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Friday 3 December 2021
International Drug Trafficking Organization Member Sentenced for Trafficking over a Thousand Kilograms of CocaineRead the Press Release
RICHMOND, Va. – A Guatemalan national was sentenced today to 172 months in prison for his role as a maritime transportation manager in a large-scale Guatemalan drug trafficking organization (DTO).
According to court documents, beginning in 2016, Amilcar Chavez-Barrera, 42, conspired to distribute over 1,000 kilograms of cocaine for distribution into the United States. Chavez-Barrera managed and coordinated the maritime transportation of cocaine off the Pacific Coast of Guatemala onto the Guatemalan mainland. In this leadership role, Chavez-Barrera worked for a maritime transportation cell contracted by the DTO and managed the boats that picked up cocaine loads approximately 100 miles off the coast of Guatemala and transported the cocaine to the Guatemalan mainland. Chavez-Barrera coordinated the maritime transportation of 1,500 kilograms of cocaine from the Pacific Ocean to mainland Guatemala, where the cocaine was offloaded for further ground transportation through Central America.
On July 1, 2020, Luis Pedro Fuentes Amaya, a co-defendant of Chavez-Barrera, was sentenced to 192 months for his role in the cocaine trafficking conspiracy on behalf of the DTO. On August 10, 2021, Edi Donaldo Barrera-Salguero, another co-defendant of Chavez-Barrera, was sentenced to 210 months for his role in the cocaine trafficking conspiracy on behalf of the DTO.
This prosecution is part of the Organized Crime and Drug Enforcement Task Force (OCDETF). 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.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, and Jarod Forget, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Division, made the announcement after sentencing by Senior U.S. District Judge Henry E. Hudson.
Assistant U.S. Attorneys Heather Hart Mansfield and Erik S. Siebert prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:19-cr-18.
Inmate admits to assault, sentencedRead the Press Release
CLARKSBURG, WEST VIRGINIA – Timothy Terrazas, and inmate at United States Penitentiary Hazleton in Bruceton Mills, West Virginia, has admitted to assault and was sentenced today to an additional 24 months of incarceration, United States Attorney William J. Ihlenfeld, II announced.
Terrazas, 33, pleaded guilty today to one count of “Assault with a Dangerous Weapon with Intent to do Bodily Harm.” Terrazas admitted to assaulting another inmate in March 2021 in Preston County.
Assistant U.S. Attorney Christopher L. Bauer prosecuted the case on behalf of the government. The Bureau of Prisons investigated.
U.S. District Judge Thomas S. Kleeh presided.
Informational: Federal Court arraignmentsRead the Press Release
The U.S. Attorney’s Office announced that the following persons were arraigned or appeared this week before U.S. Magistrate judges on indictments handed down by the Grand Jury or on criminal complaints. The charging documents are merely accusations and defendants are presumed innocent until proven guilty:
Appearing in Great Falls before U.S. Magistrate Judge John T. Johnston and pleading not guilty on Dec. 1 was:
Dillon James Wippert, 26, of East Glacier and Washington, on charges of second degree murder and use of a firearm during and in relation to a crime of violence. If convicted of the most serious crime, Wippert faces a maximum of life in prison, a $250,000 fine and five years of supervised release on the murder crime and a mandatory minimum of 10 years to life in prison, consecutive to any other term of imprisonment, a $250,000 fine and five years of supervised release on the firearms crime. Wippert was detained pending further proceedings. The FBI and Blackfeet Law Enforcement Services investigated the case. PACER case reference. 21-74.
Appearing in Missoula before U.S. Magistrate Judge Kathleen L. DeSoto and pleading not guilty on Nov. 30 was:
Richard Daniel White, 35, of Butte, on charges of prohibited person in possession of firearms and ammunition. If convicted of the most serious crime, White faces a maximum of 10 years in prison, a $250,000 fine and three years of supervised release. White was detained pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives, Montana Probation and Parole and Butte Silver Bow Law Enforcement. PACER case reference. 21-40.
Appearing on Nov. 29 was:
Chet Norman Andersen, 44, of Bozeman, on charges of felon in possession of a firearm. If convicted of the most serious crime, Andersen faces a maximum of 10 years in prison, a $250,000 fine and three years of supervised release. Andersen was detained pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives and Montana Probation and Parole investigated the case. PACER case reference. 21-36.
Lassana Diaby, 40, of Missoula, on charges of theft of mail by officer or employee. If convicted of the most serious crime, Diaby faces a maximum of five years in prison, a $250,000 fine and three years of supervised release. Diaby was released pending further proceedings. The U.S. Postal Service Office of Inspector General investigated the case. PACER case reference. 21-51.
Appearing in Billings before U.S. Magistrate Judge Timothy J. Cavan and pleading not guilty on Dec. 3 was:
John Aaron Champ, 41, of Crow Agency, on charges of assault resulting in serious bodily injury. If convicted of the most serious crime, Champ faces a maximum of 10 years in prison, a $250,000 fine and three years of supervised release. Champ was detained pending further proceedings. The FBI investigated the case. PACER case reference. 21-70.
Appearing on Nov. 30 was:
Erik Stephen Deaner, 46, of Billings, on charges of theft from federal firearm licensee, possession of stolen firearms and prohibited person in possession of firearms. If convicted of the most serious crime, Deaner faces a maximum of 10 years in prison, a $250,000 fine and three years of supervised release. Deaner was detained pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. PACER case reference. 21-96.
Denise Danielle Piccione, 37, a transient, on charges of conspiracy to possess with intent to distribute methamphetamine and possession with intent to distribute meth. If convicted of the most serious crime Piccione faces a mandatory minimum 10 years to life in prison, a $10 million fine and at least five years of supervised release. Piccione was released pending further proceedings. The Eastern Montana High Intensity Drug Trafficking Area Task Force investigated the case. PACER case reference. 21-25.
Cecil Jerome Hatchett, 31, of Las Vegas, Nevada, on charges of conspiracy to transport a minor with intent to engage in prostitution. If convicted of the most serious crime, Hatchett faces a mandatory minimum 10 years to life in prison, a $250,000 fine and three years of supervised release. Hatchett was detained pending further proceedings. The FBI investigated the case.PACER case reference. 21-41.
The progress of cases may be monitored through the U.S. District Court Calendar and the PACER system. To establish a PACER account, which provides electronic access to review documents filed in a case, please visit http://www.pacer.gov/register.html. To access the District Court’s calendar, please visit https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
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Healthcare System to Pay $150,000 to Settle Controlled Substances Act AllegationsRead the Press Release
NEWARK, N.J. – A nonprofit healthcare system that owns and operates a network of healthcare entities has agreed to pay $150,000 to resolve allegations that it violated the Controlled Substances Act, Acting U.S. Attorney Rachael A. Honig announced today.
According to documents filed in this case and the contentions of the United States contained in the settlement agreement:
In July 2016, Virtua Health Inc., which owned and operated Virtua Voorhees Hospital through a subsidiary, reported to the Drug Enforcement Administration (DEA) that 400 tablets of oxycodone 30mgs had been lost or stolen from the inpatient pharmacy at the hospital. An investigation conducted by diversion investigators from the DEA revealed that from Oct. 8, 2015, through Nov. 2, 2016, Virtua Health failed to keep an accurate inventory of controlled substances, failed to keep the controlled substances in a secure location, and failed to properly supervise its employees concerning the controlled substances.
Acting U.S. Attorney Honig credited diversion investigators of the DEA, under the direction of Special Agent in Charge Susan A. Gibson in Newark, with the investigation leading to the agreement.
The government is represented by Assistant U.S. Attorney Kruti D. Dharia of the U.S. Attorney’s Opioid Abuse Prevention and Enforcement Unit in Newark.
The claims settled by this agreement are allegations only, and there has been no determination of liability.
Hamilton County Woman Pleads Guilty to Meth PossessionRead the Press Release
A woman who possessed with intent to distribute methamphetamine pled guilty December 2, 2021, in federal court in Sioux City.
Kelly Beightol, 41, from Webster City, Iowa, was convicted of possessing methamphetamine with intent to distribute. Beightol was previously convicted of Possession of More Than 5 Grams of Methamphetamine With the Intent to Deliver, and Delivery of Less Than 5 Grams of Methamphetamine, in the Iowa District Court for Webster County, on or about December 23, 2015.
At the plea hearing, Beightol admitted that on September 6, 2021, during a traffic stop in Hardin County, Iowa, she was found in possession of about 53 grams of pure methamphetamine and ½ pound of marijuana. Law enforcement also seized indicia of drug distribution, including drug packaging, a digital scale, two cellular telephones, and nearly $1,700 in cash. Beightol said she intended to distribute some or all of the methamphetamine to another person or persons.
Sentencing before United States District Court Chief Judge Leonard T. Strand will be set after a presentence report is prepared. Beightol remains in custody of the United States Marshal pending sentencing. Beightol faces a mandatory minimum sentence of 5 years’ imprisonment and a possible maximum sentence of 40 years’ imprisonment, a $5,000,000 fine, and at least four years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by Iowa Division of Narcotics Enforcement, the Hardin County Sheriff’s Office, the Iowa Division of Criminal Investigation Laboratory, the Hamilton County Sheriff’s Office and the Webster City Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 21-3035.
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Gold Dealers Sentenced for Financial Crimes and Gun CrimesRead the Press Release
Assistant U. S. Attorney Daniel Silva (619) 546-9713
NEWS RELEASE SUMMARY—December 3, 2021
SAN DIEGO – Global Gold Exchange, LLC and its managers, Richard M. Owen, James Warren, and Jeffrey Morrow, were sentenced in federal court today for committing multiple financial and firearms crimes, including laundering money through their unlicensed money transmitting business by falsely reporting transactions as “gold” and other precious metals.
Following entry of guilty pleas across 2019 and 2020, U.S. District Court Judge Cathy Ann Bencivengo sentenced each of the individual defendants to a term of incarceration. Owen received a custodial sentence of 24 months on his money laundering and felon-in-possession of firearm convictions. Warren and Morrow received custodial sentences of 6 and 8 months, respectively, on their convictions for operating an unlicensed money transmitting business.
As part of their sentences, the defendants agreed to forfeit approximately $2 million in assets involved in the money laundering and unlicensed money transmitting business, and further to provide restitution in the amount of no less than $3,682,063.44 for the crimes of money laundering, mail fraud, and operating an unlicensed money transmitting business. Each defendant is subject to a three-year term of supervised release following their custodial sentences.
Special Agents from IRS-Criminal Investigation’s Financial Investigations and Border Crimes Task Force worked with FBI agents and the United States Postal Inspection Service during the multi-year investigation to unravel millions of dollars in suspicious transactions taking place at the San Diego-based office and bank accounts of Global Gold Exchange, or “GGEX.”
Taken together, the defendants unlawfully laundered cash and funds from a variety of sources—both lawful and unlawful—and fraudulently documented the transactions as “a complete gold transaction.” Their crimes were best summed up in plea agreements that were previously entered by all four defendants, which admitted to operating GGEX “as an informal money transfer system engaged in facilitating the transfer of money domestically and internationally outside of the conventional financial institutions system, and did so without regard for the source, destination, purpose, or legality of the funds transmitted.”
Several victims addressed the court and the defendants, describing how they had “stolen our dignity,” “robbed us of peace of mind,” and “hurt people at a very deep level.” After reviewing the underlying facts of the case and handing down the sentences, Judge Bencivengo stated that the defendants’ crimes allowed people to “hide assets and improper transactions” while causing “irreparable harm” to the victims.
“Global Gold Exchange and its managers attempted to operate as a one-stop-shop for money laundering,” said Acting United States Attorney Randy S. Grossman. “The sentences handed down today make clear that the United States will pursue and prosecute any individual, asset, or business attempting to launder the proceeds of crimes, or that threaten the integrity of our financial system.”
Between 2017 and 2018, defendants GGEX, Owen, Warren, and Morrow employed various money laundering, fraud, and unlicensed money transmitting techniques to conduct unlawful transactions through GGEX and GGEX’s bank accounts, including transacting with a “local cartel out of Mexico;” falsifying invoices for sales of gold, when in reality it was the receipt of a large cash deposit, and returned by check after GGEX took a 10 percent fee; agreeing with “clients” to tell law enforcement or tax authorities that the transactions were sales/purchases of precious metals; and advising clients to mail GGEX parcels filled with heavy substances to mimic the weight of gold, all to falsely document the nature of GGEX’s transactions.
“Today’s sentences demonstrate IRS Criminal Investigation’s commitment to disrupting professional enablers, who facilitate the commission and concealment of financial crimes by veiling them behind legitimate business services,” said Special Agent in Charge Ryan L. Korner of the Los Angeles Field Office. “Targeting organizations such as Global Gold Exchange, LLC and its managers, who used their expertise of our financial systems to launder illicit funds, eliminates this avenue for criminal activity.”
“The FBI is proud to partner with IRS Criminal Investigations and the United States Postal Inspection Service to bring our collective authorities to bear in money laundering and fraud cases such as these,” said FBI Special Agent in Charge Suzanne Turner. “Today’s sentences should serve as a deterrent to those who seek to launder criminal proceeds by exploiting our financial system. The FBI and our federal partners will continue to bring all available resources to stop the flow of money to criminal organizations.”
“Today’s sentencing makes a statement to those who use the U.S. Mail to commit fraud,” stated Carroll N Harris, Postal Inspector in Charge of the Los Angeles Division, United States Postal Inspection Service. “Instead of seeing gold bars, these fraudsters will be behind prison bars. As always, Postal Inspectors remain committed to keeping the mail free from fraudulent mailings and will hold those that do accountable for their crimes.”
This case is the result of ongoing efforts by the Financial Investigations and Border Crimes Task Force, a partnership targeting unlawful transactions through the financial system. The task force brings together the combined expertise of federal, state, and local law enforcement including IRS-CI, California Franchise Tax Board, United States Postal Inspection Service, and the San Diego Police Department. FBI and United States Postal Inspection Service partnered with the FIBC in this coordinated investigation, with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case is being prosecuted by Assistant U.S. Attorney Daniel Silva.
DEFENDANTS Case Numbers: 19-CR-2936-CAB; 20-CR-3748-CAB
Global Gold Exchange, LLC
Richard M. Owen San Diego, CA Age: 52
James Warren San Diego, CA Age: 50
Jeffrey Morrow San Diego, CA Age: 46
SUMMARY OF COUNTS OF CONVICTION
Money Laundering – Title 18, U.S.C., Section 1956
Maximum penalty: Twenty years in prison and $500,000 fine
Operation of Unlicensed Money Transmitting Business – Title 18, U.S.C., Section 1960
Maximum penalty: Five years in prison and $250,000 fine
Mail Fraud – Title 18, U.S.C., Section 1341
Maximum penalty: Thirty years in prison and $1 million fine
Unlawful Possession of Firearm – Title 18, U.S.C., Section 922(g)
Maximum penalty: Ten years in prison and $250,000 fine
AGENCIES
IRS Criminal Investigation and the Financial Investigations and Border Crimes Task Force
Federal Bureau of Investigation
United States Postal Inspection Service
Fort Wayne Man Convicted of Federal Gun and Drug OffensesRead the Press Release
FORT WAYNE- Torrence Larry, 44, of Fort Wayne, Indiana, was convicted of federal drug and gun charges on December 2, 2021, following a three-day jury trial before United States District Court Judge Holly A. Brady, announced United States Attorney Clifford D. Johnson.
According to documents in this case, in May and June of 2017, Larry sold cocaine and heroin from his residence while under investigation by law enforcement. In June of 2017, officers served a search warrant at Larry’s residence and located quantities of cocaine, crack cocaine, and methamphetamine. Officers also found additional evidence of drug dealing and a firearm possessed by Larry to facilitate and protect his drug trafficking.
Larry was convicted of all three dealing counts, as well as the single count for possessing with intent to distribute controlled substances. Larry was convicted of both gun charges. He was convicted of possession of a firearm based upon his previous armed bank robbery conviction in federal court and his state drug dealing conviction. The jury also found Larry guilty of possessing the firearm in furtherance of his drug trafficking offense.
Larry’s sentencing is scheduled for March 16, 2022. Any specific sentence to be imposed will be determined by the District Court Judge after consideration of federal sentencing statutes and the United States Sentencing Guidelines.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives with the assistance of the Fort Wayne Police Department, the Drug Enforcement Administration, the Drug Enforcement Administration Laboratory, and the Indiana State Police Laboratory. This case is being prosecuted by Assistant U.S. Attorney Stacey R. Speith.
This case was 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.
Fort Myers Beach Man Pleads Guilty to FEMA FraudRead the Press Release
Fort Myers, Florida – Roberto Armando Mimmo (60, Fort Myers Beach) has pleaded guilty to fraud in connection with a major disaster. Mimmo faces a maximum penalty of 30 years in federal prison. A sentencing date has not yet been set.
According to the plea agreement, on September 15, 2017, Mimmo applied for Federal Emergency Management Agency (FEMA) assistance for his residence, a houseboat, located at 18600 San Carlos Boulevard, in Fort Myers Beach. Mimmo claimed he was residing at the houseboat at the time of Hurricane Irma (a federally declared disaster), and that the houseboat had sunk as result of damage caused by the hurricane. An investigation revealed the houseboat had sunk months prior to Hurricane Irma’s landfall, in December of 2016. As a result of Mimmo’s fraudulent representation, FEMA approved and issued Mimmo more than $35,000 in home repair and rental assistance.
This case was investigated by the U.S. Department of Homeland Security – Office of Inspector General. It is being prosecuted by Assistant United States Attorney Trent Reichling.
Fort Leonard Wood Pharmacist Charged with Knife AttackRead the Press Release
SPRINGFIELD, Mo. – A civilian pharmacist at Fort Leonard Wood, Missouri, was charged in federal court today with assaulting his supervisor with a knife and stabbing him multiple times.
Robert E. Sapp, 63, was charged in a complaint filed in the U.S. District Court in Springfield, Mo., with one count of assault with a dangerous weapon with the intent to do bodily harm. Sapp remains in federal custody.
According to an affidavit filed in support of today’s criminal complaint, Sapp was working at a dispensing window at the Post Exchange Pharmacy at Fort Leonard Wood when he was approached by the supervisory pharmacist. Another employee told investigators the two men started arguing, then tumbled to the ground. The witness said she saw Sapp standing over the victim with a knife in his hand, stabbing him. When she asked Sapp, “What are you doing?” he put the knife in his pocket and fled from the pharmacy.
Two bystanders chased Sapp to the parking lot, the affidavit says. They saw Sapp get into a vehicle, which they tried to stop, but Sapp backed up and almost hit one of them, who jumped out of the way, and then Sapp drove off.
Military Police Service activated a barrier to prevent anyone from exiting the installation through the main gate. Sapp was detained by military police while attempting to flee in his vehicle. When Sapp was removed from his vehicle, the affidavit says, he had a knife in his pocket with visible hair and blood on it. The vehicle also had visible blood on the interior of the driver’s side door, and Sapp had blood on his clothing.
The victim was transported to the General Leonard Wood Army Community Hospital and was treated for non-life-threatening injuries. Medical personal reported that he has multiple stab wounds, including multiple stab wounds to his head.
The charge contained in this complaint is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorneys Ami Harshad Miller and Jessica R. Sarff. It was investigated by the U.S. Army Criminal Investigation Command.
Former governor of the Laguna Pueblo sentenced to four years in federal prison for sexual abuse in Indian CountryRead the Press Release
ALBUQERQUE, N.M. – Conrad Lucero, 71, of Mesita, New Mexico, and an enrolled member of the Laguna Pueblo, was sentenced in federal court on Oct. 28 to four years in prison for sexual abuse in Indian Country. Lucero is a former governor of the Laguna Pueblo.
Lucero pleaded guilty on April 23. According to the plea agreement, on March 20, 2019, Lucero sexually abused Jane Doe while she was staying at his residence in Cibola County, New Mexico, on the Laguna Pueblo. Lucero approached the victim while she slept and engaged in sexual contact without her consent.
After his release from prison, Lucero will be subject to five years of supervised release and must register as a sex offender.
The Bureau of Indian Affairs investigated this case with assistance from the Laguna Pueblo Police Department and the Isleta Pueblo Police Department. Assistant U.S. Attorney Fredrick T. Mendenhall and Kyle T. Nayback prosecuted the case.
Former Netflix engineer sentenced to prison for insider tradingRead the Press Release
Seattle – A former Netflix software engineer, and his best friend and co-conspirator were sentenced today in U.S. District Court in Seattle for securities fraud for their roles in an insider trading ring that generated more than $3 million in illegal proceeds, announced U.S. Attorney Nick Brown. Sung Mo Jun, 49, of Bellevue, Washington, was sentenced to 2 years in prison and a $15,000 fine. His friend and co-conspirator Junwoo Chon, 50, of Bellevue, Washington, was sentenced to 14 months in prison and a $10,000 fine. At the sentencing hearings U.S. District Judge Richard A. Jones said he hoped the prison time would deter others. “For people in the high tech industry, they will clearly know that there are consequences – including prison time – for this activity,” Judge Jones said.
“Insider trading is a serious offense,” said U.S. Attorney Nick Brown. “Such conduct damages our financial markets and erodes public trust because the investing public needs to have faith that the markets provide an even playing field to all participants. Mr. Jun and Mr. Chon were both financially secure with good jobs and good salaries when greed drove them to break the law to increase their own wealth, at the expense of others. Such conduct, will not be tolerated.”
“Insider trading undermines our capital markets, harms companies by misusing their confidential information, and causes investors to lose faith in the fairness of the system,” said Donald M. Voiret, Special Agent in Charge, Seattle Field Office. “The actions of this trusted employee and his friend were calculated and ongoing to reap a huge profit.”
According to records filed in the case, from July 2016 to February 2017, Sung Mo Jun was employed by Netflix as a software engineer. He had access to subscriber data and had been trained by the company that such data was material, non-public information. Nevertheless, Jun disclosed that information to his brother Joon Jun, 45, of Issaquah, Washington, and his close friend, Junwoo Chon, knowing that the two intended to use the information to profit on the purchase and sale of Netflix securities. After Chon made significant profits on the securities, Sung Mo Jun asked Chon to provide Sung Mo Jun with $60,000 in cash as Sung Mo Jun’s share of the profits.
After Sung Mo Jun left Netflix, he obtained additional non-public information about subscriber data from another Netflix employee, software engineer Ayden Lee, 33, of San Jose, California. Jun not only passed that information on to his brother and Chon, he also used it to make his own trades. Between April 2017, and July 2019, Sung Mo Jun made a profit of $434,086 by trading in Netflix stock and options with this inside information. Between July 2016 and April 2017, Jun’s brother, Joon Jun, made $215,419 and co-conspirator Junwon Chon made $521,400. All told, the insider trading attributable to Sun Mo Jun in Netflix securities resulted in an illicit gain of $1,170,905. Chon is responsible for illicit profits of $1,642,855
Sung Mo Jun also obtained insider information from a “tipper” he knew at another tech company and shared this information with his brother and Chon. Their profits from trading on that inside information was less than $2,000.
In addition to the prison sentences, both men will be on one year of supervised release following prison and must complete 50 hours of community service.
As Judge Jones imposed the sentence, he told Jun “You had no reason to pursue this additional wealth, and yet you chose to engage your brother and best friend in this scheme. There is just one reason: greed.”
Jun told the court, “What I did was foolish, wrong, illegal…. I have no excuse. I disappointed many people.”
Jun is forfeiting $495,188 to the U.S. and Chon is forfeiting $1,582,885 to the U.S. The forfeiture amounts are based on the illegal gain by each defendant.
The two remaining conspirators will be sentenced next year. Joon Jun is responsible for illicit profits totaling $1,106,208. Lee is connected to illicit profits totaling $453,465.
The Securities and Exchange Commission (SEC) has filed a separate civil enforcement action against the defendants who have each entered into settlements with the SEC. Both men still face potential penalties from the SEC.
The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Justin Arnold.
Florida man sentenced for defrauding W.Va. churches, citizensRead the Press Release
CLARKSBURG, WEST VIRGINIA – Phillip W. Conley, of Jacksonville, Florida, was sentenced today to 87 months in prison for defrauding West Virginia churches, pastors, and others of nearly $5 million, United States Attorney William J. Ihlenfeld, II announced.
Conley, 38, previously pleaded guilty to one count of “Securities Fraud,” admitting to swindling millions of dollars from victims in multiple states.
Conley portrayed himself as an investment advisor even after his broker’s license was suspended in December 2015. He formed a company called ALPAX, LLC, and persuaded victims to invest in false ventures such as student housing construction, high-yield fixed income securities, oil and gas technology, mineral rights, and timber leasing. Conley provided investors with a false sense of security by mailing them dividend statements that misstated the value of the investment accounts.
Conley’s victims included churches in Charleston, Parkersburg and Morgantown. Small business owners were also victimized, along with friends and family members of Conley. He spent the stolen money on private jets, designer clothes, fine dining, jewelry, and housing and living expenses.
“Securities fraud is a terrible crime and often has a devastating impact,” said United States Attorney Ihlenfeld. “Mr. Conley was very persuasive and groomed his victims, convincing them that these were legitimate investment opportunities. Unfortunately, it was a scam in which Conley robbed investors of their life savings.”
Ihlenfeld urges anyone considering investing with a stockbroker to first visit brokercheck.finra.org to learn whether a broker has been suspended or sanctioned.
“Mr. Conley lived a luxurious life, but in reality, lined his pockets by orchestrating a multi-million-dollar fraud scheme that took money from his own family members and other victims," said FBI Pittsburgh Special Agent in Charge Mike Nordwall. “His victims trusted him to safeguard their money and he betrayed their trust. Today's sentence sends the message that he can't escape accountability for his actions."
In addition to the prison sentence, Conley was ordered to forfeit any property purchased from the proceeds of the crimes and to pay a money judgement of $4,858,817.42.
Assistant U.S. Attorney Danae DeMasi-Lemon prosecuted the case on behalf of the government. The FBI investigated.
U.S. District Judge Thomas S. Kleeh presided.
Fitchburg Woman Pleads Guilty to Role in Fentanyl, Heroin, Crack and Cocaine ConspiracyRead the Press Release
BOSTON – A Fitchburg woman pleaded guilty today in federal court in Worcester to her role in a wide-ranging fentanyl, heroin, cocaine and crack cocaine trafficking conspiracy.
Amanda Ford, 35, pleaded guilty to conspiracy to distribute and possession with intent to distribute fentanyl, heroin, cocaine and cocaine base. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for March 22, 2022. Ford was charged along with 17 others in July 2020.
According to court documents, following a fatal fentanyl overdose in September 2018, law enforcement began an investigation into a drug trafficking organization (DTO) in the Fitchburg area led by co-conspirators Pedro Baez and Anthony Baez. Beginning in July 2019, intercepted electronic communications between Pedro and Anthony Baez and other members of the DTO revealed that Ford worked with Pedro and Anthony Baez to distribute a fentanyl and heroin mixture and crack cocaine on a regular basis to individuals in the Fitchburg area who then redistributed that mixture to others.
Over the course of the investigation, agents seized over 1.8 kilograms of a heroin and fentanyl mixture, over 3.6 kilograms of cocaine and over 50 grams of crack cocaine, as well as a stolen, loaded handgun, drug manufacturing equipment and over $376,000.
Ford is the 10th defendant to plead guilty in the case. In December 2020, Anthony Baez was sentenced by Judge Hillman to 13 years in prison. Defendants Pedro Baez, Monica Troche, Valerie Lucier, Shastaalena Blair, Ricky Figueroa, Hector Matos, Rafael Hidalgo Rodriguez, and Pablo Vidarte Hernandez have also pleaded guilty to the superseding indictment.
The charge of conspiracy to distribute fentanyl, heroin, cocaine, and cocaine base, provides for a sentence of up to life in prison, a term of supervised release of at least three years and up to life, and a fine of up to $10 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Commissioner Carol Mici of the Massachusetts Department of Correction; and Colonel Christopher Mason, Superintendent of the Massachusetts State Police made the announcement today. Valuable assistance was provided by the Fitchburg and Lunenburg Police Departments; the U.S. Postal Inspection Service; and the Massachusetts State Police. Assistant U.S. Attorney Alathea Porter, of Mendell’s Narcotics and Money Laundering Unit, is prosecuting the case.
The operation was conducted is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) Strike Force Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations. More information on the OCDETF program is available here: https://www.justice.gov/ocdetf/about-ocdetf.
The details contained in the indictment are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Felon Sentenced for Illegal Possession of Firearms and Witness TamperingRead the Press Release
NORFOLK, Va. – A Norfolk man was sentenced today to 17.5 years in prison for illegally possessing firearms as a felon, four counts of witness tampering and obstruction of justice, and one count of unlawful possession of a controlled substance.
According to court documents, in October and November 2017, Adonis Marquis Perry, 32—a five-time convicted felon who had sustained two state convictions and one federal conviction for being a felon in possession of firearms and ammunition—took pictures of himself holding a Glock, Model 17, 9mm semi-automatic handgun, loaded with an extended magazine, and a Taurus, Model 66, .357 magnum revolver.
On December 18, 2017, Perry was arrested at a traffic stop in Norfolk after attempting to elude law enforcement by running through stop signs and making rapid turns, finally stopping in a residential parking lot. When law enforcement caught up to the car, they ordered the two occupants out of the vehicle. After receiving permission to search the vehicle, officers found the Taurus revolver and the Glock handgun—the latter loaded with the same magazine that was in the defendant’s pictures.
Perry spent the next seven months after his arrest making recorded calls from the jail to engage in witness tampering and obstruction of justice, specifically involving a series of efforts to interfere with the potential testimony of the second person who was in the car during Perry’s arrest encounter. The defendant controlled the witness through fear—at one point before his arrest, he pointed the Glock handgun at the witness and threatened to kill her if she left him, and on jail calls he reminded her that he knew where she and her family members lived.
Since his arrest, Perry has threatened to hurt or kill at least five of his seven court-appointed attorneys and even lunged at one in the middle of a status hearing in federal court. Perry also mailed letters to some of his attorneys threatening to send associates to their offices if they did not move to withdraw from his case.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, and Charlie J. Patterson, Special Agent in Charge of the ATF’s Washington Field Division, made the announcement after sentencing by Senior U.S. District Judge Rebecca Beach Smith.
Assistant U.S. Attorney s William B. Jackson and Joseph E. DePadilla prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:18-cr-113.
Federal Prisoner Sentenced to Additional Prison Time for Illegal Contraband and EscapeRead the Press Release
PENSACOLA, FLORIDA – William Brett Brownell, 30, of Milton, Florida, was sentenced to an 8-month consecutive prison term after pleading guilty to charges of possession of contraband by a federal prisoner, introduction of contraband to a federal prison, and escape. The sentence was announced today by Jason R. Coody, Acting U.S. Attorney for the Northern District of Florida.
Between October 2019 and June 2020, Brownell obtained, possessed, and distributed to fellow prisoners at the Federal Prison Camp in Pensacola various prohibited items, including marijuana, alcohol, phones, SD cards and readers, and tobacco products. Brownell coordinated the contraband “drops” by using a contraband cell phone. The indictment also alleges that around approximately the same time frame, Brownell escaped from custody by leaving prison limits without permission.
Brownell was in the midst of serving a 70-month sentence for marijuana trafficking and money laundering convictions, and he must serve 8 additional months after that as a result of the sentence in this case.
This case resulted from a joint investigation by the Bureau of Prisons Special Investigative Services, the United States Air Force Office of Special Investigations, Eglin Air Force Base 96th Test Wing Legal Office, and the Federal Bureau of Investigation. Assistant United States Attorney Alicia Forbes prosecuted this case.
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Federal Jury Convicts Pharmacy Owner for Role in $174 Million Telemedicine Pharmacy Fraud SchemeRead the Press Release
On Dec. 2, a federal jury in Greeneville, Tennessee, convicted Peter Bolos, 44, of Tampa, Florida, of 22 counts of mail fraud, conspiracy to commit health care fraud and introduction of a misbranded drug into interstate commerce, following a month-long trial.
According to court documents and evidence presented at trial, Bolos and his co-conspirators, Andrew Assad, Michael Palso, Maikel Bolos, Larry Smith, Scott Roix, HealthRight LLC, Mihir Taneja, Arun Kapoor, and Sterling Knight Pharmaceuticals, as well as various other companies owned by them, deceived pharmacy benefit managers (PBMs), such as Express Scripts and CVS Caremark, regarding tens of thousands of prescriptions. The PBMs processed and approved claims for prescription drugs on behalf of insurance companies. Bolos and his co-conspirators defrauded the PBMs into authorizing claims worth more than $174 million that private insurers such as Blue Cross Blue Shield of Tennessee, and public insurers such as Medicaid and TRICARE, paid to pharmacies controlled by the co-conspirators.
Court documents and evidence at trial established that Bolos, Assad and Palso owned and operated Synergy Pharmacy in Palm Harbor, Florida. Under their direction, Synergy agreed with Scott Roix, a Florida telemarketer operating under the name HealthRight, to generate prescriptions for Synergy and the other pharmacies involved in the scheme. The prescriptions were typically for drugs such as pain creams, scar creams and vitamins. To obtain the prescriptions, evidence showed Roix used HealthRight’s telemarketing platform as a telemedicine service, calling consumers and deceiving them into agreeing to accept the drugs and to provide their personal insurance information. HealthRight then paid doctors to authorize the prescriptions through its telemedicine platform, even though the doctors never communicated directly with the patients and relied solely on the telemarketers’ screening process as the basis for their authorizations. Because this faulty and fraudulent process made the prescriptions invalid, the drugs were misbranded under the Food, Drug and Cosmetic Act. Synergy and the other pharmacies nonetheless dispensed the drugs to consumers as part of the scheme, so that Bolos could submit fraudulent reimbursement claims.
Court documents and evidence at trial established that during the conspiracy, which lasted from May 2015 through April 2018, Bolos paid Roix more than $30 million to buy at least 60,000 invalid prescriptions generated by HealthRight. Evidence showed Bolos selected specific medications for the prescriptions that he could submit for highly profitable reimbursements. In addition, Bolos used illegal means to hide his activity from the PBMs so that he could remain undetected. Evidence showed that Bolos was responsible for at least $89 million out of the total $174 million in fraudulently paid billings.
“The defendants deceived consumers in order to facilitate the distribution of drugs without proper medical oversight, and overbilled insurers for illegal prescriptions,” said Deputy Assistant Attorney General Arun G. Rao of the Justice Department’s Civil Division. “The Department will continue to investigate and prosecute individuals who use telemedicine to advance fraudulent schemes that violate the Food, Drug, and Cosmetic Act.”
“The United States Attorney’s Office for the Eastern District of Tennessee applauds the unwavering efforts of the multiple agencies involved in this collaborative investigation to bring this extensive healthcare fraud and misbranding scheme to justice,” said Acting U.S. Attorney Francis M. Hamilton III for the Eastern District of Tennessee. “The scope and nature of this fraud and misbranding scheme shock the conscience. Patients were given medications that they neither requested nor wanted, and the trial proof demonstrated that the prescriptions were specifically chosen by Bolos to maximize the fraudulent scheme’s profits, rather than for the patients’ healthcare needs. The guilty verdict against Bolos and the guilty pleas obtained from his co-defendants should send a strong message that the Department of Justice will aggressively prosecute fraud against health insurance providers.”
“Healthcare fraud is an egregious crime problem that impacts every American,” said Special Agent in Charge Joseph E. Carrico of the FBI’s Knoxville Field Office. “The guilty verdict was a result of a multi-agency investigation into a complex health care fraud scheme that required substantial investigative resources. Along with its law enforcement partners, the FBI remains committed to investigate these crimes and prosecute all those that are intent in defrauding the American public."
“Distributing misbranded prescription drugs in the U.S. marketplace places patients’ health at risk,” said Special Agent in Charge Justin C. Fielder of the FDA Office of Criminal Investigations Miami Field Office. “We will continue to pursue and bring to justice those who put profits ahead of public health.”
“Bolos and his co-conspirators used their pharmacies to fraudulently bill insurance companies hundreds of millions of dollars, and that type of health care fraud impacts everyone,” said Special Agent in Charge John Condon of Homeland Security Investigations (HSI) Tampa. “HSI will continue to work with our law enforcement partners at the federal, state and local level to investigate all fraud and bring those responsible to justice.”
“Bolos and his co-conspirators sought to increase their profits by executing a comprehensive health care fraud scheme involving innocent patients,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services, Office of Inspector General. “This conviction should serve as a warning to individuals who wish to deceive the government and steal from taxpayers. Alongside our law enforcement partners, we will continue to pursue medical professionals who engage in fraudulent activity.”
“The verdict in this case sends a clear message that these types of schemes will not be tolerated,” said Special Agent in Charge Matthew Modafferi of the U.S. Postal Service Office of Inspector General in the Northeast Area Field Office. “The Special Agents of the U.S. Postal Service Office of Inspector General will continue to work closely with the U.S. Attorney’s Office and our law enforcement partners to bring to justice those who commit these kinds of offenses.”
Roix, Assad, Palso, Smith, Maikel Bolos and various associated business entities previously pleaded guilty to their roles in the conspiracy. Taneja, Kapoor, and Sterling Knight pleaded guilty to felony misbranding in a conspiracy with Bolos. U.S. District Judge J. Ronnie Greer set sentencing for Bolos for May 19, 2022, in the United States District Court for the Eastern District of Tennessee at Greeneville. Sentencings for the other defendants will be set for dates in 2022.
The trial and plea agreements resulted from a multi-year investigation conducted by the U.S. Department of Health & Human Services Office of Inspector General (Nashville); Food and Drug Administration Office of Criminal Investigations (Nashville); U.S. Postal Service, Office of Inspector General (Buffalo); Federal Bureau of Investigation (Knoxville and Johnson City, Tennessee); Office of Personnel Management Office of Inspector General (Atlanta); and the Department of Homeland Security, Homeland Security Investigations (Tampa). The U.S. Marshals Service also assisted in the investigation and the forfeiture of assets.
Assistant U.S. Attorneys TJ Harker and Mac Heavener for the Eastern District of Tennessee and Trial Attorney David Gunn of the Department of Justice Civil Division’s Consumer Protection Branch in Washington, and a former Assistant U.S. Attorney in Knoxville, prosecuted and tried the case. They were assisted by Barbra Pemberton, Bryan Brandenburg and April Denard from the U.S. Attorney’s office.
Federal Jury Convicts Pharmacy Owner for Role in $174 Million Telemedicine Pharmacy Fraud SchemeRead the Press Release
WASHINGTON – On Dec. 2, a federal jury in Greeneville, Tennessee, convicted Peter Bolos, 44, of Tampa, Florida, of 22 counts of mail fraud, conspiracy to commit health care fraud and introduction of a misbranded drug into interstate commerce, following a month-long trial.
According to court documents and evidence presented at trial, Bolos and his co-conspirators, Andrew Assad, Michael Palso, Maikel Bolos, Larry Smith, Scott Roix, HealthRight LLC, Mihir Taneja, Arun Kapoor, and Sterling Knight Pharmaceuticals, as well as various other companies owned by them, deceived pharmacy benefit managers (PBMs), such as Express Scripts and CVS Caremark, regarding tens of thousands of prescriptions. The PBMs processed and approved claims for prescription drugs on behalf of insurance companies. Bolos and his co-conspirators defrauded the PBMs into authorizing claims worth more than $174 million that private insurers such as, Blue Cross Blue Shield of Tennessee, and public insurers such as, Medicaid and TRICARE, paid to pharmacies controlled by the co-conspirators.
Court documents and evidence at trial established that Bolos, Assad, and Palso owned and operated Synergy Pharmacy in Palm Harbor, Florida. Under their direction, Synergy agreed with Scott Roix, a Florida telemarketer operating under the name HealthRight, to generate prescriptions for Synergy and the other pharmacies involved in the scheme. The prescriptions were typically for drugs such as pain creams, scar creams and vitamins. To obtain the prescriptions, evidence showed Roix used HealthRight’s telemarketing platform as a telemedicine service, calling consumers and deceiving them into agreeing to accept the drugs and to provide their personal insurance information. HealthRight then paid doctors to authorize the prescriptions through its telemedicine platform, even though the doctors never communicated directly with the patients and relied solely on the telemarketers’ screening process as the basis for their authorizations. Because this faulty and fraudulent process made the prescriptions invalid, the drugs were misbranded under the Food, Drug, and Cosmetic Act. Synergy and the other pharmacies nonetheless dispensed the drugs to consumers as part of the scheme, so that Bolos could submit fraudulent reimbursement claims.
Court documents and evidence at trial established that during the conspiracy, which lasted from May 2015 through April 2018, Bolos paid Roix more than $30 million to buy at least 60,000 invalid prescriptions generated by HealthRight. Evidence showed Bolos selected specific medications for the prescriptions that he could submit for highly profitable reimbursements. In addition, Bolos used illegal means to hide his activity from the PBMs so that he could remain undetected. Evidence showed that Bolos was responsible for at least $89 million out of the total $174 million in fraudulently paid billings.
“The defendants deceived consumers in order to facilitate the distribution of drugs without proper medical oversight, and overbilled insurers for illegal prescriptions,” said Deputy Assistant Attorney General Arun G. Rao of the Justice Department’s Civil Division. “The Department will continue to investigate and prosecute individuals who use telemedicine to advance fraudulent schemes that violate the Food, Drug, and Cosmetic Act.”
“The United States Attorney’s Office for the Eastern District of Tennessee applauds the unwavering efforts of the multiple agencies involved in this collaborative investigation to bring this extensive healthcare fraud and misbranding scheme to justice,” said Acting U.S. Attorney Francis M. Hamilton III for the Eastern District of Tennessee. “The scope and nature of this fraud and misbranding scheme shock the conscience. Patients were given medications that they neither requested nor wanted, and the trial proof demonstrated that the prescriptions were specifically chosen by Bolos to maximize the fraudulent scheme’s profits, rather than for the patients’ healthcare needs. The guilty verdict against Bolos and the guilty pleas obtained from his co-defendants should send a strong message that the Department of Justice will aggressively prosecute fraud against health insurance providers.”
“Healthcare fraud is an egregious crime problem that impacts every American,” said Special Agent in Charge Joseph E. Carrico of the FBI’s Knoxville Field Office. “The guilty verdict was a result of a multi-agency investigation into a complex health care fraud scheme that required substantial investigative resources. Along with its law enforcement partners, the FBI remains committed to investigate these crimes and prosecute all those that are intent in defrauding the American public."
“Distributing misbranded prescription drugs in the U.S. marketplace places patients’ health at risk,” said Special Agent in Charge Justin C. Fielder of the FDA Office of Criminal Investigations Miami Field Office. “We will continue to pursue and bring to justice those who put profits ahead of public health.”
“Bolos and his co-conspirators used their pharmacies to fraudulently bill insurance companies hundreds of millions of dollars, and that type of health care fraud impacts everyone,” said Special Agent in Charge John Condon of Homeland Security Investigations (HSI) Tampa. “HSI will continue to work with our law enforcement partners at the federal, state and local level to investigate all fraud and bring those responsible to justice.”
“Bolos and his co-conspirators sought to increase their profits by executing a comprehensive health care fraud scheme involving innocent patients,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services, Office of Inspector General. “This conviction should serve as a warning to individuals who wish to deceive the government and steal from taxpayers. Alongside our law enforcement partners, we will continue to pursue medical professionals who engage in fraudulent activity.”
“The verdict in this case sends a clear message that these types of schemes will not be tolerated,” said Special Agent in Charge Matthew Modafferi of the U.S. Postal Service Office of Inspector General in the Northeast Area Field Office. “The Special Agents of the U.S. Postal Service Office of Inspector General will continue to work closely with the U.S. Attorney’s Office and our law enforcement partners to bring to justice those who commit these kinds of offenses.”
Roix, Assad, Palso, Smith, Maikel Bolos, and various associated business entities previously pleaded guilty to their roles in the conspiracy. Taneja, Kapoor, and Sterling Knight pleaded guilty to felony misbranding in a conspiracy with Bolos. U.S. District Judge J. Ronnie Greer set sentencing for Bolos for May 19, 2022, in the United States District Court for the Eastern District of Tennessee at Greeneville. Sentencing for the other defendants will be set for dates in 2022.
The trial and plea agreements resulted from a multi-year investigation conducted by the U.S. Department of Health & Human Services Office of Inspector General (Nashville); Food and Drug Administration Office of Criminal Investigations (Nashville); U.S. Postal Service, Office of Inspector General (Buffalo); Federal Bureau of Investigation (Knoxville and Johnson City, Tennessee); Office of Personnel Management Office of Inspector General (Atlanta); and the Department of Homeland Security, Homeland Security Investigations (Tampa). The U.S. Marshals Service also assisted in the investigation and the forfeiture of assets.
Assistant U.S. Attorneys TJ Harker and Mac Heavener of the U.S. Attorney’s Office for the Eastern District of Tennessee and Trial Attorney David Gunn of the Department of Justice Civil Division’s Consumer Protection Branch in Washington, and a former Assistant U.S. Attorney in Knoxville, prosecuted and tried the case. They were assisted by Barbra Pemberton, Bryan Brandenburg, and April Denard from the U.S. Attorney’s office.
Federal Indictment Returned Against Nursing Director for Producing Fraudulent COVID Vaccine Cards and Lying to Federal InvestigatorsRead the Press Release
Columbia, South Carolina --- Acting United States Attorney M. Rhett DeHart announced today that a Federal Grand Jury in Columbia returned a multiple-count indictment in connection with the production of fraudulent COVID-19 Vaccination Record Cards, the first such criminal prosecution in the District of South Carolina.
Tammy McDonald, 53, of Columbia, was charged in a three-count indictment with two counts of producing fraudulent COVID-19 Vaccination Record Cards and one count of lying to federal investigators about her role in producing the cards.
“Although the indictment speaks for itself, creating fraudulent or fake vaccine cards for those who have not been vaccinated poses a direct threat to the health of the people of South Carolina,” said Acting U.S. Attorney DeHart. “I want to thank our federal and state partners for their quick work in acting on this matter. This office will continue to prosecute fraud related to the Coronavirus in all its forms, and this case speaks to those efforts.”
“The indictment alleges McDonald defrauded and endangered the public by creating and distributing fake COVID-19 vaccination cards. Engaging in such illegal activities undermines the ongoing pandemic response efforts,” stated Derrick L. Jackson, Special Agent in Charge with the Department of Health and Human Services (HHS) Office of Inspector General. “We remain committed to working with our law enforcement partners to investigate individuals who are exploiting the pandemic and people for personal gain.”
“Since the beginning of the pandemic, the FBI and its partners have been at the forefront of investigating crimes involving fraudulent COVID-19 schemes,” said Susan Ferensic, Special Agent in Charge of the Federal Bureau of Investigation (FBI) Columbia Field Office. “Producing fraudulent vaccination cards is a serious matter and is not taken lightly. Anyone leading or participating in this type of activity should know there will be consequences.”
The indictment alleges that McDonald, who worked as the Director of Nursing Services at a skilled nursing and rehabilitation center in Columbia, produced the fraudulent vaccine cards on June 20, 2021, and July 28, 2021. The indictment further alleges that on October 22, 2021, McDonald was questioned by federal agents with HHS and FBI and lied by stating she did not have access to COVID-19 Vaccination Record Cards and that she never produced a false or inaccurate vaccine card. The indictment alleges this was false because she had personally filled out vaccine cards for individuals she knew had not received a COVID-19 vaccine.
McDonald, who has pleaded not guilty on all three charges, was arraigned today by a United States Magistrate Judge in Columbia. She was granted a $10,000 bond. McDonald faces up to 15 years in prison for each count of producing a fraudulent COVID-19 Vaccination Record Card, and five years in prison for lying to federal investigators.
The case was investigated by HHS and FBI, with assistance from the South Carolina Law Enforcement Division (SLED). Assistant U.S. Attorney Derek A. Shoemake, who also serves as the District’s Coronavirus Fraud Coordinator, is prosecuting the case.
Acting U.S. Attorney DeHart stated that all charges in the indictment are merely accusations and that McDonald is presumed innocent unless and until proven guilty.
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.
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Federal Correctional Officer Charged with Sexual Abuse of an InmateRead the Press Release
OAKLAND–John Russell Bellhouse appeared today in federal court to face the charge of sexual abuse of a prison ward, announced Acting U.S. Attorney Stephanie M. Hinds, Department of Justice Office of the Inspector General Los Angeles Field Office Special Agent in Charge Zachary Shroyer, and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.
According to the complaint filed November 29, 2021, and unsealed today, Bellhouse, 39, of Pleasanton, was employed as a correctional officer at the Federal Correctional Institute Dublin (FCI Dublin), an all-female correctional institution that houses federal prisoners and is operated by the Federal Bureau of Prisons (BOP). Bellhouse held the position of Safety Administrator. As a correctional officer, he supervised and had disciplinary authority over female inmates incarcerated at FCI Dublin. Bellhouse was trained in BOP policies and procedures, which included training that sexual, financial, and social relationships with inmates are prohibited.
The complaint charges that in 2020 Bellhouse engaged in sexual acts with an inmate. The complaint describes that Bellhouse began to express an interest in a particular female inmate and started calling the inmate his “girlfriend.” Among other benefits, he allegedly provided the female inmate with a gift of earrings and allowed her to use an office phone. The complaint further alleges that Bellhouse began to engage in sexual touching with the inmate and eventually engaged in oral sex on two occasions. The complaint describes that on one of those occasions oral sex allegedly occurred in the Safety Office, a space inside the prison accessible to both BOP staff and inmates. Another inmate acted as a “lookout” during at least one of the sexual encounters, according to the complaint’s allegations.
In March 2021, Bellhouse was put on administrative leave due to the allegations described in the complaint.
Bellhouse was arrested yesterday and made his initial court appearance today in U.S. District Court in Oakland before United States Magistrate Judge Donna M. Ryu. His next court appearance is scheduled for January 10, 2022, at 1:00 p.m. before U.S. Magistrate Judge Ryu.
Bellhouse is charged with one count of sexual abuse of a ward in violation of 18 U.S.C. § 2243(b). If convicted, Bellhouse faces a maximum statutory sentence of 15 years imprisonment, a three-year term of supervised release, and a $250,000 fine. However, any sentence following a conviction would be imposed by a court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The charges contained in the criminal complaint are allegations. As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.
Assistant U.S. Attorney Molly K. Priedeman is prosecuting the case with the assistance of Leeya Kekona. The prosecution is the result of an investigation by the Department of Justice Office of the Inspector General and the Federal Bureau of Investigation.
Dominican Republic National Pleads Guilty to Charges Stemming from Haulover Bay, St. John ShootoutRead the Press Release
St. Thomas, USVI – United States Attorney Gretchen C.F. Shappert announced today that Rammer Guerrero Morales, a citizen of the Dominican Republic, appeared before United States Magistrate Judge Ruth Miller in the District Court and entered a guilty plea to the charges of Possession and Discharge of Firearms During and In Relation to a Crime of Violence (18 U.S.C. § 924) and Assaulting, Resisting, or Impeding Certain Officers or Employees (18 U.S.C. § 111). He faces up to life in federal prison. The sentencing date will be set by the Court.
According to Court documents, on September 25, 2019, members of Customs and Border Protection ("CBP") Air and Marine Operations ("AMO") conducted a maritime interdiction operation on the north coast of St. John, USVI, near Haulover Bay. This area is a known smuggling location where traffickers offload large shipments of narcotics and U.S. Currency. This location contains a trail that leads from the main road down to the beach of Haulover Bay.
At approximately 7:30 p.m. Customs and Border Protection ("CBP") Air and Marine Interdiction Agents observed two individuals, who were armed on a trail that leads down to the beach at Haulover Bay. The Agents identified themselves as "police". Immediately thereafter, the individuals fired at the Agents. One CBP Air and Marine Interdiction Agent was wounded by the rounds fired by the individuals. Defendant Guerrero Morales was wounded by shots fired in self-defense by CBP Air and Marine Agents. CBP Air and Marine Agents recovered two firearms at the scene, described as an AR-15 style .223 caliber rifle and a Glock .40 caliber pistol with an extended magazine.
This case is being investigated by the Federal Bureau of Investigation, Department of Homeland Security Investigations and Customs and Border Protection. It is being prosecuted by Assistant United States Attorney Juan Albino, 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
District of Columbia Man Found Guilty of First-Degree Murder in 2017 Shooting in Southeast WashingtonRead the Press Release
WASHINGTON – A District of Columbia man has been found guilty of first-degree (felony) murder while armed, with aggravating circumstances, and attempted robbery while armed in a 2017 shooting in Southeast Washington that led to the death of a swim coach.
Christopher Green, 36, also known as “Twin,” was found guilty on Dec. 2, 2021, following a month-long trial in the U.S. District Court for the District of Columbia. In addition to the murder charge, Green was found guilty of assault with a dangerous weapon, possession of a firearm during a crime of violence, and attempted robbery while armed. The jury was unable to reach a verdict on federal racketeering and other charges.
The guilty verdict was announced by U.S. Attorney Matthew M. Graves, Wayne A. Jacobs, Special Agent in Charge of the FBI’s Washington Field Office Criminal Division, Robert J. Contee III, Chief of the Metropolitan Police Department (MPD), and Malik Aziz, Chief of the Prince George’s County, Maryland Police.
According to the government’s evidence, Green was a core member of a criminal organization that operated in the District of Columbia, Prince George’s County, Maryland, and elsewhere, primarily making money through a series of armed robberies.
The jury found Green found guilty of murder in a shooting in Southeast Washington on April 9, 2017, that later led to the death of Zaan Scott, 25. Mr. Scott, a coach at the Eastern Market pool, was on his way home from swim lessons when Green intended to rob him at approximately 9:05 p.m. Mr. Scott died on May 17, 2017, of a blood clot that the medical examiner determined was a result of the shooting. Green also was found guilty of firing gunshots at another victim on Feb. 23, 2017.
Green has been detained since his arrest in April 2017.
The Honorable Randolph D. Moss scheduled sentencing for March 25, 2022.
In announcing the verdict, U.S. Attorney Graves, Special Agent in Charge Jacobs, Chief Contee, and Chief Aziz commended the work of those who investigated the case from the FBI’s Washington Field Office, the Metropolitan Police Department, and the Prince George’s County Police Department.
They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney Ellen D’Angelo; former Assistant U.S. Attorneys Kenneth F. Whitted and Richard Barker; Paralegal Supervisor Mary Downing; Paralegal Specialists Candace Battle and Lornce Applewhite; Legal Assistant Latoya Wade; Investigative Analyst Zachary McMenamin; Litigation Technology Specialist Paul Howell, and Victim/Witness Advocate Marcia Rinker.
Finally, they expressed appreciation for the work of Assistant U.S. Attorneys Michael C. Liebman and Nihar R. Mohanty, who investigated and prosecuted the case.
Detroit man sentenced for drug chargeRead the Press Release
CLARKSBURG, WEST VIRGINIA – Mario Rayshawn White, of Detroit, Michigan, was sentenced today to five years of probation for a drug charge, United States Attorney William J. Ihlenfeld, II announced.
White, also known as “MT,” 31, pleaded guilty in April 2021 to one count of “Conspiracy to Distribute Oxycodone.” White admitted to selling Oxycodone in April 2019 in Monongalia County.
Assistant U.S. Attorney Zelda E. Wesley prosecuted the case on behalf of the government. The Mon Metro Drug Task Force, a HIDTA-funded initiative, investigated.
U.S. District Judge Thomas S. Kleeh presided.
Des Moines Man Sentenced to over 30 Years in Prison for Distributing Methamphetamine and Two Firearm ChargesRead the Press Release
A convicted felon who distributed nearly a pound of methamphetamine and possessed a gun was sentenced today to more than 30 years in federal prison.
Patrick Miller Webb, age 32, from Des Moines, Iowa, received the prison term after a March 20, 2021 jury verdict finding him guilty of distribution of methamphetamine near a protected location, possession of a firearm in furtherance of a drug trafficking crime, and possession of a firearm by a prohibited person.
The evidence at trial showed that Webb drove from Des Moines to Dubuque to sell nearly one pound of methamphetamine during a controlled buy for $6,000. Following the drug sale, officers found a loaded firearm underneath the driver’s seat of Webb’s car, where he had been sitting. The drug distribution occurred inside a carwash that was located within 1,000 feet of a public playground located at Cleveland Park, Dubuque. Webb has a previous felony conviction for possession with intent to deliver methamphetamine and was also a user of methamphetamine and marijuana. Information at sentencing showed that Webb had previously been convicted of two felonies involving controlled substances, which classified him as a career offender.
Webb was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Webb was sentenced to 380 months’ imprisonment. He must also serve a ten-year term of supervised release after the prison term. There is no parole in the federal system.
Webb is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Special Assistant United States Attorney Alexander Geocaris and Assistant United States Attorney Tony Morfitt and was investigated by the Dubuque Drug Task Force, comprised of the Dubuque Police Department and the Dubuque County Sheriff’s Office, the Iowa Division of Narcotics Enforcement, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-CR-1018.
Follow us on Twitter @USAO_NDIA.
Deer Isle Man Sentenced for Possessing Child PornographyRead the Press Release
BANGOR, Maine: A Deer Isle man was sentenced today in federal court for possessing child pornography, U.S. Attorney Darcie N. McElwee announced.
U.S. District Court Judge Lance E. Walker sentenced Nicholas Pettis, 38, to 10 years in prison followed by five years of supervised release. Pettis was also ordered to pay $6,000 in restitution to victims depicted in the videos he possessed. Pettis pleaded guilty on April 13, 2021.
According to court records, Pettis possessed electronic devices containing short videos of children, including infants and toddlers, being sexually abused by adult men. Pettis traded these videos online to obtain similar materials. The electronic devices, including cell phones and a computer, were seized from his home on June 25, 2020, during execution of a search warrant.
In imposing the sentence, Judge Walker noted that the materials in this case depicted “the most vulnerable, youngest members of society, who are completely helpless, subject to the most profound terror imaginable.” The judge further commented that the horrors of the materials Mr. Pettis traded in “could not be adequately captured by Dante or his seven circles of Hell, and I don’t think any of us do ourselves any favors by ignoring that truth.”
Homeland Security Investigations (HSI) and the Maine State Police Computer Crimes Unit investigated this case.
The case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
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Daytona Beach Drug Trafficker Pleads Guilty in the Southern District of FloridaRead the Press Release
Miami, Florida – Daytona Beach drug trafficker, Maxwell A. Vega, pled guilty today in federal court in Ft. Pierce to one count of distribution of over 50 grams of methamphetamine, one count of distribution of methamphetamine and one count of distribution of fentanyl.
According to court documents, on July 2, 2021, Vega traveled from Daytona Beach, Florida to a hotel in Martin County, where he had prearranged a meeting to sell methamphetamine. During the course of arranging the drug deal, Vega offered to sell fentanyl in addition to the methamphetamine. The purchaser initially declined, stating that fentanyl was too dangerous a drug. Vega encouraged the sale, and offered to bring a sample of fentanyl to the meeting. Vega told the purchaser that the fentanyl was the “real deal” and to be careful not to touch it. Lab results showed that the 54.81 grams of meth that Vega sold was 98% pure.
On July 7, 2021, Vega again traveled from Daytona Beach, Florida to the same hotel in Martin County, where he had prearranged a second meeting to sell methamphetamine and fentanyl. Vega again arrived and proceeded to the room where he sold an ounce of fentanyl, and 1.170 grams of methamphetamine which had a purity of 99%. Vega was arrested shortly after this transaction.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and Anthony Salisbury, Special Agent in Charge, Homeland Security Investigations (HSI), Miami Field Office made the announcement.
The Department of Homeland Security, together with the Martin County Sheriff’s Office, investigated this case. Assistant U.S. Attorney Luisa Honora Berti is prosecuting this case.
Vega will be sentenced on a date to be announced. He faces a minimum term of imprisonment of ten years and a maximum of life.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 21-cr-14030.
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David H. Estes sworn in as U.S. Attorney for the Southern District of GeorgiaRead the Press Release
AUGUSTA, GA: David H. Estes now serves as U.S. Attorney for the Southern District of Georgia after his appointment by U.S. Attorney General Merrick Garland.
U.S. Attorney Estes took the oath of office Friday, Dec. 3, in the Augusta Office of the U.S. Attorney for the Southern District of Georgia before U.S. District Court Chief Judge J. Randal Hall.
“It is truly an honor to continue to serve the citizens of the Southern District of Georgia as we work with our outstanding staff and the exceptional law enforcement partners in the district to keep our communities safe,” said U.S. Attorney Estes. “We are dedicated to upholding the law and defending access to justice for those who live, work, worship and play throughout this district.”
As First Assistant U.S. Attorney, Estes was named Acting U.S. Attorney under the Vacancies Reform Act after the resignation February 9, 2021, of then-U.S. Attorney Bobby L. Christine. Estes now becomes U.S. Attorney by Attorney General appointment in the absence of a presidentially nominated and U.S. Senate-confirmed U.S. Attorney for a term of 120 days or until a U.S. Attorney is confirmed. If a U.S. Attorney is not nominated and confirmed within that period, a U.S. Attorney would be appointed by the Southern District U.S. Court.
The Southern District of Georgia U.S. Attorney’s Office encompasses 43 counties along the east side of the state, from Wilkes County in the north, along the Georgia coast, to the Florida border in the south, and as far west as Laurens County. The U.S. Attorney serves as the chief federal law enforcement officer for the Southern District of Georgia.
U.S. Attorney Estes, a native of Scottsboro, Ala., received an Associates in Business and his Regular Army commission through the Reserve Officer Training Corps at Marion Military Institute (1987) and a Bachelor’s Degree in English from Auburn University (1989), and in 1993 received his Juris Doctorate Degree from the University of Tulsa in Tulsa, Okla. From 1987 to 1994 he served as a Field Artillery Officer in the Alabama and Oklahoma Army National Guard, and after law school served on active duty with the Judge Advocate General’s Corps for three years at Redstone Arsenal, Ala., Office of the Staff Judge Advocate.
In 1997, Estes joined the Alabama Attorney General’s Office, Violent Crimes Division, as a violent crime prosecutor. During this time, Estes rejoined the Alabama Army National Guard as a Judge Advocate. In 2002, Estes joined the United States Attorney’s office for the Northern District of Alabama (Huntsville Branch Office) as an Assistant U.S. Attorney. Estes assumed the duties of First Assistant U.S. Attorney for the Southern District of Georgia in January 2018.
In his military career, Estes deployed to Iraq from 2004-2005 with the 122nd Corps Support Group and served as the Deputy Staff Judge Advocate and Chief, Military Justice. He was awarded the Bronze Star for his service in Iraq. In October 2013 he was promoted to Colonel and assumed the Staff Judge Advocate position for the 167th Theatre Sustainment Command. Col. Estes previously served as the very first Regional Defense Counsel for the Army National Guard. Estes recently retired from the Army after more than 34 years of military service. He was twice awarded the Legion of Merit Medal for his accomplishments.
Estes was accompanied at his swearing-in ceremony by his wife, Connie Estes. They have four children: Garrett, Madison, Everett, and Gracie, and two stepchildren, Abby and Hamilton, and are members of Christ Church Anglican in Savannah.
U.S. Attorney's Office U.S. Attorney David H. Estes takes the oath of office from U.S. District Court Chief Judge J. Randal Hall. Estes will serve 120 days, or more, until a presidentially appointed and Senate ratified nominee takes office.Colorado Springs Man Sentenced to 20 Years in Federal Prison for Producing Child PornographyRead the Press Release
DENVER – The U.S. Attorney’s Office for the District of Colorado announces that Gregory Lopez, age 28, of Colorado Springs, was sentenced to serve 240 months (20 years) in federal prison, followed by 20 years on supervised release for production and transportation of child pornography.
According to the stipulated facts contained in the plea agreement, the defendant was advertising the sale of child pornography on “The Onion Router” or TOR network, which makes it difficult for users to learn each other’s physical location. A federal agent observed the advertisement and began communicating with the defendant. On May 6, 2020, in exchange for $40, the defendant sent the agent five videos depicting the sexual abuse of a minor victim, who was seven years old at the time. A search warrant was executed at the defendant’s home in Colorado Springs the next day. The defendant was home, identified the minor victim to law enforcement, admitted to creating the videos depicting his sexual abuse of the minor victim, and admitted to selling the videos on TOR. The defendant also possessed approximately 265 videos files and 20 image files depicting child pornography.
“Sexual abuse of children is egregious and harms victims for their lifetime,” said United States Attorney Cole Finegan. “Due to the excellent work of federal law enforcement and the Colorado’s Internet Crimes Against Children Task Force, the victim in this case is no longer in danger, and the perpetrator has been removed from the community for a very long time.”
“This sentencing should send a very clear message to this defendant and others like him, that HSI will punish anyone who engages in the inexcusable abuse of innocent children,” said Ryan L. Spradlin, Special Agent in Charge, HSI Denver. “We’re grateful for the collaboration with our federal, state and local law enforcement partners in Colorado to target and prosecute criminals who exploit children.”
United States District Court Judge Christine M. Arguello sentenced Gregory Lopez on December 2, 2021.
Homeland Security Investigations and the Colorado Internet Crimes Against Children (ICAC) Task Force conducted the investigation. Assistant United States Attorney Alecia L. Riewerts handled the prosecution of 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.
Case No. 20-cr-165-CMA
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Cleveland Man Found Guilty of Threatening a Federal EmployeeRead the Press Release
U.S. Attorney Bridget M. Brennan announced that a federal jury today returned a guilty verdict against Defendant Lon R. Sweeney, 56, of Cleveland, Ohio, following a four-day trial before Judge Dan Aaron Polster in Cleveland. Sweeney was convicted of threatening a federal employee and acquitted of assault of an officer.
According to court documents and evidence presented at trial, on July 12, 2017, Sweeney left a voicemail message threatening bodily harm to an employee of the Department of Veterans Affairs (VA) after the VA had begun the process of assigning a fiduciary to manage Sweeney’s monetary VA benefits. During the same voicemail, Sweeney also threatened bodily harm against an employee of the Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division, who had previously warned Sweeney about making threats to VA employees. Following the threats on July 12, a warrant was issued for Sweeney’s arrest.
On January 7, 2019, Sweeney appeared for a scheduled appointment at the VA Medical Center in Cleveland. After the appointment concluded, law enforcement officers apprehended Sweeney on his outstanding warrant.
Sweeney is scheduled to be sentenced on April 12, 2022. A federal district court judge will determine a sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
This case was investigated by the Department of Veterans Affairs Office of the Inspector General with the help of the Cleveland VAMC Police and Brecksville Police Departments. This case is being prosecuted by Assistant United States Attorneys Brad J. Beeson and Brian M. McDonough.
Clay County Pharmacy Investigation Results in Criminal Charges Against Six More Individuals in Opioid Distribution and Health Care Fraud ConspiracyRead the Press Release
NASHVILLE – Charging documents unsealed yesterday charge six more individuals in relation to a massive opioid distribution and health care fraud conspiracy orchestrated from pharmacies in Celina, Tennessee, announced Acting U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee.
A seven-count indictment returned on November 15, 2021, charges Thomas K. Weir, 61, majority owner of Dale Hollow Pharmacy and Xpress Pharmacy in Celina, and William L. Donaldson, 61, former owner and Pharmacist-in-Charge of Dale Hollow Pharmacy (then known as Donaldson Pharmacy), both of Celina, Tenn.; Charles R. Oakley, aka Bobby Oakley, 69, of Cookeville, Tenn., co-owner of Dale Hollow Pharmacy; and Pamela Spivey, 50, of Hilham, Tenn., co-owner of Xpress Pharmacy, with conspiracy to distribute and dispense controlled substances and conspiracy to commit health care fraud. The indictment also charges Weir, Donaldson, and Oakley with conspiracy to defraud the United States and commit an offense through the payment of illegal kickbacks, and Weir, Oakley and Spivey with health care fraud and aiding and abetting health care fraud.
All were arrested yesterday by federal, and state law enforcement agents and appeared before a U.S. Magistrate Judge in Nashville.
In addition, a superseding information, filed on December 15, 2020, and unsealed yesterday, charges former Pharmacist-in-Charge of Dale Hollow Pharmacy John M. Polston, 60, of Tompkinsville, Kentucky, with conspiracy to distribute and dispense controlled substances, 22 counts of unlawful distribution of controlled substances, and conspiracy to defraud the United States and commit an offense through the payment of illegal kickbacks. A criminal information filed on May 6, 2021, and unsealed yesterday, charges Michael L. Griffith, 37, of Mount Juliet, Tenn., the former Pharmacist-in-Charge of Xpress Pharmacy, with conspiracy to distribute and dispense controlled substances, health care fraud, and aiding and abetting health care fraud.
Also unsealed yesterday are two plea agreements. On March 23, 2021, John Polston pleaded guilty to conspiracy to distribute and dispense controlled substances, illegal distribution of controlled substances, and conspiracy to defraud the United States and commit an offense through the payment of illegal kickbacks, in violation of the Anti-Kickback Statute. He is currently awaiting sentencing. On August 26, 2021, Michael Griffith pleaded guilty to conspiracy to distribute and dispense controlled substances and to two counts of health care fraud. Griffith is also awaiting sentencing.
According to the charging documents, the defendants conspired with or otherwise aided and abetted one or more co-defendants in illegally distributing and dispensing controlled substances, including oxycodone, hydrocodone, morphine, buprenorphine, alprazolam, and other Schedule II, III, and IV controlled substances, outside the usual course of professional practice and for no legitimate medical purpose, for the purpose of unlawfully enriching and benefitting themselves. The conspiracy was carried out by a variety of means, including dispensing prescriptions for controlled substances to patients despite obvious signs of abuse or diversion by the patients and other indications that the prescriptions were not for legitimate medical purposes.
According to the charging documents, Weir, Oakley, Donaldson, and others, conspired to defraud the United States and violate the Anti-Kickback Statute by offering and paying kickbacks and bribes to Donaldson for arranging the referral of patients, including Medicare and Medicaid beneficiaries, to Dale Hollow Pharmacy and paying Donaldson at least $50,000 for the recruitment of patients; paying patient’s insurance co-payments and $100.00 in cash, and developing and providing a cash coupon called “Monkey Bucks” to patients to induce patients to fill expensive prescriptions at Dale Hollow Pharmacy; and submitting false claims to and obtaining reimbursement from Medicare and Medicaid. For example, during the course of the conspiracy, Medicare paid Dale Hollow Pharmacy $237,558 in reimbursement for a single patient’s prescriptions procured through routine cash incentive payments to the patient. During the course of the conspiracy, Medicare Part D and TennCare, Tennessee’s Medicaid program, paid a total of $7.4 million in reimbursements to Dale Hollow Pharmacy for patient prescriptions procured through kickbacks and bribes.
The charging documents also allege that in 2015, Weir purchased a controlling interest in Xpress Pharmacy, a pharmacy located approximately 200 yards from Dale Hollow Pharmacy. In-between Dale Hollow Pharmacy and Xpress Pharmacy was another competing retail pharmacy. Weir, with co-owner Pam Spivey and Pharmacist-in-Charge Michael Griffith, conspired to distribute and dispense opioids and other controlled substances and developed a plan to increase profits. Marketing flyers were then developed, advertising that Xpress Pharmacy dispensed buprenorphine (Subutex), a controlled substance that is sought after by those who abuse opioids.
Griffith and Spivey then purchased trays of cookies and delivered the cookies and marketing flyers to medical clinics around the State of Tennessee whose doctors wrote prescriptions for Subutex. Many of these clinics were hours away from Xpress Pharmacy. Following the marketing campaign, patients drove hundreds of miles to Xpress Pharmacy to fill prescriptions for Subutex, sometimes arriving together in car loads. Weir purchased Subutex through Dale Hollow Pharmacy and delivered it through co-conspirators in tote bags to the neighboring Xpress Pharmacy.
In the third quarter of 2015, before Weir was the majority owner of Xpress Pharmacy, Xpress Pharmacy dispensed approximately 420 doses of Subutex. By the end of the first quarter of 2016, after Weir was majority owner, that number was over 14,000 doses. By the second quarter of 2017, it was over 34,000 doses.
In May and June of 2016, the Drug Enforcement Administration (DEA) inspected Dale Hollow Pharmacy and in 2017, Weir, Oakley, and Polston signed a Memorandum of Agreement with the DEA related to violations of the regulations governing the dispensing of controlled substances, including Subutex. Despite the agreement, the dispensing of Subutex continued to increase. Weir also set mandates on the number of Subutex pills or doses to fill in a month, routinely checked to see how much had been dispensed, and instructed the pharmacy employees, to never run out of Subutex.
Dale Hollow Pharmacy and Xpress Pharmacy also submitted false and fraudulent claims to Medicare Part D plans, and to TennCare, for controlled substances dispensed to Medicare and Medicaid beneficiaries that were medically unnecessary or otherwise ineligible for reimbursement.
In February 2019, the Justice Department filed a civil complaint against Dale Hollow Pharmacy and Xpress Pharmacy, including the owner, Thomas Weir and pharmacists John Polston, Michael Griffith, and others. The government sought and received a Temporary Restraining Order and a Preliminary Injunction, which remains in place, and which prevented the pharmacies and pharmacists from dispensing controlled substances.
The government is also seeking civil monetary penalties and treble damages for civil violations of the Controlled Substances Act and the False Claims Act.
In the criminal case, the government also seeks the forfeiture of any property used or intended to be used to commit or facilitate the commission of each offense.
The offenses charged carry between 5-20 years in prison for each count, upon conviction, and fines between $250,000-$1 million.
The charges are merely accusations. All defendants are presumed innocent until proven guilty in a court of law.
This case was investigated by the DEA; the U.S. Department of Health & Human Services-Office of Inspector General; and the Tennessee Bureau of Investigation; with the assistance of the Clay County Sheriff’s Office. Assistant U.S. Attorneys Sarah K. Bogni and Amanda J. Klopf are prosecuting the criminal cases and Assistant U.S. Attorney Ellen Bowden-McIntyre is handling the civil investigation and litigation. The criminal investigation was supported by resources provided by the Department of Justice, Fraud Section, Health Care Fraud, Appalachian Regional Prescription Opioid Strike Force. The civil investigation was assisted by the Department of Justice, Consumer Protection Branch.
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Ceres Man Pleads Guilty to Conspiring to Run an Animal Fighting OperationRead the Press Release
FRESNO, Calif. — Joseph D. Sanford, 74, of Ceres, pleaded guilty today to conspiring to violate the Animal Welfare Act by operating a cockfighting and fighting-bird breeding business, Acting U.S. Attorney Phillip A. Talbert announced.
According to court documents, Sanford was the owner and operator of Joe Sanford Gamefarm in Ceres, where he bred and sold gamecocks for cockfighting. Sanford also fought his own roosters. Following an undercover purchase of a trio of fighting game birds, federal agents searched Joe Sanford Gamefarm, where Sanford resides, and found a large cockfighting enterprise consisting of 2,956 game fowl. In pleading guilty, Sanford acknowledged that he had shipped game fowl within the United States and to Mexico, Peru and the Philippines for cockfighting.
“The gruesome act of animal fighting has no place in a civilized society and will not be tolerated,” said Dusty Cladis, Acting Special Agent in Charge, U.S. Department of Agriculture Office of the Inspector General. “Our agency has prioritized dismantling animal fighting organizations as we continue to pursue those who would take pleasure and profit in inflicting misery and death upon these defenseless creatures.”
This case is the product of an investigation by the U.S. Department of Agriculture Office of the Inspector General (USDA-OIG); with assistance from the USDA Animal and Plant Health Inspection Service; the IRS Criminal Investigation; Homeland Security Investigations; the U.S. Forest Service; and the Stanislaus County Sheriff’s Office. Assistance was also provided by the Humane Society of the United States, the Placer County Animal Services, and the El Dorado County Animal Services. The U.S. Department of Justice’s Environment and Natural Resources Division and U.S. Marshals Service also lent assistance in the disposal of the fighting roosters and placement of the hens in an animal sanctuary. Assistant U.S. Attorney Karen A. Escobar is prosecuting the case.
Sanford is scheduled for sentencing on March 11, 2022. He faces a maximum statutory penalty of five years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
California Man Sentenced to More Than Six Years in Prison for Federal Hate Crime ConvictionRead the Press Release
A California man was sentenced to 82 months in prison for committing a federal hate crime in connection with attacking a Black man with a knife in Santa Cruz, California. The sentence was handed down by the Hon. Edward J. Davila, U.S. District Judge for the Northern District of California.
Ole Hougen, 45, of Santa Cruz, California, was convicted of the crime on April 9. According to evidence presented at trial, Hougen confronted a 29-year-old Black man who was crossing the street in Santa Cruz. Hougen began screaming racial slurs at him. Hougen then brandished a nine-inch knife and slashed multiple times at the man’s head, chest and stomach, while yelling the racial slurs. A witness testified that Hougen slashed and stabbed at the victim’s head and chest approximately 10-20 times. At the time of the attack, Hougen was on probation after pleading no contest to state charges that he committed a racially motivated assault on a different Black man in 2018. The trial also included evidence of several other incidents where Hougen threatened or committed violent acts while yelling racial slurs. This conviction represents Hougen’s fourth known racially motivated attack against Black men in the last seven years.
A federal grand jury indicted Hougen on Nov. 17, 2020, charging him with a violation of the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act. After a six-day trial, a jury convicted Hougen of the charge. It is the first conviction and sentencing in the Northern District of California under the Shepard-Byrd Act, which was signed into law by President Barack Obama in 2009.
“Racially motivated crimes have no place in our society. This defendant has attacked at least four people because they are Black, and for his most recent racially motivated attack of a Black man the defendant has been convicted,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department will continue to vigorously prosecute bias-motivated crimes in an effort to secure justice for victims of these crimes and the communities they are meant to target and intimidate.”
“Racially motivated violent attacks cannot be tolerated in any society,” said Acting U.S. Attorney Stephanie Hinds for the Northern District of California. “The Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act provides significant penalties for violence motivated by racism and other group-hate. This office will use this and every other tool to ensure prosecutions are brought down on criminals committing violence motivated by animus towards our community’s protected groups.”
“Ole Hougen’s violent assault didn't just attack an individual, he attacked the entire community associated with the victim,” said Acting Assistant Director Jay Greenberg of the FBI’s Criminal Investigative Division. “All crime is unacceptable, but hate crimes are particularly cruel. They strike at an unchangeable, fundamental, and defining part of a victim's identity. In this way, they attack everyone who identifies with this victim. Hate crimes are the highest priority of the FBI’s Civil Rights Program because each crime threatens the freedoms and protections guaranteed to all our communities.”
In addition to the prison term, Judge Davila also sentenced Hougen to three years of supervised release.
Assistant U.S. Attorney Marissa Harris and Trial Attorney Michael J. Songer of the Civil Rights Division are prosecuting the case on behalf of the government. The FBI San Francisco Field Office conducted the investigation with the assistance of the Santa Cruz Police Department.
For more information and resources on the department’s efforts to combat hate crimes, visit www.justice.gov/hatecrimes. If you believe you have been a victim of a civil rights violation, please visit: https://civilrights.justice.gov/ to file a report.
California Man Sentenced to More Than Six Years in Prison for Federal Hate Crime ConvictionRead the Press Release
SAN JOSE –Ole Hougen was sentenced to 82 months in prison for committing a federal hate crime in connection with attacking a Black man with a knife on a street in Santa Cruz, Calif. The sentence was handed down by the Hon. Edward J. Davila, United States District Judge.
Hougen, 45, of Santa Cruz, California, was convicted of the crime on April 9. According to evidence presented at trial, Hougen confronted a 29-year-old Black man who was crossing the street in Santa Cruz. Hougen began screaming racial slurs at him. Hougen then brandished a nine-inch knife and slashed multiple times at the man’s head, chest and stomach, while yelling the racial slurs. A witness testified that Hougen slashed and stabbed at the victim’s head and chest approximately 10-20 times. At the time of the attack, Hougen was on probation after pleading no contest to state charges that he committed a racially motivated assault on a different Black man in 2018. The trial also included evidence of several other incidents where Hougen threatened or committed violent acts while yelling racial slurs. This conviction represents Hougen’s fourth known racially motivated attack against Black men in the last seven years.
A federal grand jury indicted Hougen on Nov. 17, 2020, charging him with a violation of the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act. After a six-day trial, a jury convicted Hougen of the charge. It is the first conviction and sentencing in the Northern District of California under the Shepard-Byrd Act, which was signed into law by President Barack Obama in 2009.
“Racially motivated violent attacks cannot be tolerated in any society,” said Acting U.S. Attorney Hinds. “The Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act provides significant penalties for violence motivated by racism and other group-hate. This office will use this and every other tool to ensure prosecutions are brought down on criminals committing violence motivated by animus towards our community’s protected groups.”
“Racially motivated crimes have no place in our society. This defendant has attacked at least four people because they are Black, and for his most recent racially motivated attack of a Black man the defendant has been convicted,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department will continue to vigorously prosecute bias-motivated crimes in an effort to secure justice for victims of these crimes and the communities they are meant to target and intimidate.”
"Ole Hougen’s violent assault didn't just attack an individual, he attacked the entire community associated with the victim,” said Acting Assistant Director Jay Greenberg of the FBI’s Criminal Investigative Division. “All crime is unacceptable, but hate crimes are particularly cruel. They strike at an unchangeable, fundamental, and defining part of a victim's identity. In this way, they attack everyone who identifies with this victim. Hate crimes are the highest priority of the FBI’s Civil Rights Program because each crime threatens the freedoms and protections guaranteed to all our communities."
“Justice was served in this landmark investigation,” said Special Agent in Charge Craig Fair of the FBI San Francisco Field Office. “This case shows how critical it is for the community to report hate crimes to law enforcement. Thanks to the work of our FBI Special Agents, the Santa Cruz Police Department, and the brave reporting of members of our community, Ole Hougen was convicted of a federal hate crime by a jury of his peers and will now serve his sentence in federal prison.”
When announcing his sentence from the bench, Judge Davila stated that it was “profoundly wrong to attack someone because of their race” and told Hougen to use his time in prison to “remove the hate from his heart.” In addition to the prison term, Judge Davila also sentenced Hougen to a three-year term of supervised release. Hougen will begin serving his prison term immediately.
Assistant U.S. Attorney Marissa Harris and Trial Attorney Michael J. Songer of the Civil Rights Division are prosecuting the case on behalf of the government. The FBI San Francisco Field Office conducted the investigation with the assistance of the Santa Cruz Police Department.
For more informat
Brazilian National Sentenced to 60 Years in Prison for Sexual Exploitation of a ChildRead the Press Release
AUSTIN – A Brazilian national was sentenced today to 60 years in prison for sexual exploitation of a child, followed by 10 years of supervised release. Defendant was also ordered to pay restitution to his victims.
According to court documents, Luann Fabric Campos Leao Hida, aka “Luann Hida,” “Luann Leao,” and “LOTR,” 27, enticed minors to engage in sexually explicit conduct and produced visual depictions of the conduct. Hida would furnish alcohol and e-cigarettes to minors. In addition, he would give money and vaping materials to the minors in exchange for sexual favors.
On August 26, 2021, Hida pleaded guilty to two counts of sexual exploitation of a child and one count of distribution of child pornography.
Hida has remained in federal custody since his arrest on July 1, 2019.
“This is one of the most heinous child sexual crimes we have seen in our community and the Court recognized this with its sentence,” said U.S. Attorney Ashley C. Hoff. “Child sexual predators cause incalculable and long-lasting damage to our communities, the individual victims, and the families of the victims and we will continue to prosecute these cases aggressively to bring justice for the victims and protect our communities.”
“This case is particularly egregious, as it involved 20 child victims over the course of four years,” said FBI Special Agent in Charge Christopher Combs. “The FBI and our law enforcement partners are committed to protecting our community's vulnerable children and holding accountable those who would harm them.”
The FBI investigated the case in conjunction with the U.S. Secret Service, Hays County Sheriff’s Office, Lakeway Police Department, Travis County Sheriff’s Office, Bee Cave Police Department, and Austin Police Department.
Assistant U.S. Attorneys G. Karthik Srinivasan and Keith M. Henneke 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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Bois Forte Man Sentenced to 30 Months in Prison for Violent AssaultRead the Press Release
MINNEAPOLIS – A Bois Forte man was sentenced today to 30 months in prison followed by two years of supervised release for violently assaulting a man on the Bois Forte Reservation.
According to court documents, on May 31, 2020, Marshall Wayne Boshey, 20, assaulted a man outside of the defendant’s residence by repeatedly hitting him with a baseball bat on the top of his head and across his upper body. Boshey also cut the man with a small pocket knife. The victim was hospitalized for his injuries and required 11 staples to his scalp, 20 sutures on his left ear, 3 sutures on his left elbow, and 6 sutures on his left hand.
On July 9, 2021, Boshey pleaded guilty to one count of assault with a dangerous weapon.
Acting U.S. Attorney Charles J. Kovats made the announcement after U.S. District Judge Patrick J. Schiltz sentenced the defendant.
This case is the result of an investigation conducted by the FBI and the Bureau of Indian Affairs.
This case was prosecuted by Assistant U.S. Attorneys Chelsea A. Walcker and Deidre Y. Aanstad.
Bogalusa Rapper Indicted After Violating the Federal Gun Control ActRead the Press Release
NEW ORLEANS, LOUISIANA – JAVORIOUS SCOTT, aka JAYDAYOUNGAN, age 23, a Bogalusa resident and rapper was charged in a one-count indictment with possession of a firearm while under indictment for a felony, in violation of Title 18, United States Code, Sections 922(n)(1) and 924(a)(1)(D), announced U.S. Attorney Duane A. Evans.
According to court documents, on October 29, 2021, officers with the Bogalusa Police Department executed a traffic stop on a silver-colored Audi bearing a Virginia license plate traveling south on South Columbia Street in Bogalusa, Louisiana because the vehicle possessed a switched license plate. SCOTT, the driver of the vehicle, failed to provide his license or vehicle registration. While speaking to SCOTT and the passenger, officers smelled a strong odor of marijuana in the vehicle. The officers also observed a black handgun on the driver’s side floorboard directly beneath SCOTT’S legs. Officers removed SCOTT from the vehicle and observed a small amount of suspected marijuana in the driver’s seat. Officers then recovered a loaded Ruger Model Security-9, 9mm, pistol from the driver’s side floorboard.
At the time that the officers located and seized the firearm from the floorboard, SCOTT was under indictment for felony crimes, possession of a controlled substance and assault, in Harris County, Texas.
SCOTT faces a maximum term of imprisonment of five (5) years, a fine of up to $250,000.00, up to (3) years of supervised release following any term of imprisonment, and a mandatory $100.00 special assessment fee.
U.S. Attorney Evans reiterated that the indictment is merely a charging document 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.
This case was investigated by the Bureau of Alcohol, Tobacco, and Firearms and the Bogalusa Police Department. The prosecution is being handled by Assistant United States Attorney André Jones.
Bogalusa Man Indicted After Violating the Federal Gun Control ActRead the Press Release
NEW ORLEANS, LOUISIANA – CARLOS WALKER, age 31, a resident of Bogalusa, Louisiana, was charged in a one-count indictment with possession of a firearm after having been convicted of a felony, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2), announced U.S. Attorney Duane A. Evans.
According to court documents, on September 24, 2021, WALKER, knowing he had previously been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess a Taurus Model G2C 9mm pistol.
WALKER faces a maximum term of imprisonment of ten (10) years, a fine of up to $250,000.00, up to (3) years of supervised release following any term of imprisonment, and a mandatory $100.00 special assessment fee.
U.S. Attorney Evans reiterated that the indictment is merely a charging document 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.
This case was investigated by the Bureau of Alcohol, Tobacco, and Firearms and the Bogalusa Police Department. The prosecution is being handled by Assistant United States Attorney André Jones.
Baltimore Man Facing Federal Indictment for Tax Evasion and Failure to File Tax ReturnsRead the Press Release
Baltimore, Maryland – A federal grand jury has returned an indictment charging Michael McDonald, age 40, of Baltimore, Maryland, for tax evasion for tax years 2016 through 2018 and failure to file tax returns for the tax years 2016 through 2019. The indictment was returned on November 10, 2021, and unsealed today upon McDonald’s arrest. McDonald will have an initial appearance today at 1:30 p.m. in U.S. District Court in Baltimore before U.S. Magistrate Judge Mark Coulson.
The indictment was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Darrell J. Waldon of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
According to the seven-count indictment, McDonald submitted false W-4 forms for tax years 2016, 2017, and 2018. In addition, the indictment alleges that McDonald failed to file an income tax return for those tax years as well as for tax year 2019.
If convicted, McDonald faces a maximum sentence of five years in federal prison for each count of tax evasion and a maximum of one year in federal prison for each count of failure to file income tax returns. 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.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Erek L. Barron commended the FBI and the IRS-CI for their work in the investigation. Mr. Barron thanked Assistant U.S. Attorneys Kathleen O. Gavin and P. Michael Cunningham, who are prosecuting the federal case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.
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Arizona Man Sentenced for Failure to Pay Child SupportRead the Press Release
Acting United States Attorney Dennis R. Holmes announced that an Anthem, Arizona, man convicted of Failure to Pay Child Support was sentenced on November 30, 2021, by U.S. District Judge Karen E. Schreier.
Jacob A. Tate, age 45, was sentenced to five years of probation, $78,979.14 in restitution to the South Dakota Department of Social Services, Office of Child Support Enforcement, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Tate was indicted by a federal grand jury on June 6, 2018. He pled guilty on February 22, 2021.
The conviction stemmed from the fact that Tate failed to pay child support from on or about October 1, 2012, through June 6, 2018. Tate has five children who live in South Dakota. Tate knew that a support order had been issued against him to pay child support, but he willfully did not make payments toward the child support.
This case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General and the South Dakota Department of Social Services. Assistant U.S. Attorney Ann M. Hoffman prosecuted the case.
Thursday 2 December 2021
Wiggins Man Pleads Guilty to Transportation of Child PornographyRead the Press Release
Hattiesburg, Miss. – A Wiggins man pled guilty to transporting visual depictions of minors engaging in sexually explicit conduct, announced U.S. Attorney Darren J. LaMarca and Special Agent in Charge Jermicha Fomby of the Federal Bureau of Investigation in Mississippi.
According to court documents, Charles Ezekiel Spangler, 38, was identified by the FBI when they received information from the National Center for Missing and Exploited Children that he uploaded pictures of minors engaging in sexually explicit conduct via the internet to his Tumblr account in June of 2018.
Spangler is scheduled to be sentenced on March 8, 2022, at 9:30 a.m. in Hattiesburg, and faces a maximum penalty of 20 years in prison and a $250,000 fine. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Federal Bureau of Investigation is investigating the case with the assistance of the Mississippi Attorney General’s Cyber Crimes Division.
Assistant U.S. Attorney Andrea Jones is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.
Wholesale Distributor of Medical and Dental Supplies to Pay $500,000 to Resolve Controlled Substance Act ViolationsRead the Press Release
CHARLESTON, W.Va. -- Henry Schien, Inc., (“HSI”) a wholesale medical distributor based in Long Island, New York, has entered into a settlement agreement with the United States to resolve civil penalty claims arising from its improper distribution of opioids and other controlled substances to medical and dental practitioners in five states in violation of the Controlled Substances Act (CSA).
The settlement provides that between January 1, 2015 and October 9, 2018, HSI distributed approximately 25,400 hydrocodone pills and 3,600 Xanax pills to Scott Edmonds, DDS, a dentist practicing in Huntington, West Virginia, making him one of the top practitioners for hydrocodone purchases in the state. After the DEA conducted an administrative inspection of Dr. Edmonds’ office, he admitted that he had obtained the substances from HSI to feed his personal addiction. Dr. Edmonds voluntarily surrendered his DEA registration and entered rehab, and later entered into a civil penalty settlement with the United States for his CSA violations. Further investigation revealed that HSI had enabled the dentist’s abuse by overlooking numerous red flags indicating abuse and diversion. Specifically, HSI approved Dr. Edmonds’ repeated requests to increase the quantities of controlled substances he could order, and HSI personnel cleared the dentist to continue abusing the medications after an office inspection in February, 2016 revealed that Dr. Edmonds was not properly accounting for where the drugs were going.
HSI also distributed opioids to Dr. Elizabeth Korcz, a family medicine physician in Hoover, Alabama. From February 2015 to February 2017, HSI sold more than 100,000 hydrocodone pills to Dr. Korcz, some of which were diverted. Dr. Korcz and her husband Matthew Korcz were indicted in the U.S. District Court for the Northern District of Alabama and pled guilty to conspiracy to unlawfully dispense controlled substances. HSI was the primary distributor of opioids to Dr. Korcz.
From 2013 to 2017, HSI sold nearly 55,000 units of hydrocodone to Dr. John Eldridge, a chiropractor and naturopathic physician who practiced in Phoenix, Arizona, despite red flags of abuse and diversion and significant disciplinary history related to his license to practice medicine. Dr. Eldridge pled guilty to state charges of solicitation to offer to sell or transfer a narcotic drug in August 2021 and surrendered his naturopathic medical license.
From July 2012 to September 2014 HSI supplied more than 24,000 10 mg hydrocodone pills to Dr. Larry Preston, a general family dentist practicing near Bristol, Tennessee. Dr. Preston was continually among the top three dental practitioners purchasing oral hydrocodone in the Knoxville, Tennessee area from 2006 through 2014. In 2012, 2013, and 2014 Preston purchased more oral hydrocodone than any other dentist in the Knoxville area. In 2015, federal and state agents learned that Preston had been consuming approximately 15 hydrocodone tablets every day since 2002. Dr. Preston pled guilty in 2015 to federal charges in the Eastern District of Tennessee.
From April 2014 to July 2016, HSI supplied nearly 4,000 oxycodone and hydrocodone tablets to Dr. Frank Purpera, a vascular surgeon practicing in Blacksburg, Virginia. A federal investigation determined that Dr. Purpera had no record of what happened to these pills. Investigators learned that Dr. Purpera illegally distributed the opioid tablets, providing many of the pills to his wife. Dr. Purpera was criminally prosecuted by the United States Attorney’s Office for the Western District of Virginia and convicted in January 2020 of illegally distributing controlled substances, health care fraud, conspiracy to commit health care fraud, and obstruction of justice.
Pursuant to 21 C.F.R. 1301.74(b) distributors of controlled substances have a responsibility to “design and operate a system to disclose to the registrant suspicious orders of controlled substances” including “orders of unusual size, orders deviating substantially from a normal pattern, and orders of unusual frequency.” Distributors must “inform the Field Division Office of the Administration in his area of suspicious orders when discovered by the registrant.” Moreover, registrants are obliged to maintain effective controls against diversion of controlled substances into other than legitimate medical, scientific, and industrial channels. The United States contends that HSI’s failure to comply with its responsibilities under the CSA enabled the diversion and abuse described above.
“The opioid epidemic has caused unspeakable harm to communities throughout West Virginia and the nation,” said United States Attorney Will Thompson. “DEA registrants have obligations under the CSA that HSI failed to uphold. Together with DEA, we will utilize every tool at our disposal to hold accountable those that contribute to the diversion of opioids, fuel substance use disorder and cause despair and death among our families.”
“Medical distributors who ignore red flags and put profits over patient care must be held accountable for the harm they inflict on our communities,” said Special Agent in Charge Todd Scott, head of the Drug Enforcement Administration’s Louisville Division, which includes West Virginia, Kentucky and Tennessee. “Henry Shien, Incorporated played a role in fueling the opioid crisis in several states and today’s announcement provides some measure of justice for those who have suffered as a result of their greed and unlawful actions.”
The case was handled by former Assistant United States Attorney Alan G. McGonigal and Assistant United States Attorney Gregory P. Neil.
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.
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Waterloo Man Sent Back to Federal Prison for Possessing Guns While as a Felon and While on Supervised ReleaseRead the Press Release
A man who possessed firearms after finishing his prison terms was sentenced December 1, 2021, to a total of seven years in federal prison.
Jumonie Dontez Wilson, age 21, from Waterloo Iowa, received the prison term after an April 23, 2021 guilty plea to being a felon in possession of a firearm.
In October 2019, Wilson was sentenced to 21 months in prison after pleading guilty to being a drug user in possession of a firearm. In his December 1, 2021, sentencing hearing, Wilson admitted that after being released in October 2020, he violated his supervised release conditions by using marijuana and possessing a firearm. On November 18, 2020, Wilson was at a residence with friends and a gun went off, resulting in life threatening injuries to one of the friends. Wilson later told another person that he and the injured person believed the guns were empty and shot at each other. Wilson was arrested the next day when he ran from law enforcement while tossing a loaded firearm.
Wilson was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Wilson was sentenced to 60 months’ imprisonment in the felon in possession case and must serve an additional 24 months’ imprisonment in the 2019 case. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Wilson is being held in the United States Marshal’s custody until he can be returned to federal prison.
The case was prosecuted by Assistant United States Attorney Emily K. Nydle and investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Waterloo Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file numbers are is 20-cr-2065 and 19-cr-2018.
Follow us on Twitter @USAO_NDIA.
Upton Man Pleads Guilty to Possession of Child PornographyRead the Press Release
BOSTON – An Upton man pleaded guilty yesterday in federal court in Worcester to possessing child pornography.
Matthew Stefanelli, 32, pleaded guilty to one count of possession of child pornography before U.S. District Court Judge Timothy S. Hillman who scheduled sentencing for March 18, 2022. Stefanelli was arrested and charged on July 14, 2021.
In December 2020, a CyberTip report identified Stefanelli as the owner of an account used to store child pornography. On Jan. 6, 2021, a search of Stefanelli’s residence resulted in the seizure of several electronic devices including Stefanelli’s cell phone. A forensic review of the phone revealed approximately 33 image files depicting child pornography, including the child identified in the CyberTip report. Stefanelli stored these images in an encrypted application designed to appear as a calculator.
The charge of possession of child pornography provides for a sentence of up to 20 years in prison, at least five years and up to a lifetime of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based on the United States Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell; Matthew B. Millhollin, Special Agent in Charge of Homeland Security Investigations in Boston; and Upton Police Chief Michael J. Bradley Jr. made the announcement today. Assistant U.S. Attorney Kristen Noto of Mendell’s Worcester Branch Office is prosecuting the case.
Members of the public who have questions, concerns or information regarding this case should call 617-748-3274.
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 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 www.projectsafechildhood.gov/.
Two Novus Doctors Sentenced to Combined 23 Years in Prison for Healthcare FraudRead the Press Release
Two doctors who helped a local hospice agency scam Medicare were sentenced today to a combined 23 years in prison for healthcare fraud, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.
In May, a federal jury found Novus Health Services Medical Directors Dr. Mark E. Gibbs and Dr. Laila Hirjee, along with Novus RN Tammie Little, guilty of conspiracy to commit healthcare fraud and other charges. Today, Chief U.S. District Judge Barbara M.G. Lynn sentenced Dr. Gibbs to 13 years in federal prison and ordered him to pay $27,978,903 in restitution; she sentenced Dr. Hirjee to 10 years in federal prison and ordered her to pay $16,253,281 in restitution. The judge also sentenced Ms. Little to 33 months in federal prison.
According to evidence presented at trial, the defendants helped Novus CEO Bradley Harris defraud Medicare by, among other things, illegally admitting patients who were not appropriate for hospice and submitting materially false claims for hospice services.
Mr. Harris, who pleaded guilty prior to trial, testified against his former employees.
He told the jury that instead of relying on the expertise of licensed medical professions, he and Novus nurses determined which patients would be admitted to or discharged from hospice care, as well as which drugs and dosages they would receive.
They relied upon Novus doctors, including Dr. Gibbs and Dr. Hirjee, to certify that they had examined these patients face-to-face, when no such examinations had occurred, Mr. Harris testified.
Witnesses also testified that Dr. Hirjee and Dr. Gibbs engaged in the prescription of Schedule II controlled substances, such as morphine, hydromorphone, and fentanyl, by pre-signing blank C2 prescriptions and giving those to Brad Harris and others at Novus to let them prescribe controlled substances without any physician oversight.
As Director of Operations Melanie Murphey testified on day five of trial, “I was the doctor.”
Mr. Harris and the nurses used pre-signed prescription pads, prepared by Dr. Gibbs, Dr. Hirjee, and other Novus doctors, to dispense medications like morphine to patients. When Medicare suspended payment to Novus over concerns about billing, Mr. Harris, Dr. Gibbs, and others moved patients and employees to a new hospice company and continued to bill Medicare for hospice services.
In total, Medicare and Medicaid paid the Novus entities approximately $40 million dollars for hospice services before the companies were shut down.
“These doctors allowed Bradley Harris – an accountant with no medical expertise – to dispense controlled substances like candy, with little to no medical oversight,” said U.S. Attorney Chad Meacham. “They claimed to have had hands-on experience with hospice patients, when in fact, they’d entrusted life-or-death medical decisions to untrained businesspeople. We are satisfied to know they will spend the next decade behind bars.”
“The defendants violated their Hippocratic Oath as doctors and instead focused on lining their pockets at the expense of patient safety. This case highlights the importance of thoroughly investigating any complaint of healthcare fraud,” said FBI Dallas Special Agent in Charge Matthew DeSarno. “We encourage the public to help us identify, investigate, and prosecute this crime. If you suspect health care fraud, report it to the FBI at tips.fbi.gov, 1-800-CALL-FBI, or contact your health insurance provider.”
Several of their codefendants – Novus CEO Brad Harris, his wife, Novus Vice President of Patient Services Amy Harris, Novus Director of Operations Melanie Murphy, Novus Medical Director Charles Leach, Novus Medical Director Reziuddin Siddique (deceased), Novus Vice President of Marketing Samuel Anderson, Novus Director of Marketing Slade Brown, Novus RN Jessica Love, Novus triage RN Patricia Armstrong, Novus LVN Taryn Stewart, and Ali Rizvi, the owner of a separate physician home visit company – pleaded guilty to various offenses prior to trial. Love was sentenced 102 months, Stuart was sentenced to 96 months, Armstrong was sentenced to 84 months, Dr. Leach was sentenced to 57 months, and Anderson was sentenced to 33 months. The remaining defendants are facing statutory maximums of between two and 14 years in federal prison.
The Federal Bureau of Investigation’s Dallas Field Office, the U.S. Department of Health & Human Services Office of Inspector General (HHS-OIG), and the Texas Attorney General’s Medicaid Fraud Control Unit conducted the investigation. Assistant U.S. Attorneys Donna Strittmatter Max and Marty Basu are prosecuting the case with Assistant U.S. Attorneys Stephen Gilstrap, Gail Hayworth, and Brian McKay.
Two Malden Men Indicted for Trafficking Fentanyl and MethamphetamineRead the Press Release
BOSTON – Two Malden men were indicted yesterday in connection with trafficking fentanyl and methamphetamine disguised as Adderall, Xanax or oxycodone in and around the Malden area.
Igor Desouza, 25, and Matthew Ramos, 24, were indicted on one count each of possession with intent to distribute 500 grams or more of methamphetamine, 40 grams or more of fentanyl, and other controlled substances. Desouza will be arraigned in federal court in Boston on Dec. 3, 2021.
According to the charging documents, a search of the defendants’ residence on May 25, 2021 resulted in the recovery of a firearm, over 200 rounds of ammunition, black tar heroin, MDMA crystals, cocaine, doses of LSD and nearly 10,000 pills suspected to include thousands of methamphetamine pills pressed to resemble Adderall or Xanax; thousands of fentanyl pills pressed to resemble oxycodone; thousands of MDMA tablets; amphetamines; and oxycodone.
The charge of possession with intent to distribute 500 grams or more of methamphetamine provides for a sentence of at least 10 years and up to life in prison, at least five years and up to a lifetime of supervised release and a fine of up to $10 million. The charge of possession with intent to distribute 40 grams or more of fentanyl provides for a sentence of at least five years and up to life in prison, at least four and up to a lifetime of supervised release and a fine of up to $5 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell and Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Division made the announcement today. The investigation was led by DEA’s New England Field Division’s Boston Tactical Diversion Squad. Special assistance was provided by the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; the Malden Police Department; and the Middlesex District Attorney’s Office. Assistant U.S. Attorney Lindsey E. Weinstein of Mendell’s Narcotics and Money Laundering Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Two Iranian Nationals Indicted in Local Cryptojacking CaseRead the Press Release
ST. LOUIS – Yesterday, a federal grand jury indicted Danial Jeloudar and Saeeid Safaei for conspiracy to commit wire fraud. Both defendants are Iranian nationals believed to be living abroad.
This is the first cryptojacking case to be prosecuted in the Eastern District of Missouri. “Cryptojacking has nothing to do with whether a victim owns cryptocurrency,” said Special Agent in Charge Richard Quinn of the FBI St. Louis Division. “It’s about criminals hijacking the use of your computer’s processing power to generate and cash out cryptocurrency.”
Cryptojacking is when cyber criminals fraudulently gain access to a victim’s device to use its computing power to generate or “mine” cryptocurrency. Computing power is needed for a virtual master ledger that uses complicated algorithms to verify and record cryptocurrency transactions. Individuals or groups can dedicate their computer power and be rewarded with cryptocurrency.
According to court documents, both defendants conspired to victimize a technology company in St. Charles, Missouri by fraudulently gaining access and using the company’s account on a cloud service. By misrepresenting themselves through the victim company’s account, the defendants fraudulently authorized the cloud service provider to build and install at least five new computer servers in the cloud. The purpose of the new servers was to run and operate software programs to generate cryptocurrency.
The fraud came to light when the victim company received a bill of more than $760,000 from the cloud service provider related to the use of fraudulent servers.
The following cyber security practices can minimize your risk of cryptojacking:
- Two-step authentication will make it harder for criminals to gain access to your online accounts.
- Monitor log-in history to detect suspicious activity early.
- Audit cloud storage to verify contents.
Charges set forth are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
The FBI St. Louis Division investigated this case. Assistant U.S. Attorney Kyle T. Bateman handled the case.
Two Georgia men sentenced for using Dark Web to steal identities of elderly victimsRead the Press Release
ATLANTA – Durrell Tyler and DeShawn Johnson have been sentenced for access device fraud and aggravated identity theft related to their use of stolen identities to open accounts with credit card companies and various retailers.
“Criminals using dark net markets to steal identities wreak havoc on the lives of individuals and compromise the financial security of victims,” said U.S. Attorney Kurt R. Erskine. “While law enforcement is focused on investigating and prosecuting these individuals, citizens are reminded to be vigilant with their personal identifiable information.”
“These defendants motivated by greed targeted our most vulnerable population by seeking the identities of older individuals to violate their personal and financial well-being,” said Tommy D. Coke, Inspector in Charge of the Atlanta Division. “Postal Inspectors and our law enforcement partners will continue to work every day to protect our elderly neighbors from financial exploitation.”
“Those who operate in the shadows will be exposed to the light of justice,” said U.S. Secret Service Special Agent in Charge Steven R. Baisel. “Deplorable felons who purposely prey on elderly victims are among the worst criminals there are. We will work tirelessly to pull them from their hiding places.”
According to U.S. Attorney Erskine, the charges, and other information presented in court: Durrell Tyler and DeShawn Johnson purchased personal identifiable information (PII) from dark net markets and used the information to open credit accounts using the victims’ information. They then forwarded the phone lines, mailing addresses, and the emails of their victims to their control. This allowed Tyler and Johnson to impersonate victims with creditors and prevented victims from learning about the fraud.
Law enforcement began investigating Tyler after discovering that he attempted to forward the phone number of an elderly couple in Georgia who had been murdered. Search warrants at multiple homes in the Atlanta area used by Tyler and Johnson revealed the scope of their fraud. Law enforcement found mail for victims, fraudulent driver’s licenses in the name of elderly victims with Tyler’s picture, and PII for dozens of victims listed in phones, email accounts, and a handwritten notebook. Tyler and Johnson were each held accountable for more than $130,000 in actual and intended loss suffered by more than 75 victims around the United States. Targets of their scheme included elderly men and women who were repeat victims of identity theft.
The defendants have been sentenced by U.S. District Judge Steve C. Jones as follows:
- Durrell Tyler, 29, of Atlanta, Georgia, was sentenced to three years, ten months in prison for access device fraud, to be followed by two consecutive years imprisonment for aggravated identity theft. He was also sentenced to serve three years of supervised release and ordered to pay restitution in the amount of $108,397.55. Tyler was convicted on these charges on May 14, 2021, after he pleaded guilty.
- DeShawn Johnson, 30, of Atlanta, Georgia, was sentenced to one year, six months in prison for access device fraud, to be followed by two consecutive years imprisonment for aggravated identity theft. He was also sentenced to serve three years of supervised release and ordered to pay restitution in the amount of $66,097.55. Johnson was convicted on these charges on September 9, 2021, after he pleaded guilty.
The case was investigated by the U.S. Postal Inspection Service and U.S. Secret Service.
Assistant U.S. Attorneys Nicholas Hartigan, Tiffany Dillingham, and former Assistant U.S. Attorney Jolee Porter prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Two Arrested in Los Angeles for Their Roles in Hospice Fraud ConspiracyRead the Press Release
Two California hospice facility owners were arrested today in Los Angeles on criminal charges related to their alleged participation in a kickback and health care fraud scheme.
According to court documents, Oganes Doganyan, 49, of Northridge, and Kristine Arutyunyan, 38, of Glendale, paid illegal kickbacks for the referral of Medicare beneficiary information that could be used to bill for purported hospice services. Doganyan and Arutyunyan also caused false and fraudulent claims to be billed to Medicare for hospice services that were medically unnecessary, not eligible for reimbursement, and not provided, including for services purportedly provided to Medicare beneficiaries who did not exist.
Doganyan and Arutyunyan are charged with conspiracy to commit health care fraud, health care fraud, conspiracy to pay and receive kickbacks, and paying kickbacks. If convicted, Doganyan and Arutyunyan each face a maximum total penalty of 35 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Tracy L. Wilkison of the Central District of California; Acting Assistant Director Jay Greenberg of the FBI’s Criminal Investigative Division; Assistant Director in Charge Kristi K. Johnson of the FBI Los Angeles Field Office; and Special Agent in Charge Timothy B. DeFrancesca of the Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Los Angeles Regional Office, made the announcement.
The FBI Los Angeles Field Office and HHS-OIG are investigating the case.
Trial Attorneys Justin Givens and Helen Lee of the Criminal Division’s Fraud Section are prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Three South Florida Men Sentenced for Conspiring to Launder Fraudulently Obtained Covid-19 Relief Money and Proceeds from Business Email Compromise SchemesRead the Press Release
Miami, Florida – A South Florida federal district judge sentenced three Broward County residents to prison terms this week for conspiring with each other to launder proceeds obtained from business email compromise schemes and fraudulently obtained Covid-19 relief loans.
Jimpcy One, 35, was sentenced to 36 months’ imprisonment. Frantz Guillaume, Jr. a/k/a Sandro Saintfloeur, 44, was sentenced to 46 months in prison. Gousman Lemy, 43, was sentenced to 51 months in prison. In addition, they were each ordered to pay approximately $1.8 million in restitution.
A business email compromise scheme is a type of computer intrusion that occurs when an employee of a company is fooled into interacting with an email message that appears to be, but is not, legitimate. The bogus email usually contains either an attachment or a link to a malicious website or program. When an unwitting user clicks on either the link or the attachment, it releases some form of malware (i.e., a virus, spyware, or other program application) that subsequently infects the employee’s email and/or computer. The malware may affect an employee’s individual account or spread throughout the computer network. The malware, once executed, can harvest information including but not limited to credentials and passwords, thereby giving the intruder access to sensitive company information.
According to court documents, in July of 2017, Lemy and Guillaume laundered a little over $425,000 obtained from a business email compromise of a Texas based university. Then, in 2019, One joined Lemy, and Guillaume in laundering over $900,000 obtained from a business email compromise of another U.S. based victim company. In each business email compromise scheme, co-conspirators sent false and fraudulent emails from a hacked account which tricked the victims into wiring money into accounts controlled by the defendants and their co-conspirators. One, Gousman, and Lemy then sought to conceal the origin of this fraudulently obtained money by transferring it among the bank accounts of various shell companies that One, Gousman, and Lemy controlled.
When the coronavirus pandemic hit the United States in 2020, One, Gousman, and Lemy allegedly initiated a new fraud scheme using existing shell companies from the email compromise scheme, as well as newly created and reactivated shell companies. Defendants allegedly submitted false and fraudulent loan applications under two U.S. government relief programs authorized by the CARES Act to help small businesses and their employees survive the Covid-19 economic crisis: the Paycheck Protection Program (“PPP”) and the Economic Injury Disaster Loan Program (“EIDL”). In June and July 2020, through false submissions in the names of their shell companies, One, Gousman, and Lemy fraudulently applied for and received close to $2 million in PPP and EIDL funds, which was laundered amongst the co-conspirators.
Juan Antonio Gonzalez, United States Attorney for the Southern District of Florida; George L. Piro, Special Agent in Charge, FBI Miami; Kyle A. Myles, Special Agent in Charge, Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG), Atlanta Region; and Amaleka McCall-Brathwaite, Special Agent in Charge of U.S. Small Business Administration, Office of Inspector General (SBA-OIG), Eastern Regional Office announced the sentences imposed by U.S. District Judge Rodolfo A. Ruiz, who sits in Ft. Lauderdale.
FBI Miami, FDIC-OIG, and SBA-OIG handled the investigation, with assistance from the United States Secret Service Miami Field Office and the Treasury Inspector General for Tax Administration Cybercrimes Division. Assistant U.S. Attorney Brooke Watson is prosecuting the case. Assistant U.S. Attorney Nicole Grosnoff is handling asset forfeiture.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case no. 21-cr-60126.
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Texas Man Sentenced to 12 Years in Prison for Defrauding Business Opportunity Buyers of More Than $5 MillionRead the Press Release
CAMDEN, N.J. – A Dallas, Texas, man was sentenced today to 144 months in prison for his role in orchestrating and operating a fraudulent scheme to sell medical-related business opportunities, causing a loss of more than $5 million, Acting U.S. Attorney Rachael A. Honig announced.
David Weinstein, 62, formerly of Cherry Hill, New Jersey, previously pleaded guilty before U.S. District Judge Robert B. Kugler to an information charging him with conspiracy to commit wire fraud and money laundering. Judge Kugler imposed Weinstein’s sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
From December 2015 through November 2020, Weinstein and his conspirators, Vijay Reddy and Kevin Brown, advertised business opportunities for sale on various websites. They purported to sell “blocks” of contracts with medical providers who allegedly wanted to outsource their medical billing, collections, appeals, answering, credentialing, or transcription functions. The buyers would then provide the contracted services to the medical providers and earn a profit. The conspirators promised to deliver a specified number of providers and pledged that their proprietary marketing efforts would provide a guaranteed client base to the buyers.
To induce buyers to purchase the business opportunities, the conspirators created fake references purporting to be buyers who vouched for their prior business purchases from the conspirators. In fact, the references were Weinstein, Reddy, and their friends and family members, and they used aliases and disguised phone numbers to speak with potential buyers.
After agreeing to purchase the blocks of medical providers, victims entered contracts with companies represented by Weinstein or Reddy and wired down payments ranging from $15,000 to $240,000 to accounts controlled by Weinstein or Brown. The remainder of each purchase price was payable when the conspirators fulfilled the contract by delivering the agreed-upon number of providers.
After receiving the down payments, Weinstein and Reddy typically delivered to each victim only a small number of medical providers. Despite not fulfilling the contracts of any of the buyers identified by law enforcement, the conspirators continued to sell blocks of medical providers to new buyers and refused to provide refunds for their failures to satisfy the terms of the contracts. The conspirators also periodically sold batches of previously signed contracts and disclaimed further responsibility for those contracts to insulate themselves from complaints or legal action from disgruntled buyers.
Brown acted as the business broker for most of the transactions and received a commission for the sales he brokered. Reddy or Weinstein acted as the seller and signed the contracts with the victims. Approximately 90 victims sent more than $5 million to accounts controlled by the defendants. The defendants spent the victims’ money on personal expenses, including a travel, jewelry, real estate, a wedding and a college education, and other business investments.
In addition to the prison term, Judge Kugler sentenced Weinstein to three years of supervised release and ordered him to pay $5.85 million in restitution. The court also ordered Weinstein to forfeit $1.98 million.
Acting U.S. Attorney Honig credited special agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Jacqueline Maguire in Philadelphia; special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; and postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Damon Wood in Philadelphia, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorneys Daniel A. Friedman and Diana V. Carrig of the U.S. Attorney’s Office Criminal Division in Camden.
Vijay Reddy pleaded guilty in June 2021 to an information charging him with conspiracy to commit wire fraud and wire fraud and is awaiting sentencing.
The charges and allegations in the criminal complaints against Brown are merely accusations, and he is presumed innocent unless and until proven guilty.
Tampa Man Pleads Guilty to Sending Obscene Material and Letters to a Western PA MinorRead the Press Release
PITTSBURGH - A Florida resident pleaded guilty in federal court to charges of transferring obscene material to a minor, United States Attorney Cindy K. Chung announced today.
Robert Fike, age 50, of Tampa, Florida, pleaded guilty to two counts before United States District Judge Arthur J. Schwab.
In connection with the guilty plea, the court was advised that in January of 2019 and in February of 2019, Fike sent packages to a minor female residing in the Western District of Pennsylvania. The packages contained obscene material—socks or leggings with Fike’s semen, as confirmed by laboratory testing and letters addressed to Minor A with graphic, sexually explicit content.
Judge Schwab scheduled sentencing for April 5, 2022 at 9:30 a.m. The law provides for a maximum total sentence of 20 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history of the defendant.
Pending sentencing, the Court ordered that the defendant remain detained.
Assistant United States Attorney Heidi M. Grogan is prosecuting this case on behalf of the government.
The United States Postal Inspection Service, the Pennsylvania Office of Attorney General, and the Penn Township Police Department conducted the investigation that led to the prosecution of Fike.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals, who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.