN members in the shootings of suspected rival gang members and associates. Specifically, in July of 2017, Anaya, along with another Latin Dragon member, stole a car in Hammond, Indiana. The next day, Anaya, accompanied by another Latin Dragon member, drove the stolen car through a rival gang neighborhood in Chicago, Illinois. The other Latin Dragon member shot at a vehicle occupied by suspected rival gang members resulting in the death of a minor child who was in the vehicle. In November of 2017, in Chicago, Illinois, Anaya was in a vehicle with other Latin Dragon members chasing another vehicle. Anaya fired several shots at the occupants of the other vehicle and fatally shot a man who was in that vehicle. In addition to participating in criminal assaults, Anaya’s also participated in the LDN’s illegal drug and firearms trafficking activities.
“As this case demonstrates, this Office will vigorously prosecute persons who conduct illegal activities on behalf of criminal street gangs,” said United States Attorney Clifford D. Johnson. “I thank all of our federal and state law enforcement partners who worked with this office on this case as, in my view, this joint effort has increased public safety for Northern District of Indiana citizens.”
“As a member of a violent street gang, the defendant terrorized the streets of Northwest Indiana and participated in senseless murders,” said FBI Indianapolis Special Agent in Charge Herb Stapleton. “The 35-year sentence reflects the seriousness of these crimes and sends a clear message that the FBI and our law enforcement partners will disrupt and dismantle these gangs and hold these criminals accountable for their violent acts.”
“Working closely with our local, state and federal partners is the most effective way to investigate and prosecute violent crime,” said ATF Special Agent in Charge Kristen de Tineo. “I commend the diligence and commitment of each officer, agent and prosecutor who worked on this important case.”
The matter was investigated by the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Chicago Police Department Criminal Enterprise Unit; the Cook County Sheriff’s Office; the Bartlett Police Department; the Hammond Police Department; the East Chicago Police Department; the Merrillville Police Department; the Hobart Police Department; the Lake County Sheriff’s Department; and the Calumet City Police Department, with assistance from the Lake County, Indiana Prosecutor’s Office, the Cook County, Illinois State’s Attorney’s Office, the Indiana Department of Corrections, and the Illinois Department of Corrections. This case was prosecuted by Assistant U.S. Attorneys Kevin F. Wolff and Michael J. Toth, with prior assistance from former Hammond Assistant U.S. Attorney Joseph A. Cooley.
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.
Las Vegas Attorney Charged with Assaulting Federal OfficersRead the Press Release
LAS VEGAS – A Las Vegas attorney made his initial appearance in federal court today for allegedly assaulting three FBI Special Agents with a firearm when they attempted to interview him at his home.
Matthew Wade Beasley (49) was arrested on March 4, 2022. He is charged with one count of assault on a federal officer with a deadly weapon. U.S. Magistrate Judge Elayna J. Youchah scheduled a preliminary hearing for March 22, 2022.
According to allegations in the criminal complaint, on March 3, 2022, FBI Special Agents went to a house in northwest Las Vegas to interview Beasley as part of an ongoing investigation. When agents knocked on the glass front doors, Beasley appeared with part of his body obscured. After an agent pulled back his suit jacket to show his FBI badge, Beasley then stepped into complete view with a gun pointed at his own head. When agents instructed Beasley to drop the gun, Beasley instead pointed it at the agents in a sweeping motion — causing one or more agents to discharge their firearm and striking Beasley.
The statutory maximum penalty is 20 years in prison for assault on a federal officer with a deadly weapon.
Acting U.S. Attorney Christopher Chiou for the District of Nevada and Acting Special Agent in Charge W.M. Herrington for the FBI made the announcement.
This case was investigated by the FBI. Assistant U.S. Attorneys Tony Lopez and Eric Schmale are prosecuting the case.
A complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Kankakee, Illinois, Woman Sentenced to 14 Months in Prison for Theft of Social Security BenefitsRead the Press Release
URBANA, Ill. – A Kankakee, Illinois, woman, Sharrie McInnis, 49, of the 1100 block of East Merchant Street, was sentenced on March 7, 2022, to 14 months of imprisonment, to be followed by three years of supervised release, for theft of public money.
The government previously stated at McInnis’s change-of-plea hearing that McInnis had been claiming Title II Child-In-Care benefits for a grandchild that was not actually in her care. The total fraudulent benefits received amounted to $22,849.
At the sentencing hearing, U.S. District Judge Colin S. Bruce found that McInnis received additional improper Social Security payments under other titles, resulting in a total of $98,701.74 in overpayments. Judge Bruce ordered McInnis to pay full restitution to the Social Security Administration.
McInnis previously pleaded guilty to the one-count indictment in the case in October 2021. The statutory penalties for a violation of 18 U.S.C. § 641 are up to 10 years of imprisonment and up to three years of Supervised Release.
“Maintaining the integrity of the Social Security benefit system is critically important for the welfare of all who have paid into it,” said Assistant U.S. Attorney William J. Lynch, who represented the government in the prosecution.
“Ms. McInnis schemed to fraudulently obtain Social Security benefits. Her sentence demonstrates the commitment by our investigators and the U.S. Attorney’s Office to uphold the integrity of SSA’s programs by aggressively pursuing those who intend to defraud SSA,” said Andrew Boockmeier, Special Agent in Charge of the Social Security Administration’s Office of the Inspector General, Chicago Field Division, which investigated the case. “I thank the U.S. Attorney’s Office for prosecuting this case.”
Kankakee County Man Sentenced to Eight Years in Prison for Child Enticement CrimesRead the Press Release
URBANA, Ill. – A Kankakee County, Illinois, man, Joshua Koenig, 29, of the 200 block of South Randolph Street in Bradley, Illinois, was sentenced today to 96 months’ imprisonment for one count of attempted enticement of a minor and two counts of attempted receipt of child pornography.
According to court documents, law enforcement identified Koenig when he attempted to meet two separate individuals whom he believed to be minors on a popular dating application. Senior U.S. District Judge Michael M. Mihm sentenced Koenig to the eight-year term of imprisonment, to be followed by 10 years of supervised release. Koenig pleaded guilty in November 2021 to the three-count indictment.
In March 2020, a federal grand jury charged Koenig by indictment following his February 2020 arrest pursuant to a criminal complaint. Koenig has remained in the custody of the U.S. Marshals Service since his arrest.
Koenig was arrested February 14, 2020, as part of an FBI operation conducted in Kankakee County. The operation was conducted with the assistance of the Bradley Police Department, the Kankakee County Sheriff’s Office, and the Kankakee Area Metropolitan Enforcement Group. Assistant U.S. Attorney Elly Peirson represented the government in this prosecution.
The case was brought as part of Project Safe Childhood, a nationwide initiative by the Department of Justice to combat the epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
KC Man Sentenced to 17 Years for Crack Cocaine TraffickingRead the Press Release
KANSAS CITY, Mo. – A Kansas City, Missouri, man who twice fled from police officers was sentenced in federal court today for possessing crack cocaine to distribute.
Eldon M. Cox, 38, was sentenced by U.S. District Judge Greg Kays to 17 years in federal prison without parole. Cox was sentenced as an career offender due to his prior felony convictions for drug trafficking and violent crimes.
On Aug. 11, 2021, Cox pleaded guilty to two counts of possessing crack cocaine with the intent to distribute. Cox admitted that he was stopped twice by Kansas City police officers while he was in possession of crack cocaine that he intended to distribute.
On Sept. 3, 2017, Cox was passed out in the back seat of a Chevrolet parked at a gas station on Truman Road in Kansas City, Mo. The driver’s side door was open and there was a Bohnmische Waffenfabrik/FNH .40-caliber handgun, which officers later learned had been stolen, inside the car. Officers searched the Chevrolet and found a bag with 5.52 grams of crack cocaine and a bag of 1.3 grams of cocaine in the compartment next to the driver’s door handle.
On Sept. 24, 2018, a Kansas City police motorcycle officer attempted to stop Cox near 7th Street and Benton Boulevard. Cox began to flee in his vehicle down 7th Street, but only made it approximately 50 yards before his vehicle was stopped. Cox reversed the vehicle as the officer approached, driving toward the officer, who had to move to avoid being hit. Cox jumped from the car while it was moving. The vehicle continued unmanned across Benton Boulevard, hit a handicap sign, and struck a gas meter, causing a leak that required evacuation of the block. The officer chased Cox into the parking lot behind 613 Benton Boulevard, and ultimately into an alley. The officer saw Cox pull a Taurus .40-caliber semi-automatic handgun from his front waistband along with several baggies and try and throw the baggies and the firearm over a fence. The baggies struck the top of the fence and fell straight down. The gun struck the roadway and slid into the middle of the street.
The officer caught Cox, but Cox resisted and got away. By this point, other officers had arrived and, with the help of a helicopter, tracked Cox to an apartment complex’s rear stairs and arrested him. Officers retrieved the firearm Cox had thrown into the street. Officers also found 34 baggies of crack cocaine. Officers also found two baggies of powder cocaine in Cox’s car. Cox had $2,276 in his pants pocket.
In addition to these incidents, to which Cox pleaded guilty, Kansas City police officers and the U.S. Marshals Service were surveilling Cox on April 24, 2019, seeking to arrest him on the warrant in this case. They found Cox, but he again tried to flee.
Cox was outside the vehicle when officers approached and surrounded him. Rather than surrendering, Cox ran back into the driver’s seat, put the car in reverse, and struck a marshal’s vehicle. When Cox was unable to move the marshal’s vehicle, he fled on foot, but was captured shortly into his flight. On the floor of the front passenger seat was a Glock .40-caliber handgun with an extended magazine.
This case was prosecuted by Assistant U.S. Attorneys Sean T. Foley and Sarah J. Rasalam. It was investigated by the Kansas City, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.