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Friday 2 July 2021
Man Pleads Guilty to Violating Federal Controlled Substances ActRead the Press Release
NEW ORLEANS, LOUISIANA – U.S. Attorney Duane A. Evans announced that on Wednesday June 30, 2021, JEFFREY GITTE, age 24, a resident of New York, pled guilty to two counts of the Indictment filed against him, in which he was charged with participating in a conspiracy to distribute and to possess with intent to distribute 500 grams or more of cocaine hydrochloride, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(B) and with attempting to escape from federal custody, in violation of Title 18, United States Code, Section 751.
According to court documents, GITTE and his co-conspirators transported approximately 10 kilograms of suspected cocaine from New York to New Orleans in an effort to sell the drugs to an individual, who happened to be a DEA informant, in return for $350,000.00. As it turned out, most of the drugs were fake, and GITTE and his co-conspirators tried to rip off the informant by supplying him with fake drugs in return for the $350,000.00 dollars. After being arrested by DEA agents, GITTE and one of his co-conspirators were able to get out of their cells and tried to escape. They were re-captured a short time later.
United States District Court Judge Sarah Vance will sentence GITTE on November 17, 2021. For the drug trafficking violation, GITTE faces a term of imprisonment of not less than 5 years and not more than 40 years in prison, a fine of up to $5,000,000.00, a period of supervised release of at least 4 years, and a mandatory special assessment fee of $100.00. For the escape violation he faces a sentence of not more than 5 years, a fine of not more than $250,000.00, a period of supervised release of not more than 3 years and a mandatory $100 special assessment fee.
The case was investigated by the Drug Enforcement Administration. This case is being prosecuted by United States Attorney Maurice Landrieu of the U.S. Attorney’s Office.
Man Pleads Guilty for Violating Federal Controlled Substances ActRead the Press Release
NEW ORLEANS, LOUISIANA – U.S. Attorney Duane A. Evans announced that on June 30, 2021, that YRIAN DEVORE “DEVORE”, age 48, a resident of New Orleans, Louisiana pled guilty to count five of a multicount Indictment, which charged him with possession with intent to distribute 500 grams or more of cocaine hydrochloride, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(B).
According to court documents, DEVORE transported drugs and money between Houston, Texas and Louisiana for others who were involved in a drug trafficking conspiracy.
United States District Court Judge Jane Triche Milazzo will sentence DEVORE on September 29, 2021. For this violation, DEVORE faces a term of imprisonment of not less than 5 years and not more than 40 years in prison, a fine of up to $5,000,000.00, a period of supervised release of at least 4 years, and a mandatory special assessment fee of $100.00.
The case was investigated by the Drug Enforcement Administration. This case is being prosecuted by United States Attorney Maurice Landrieu of the U.S. Attorney’s Office.
Man Charged with Threatening Life of Philadelphia Woman Online from OverseasRead the Press Release
PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Davit Davitashvili, 43, of Gori, the Republic of Georgia, and a naturalized American citizen, was charged by Indictment today with one count of transmitting in interstate and foreign commerce a threat to injure another person. The defendant was arrested on June 3, 2021 upon arriving at John F. Kennedy Airport in Queens, New York, and taken into custody.
The Indictment alleges that on March 10, 2020, Davitashvili knowingly and willfully transmitted messages using an Internet messaging application to a woman living in Philadelphia known as ‘O.V.,’ which contained threats to sexually assault the mother of O.V., and to injure, maim, and kill O.V. and others.
“The defendant is alleged to have sent incredibly scary, disturbing, and intimidating messages to a woman living and working in our city. No one should have to live in such constant fear,” said Acting U.S. Attorney Williams. “The public can rest assured that our Office, together with our law enforcement partners, is working tirelessly to protect victims from all types of threats both at home and abroad.”
“You can't just threaten people online with violent physical harm. That’s not protected speech — it’s a crime,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “The FBI takes all threats to life seriously and so should anyone thinking about making one. We will investigate, identify you, and ensure you’re held accountable for your actions.”
If convicted, the defendant faces a maximum possible sentence of five years in prison, three years of supervised release, a $250,000 fine, and a $100 special assessment.
The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorney Thomas M. Zaleski.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Maine Fugitive Caught and Sentenced for Earlier Stunt to Gain Attention at Old Faithful in Yellowstone National ParkRead the Press Release
Acting United States Attorney Bob Murray announced today that AARON E. MERRITT, age 37 of Madison, Maine pleaded guilty to trespassing on the Old Faithful thermal area in Yellowstone National Park (YNP). Merritt appeared in front of Magistrate Judge Mark L. Carman in Mammoth Hot Springs, Wyoming on July 1, 2021, for the arraignment and sentencing.
On July 7, 2020, while wearing a raccoon skin hat and waiving an American flag, Merritt ran out on the thermal area and up to the geyser of Old Faithful more than once. He then failed to appear for his court hearing on July 23, 2020, and a warrant was issued for his arrest. He was arrested on June 5, 2021, in Maine and made his appearance at the Yellowstone Justice Center in YNP. Merritt was sentenced to 15 days imprisonment with credit for four days served. He was fined $200 plus $30 in court costs and a $10 special assessment fee. He was also banned from YNP.
This case was handled by YNP law enforcement rangers and prosecuted by Assistant United States Attorney Stephanie Hambrick.
For questions relating to Yellowstone National Park, please contact Public Affairs Specialist, Morgan Warthin at 406-404-5096 or [email protected].
Lead defendant admits guilt in Georgia dog-fighting operationRead the Press Release
AUGUSTA, GA: All of the defendants charged in connection with a dog-fighting ring broken up in 2018 in Dodge County have admitted guilt to federal charges now that the operator of the dog-fighting facility has pled guilty.
James Lampkin, a/k/a “Pookie,” 46, of Eastman, Ga., awaits sentencing after pleading guilty in U.S. District Court to Conspiracy to Violate the Animal Welfare Act, said David H. Estes, Acting U.S. Attorney for the Southern District of Georgia. The plea subjects Lampkin to a statutory sentence of up to five years in prison, along with substantial fines and up to three years of supervised release upon completion of any prison term. There is no parole in the federal system.
“Animal fighting is cruel and barbaric, and has no place in our society – and it is particularly unwelcome in the Southern District of Georgia,” said Acting U.S. Attorney Estes. “Our vigilant law enforcement partners shut down Lampkin’s brutal operation and rescued dozens of animals from a life of pain and misery.”
“This investigation and prosecution should send a strong zero-tolerance message to those individuals involved in the inhumane torture of animals for the purpose of entertainment,” said Jason Williams, Special Agent in Charge, U.S. Department of Agriculture-Office of Inspector General. “We appreciate the partnership with our law enforcement partners in pursuing these purveyors of death and senseless suffering.”
Five of Lampkin’s co-defendants – Benjamin Shinhoster III, 41, of Augusta; Deveon Hood, 34, of Tennille, Ga.; Andre Archer, 23, of Sandersville, Ga.; Xavier Simmons, 34, of Sandersville, Ga.; and Joe Ford, 33, of Elgin, S.C. – also await sentencing in federal court after pleading guilty to related felony charges.
The remaining co-defendant, Dwight McDuffie, 44, of Eastman, Ga., pled guilty to Attending an Animal Fighting Venture, a misdemeanor, and was sentenced to two years of probation, 150 hours of community service, and prohibited from owning animals.
In March 2018, Georgia State Patrol troopers and Georgia Department of Natural Resources game wardens conducted traffic stops in Eastman after receiving reports of a dogfighting operation at Lampkin’s property. During those traffic stops, officers discovered a dog in one of the vehicles that appeared to have been injured while fighting. Investigators later seized 63 dogs at Lampkin’s residence while serving a search warrant after finding the animals chained in the back yard. Investigators also discovered a disassembled pit where fights were held, and equipment used to train dogs for fighting.
While the Asset Forfeiture Unit of the Southern District of Georgia U.S. Attorney’s Office initiated a civil forfeiture action, an animal rescue operation took custody of the dogs.
The case is being investigated by the U.S. Department of Agriculture Office of Inspector General, and prosecuted for the United States by Special Assistant U.S. Attorney Jessica Rock and Assistant U.S. Attorney Alejandro V. Pascual IV.
Land O’ Lakes Man Indicted for Enticing A Minor Child to Engage in Sexual Activity, and for Producing and Possessing Child Sexual Abuse MaterialsRead the Press Release
Tampa, Florida – Acting United States Attorney Karin Hoppmann announces the return of an indictment charging Michael Lumpkin, a/k/a “Jamari” (26, Land O’Lakes), with one count of enticement and attempted enticement of a minor to engage in sexual activity, two counts of using a minor child to produce videos depicting sexual abuse, and one count of possessing matters containing child sex abuse materials. If convicted on all counts, Lumpkin faces a maximum penalty of life in federal prison.
According to the indictment, between July 2019 and February 2020, Lumpkin enticed and attempted to entice a child to engage in sexual activity. In February 2020, Lumpkin used a child to produce sexually explicit videos. Lastly, on or about July 24, 2020, Lumpkin knowingly possessed certain matters that contained visual depictions of children under the age of 12 being sexually abused.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation and the Pasco Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Ilyssa M. Spergel.
This is another case 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.
Lackawanna County Man Pleads Guilty to Methamphetamine and Heroin TraffickingRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Rudolph Ford, age 32, formerly of Olyphant, Pennsylvania, pleaded guilty on July 1, 2021, before U.S. District Court Judge Robert D. Mariani, to conspiracy to distribute methamphetamine and heroin.
According to Acting United States Attorney Bruce D. Brandler, Ford admitted to participating in a conspiracy to distribute highly pure crystal methamphetamine, as well as heroin, in Luzerne, Lackawanna and Schuylkill Counties between January 2017 and December 2018. Ford was one of five individuals indicted by a grand jury in December 2018 for methamphetamine trafficking in Northeastern Pennsylvania.
Judge Mariani ordered that a presentence report be completed. Sentencing will be scheduled at a later date.
Previously, Amanda Boyle, age 37, of Sweet Valley, Luzerne County, was sentenced by Judge Mariani to nine years in prison for her role in this same drug trafficking conspiracy.
The investigation was conducted by the Bureau of Alcohol, Tobacco and Firearms (ATF), the Pennsylvania State Police, the Kingston Police Department, the Luzerne County Drug Task Force, and the Pennsylvania Office of Attorney General. Assistant United States Attorney Robert J. O’Hara is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The charge carries a maximum penalty of up to twenty years in prison, a term of supervised release following imprisonment, and a $1,000,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Knoxville Woman Sentenced in Connection with Overdose DeathRead the Press Release
KNOXVILLE, Tenn.– On July 1, 2021, Katrina S. Carinci, 28, of Knoxville, TN, was sentenced to 125 months imprisonment by the Honorable Thomas A. Varlan, in the United States District Court for the Eastern District of Tennessee at Knoxville.
As part of the plea agreement filed with the Court, Katarina S. Carinci agreed to plead guilty to conspiracy to distribute and possess with intent to distribute 40 grams or more of a mixture and substance containing fentanyl, and a quantity of heroin, in violation of 21 U.S.C. §§ 846, 841(a)(1), and 841(b)(1)(B), as well as distribution of fentanyl, in violation of 21 U.S.C. § 841(a)(1) and 841(b)(1)(C). Yesterday, the defendant was sentenced to 125 months in prison, followed by five years of supervised release.
According to documents filed with the Court, between May 1, 2017, and September 2017, the defendant engaged in a conspiracy to distribute and possess with intent to distribute heroin and fentanyl for a drug trafficking organization operating within the Eastern District of Tennessee. The defendant obtained drugs from the leaders of the organization and distributed them to various customers in East Tennessee. On one specific occasion in August 2017, officers responded to an overdose death in Oak Ridge, TN. Prior to the death, the defendant had received drugs from her source and distributed drugs to a co-defendant, Samuel Hammond, who used the drugs with his friend. The friend later overdosed and died.
The criminal indictment was the result of an investigation by the Appalachian High Intensity Drug Trafficking Area’s Drug Related Death Task Force, which includes members of the Knoxville Police Department and the Drug Enforcement Administration. The Tennessee Bureau of Investigation, the Oak Ridge Police Department, and the Knox County Regional Forensics Center also assisted in this investigation.
Assistant United States Attorney Brent N. Jones represented the United States.
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Kaiser Permanente Agrees to Comply with Federal Law by Improving Access for People Who Are Deaf or Hard of HearingRead the Press Release
LOS ANGELES – Southern California Permanente Medical Group and Kaiser Foundation Hospitals have agreed to resolve allegations that they violated the Americans with Disabilities Act (ADA) by failing to provide at one of their facilities a qualified sign language interpreter or other appropriate form of auxiliary aid or service to a deaf patient.
The letter of resolution, which was signed this week by executives with the two Kaiser entities, ensures that individuals with disabilities at its Baldwin Park Medical Center receive appropriate auxiliary aids and services necessary for effective communication. Southern California Permanente Medical Group and Kaiser Foundation Hospitals have agreed to provide equipment and services free of charge to ensure that people who are deaf or hard of hearing have full and equal access to medical appointments, treatments and emergency visits at this medical center.
The investigation in this matter was triggered by a complainant who alleged she was not provided effective communication before and after a surgical procedure in 2018.
The entities, which fully cooperated with the government’s investigation, have agreed to:
- Provide appropriate auxiliary aids and services, including qualified interpreters, when necessary to ensure effective communication with patients who are deaf or hard of hearing and their companions;
- Advertise the availability of auxiliary aids and services;
- Provide training on auxiliary aids and services, including to qualified interpreters, the diversity coordinator, Medical Center personnel and telephone operators; and
- Pay compensation to the complainant and civil penalties to the United States.
In February 2020, the U.S. Attorney’s Office, Southern California Permanente Medical Group, and Kaiser Foundation Hospitals entered into a settlement agreement to resolve allegations that the two entities failed to provide qualified sign language interpreters or other appropriate forms of assistant to a patient at their West Los Angeles Medical Center.
The U.S. Attorney’s Office conducted the investigation as part of the Department of Justice’s Barrier-Free Health Care Initiative, through which U.S. Attorneys’ offices and the Department’s Civil Rights Division target their enforcement efforts on a critical area for individuals with disabilities – access to medical services and facilities.
Assistant United States Attorney Acrivi Coromelas of the Civil Division’s Civil Rights Section handled this matter.
For more information on the ADA, please call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TDD) or access the ADA website at http://www.ada.gov.
Jury Convicts New Jersey Man of Essex County Drug ConspiracyRead the Press Release
ALBANY, NEW YORK - James Kerns, age 30, of Elizabethtown, New Jersey, was convicted on June 30, 2020, following a four-day jury trial of conspiracy to possess with intent to distribute and to distribute cocaine and crack cocaine, and possession with intent to distribute cocaine and crack cocaine, announced Acting United States Attorney Antoinette T. Bacon and Ray Donovan, Special Agent in Charge of the U.S. Drug Enforcement Administration (DEA), New York Division.
The trial evidence showed that on November 2, 2020, Kerns conspired with co-defendant Ibn Spivey and others to distribute cocaine and crack cocaine from a local residence in Westport, New York, in Essex County. It was established during trial that on November 2, 2020, Kerns and Spivey travelled from New Jersey to a residence in Westport and began to distribute cocaine and crack cocaine. On November 3, 2020, DEA Special Agents executed a search warrant at this location where they found Kerns sitting across from a large brick of cocaine and drug packaging materials along with a large knife and a video surveillance monitor. Beside Kerns was a lunchbox filled with crack cocaine and powder cocaine. DEA Special Agents found Spivey sitting across from Kerns, with a bag of crack tucked in his (Spivey’s) trousers. Both Spivey and Kerns were arrested.
Sentencing is scheduled for November 4, 2021. As a result of his trial conviction, Kerns faces a minimum of 5 years and a maximum term of imprisonment of 40 years, a fine of up to $5,000,000, and term of supervised release of at least 4-years and up to life, when he is sentenced by Chief United States District Judge Glenn T. Suddaby. A defendant’s sentence is imposed by a judge based on the particular statutes the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
Ibn Spivey, 29, also from Elizabethtown, New Jersey, pled guilty to possession with intent to distribute cocaine and crack cocaine just prior to the commencement of trial. Spivey is scheduled to be sentenced on October 28, 2021. As a result of his conviction, Spivey faces a minimum of 5 years and a maximum term of imprisonment of 40 years, a fine of up to $5,000,000, and term of supervised release of at least 4 years and up to life.
This case was investigated by the DEA and is being prosecuted by Assistant U.S. Attorneys Troy Anderson and Katherine Kopita.
Jury Convicts Arizona Man of Methamphetamine Trafficking and Possession of a FirearmRead the Press Release
SYRACUSE, NEW YORK – A federal court jury in Syracuse today convicted Davonte Williams-Dorsey, age 24, of Phoenix, Arizona, of Conspiracy to Possess with Intent to Distribute a Controlled Substance (methamphetamine), Possession with Intent to Distribute a Controlled Substance (methamphetamine), and Possession of a Firearm in Furtherance of a Drug Trafficking Crime, announced Acting United States Attorney Antoinette T. Bacon and Ray Donovan, Special Agent in Charge of the U.S. Drug Enforcement Administration (DEA), New York Division. The guilty verdict today followed a four-day jury trial during which Davonte Williams-Dorsey represented himself with the assistance of standby counsel.
The evidence at trial established that Williams-Dorsey and Tyshawn Logan, 24, of Cleveland, Ohio, conspired together to bring 20 kilograms (approximately 44 pounds) of methamphetamine from Arizona to Syracuse, where it was to be sold. DEA Special Agents and other law enforcement officers arrested Davonte Williams-Dorsey in Syracuse on January 8, 2020 in possession of 20 kilograms of methamphetamine in an automobile. At the time of his arrest Davonte Williams Dorsey was carrying a loaded Taurus 9mm semiautomatic handgun in the waistband of his trousers. Tyshawn Logan was arrested in a building in Syracuse where he was staying after transporting the methamphetamine from California by car.
Davonte Williams-Dorsey is scheduled to be sentenced on November 29, 2021, at which time he faces a minimum sentence of 10-years and a maximum sentence of life imprisonment, a fine of up to $10,000,000.00, and a term of supervised release of at least 5-years and up to life, for his convictions for Conspiracy to Possess with Intent to Distribute a Controlled Substance (methamphetamine), and Possession with Intent to Distribute a Controlled Substance (methamphetamine). For his conviction for Possession of a Firearm in Furtherance of a Drug Trafficking Crime he faces a mandatory consecutive sentence of at least 5-years and up to life imprisonment, and a fine of up to $250,000.00.
Tyshawn Logan pled guilty previously to Conspiracy to Possess with Intent to Distribute a Controlled Substance (methamphetamine), and Possession with Intent to Distribute a Controlled Substance (methamphetamine). He is scheduled to be sentenced August 24, 2021, and faces a minimum sentence of 10-years and a maximum sentence of life imprisonment, a fine of up to $10,000,000.00, and a term of supervised release of at least 5-years and up to life, for his convictions for Conspiracy to Possess with Intent to Distribute a Controlled Substance (methamphetamine), and Possession with Intent to Distribute a Controlled Substance (methamphetamine).
A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
This case is being investigated by The United States Drug Enforcement Administration (DEA), with the assistance of the Syracuse Police Department-Special Investigations Division, the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and DEA Task Force Officers from the New York State Police, U.S. Department of Homeland Security ICE-ERO, the Oneida County Sheriff’s Department, and the City of Rome Police Department, and is being prosecuted by Assistant U.S. Attorney Nicolas Commandeur.
Jefferson County man charged with operating binary options fraud schemeRead the Press Release
COLUMBUS, Ohio – A federal grand jury here has indicted William T. Caniff, Jr., 52, of Toronto, Ohio alleging multiple wire fraud and money laundering charges related to a binary options fraud scheme.
Binary options are a type of options contract in which the payout depended on the outcome of a yes/no proposition, typically related to whether the price of a particular asset would rise above or fall below a certain amount. A binary option did not give the holder the right to buy or sell the underlying asset. Instead, the holder received a pre-determined amount of money or nothing at all.
According to the indictment, it is alleged that Caniff and another individual formed Berkley Capital Management, LLC in January 2016 which purported to be in the business of trading binary options. Berkley Capital Management was the general partner for Bbot 1 LP (Bbot) which was created in January 2016 and Berkley II LP (Berkley II), which was created in August 2017. Bbot 1 LP and Berkley II LP were established as an investment pool that would offer participants the opportunity to trade binary options in a pool with other participants.
Caniff was the designated trader for Bbot and Berkley II. Caniff established bank accounts for Berkley Capital Management, Bbot 1, and Berkley II and had control of the bank accounts.
The indictment alleges that Caniff knowingly made and caused to be made materially false representations to investors to fraudulently obtain and retain money, including false representations about the risks involved with the investments, the expected and actual returns on investments, and the ways investor funds would be used and were used. Caniff created or caused to be created false documents in order to mislead investors, including false account statements.
The indictment also alleges that, even though Bbot and Berkley II received more than $4 million in funds from investors, Caniff caused only $85,000 of the funds to be invested through Nadex, an online binary options exchange. Caniff fraudulently misappropriated at least $2 million of investors’ funds for his own benefit and the benefit of a business partner, the indictment charges.
If convicted of wire fraud, Caniff faces a maximum sentence of 20 years in prison. Money laundering is punishable by up to ten years in prison.
Vipal J. Patel, Acting United States Attorney for the Southern District of Ohio and Bryant Jackson, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office, announced the charges.
This case is being prosecuted by Assistant United States Attorney Peter K. Glenn-Applegate and was investigated by special agents of IRS-Criminal Investigation.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
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Iowa Man Sentenced to Federal Prison for his Role in COVID-19 Unemployment Insurance FraudRead the Press Release
A man who used his credit union account to receive unemployment insurance money from the State of Washington to which he was not entitled was sentenced July 1, 2021, to federal prison.
Jerry D. Johnson, age 54, from Webster City, Iowa, received the prison term after a January 28, 2021, guilty plea to one count of mail fraud.
Information at Johnson’s plea and sentencing hearings showed that, in May 2020, Johnson’s credit union account received over $31,000 in unemployment funds from the State of Washington in the names of others. He then withdrew the benefits in cash and mailed the cash through the United States Postal Service to others involved in the scheme. Later, the Commonwealth of Massachusetts attempted to deposit over $20,000 in fraudulent unemployment benefits into Johnson’s account. The credit union recognized the transaction as fraudulent and returned the money.
Johnson was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Johnson was sentenced to eight months’ imprisonment. He was ordered to make $31,062 in restitution to the State of Washington. He must also serve a two-year term of supervised release after the prison term. There is no parole in the federal system.
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.
Johnson was released on the bond previously set and is to surrender to the Bureau of Prison on a date yet to be set.
The case was prosecuted by Assistant United States Attorney Morfitt and investigated by the Federal Bureau of Investigation and the United States Department of Labor, Office of Inspector General.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-CR-3027.
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Illinois Felon Who Possessed Loaded Firearm in Iowa Sentenced to over Three Years in PrisonRead the Press Release
A man who possessed a loaded Glock .380 pistol and attempted to flee from law enforcement was sentenced today to more than three years in federal prison.
Anthony Redman, age 30, from Chicago, Illinois, received the prison term after a December 18, 2020 guilty plea to being a felon in possession of a firearm.
In a plea agreement, Redman admitted that on November 26, 2019, he was a passenger in a vehicle located at a motel in Cedar Rapids, Iowa. Law enforcement responded to the location based on a 9-1-1 call reporting shots fired. When officers asked Redman to remain in the area, he attempted to flee to a hotel room. He was stopped and a loaded Glock .380 semiautomatic firearm was located in his coat pocket. Redman was previously convicted of being a felon in possession of a firearm in Cook County, Illinois, in 2007.
Redman was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Redman was sentenced to 46 months’ imprisonment and fined $100. 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.
Redman is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Elizabeth Dupuich and investigated by the Cedar Rapids Police Department and the Sixth Judicial District Department of Correctional Services.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-CR-0039.
Follow us on Twitter @USAO_NDIA.
Houston Man Pleads Guilty to Violating the Federal Controlled Substances ActRead the Press Release
NEW ORLEANS, LOUISIANA – RAYMOND ZEPEDA age 48, of Houston, Texas, pleaded guilty on June 29, 2021 before the Honorable Jay C. Zainey to an indictment charging him with violating the Federal Controlled Substances Act, announced U.S. Attorney Duane A. Evans.
According to the court records, ZEPEDA conspired to possess with the intent to distribute and to distribute a kilogram or more of a mixture or substance containing a detectable amount of heroin and five kilograms or more of a mixture or substance containing a detectable amount of cocaine. ZEPEDA admitted to being captured on recorded calls as part of a lengthy Title III wire intercept.
Sentencing is scheduled for September 28, 2021. ZEPEDA faces a mandatory minimum term of imprisonment of at least ten years up to a maximum of life, a fine of $10,000,000, at least five years of supervised release following any term of imprisonment, and a $100 special assessment.
This case was investigated by Special Agents of the Drug Enforcement Administration (DEA). The prosecution is being handled by Assistant United States Attorney David Haller.
Hollygrove Man Sentenced for Drug ChargesRead the Press Release
NEW ORLEANS, LOUISIANA – BRIAN TILLMAN, a/k/a “Cosca,” a/k/a “Costa,” a/k/a “Speedy,” age 34, was sentenced in federal court on June 30, 2021, to twenty-eight (28) months before U.S. District Court Judge Jane Triche Milazzo to conspiracy to distribute and possess with the intent to distribute over 100 grams of heroin and over 28 grams of cocaine base and a quantity of marijuana in violation of Title 21, United States Code, Sections 841(a)(1), 841(b)(1)(C) and 846. TILLMAN was also sentenced to four (4) years of supervised release following imprisonment and payment of a mandatory $100 special assessment fee.
According to court documents, TILLMAN and his co-conspirators sold drugs in the Hollygrove neighborhood in and around a corner-store in 2017 and 2018. TILLMAN was intercepted on a Title III wiretap arranging to purchase and/or sell heroin and cocaine base during multiple days in March and April of 2018.
U.S. Attorney Duane A. Evans praised the work of the Federal Bureau of Investigation’s New Orleans Gang Task Force. The prosecution was handled by Assistant United States Attorneys Myles Ranier and Kathryn McHugh.
Gainesville Man Convicted of Receipt and Possession of Child PornographyRead the Press Release
GAINESVILLE, FLORIDA – A federal jury in Gainesville has convicted Travonta Deangelo Rivers, 33, of Gainesville, on two counts of receipt of child pornography and two counts of possession of child pornography. The guilty verdict, reached by the jury yesterday after a two-day trial that began on Wednesday, was announced by Jason R. Coody, Acting United States Attorney for the Northern District of Florida.
A search warrant at Rivers’ residence in May 2020, resulted in the seizure of computers which Rivers used to receive and share numerous videos of child pornography. Rivers was located and arrested in December 2020, and again found in possession of a computer which he had used to receive and share child pornography.
“Those who seek to view and maintain child pornography facilitate the abuse of children by those who produce and profit from this illegal content,” stated Acting U.S. Attorney Coody. “With the assistance of our law enforcement partners, we will ensure that those who engage in such heinous conduct will be held accountable for their actions.”
"This guilty verdict has an immediate impact in making our communities safer by keeping this child predator off our streets and highlights the importance of law enforcement partnerships, like the one between HSI and the Gainesville Police Department," said HSI Jacksonville Assistant Special Agent in Charge K. Jim Phillips.
Rivers’ sentencing hearing is scheduled for September 14, 2021, at 1:00pm, at the United States Courthouse in Gainesville before the Honorable Allen Winsor. Rivers faces two mandatory minimum terms of five years imprisonment to twenty years imprisonment, a $500,000 fine, and a maximum term of Life on supervised release.
This conviction resulted from the collaborative investigation of Homeland Security Investigations, the Gainesville Police Department, the Alachua County Sheriff’s Office, and the St. John’s County Sheriff’s Office as part of the North Florida Internet Crimes Against Children (ICAC) Task Force. Assistant United States Attorney Frank Williams prosecuted the 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.
Former San Francisco Building Inspection Commission President Indicted for Bank Fraud, Obstruction of Justice, Aggravated Identity TheftRead the Press Release
SAN FRANCISCO – A federal grand jury indicted Rodrigo Santos yesterday for bank fraud, aggravated identity theft, and obstruction of justice, announced Acting United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.
An earlier criminal complaint filed May 11, 2020, against Santos, 61, of San Francisco, alleged that Santos, as the principal and co-founder of the San Francisco-based company Santos and Urrutia Structural Engineers, Inc., engaged in a fraud scheme to obtain and deposit money from his clients into his own bank account and charged him with bank fraud. The complaint also described that Santos was appointed in 2000 to be a member of the San Francisco Building Inspection Commission by Mayor Willie Brown and promoted in 2004 to be the Commission’s President by Mayor Gavin Newsom.
The federal indictment filed yesterday broadened the charges against Santos. The indictment charges ten counts of bank fraud in a scheme that spanned from November 2012 through March 2019. As part of the scheme, the indictment alleges Santos obtained money from clients who wrote checks to pay fees or costs associated with their residential building and construction projects. The indictment asserts that in several instances, Santos manipulated the checks by editing the “pay to the order of” (“payee”) field to make the checks appear to be written to Santos. In other instances, the indictment charges that Santos endorsed the checks to himself without authorization from his clients or the payee indicated on the check, sometimes handwriting the payee’s name on the back of the check’s endorsement field. Santos is alleged to have deposited to his personal bank account approximately 445 such checks written as pay to the order of a third party, totaling $775,412.90.
The indictment also charges two counts of aggravated identity theft, alleging that in February 2017 Santos, while engaging in bank fraud, twice knowingly used the identity of another person without authority.
Lastly, the indictment charges Santos with one count of altering and falsifying records in a federal investigation, alleging that Santos twice submitted altered and false invoices of his company, Santos and Urrutia Structural Engineers, Inc., to the FBI with the intent to obstruct the FBI’s investigation into his bank fraud scheme.
Santos is charged with ten counts of bank fraud, in violation of 18 U.S.C. § 1344; one count of altering or falsifying records in a federal investigation with the intent to obstruct justice, in violation of 18 U.S.C. § 1519; and two counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A. If convicted, Santos faces a statutory maximum of 30 years in prison and a $1,000,000 fine for each count of bank fraud; a statutory maximum of 20 years in prison and a $250,000 fine for the obstruction of justice count; and at least two years in prison for a conviction on a count of aggravated identity theft, imposed consecutive to any sentence already imposed on the bank fraud counts. However, any sentence following conviction would be imposed by the 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 indictment are mere allegations. As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.
Santos is scheduled to appear for arraignment on yesterday’s indictment on Tuesday, July 6, 2021, at 10:30 a.m. before the Honorable Alex G. Tse, United States Magistrate Judge. Santos remains out of custody on bond.
This case is being prosecuted by the Special Prosecutions Section of the U.S. Attorney’s Office. The case is being investigated by the FBI. San Francisco City Attorney Dennis Herrera also alleged in a state civil lawsuit unsealed in March 2020 that Santos engaged in check fraud.
Former Customs and Border Protection Officer Sentenced on Child Exploitation ChargeRead the Press Release
Miami, Florida -- Defendant Fabio Lopez, 62, of Weston, Florida was sentenced last week by a federal district judge in Fort Lauderdale to 10 years in federal prison and a lifetime of supervised release for enticing a minor to engage in sexual activity.
According to court documents, Fabio Lopez, a former officer with Customs and Border Protection, enticed a 16-year-old child into attempting to produce child pornography. Lopez met the child after befriending her mother while on duty in his official capacity at Miami International Airport. From July 2019 through March 2020, Lopez had a relationship with the child and texted her frequently. According the factual proffer filed, Lopez fondled the child and offered her money in exchange for letting him take pornographic images of her. Lopez was arrested in Davie when he arrived to meet with the child. Prior to his arrival, Lopez had rented a local hotel room for the two and left a bag with lingerie for the child to wear.
Juan Antonio Gonzalez, Acting United States Attorney for the Southern District of Florida, Anthony Salisbury, Special Agent in Charge, Homeland Security Investigations (HSI), Miami Field Office, and Vernon T. Foret, Director of Field Operation, U.S. Customs and Border Protection (CBP), Miami and Tampa Field Office, announced the sentence.
HSI Miami investigated the case, with assistance from U.S. Customs and Border Protection Office of Professional Responsibility and Pembroke Pines Police Department. The case was investigated as part of the South Florida Internet Crimes Against Children Task Force. Assistant U.S. Attorney Jodi L. Anton prosecuted the case.
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 on http://pacer.flsd.uscourts.gov under case number 20-cr-60081.
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Former Controller of the George Town Club Pleads Guilty to Defrauding Former EmployerRead the Press Release
WASHINGTON - Isabelle Garcia, 56, former controller for the George Town Club (“GTC”), pleaded guilty today to a federal charge of wire fraud stemming from a scheme in which she defrauded the GTC of over $300,000.
The announcement was made by Channing D. Phillips, Acting U.S. Attorney for the United States Attorney’s Office for the District of Columbia, and Robert Bornstein, Acting Special Agent in Charge, FBI Washington Field Office, Criminal Division.
Garcia was indicted in May 2018 on two counts of wire fraud, one count of bank fraud, and one count of first degree fraud. Garcia pleaded guilty to wire fraud, the first count of the indictment, in the U.S. District Court for the District of Columbia. The remaining charges will be dismissed at sentencing. Wire fraud carries a statutory maximum sentence of 20 years in prison and potential financial penalties. Under federal sentencing guidelines, Garcia faces a likely range of 27 to 33 months in prison and a fine of up to $100,000. The plea agreement also calls for Garcia to pay $300,422.06 in restitution and to agree to entry of a $300,422.06 forfeiture money judgment. The Honorable John D. Bates of the United States District Court for the Distict of Columbia scheduled Garcia’s sentencing for September 29, 2021.
As part of her plea, Garcia admitted that she was the controller for the GTC, a private dining club located in the District of Columbia. From 2006 to 2013, Garcia admitted that she used her control over GTC financial accounts to make payments to herself and to third parties for her personal benefit. Through her scheme, Garcia wrongfully obtained $300,442.06 to which she was not entitled.
In announcing the plea, Acting U.S. Attorney Phillips and Special Agent in Charge Robert Bornstein commended the work of those who investigated the case from the FBI’s Washington Field Office. They also expressed appreciation for the work of Paralegal Specialist Stephanie Frijas. Finally, they commended the work of Assistant U.S. Attorney Peter Lallas and former Assistant U.S. Attorney Anthony Saler, who prosecuted the case.
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Federal officials close review of fatal shooting of Samuel DuBoseRead the Press Release
CINCINNATI – The U.S. Attorney’s Office for the Southern District of Ohio, in consultation with the Justice Department’s Civil Rights Division, announced today they have concluded their review of the July 2015 fatal shooting of Samuel DuBose by former University of Cincinnati police officer Raymond Tensing without filing criminal charges against the former officer. The FBI has similarly concluded its investigation.
Justice Department officials have notified Mr. DuBose’s family of this decision via the family’s counsel.
Federal civil rights statutes – which are written by Congress – require federal authorities to prove beyond a reasonable doubt unanimously to a jury of twelve that a defendant willfully used unreasonable force with the specific intent of violating a victim’s constitutional rights. To establish willfulness beyond a reasonable doubt, federal authorities would be required to prove beyond a reasonable doubt that the former officer acted with the deliberate and specific intent to do something the law forbids. This is one of the highest standards of intent imposed by law.
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Erie Man on Parole for Child Rape Sentenced to 12+ Years in Prison for Bank RobberiesRead the Press Release
ERIE, Pa. - A former resident of Erie, Pennsylvania, has been sentenced in federal court to 155 months in prison, 3 years supervised release and ordered to pay $11,100 in restitution on his convictions for bank robbery, armed bank robbery, and using and carrying a firearm during a crime of violence, Acting United States Attorney Stephen R. Kaufman announced today.
United States District Judge Stephanie L. Haines imposed the sentence on Ronald Eugene Lomax, Jr., 32.
According to information presented to the court, on November 21, 2018, Lomax entered the Northwest Savings Bank, 3407 Liberty Street in Erie and handed the teller a note that indicated he had a gun and demanded $5,000. Lomax then fled the bank after receiving the money.
On December 28, 2018, Lomax robbed the same Northwest Savings Bank branch taking $6,100. Lomax pointed a handgun at the victim teller during this robbery. When he committed the bank robberies, Lomax was on parole in Pennsylvania for a conviction involving the rape of a child.
Prior to imposing sentence, Judge Haines noted the seriousness of Lomax’s criminal history and his escalating behavior between the two bank robberies.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
Acting United States Attorney Kaufman commended the Federal Bureau of Investigation and the Erie Police Department for the investigation leading to the successful prosecution of Lomax.
Dry Ridge Man Sentenced to 264 Months for Armed Methamphetamine TraffickingRead the Press Release
COVINGTON, Ky. – A Dry Ridge, Kentucky, man, Paul Stapleton, 48, was sentenced Friday to 264 months in federal prison, by U.S. District Judge David Bunning, for conspiring to distribute 500 grams or more of methamphetamine and possession of a short-barreled shotgun in furtherance of his drug trafficking.
Stapleton led a conspiracy that distributed more than 1.5 kilograms of crystal methamphetamine throughout Northern Kentucky. Agents seized significant amounts of methamphetamine in Campbell and Grant Counties, on October 21, 2019, and seized multiple firearms, including two short-barreled shotguns from the Grant County residence that was the focus of the conspiracy. Stapleton had four prior felony convictions for drug offenses and committed these crimes while on parole.
Several of Stapleton’s co-conspirators have already been sentenced to prison terms: Steven Green (96 months); Steven Ballard (15 months); Lee Grimm (72 months); Donald Kaylor (54 months); A.J. Phillips (120 months); Dewey Phillips (36 months); George Pickett (37 months); Crystal Prewitt (54 months); Joseph Dylan Smith (50 months); Morgan Smith (12 months and one day); April Stapleton 60 months; Jeremy Thomas (54 months); and Amber Turner (18 months).
Stapleton pleaded guilty in April 2021.
Under federal law, the defendants must serve 85 percent of their prison sentences. Upon his release, Stapleton will also be under the supervision of the U.S. Probation Office for five years.
Carlton S. Shier IV, Acting United States Attorney for the Eastern District of Kentucky; Shawn Morrow, Special Agent in Charge, ATF, Louisville Field Division; Christopher Conners, Director of the Northern Kentucky Drug Strike Force; and Colonel Lee Estepp, Chief of the Bellevue Police Department, jointly announced the sentences.
The investigation was conducted by ATF, the Northern Kentucky Drug Strike Force, and the Bellevue Police Department. The United States was represented by Assistant U.S. Attorney Tony Bracke.
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Contract Rehabilitation Therapy Providers Agree to Pay $8.4 Million to Resolve False Claims Act Allegations Relating to the Provision of Medically Unnecessary Therapy ServicesRead the Press Release
Select Medical Corporation and Encore GC Acquisition LLC have agreed to pay $8.4 million to resolve allegations that Select Medical Rehabilitation Services Inc. (SMRS) violated the False Claims Act by knowingly causing 12 skilled nursing facilities (SNFs) in New York and New Jersey to submit false claims to Medicare for rehabilitation therapy services that were not reasonable, necessary or skilled. Select Medical Corporation was the prior parent company of SMRS, while Encore GC Acquisition LLC is the successor-in-interest to SMRS. The alleged conduct occurred prior to Encore’s acquisition of SMRS.
From 1997 through March 31, 2016, SMRS offered contract rehabilitation therapy services to SNFs across the country. The United States alleged that, at various times between Jan. 1, 2010, through March 31, 2016, SMRS contracted with 12 SNFs in New York and New Jersey to provide rehabilitation therapy services. The United States alleged that SMRS’ corporate policies and practices encouraged and resulted in the provision of medically unnecessary, unreasonable and unskilled therapy services being provided to patients at the 12 SNFs.
“Today’s settlement reflects our commitment to protect patients and taxpayers by ensuring that the care provided to Medicare beneficiaries is dictated by their individual clinical needs and not by a provider’s financial interests,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “Contract rehabilitation therapy companies, like other health care providers, will be held accountable if they knowingly provide patients with unnecessary services that waste taxpayer dollars.”
“Skilled nursing facility residents and their families must be assured that the care and therapy that residents receive is based on medical need, not greed,” said Acting U.S. Attorney Rachael A. Honig for the District of New Jersey. “We must also protect the taxpayers by ensuring that Medicare pays only for appropriate services performed for legitimate medical purposes. We will hold all health care providers who violate the False Claims Act responsible for their actions.”
“Sticking taxpayers with a hefty bill for unnecessary health care services will never be tolerated,” said Special Agent in Charge Scott J. Lampert of the Department of Health and Human Services, Office of the Inspector General (HHS-OIG). “Working closely with our law enforcement partners, we will tirelessly pursue unscrupulous health care companies to protect patients and federal health care programs.”
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Melissa Vail, a former SMRS employee. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned U.S. ex rel. Doe v. Select Medical Corporation et al.,No. 2:16-cv-03569 (D.N.J.).
The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the District of New Jersey, with assistance from HHS-OIG and the FBI Newark Field Office.
The investigation and resolution of this matter illustrate the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The matter was handled by Trial Attorney Yolonda Campbell of the Civil Division and Assistant U.S. Attorney Marihug Cedeño for the District of New Jersey.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Contract Rehabilitation Therapy Providers Agree to Pay $8.4 Million to Resolve False Claims Act Allegations Relating to Provision of Medically Unnecessary Therapy ServicesRead the Press Release
NEWARK, N.J. – A contract rehabilitation therapy provider will pay $8.4 million to resolve allegations that it violated the False Claims Act (FCA) by knowingly causing 12 skilled nursing facilities (SNFs) in New York and New Jersey to submit false claims to Medicare for services that were not reasonable, necessary, or skilled, Acting U.S. Attorney Rachael A. Honig announced today.
Select Medical Corporation and Encore GC Acquisition LLL have agreed to the settlement to resolve allegations that Select Medical Rehabilitation Services Inc. (SMRS) violated the FCA. Select Medical Corporation was the prior parent company of SMRS, while Encore GC Acquisition is the successor-in-interest to SMR
“Skilled nursing facility residents and their families must be assured that the care and therapy that residents receive is based on medical need, not greed,” Acting U.S. Attorney Honig said. “We must also protect the taxpayers by ensuring that Medicare pays only for appropriate services performed for legitimate medical purposes. We will hold all health care providers who violate the False Claims Act responsible for their actions.”
“Today’s settlement reflects our commitment to protect patients and taxpayers by ensuring that the care provided to Medicare beneficiaries is dictated by their individual clinical needs and not by a provider’s financial interests,” Acting Assistant Attorney General Brian M. Boynton of the Department of Justice’s Civil Division said. “Contract rehabilitation therapy companies, like other health care providers, will be held accountable if they knowingly provide patients with unnecessary services that waste taxpayer dollars.”
“Sticking taxpayers with a hefty bill for unnecessary health care services will never be tolerated,” Special Agent in Charge Scott J. Lampert of the Health and Human Services, Office of the Inspector General (HHS-OIG) said. “Working closely with our law enforcement partners, we will tirelessly pursue unscrupulous health care companies to protect patients and federal health care programs.”
According to documents filed in this case and the contentions of the United States contained in the settlement agreement:
From Jan. 1, 2010, to March 31, 2016, SMRS contracted with 12 SNFs in New York and New Jersey to provide rehabilitation therapy services to patients of the nursing homes. The United States contends that SMRS’ profit-driven corporate policies and practices encouraged and resulted in the provision of medically unnecessary, unreasonable, and unskilled therapy services being provided to patients irrespective of the individual clinical needs of the patients.
The civil settlement includes the resolution of claims brought under the qui tam, or whistleblower, provisions of the FCA by Melissa Vail, a former SMRS employee. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery.
The resolution obtained in this matter was the result of a coordinated effort between the U.S. Attorney’s Office for the District of New Jersey and the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, with assistance from HHS-OIG and the FBI Newark Field Office.
The government is represented by Assistant U.S. Attorney Marihug P. Cedeño of the U.S. Attorney’s Office’s Opioid Abuse Prevention and Enforcement Unit in Newark and Trial Attorney Yolonda Campbell of the Civil Division, Commercial Litigation Branch, Fraud Section.
Tips and complaints about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The claims resolved by the settlement are allegations only and there has been no determination of liability.
The qui tam case is captioned U.S. ex rel. Doe v. Select Medical Corporation et al., No. 2:16-cv-03569 (D.N.J.).
Caribou Man Pleads Guilty to Federal Drug ChargeRead the Press Release
BANGOR, Maine: A Caribou man pleaded guilty in federal court yesterday to conspiring to distribute and possess with intent to distribute methamphetamine, Acting U.S. Attorney Donald E. Clark announced.
According to court records, between approximately July 2018 and May 2019, members of the conspiracy obtained methamphetamine in western and southern states from sources in Mexico. Greg Libby, 43, and his co-conspirators then distributed the drugs in Aroostook County and other parts of central and northern Maine.
Libby faces between 10 years and life in prison and a fine of up to $10 million. He also faces between five years and a lifetime of supervised release. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The U.S. Drug Enforcement Administration, Homeland Security Investigations and the Maine Drug Enforcement Agency investigated this case with the assistance of multiple state and local law enforcement agencies.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Caretaker of Senior Couple Charged with Stealing Hundreds of Thousand from Couple’s Bank AccountsRead the Press Release
Miami, Florida – A federal indictment unsealed yesterday in the Southern District of Florida charges the caretaker of two seniors with accessing to their bank accounts to steal nearly $300,000.
The indictment alleges that from 2016 to 2019, Sherri Lynn Smith worked as a caretaker for an elderly couple in Broward County. As part of her duties, Smith had access to the victims’ bank accounts to assist them with paying their monthly bills. Smith used her access to the victims’ bank accounts to embezzle approximately $300,000 out of the victims’ accounts without their knowledge or consent, according to the indictment. She accomplished this by writing and forging the victim’s signature on a number of checks made payable to herself, her family members, and her creditors; initiating Zelle electronic money transfers from the victims’ accounts to her own bank account; and making electronic payments from the victims’ accounts to her and her husband’s numerous credit card accounts, it is alleged.
The indictment returned by a federal grand jury on June 8, 2021, charges Smith with 16 counts of bank fraud and 5 counts of aggravated identity theft.
Smith made her initial federal court appearance today before U.S. Magistrate Judge Bruce E. Reinhart, who sits in West Palm Beach. If convicted, the maximum prison sentences on each bank fraud count is 30 years. The maximum sentence on each aggravated identity fraud charge is two years. The case is assigned to U.S. District Judge Aileen Cannon, who sits in Ft. Pierce.
Juan Antonio Gonzalez, Acting United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, FBI, Miami Field Office, made the announcement.
FBI Miami investigated the case. Assistant U.S. Attorney Stacey Bergstrom. Assistant U.S. Attorney Mitchell Hyman is handling asset forfeiture.
An indictment is merely a charging document. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Combatting elder abuse and financial fraud targeted at seniors is a key priority of the Department of Justice. The mission of the Department’s Elder Justice Initiative is to support and coordinate the Department’s enforcement and programmatic efforts to combat elder abuse, neglect and financial fraud and scams that target our nation’s seniors. To learn more visit https://www.justice.gov/elderjustice. The public is encouraged to report victimization and suspected fraud schemes by calling the National Elder Fraud Hotline at 1-833-FRAUD 11 (1-833-372-8311).
You may find related court documents and information 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-14023.
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Buffalo Sex Offender Sentenced to 24 Years for Child PornographyRead the Press Release
SPRINGFIELD, Mo. – A Buffalo, Missouri, man who is a registered sex offender has been sentenced in federal court for receiving and distributing child pornography.
Eddie Feck, 45, was sentenced by U.S. District Judge Roseann A. Ketchmark on Thursday, July 1, to 24 years in federal prison without parole. The court also ordered Feck to spend the rest of his life on supervised release following incarceration.
On Feb. 11, 2021, Feck pleaded guilty to receiving and distributing child pornography. Feck has a prior conviction for sodomizing an 11-year-old child (for which he served the entirety of his sentence because he refused to participate in sexual offender treatment), as well as an extensive criminal history.
The investigation began when a Missouri State Highway Patrol trooper received a Cybertipline Report from the National Center for Missing and Exploited Children on Jan. 13, 2020. That report was generated after Feck uploaded five images of child pornography to BingImage.
Law enforcement officers identified Feck as the BingImage account holder and executed a search warrant at Feck’s residence on Feb. 11, 2020. Upon arrival, the investigators located Feck’s computer, which was in the process of downloading suspected child pornography from the internet. Investigators found approximately 35 images of child pornography on Feck’s digital storage devices.
Feck confessed that he employed a variety of programs to access and view child pornography.
This case was prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the Missouri State Highway Patrol.
Project Safe Childhood
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 . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Brothers Convicted of Heroin DistributionRead the Press Release
Louisville, KY – A federal jury convicted a pair of Louisville-based brothers, Eric and Marcus Bennett, this week of conspiracy to possess with intent to distribute heroin. Eric Bennett, age 43, and Marcus Bennett, age 44, were convicted of conspiring to distribute more than 100 grams of heroin. Eric Bennett was also convicted on charges of possessing a firearm in furtherance of a drug trafficking crime and being a felon in possession of a firearm.
According to court documents and evidence presented at trial, the defendants each sold heroin to a confidential source between November 2016 and March 2017. Eric Bennett was arrested in February 2017 after taking evasive maneuvers to evade law enforcement surveillance, and tossing two parcels of heroin out the car window in a residential neighborhood. Federal agents backtracked on foot over the route Bennett had taken and recovered the heroin in a driveway and the curtilage near a recycling bin. Eric Bennett was arrested at that time and found with a loaded Sig Sauer p250 pistol in the glove compartment of his car. Eric Bennett has a prior state court conviction for trafficking in a controlled substance (cocaine) and fleeing or evading police.
The defendants were both acquitted of charges related to the 2016 shooting of a United States Postal Service mail carrier who survived a gunshot wound to the face. The charges related to the shooting included conspiracy to murder a federal employee, attempted murder of a federal employee, forcible assault of a federal employee, and discharge of a firearm during a crime of violence.
Acting U.S. Attorney Michael A. Bennett of the Western District of Kentucky made the announcement.
The United States Postal Inspection Service investigated the case.
Assistant U.S. Attorney Marisa Ford presented the case at trial for the United States. Sentencing is scheduled before Senior Judge Thomas B. Russell on October 19, 2021, in the U.S. Gene Snyder Courthouse in Louisville, Kentucky, at 10:00 a.m.
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Broome County Man Pleads Guilty to Attempted Enticement and Coercion of a MinorRead the Press Release
SYRACUSE, NEW YORK – Richard C. O’Hara, age 32, of Broome County pled guilty today to attempting to coerce and entice a minor to engage in sexual conduct with him. The announcement was made by Acting United States Attorney Antoinette T. Bacon and Thomas F. Relford, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
As part of his guilty plea, O’Hara admitted that in July and August 2020 he exchanged multiple sexually explicit messages online with an undercover officer posing a 10-year-old girl, in an attempt to entice the child into having sex with him. O’Hara also admitted that on August 5, 2020 he traveled to a house where he believed the child lived, intending to engage in sex acts with her that day.
O’Hara faces at least 10 years and up to life in prison, a fine of up to $250,000, and a term of post-imprisonment supervised release of at least 5 years and up to life. Sentencing is scheduled for November 3, 2021 in Binghamton, New York before Senior United States District Judge Thomas J. McAvoy. A defendant’s sentence is imposed by a judge based on the statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors. O’Hara also will have to register as a sex offender upon his release from prison.
O’Hara’s case was investigated by Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Michael D. Gadarian as a part of Project Safe Childhood. Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
Brockton Business Owner Sentenced for Tax Fraud and Workers' Compensation Insurance FraudRead the Press Release
BOSTON – The owner of a Brockton construction company and related businesses was sentenced yesterday on charges that he paid employees under-the-table payroll wages that defrauded the government, workers compensation insurance carriers and the state unemployment benefits program of more than $1.6 million.
Richard McLaughlin, 61, of Quincy, was sentenced by U.S. Senior District Court Judge Douglas P. Woodlock to three years of supervised release and was ordered to pay restitution of approximately $747,781 to the IRS, $207,572 to workers’ compensation insurance carriers and $731,188 to the Massachusetts Department of Unemployment Assistance. McLaughlin was also ordered to forfeit $207,572 to the federal government. In December 2020, McLaughlin pleaded guilty to five counts of filing false tax returns and three counts of mail fraud.
During tax years 2005 through 2010, McLaughlin paid wages in cash to employees under-the-table totaling more than $2.9 million, for which McLaughlin did not collect, account for or pay over to the IRS income and FICA taxes as required by law. The cash payments to employees were funded through off-the-books accounts McLaughlin created and used solely to pay the under-table wages. By failing to pay the required taxes on the $2.9 million, McLaughlin evaded nearly $750,000 in federal taxes.
McLaughlin was also required by state law to carry workers’ compensation insurance. The insurance premiums were based on an audit of his payroll records to determine actual wages paid. By failing to disclose the wages paid under-the-table, McLaughlin underreported the wages for which he owed more than $200,000 in insurance premiums.
In addition, McLaughlin instructed employees to apply for unemployment benefits while they were working for him. When McLaughlin falsely verified that employees had been laid off and concealed the fact that he was paying them wages, those employees received more than $725,000 in fraudulent unemployment benefits.
Acting United States Attorney Nathaniel R. Mendell; Ramsey E. Covington, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Anthony DiPaolo, Chief of Investigations of the Insurance Fraud Bureau of Massachusetts made the announcement. Assistant U.S. Attorney Victor A. Wild of Mendell’s Securities, Financial & Cyber Fraud Unit prosecuted the case.
Atlanta Area Man Convicted of Armed Methamphetamine TraffickingRead the Press Release
LONDON, Ky. – An Ellenwood, Georgia man was convicted late Thursday, by a federal jury sitting in London, of conspiracy to distribute methamphetamine and possession of a firearm in furtherance of drug trafficking.
Following a four-day trial before United States District Judge Robert E. Wier, the jury convicted 36-year-old Quinton Troy Hall of engaging in a conspiracy to distribute methamphetamine and possession of a firearm in furtherance of drug trafficking. The jury also found that Hall had a previous, final conviction for a serious violent felony, specifically Aggravated Assault.
The evidence at trial established that Hall traveled from Atlanta into Corbin, Kentucky to distribute methamphetamine. Hall supplied several different methamphetamine dealers in Whitley, Knox, and Laurel Counties. Records established Hall moved drug proceeds through Western Union wire transfers, Green Dot cards, and Money Gram. Four eyewitnesses testified that Hall was armed when dealing in the Eastern District of Kentucky. According to testimony at trial, Hall engaged in violent debt collection tactics, including assaulting co-conspirators with firearms. On January 24, 2020, the Henry County Sheriff’s Office Gang Suppression and Vice Unit executed a warrant at Hall’s Georgia residence. Officers seized a Sig Sauer p250, Taurus GZC 9mm, Taurus Judge pistol, Keltec subgun 2000 rifle, Aero Precision X15 rifle, and Radom Pioneer Arms Hellpup. Hall attempted to flee by climbing up into the attic.
Hall was indicted in May 2020 along with eleven co-conspirators, all of whom have been convicted. The case ultimately involved the seizure of 13 firearms, over $10,000 in U.S. Currency, and several kilograms of methamphetamine. The conspiracy involved the following convictions:
- Angelia Hammons, 47, of Corbin, was convicted of conspiracy to distribute methamphetamine on July 28, 2020.
- Larry Tyler Hammons, 25, of Corbin, was convicted of conspiracy to distribute methamphetamine on December 21, 2020.
- Glennis Reed Nantz, 49, of Woodbine, Kentucky, was convicted of conspiracy to distribute methamphetamine and possession of a firearm in furtherance of drug trafficking on December 14, 2020.
- Tramone Horne, 36, of Buffalo, New York, was convicted of conspiracy to distribute methamphetamine on December 17, 2020.
- Alexander Lebeau, 27, of London, was convicted of conspiracy to distribute methamphetamine and possession of a firearm in furtherance of a drug trafficking offense on January 26, 2021.
- Krysten Powell, 27, of Corbin, was convicted of conspiracy to distribute methamphetamine on December 9, 2020.
- Johnathon Ray Proffitt, 29, of London, was convicted of conspiracy to distribute methamphetamine and felon in possession of a firearm on December 2, 2020.
- Dustin Walters, 37, of Woodbine, Kentucky, was convicted of conspiracy to distribute methamphetamine on December 14, 2020.
- Larry Elkins, 39, of Calhoun, Georgia, was convicted of conspiracy to distribute methamphetamine.
- Jennifer Folgman, 41, of Corbin, was convicted of conspiracy to distribute methamphetamine on July 6, 2020.
- Glennis Kody Nantz, 26, of Corbin, was convicted of conspiracy to distribute methamphetamine in a related indictment on May 28, 2020.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky; Robert S. Morrow, Special Agent in Charge, ATF Louisville Field Division; and Chief Rusty Hedrick, Corbin Police Department, jointly made the announcement.
The investigation was conducted by the ATF and Corbin Police Department, with assistance from Georgia’s Henry County Sheriff’s Office. The United States was represented in the case by Assistant U.S. Attorney Jenna E. Reed.
Hall will appear for sentencing on October 29, 2021. He faces a mandatory minimum sentence of 15 years and a maximum of life imprisonment. However, the Court must consider the U.S. Sentencing Guidelines and the applicable federal sentencing statutes before imposing its sentence.
This case was prosecuted as part of the Department of Justice’s “Project Safe Neighborhoods” Program (PSN), which is a nationwide, crime reduction strategy aimed at decreasing violent crime in communities. It involves a comprehensive approach to public safety — one that includes investigating and prosecuting crimes, along with prevention and reentry efforts. In the Eastern District of Kentucky, Acting U.S. Attorney Shier coordinates PSN efforts in cooperation with various federal, state, and local law enforcement.
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36th Street Bang Squad Member Sentenced for Gang-Related Murders and ShootingsRead the Press Release
NEWPORT NEWS, Va. – A Newport News man was sentenced yesterday to four life sentences in prison for his role in a gang-related racketeering conspiracy, murder, and attempted murder.
According to court documents, Xavier Greene, 26, along with members of the 36th Street Bang Squad gang, were involved in multiple violent crimes in Hampton and Newport News between March and August 2015. On March 8, 2015, Greene and two other gang members shot and killed Dwayne Parker, 18, in Newport News. On April 6, 2015, Greene and three other members of the 36th Street Bang Squad drew firearms and began shooting at people outside a residence in Newport News. Two teenagers were killed during this incident.
On August 1, 2015, Greene, who was armed with a firearm, and two other people ran to a convenience store in Newport News to help gang members who were being jumped by a rival gang. When Greene did not fire at the rival gang, another gang member grabbed the gun and fired eight rounds at the store. A customer was grazed by bullets striking the storefront. Less than a week later, Greene and three other individuals stole more than 30 firearms from a federally licensed firearms dealer outside Richmond. Greene distributed some of the firearms to members of the gang immediately upon returning to the Tidewater area.
On December 10, 2019, after a seven-week jury trial, Greene was convicted on eight counts of crimes in aid of racketeering, including racketeering conspiracy, three murders, using a firearm in each murder, and an attempted murder.
Co-defendant Martin L. Hunt, 24, of Newport News, was sentenced to multiple life sentences for his role in the conspiracy on May 6. Co-defendant Deshaun Richardson, 25, of Newport News, was sentenced to 17 years for his role in the conspiracy on June 5. Co-defendant Eric Nixon, 25, of Hampton, was sentenced to 30 years in prison for his role in the conspiracy on June 28.
Three additional co-defendants were convicted by a federal jury in the same trial for their roles in the racketeering conspiracy. Those co-defendants currently are scheduled for sentencing on various dates through August 2.
Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; Charlie J. Patterson, Special Agent in Charge of the ATF’s Washington Field Division; Steve R. Drew, Chief of Newport News Police; Kenneth Ferguson, Interim Chief of Hampton Police; and Anton A. Bell, Commonwealth Attorney for the City of Hampton, made the announcement after sentencing by Chief U.S. District Judge Mark S. Davis.
Assistant U.S. Attorneys Brian Samuels and Howard J. Zlotnick and Special Assistant U.S. Attorney Amy E. Cross from the Eastern District of Virginia, and Trial Attorney Chad McHenry from the Justice Department’s Organized Crime and Gang Section, 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. 4:17-cr-52.
Thursday 1 July 2021
Woonsocket Man Sentenced for Possessing 50,000 Images of Child PornographyRead the Press Release
PROVIDENCE – A Woonsocket man found by members of the Rhode Island State Police Internet Crimes Against Children (ICAC) Task Force to be in possession of more than 50,000 images and 200 videos of child pornography was sentenced today to three-and-a-half years in federal prison.
In November 2018, members of the ICAC Task Force conducted an online child exploitation investigation involving the use of peer-to-peer networks. Detectives observed an IP address they later determined belonged to Jason P. Muschiano, 39, sharing files of child pornography.
On February 14, 2019, members of the task force executed a court-authorized search of Muschiano’s residence. During the search, Muschiano admitted to law enforcement that he had previously downloaded and viewed child pornography depicting toddlers ages three, four, and five. A forensic audit of digital storage devices seized from Muschiano’s residence revealed more than 50,000 images and 200 videos depicting child pornography.
On February 21, 2020, Muschiano pled guilty in U.S. District Court to possession of child pornography. He was sentenced today by U.S. District Court Judge Mary S. McElroy to 42 months in federal prison to be followed by five years of federal supervised release.
Muschiano’s sentence is announced by Acting United States Attorney Richard B. Myrus.
This Project Safe Childhood case, investigated by members of the ICAC Task Force, was prosecuted by Assistant U.S. Attorney Dulce Donovan.
The Rhode Island ICAC Task Force is comprised of members of the Rhode Island State Police Computer Crimes Unit, detectives from the Warwick, Cranston, Newport, East Providence, Pawtucket, Bristol, and Portsmouth Police Departments, and agents from Homeland Security Investigations.
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Westford Man Sentenced for Embezzlement and Tax CrimesRead the Press Release
BOSTON – The former CEO and co-founder of a Boston-based cell phone music streaming service was sentenced Tuesday, June 29 in connection with embezzling hundreds of thousands of dollars from his employer and filing false tax returns.
David John, who recently changed his name from David Fondots, 56, was sentenced by U.S. District Court Judge Richard G. Stearns to 18 months in prison and three years of supervised release. John was also ordered to pay restitution in the amount of $187,603 to the Internal Revenue Service, as well as restitution to the victims in an amount to be determined at a later date. In February 2020, John pleaded guilty to one count of wire fraud and one count of filing false tax returns.
John misappropriated company funds which he used for his personal benefit. From 2014 to 2016, John caused his company to pay significant sums of money directly to himself, to a family member and to companies controlled by a family member. John used the embezzled funds to pay personal expenses for himself and his family, including car payments, legal fees and travel, among other things.
Acting United States Attorney Nathaniel R. Mendell; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Office; and Ramsey E. Covington, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston made the announcement today. Assistant U.S. Attorneys Sara Miron Bloom of Mendell’s Securities, Financial & Cyber Fraud Unit and Jordi de Llano, Deputy Chief of the Securities, Financial & Cyber Fraud Unit, prosecuted the case.
Union County Mail Carrier Charged with Making False Statements to Obtain Federal Workers’ Compensation BenefitsRead the Press Release
NEWARK, N.J. – A Union County, New Jersey, U.S. Postal Service (USPS) mail carrier made her initial court appearance today for making false statements to obtain federal workers’ compensation benefits, Acting U.S. Attorney Rachael Honig announced.
Monique Gee, 38, of Hillside, New Jersey, is charged by complaint with one count of knowingly and willfully falsifying, concealing, and covering up a material fact, and making a false, fictitious, and fraudulent statement and representation in connection with the application for and receipt of federal workers’ compensation benefits. Gee made her initial appearance today by videoconference before U.S. Magistrate Judge Leda Dunn Wettre, and was released on $150,000 unsecured bond.
According to documents filed in this case and statements made in court:
Gee worked as a mail carrier for the USPS in Middletown, New Jersey. On June 1, 2016, Gee signed and certified a form in which she alleged she sustained a knee sprain while performing her duties on that date. On subsequent forms, Gee certified that she did not receive earnings from employment outside of her federal job. However, an investigation revealed that Gee operated a business from which she received substantial income. During the investigation, an undercover law enforcement officer placed an order from Gee’s business and made a payment for the order to Gee via a mobile payment platform. As a result of her false representations, Gee received more than $150,000 in federal workers’ compensation benefits to which she was not entitled.
The count of making false statements to obtain federal workers’ compensation benefits carries a maximum penalty of five years in prison and a $250,000 fine.
Acting U.S. Attorney Honig credited members of the USPS Office of Inspector General, under the direction of Special Agent in Charge Matthew Modafferi, Northeast Area Field Office, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Mark J. Pesce of the U.S. Attorney’s Office’s OCDETF/Narcotics Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Tulsa Man Sentenced for Coercing a Minor to Engage in ProstitutionRead the Press Release
A Tulsa man was sentenced today in federal court for coercing a 16-year-old to engage in sexual acts as part of a sex trafficking ring, announced Acting U.S. Attorney Clint Johnson.
Dominique Laron Morgan, 25, was sentenced to 25 years in federal prison followed by 25 years supervised release for possessing a firearm in furtherance of a drug trafficking crime and for coercion and enticement of a minor to engage in sexual activity.
In a blind plea, Morgan admitted that from April 10 through April 20, 2020, he used his phone and internet to knowingly entice the minor victim to engage in prostitution. He also admitted that he knowingly possessed a firearm to further his marijuana distribution activities.
Also charged in the sex trafficking case were Rontaysha Leann Cox, 27, of Wichita, Kansas, and Treveon Marquise Cato, 23, of Tulsa. In March, Cox pleaded guilty to the sex trafficking of children, and Cato pleaded guilty to possessing a firearm in furtherance of a drug trafficking crime.
On April 17, 2020, officers with the Tulsa Police Department’s Human Trafficking Vice Unit discovered advertisements for the teenager on a website promoting prostitution and soliciting sex acts in exchange for money. An officer, acting as a john, contacted the victim using the phone number listed and arranged to meet her on April 20. During the appointment, the officer revealed his identity, and the minor victim was taken into protective custody.
Officers learned that Rontaysha Cox had rented the room, and that Cox and two other men left the hotel room in a silver sedan shortly before the scheduled appointment. Cox, Cato, and Morgan were later stopped and ordered out of the sedan. A semi-automatic pistol could be seen from outside of the vehicle wedged between the driver’s seat and center console. Officers subsequently arrested the three, and during a search of the vehicle and the occupants, officers recovered marijuana, phones and the firearm.
An analysis of the phones found conversations between Cox, Morgan and the victim discussing prostitution as well as photos of the victim that constituted child pornography. Also found, were conversations between Morgan and the victim where she told him she was 16 years old.
The Tulsa Police Department, Immigration and Customs Enforcement’s Homeland Security Investigations, and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant U.S. Attorney Edward Snow is prosecuting the case.
Three Arrested for Orchestrating Multimillion-Dollar “Silver Lease” Investment FraudRead the Press Release
AUDREY STRAUSS, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging ROBERT JEFFREY JOHNSON, a/k/a “Jeff Johnson,” ROSS BALDWIN, and KATHLEEN HOOK with conspiring to commit wire fraud and wire fraud for defrauding at least approximately 60 investors of at least approximately $8 million in connection with a precious metals leasing program known as the “Silver Lease Program.” JOHNSON and BALDWIN were further charged with conspiring to commit wire fraud and wire fraud for defrauding insurance companies by making misrepresentations to these insurance companies in connection with obtaining insurance for the purported silver. BALDWIN was also charged with making false statements to federal officials in connection with lying to officials of the Commodity Futures Trading Commission (“CFTC”) during a sworn deposition. JOHNSON and HOOK were arrested this morning in Palm Beach, Florida, and were presented today in the United States District Court for the Southern District of Florida. BALDWIN was arrested this morning in Albany, New York, and was presented today in the United States District Court for the Northern District of New York.
Manhattan U.S. Attorney Audrey Strauss said: “Robert Jeffrey Johnson, Ross Baldwin, and Kathleen Hook allegedly lied to investors in order to get them to invest millions of dollars in the ‘Silver Lease Program.’ As alleged, these investors were told that they were purchasing silver, that their silver was being securely stored for them at a high-tech storage facility in Florida, and that they would earn a guaranteed monthly dividend payment. In reality, the defendants’ promises were not worth their weight in silver – or anything else for that matter. Instead of using investors’ money to purchase silver on their behalf, the defendants allegedly misappropriated that money to pay for their own lavish personal expenses and to fund unrelated business ventures.”
As alleged in the Indictment[1] unsealed today in Manhattan federal court:
The “Silver Lease Program”
From in or about 2014 through in or about January 2021, JOHNSON, BALDWIN, and HOOK conspired to defraud investors in the “Silver Lease Program.” Investors could participate in the Silver Lease Program by either (1) paying funds to purchase silver that the investor then leased back to the operators of the program in return for a fixed monthly dividend payment or (2) providing silver the investor already owned in order to lease that silver to the operators of the program in return for a fixed monthly dividend payment.
While investors were told that they owned a particular quantity of silver that was being stored for them at a specific secure, locked storage facility in Florida (the “Florida Storage Facility”), in reality the purported silver was not being stored at the Florida Storage Facility. The entity that was supposed to be storing the investors’ silver, Precious Commodities Inc. (“PCI”), which was functionally controlled by JOHNSON, did not even have any storage units at the Florida Storage Facility. In order to induce investors to invest in the Silver Lease Program, BALDWIN, through his company National Coin Broker (“NCB”) told the investors various other lies, both orally and through websites and brochures that he prepared in order to solicit investors to participate in the program.
Investors in the Silver Lease Program provided millions of dollars in order to purchase silver through the Silver Lease Program. Unbeknownst to these investors, a substantial portion of their funds were misappropriated to pay for, among other things, personal expenses of JOHNSON, JOHNSON’s wife, and HOOK, as well as to fund other, unrelated business ventures that JOHNSON, JOHNSON’s wife, and other associates of JOHNSON were engaged in.
Misrepresentations to Insurers
In order to induce investors to invest in the Silver Lease Program and so that they would feel secure in their investment, the operators of the Silver Lease Program touted the fact that the investors’ silver would be fully insured. Investors were ultimately provided with a certificate of insurance showing that PCI held an insurance policy with respect to the investor’s silver. JOHNSON and BALDWIN caused material misrepresentations to be made to insurance brokers in connection with procuring these insurance policies. These misrepresentations included lying about BALDWIN’s role with respect to PCI and lying by claiming that the silver the insurers were insuring would be stored at the Florida Storage Facility.
Dividend Payments Cease and Investors Do Not Receive the Return of their Silver or Funds
Beginning in approximately the Spring of 2019, investors largely ceased receiving their monthly dividend payments. Many investors eventually demanded the return of their silver and/or the funds they had invested in the Silver Lease Program. Investors primarily contacted BALDWIN in their efforts to receive the return of their silver and/or their funds, and BALDWIN frequently forwarded these communications from disgruntled investors to JOHNSON.
Despite the repeated attempts by numerous Silver Lease Program investors to obtain the return of their silver and/or their money, these investors never received the return of either.
BALDWIN’s False Statements to the CFTC
In October 2018, BALDWIN participated in a sworn deposition with the CFTC that occurred in Manhattan, New York. During that deposition, BALDWIN made numerous material false statements, including by lying about the role he played in obtaining insurance for PCI and by lying about visiting a storage vault at the Florida Storage Facility with an associate of JOHNSON and observing silver, when in reality this associate of JOHNSON’s never had any storage units at the Florida Storage Facility and did not otherwise have access to any storage units at the Florida Storage Facility.
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JOHNSON, 55, of West Palm Beach, Florida, is charged with two counts of conspiracy to commit wire fraud and two counts of wire fraud, which each carry, respectively, a maximum sentence of 20 years in prison. HOOK, 59, of West Palm Beach, Florida, is charged with one count of conspiracy to commit wire fraud and one count of wire fraud, which each carry, respectively, a maximum sentence of 20 years in prison. BALDWIN, 60, of Miami, Florida, is charged with two counts of conspiracy to commit wire fraud and two counts of wire fraud, which each carry, respectively, a maximum of 20 years in prison, and is also charged with one count of making false statements to federal officials, which carries a maximum sentence of 5 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Ms. Strauss praised the investigative work of the FBI. Ms. Strauss also thanked the CFTC, which has filed a civil enforcement action against the defendants.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Noah Solowiejczyk is in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Three Appear in Federal Court for Gun CrimesRead the Press Release
CHARLESTON, W.Va. – Three individuals appeared in federal court today for gun crimes.
Eddie Lee Conley, 45, of Logan County, was sentenced to 46 months in federal prison for being a felon in possession of a firearm. According to court documents, Conley admitted that during the early morning hours of May 15, 2020, he possessed a .38 caliber Cobra derringer-style handgun in his motel room at the Roadway Inn in Chapmanville, West Virginia. Conley was prohibited from possessing firearms due to a 2016 conviction for conspiracy to operate a clandestine drug laboratory in Logan County Circuit Court. Conley further admitted that he also possessed a different .38 caliber handgun in Madison, West Virginia, on January 29, 2020. The West Virginia State Police and Madison Police Department conducted the investigation with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Assistant United States Attorney Nowles Heinrich is handling the prosecution.
In another case, John Leach, 55, formerly of St. Albans, was sentenced to 37 months in prison for being a felon in possession of a firearm. According to court documents, on November 25, 2018, Leach was driving an improperly registered truck and was pulled over by the West Virginia State Police. In the truck, the Trooper found a loaded .25 caliber pistol. Leach was prohibited from possessing firearms due to multiple, prior felony convictions, including a 2006 conviction for malicious wounding in Kanawha County Circuit Court. The West Virginia State Police and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) conducted the investigation. Assistant United States Attorney Steve Loew handled the prosecution.
Also, Kayla Slater, 29, of Charleston, pleaded guilty to possession of a firearm by a prohibited person. According to court documents, on August 27, 2020, officers with the Charleston Police Department attempted to conduct a traffic stop on a vehicle in which Slater was a passenger. Officers knew that Slater had several outstanding municipal arrest warrants. The driver of the vehicle failed to stop and sped away from the scene. Officers later located Slater walking on Beech Avenue in Charleston and could see a Beretta Px4 Storm 9mm semi-automatic pistol in plain view in Slater’s handbag. Slater admitted to the officers that the gun was hers and that she was addicted to heroin. Slater is prohibited from possessing firearms due to being an habitual user of a controlled substance. Slater faces up to 10 years in prison when she is sentenced on October 14, 2021. The Metropolitan Drug Enforcement Network Team (MDENT) conducted the investigation. Assistant United States Attorney Negar Kordestani is handling the prosecution.
Acting United States Attorney Lisa G. Johnston made the announcement and commended the investigative work of the West Virginia State Police, the Madison Police Department, the Metropolitan Drug Enforcement Network Team (MDENT), and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
United States District Judge Irene C. Berger presided over the hearings.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:20-cr-00172 (Leach), 2:21-cr-00035 (Conley) and 2:21-cr-00079 (Slater).
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Texan convicted of attempting to export firearms, magazines and ammunitionRead the Press Release
LAREDO, Texas – A Laredo federal jury has convicted a 64-year-old man for attempting to export firearms, firearm magazines and thousands of rounds of ammunition to Mexico, announced Acting U.S. Attorney Jennifer B. Lowery.
The jury deliberated for less than six hours before convicting Jose Rafael Vasquez, Dallas, following a two-day trial.
On Oct. 15, 2020, Vasquez attempted to exit the United States into Mexico through the Laredo Port of Entry. The jury heard that he was driving a tan 2007 Chevrolet Suburban. During initial inspection, law enforcement discovered suspicious bundles zip-tied to the undercarriage of the vehicle. They appeared to contain ammunition.
A further inspection revealed three AK-47 rifles, eight semi-automatic handguns of various calibers, 16 handgun magazines and approximately 4,714 rounds of 7.62 mm ammunition hidden inside his vehicle. Several of the handguns had decorative handles. The jury heard testimony that these weapons were expensive and highly prized by senior members of criminal organizations in Mexico.
The weapons and ammunition had an approximate street value of $25,000.
The defense attempted to convince the jury Vasquez did not know about the items inside the vehicle. They did not believe his claims and found him guilty as charged.
U.S. District Judge Diana Saldana presided over trial and will set sentencing for a later date. At that time, Vasquez faces up to 10 years in federal prison and a possible $250,000 maximum fine.
Previously released on bond, Vasquez was taken into custody following the sentencing today where he will remain pending sentencing.
Homeland Security Investigations and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation along with Customs and Border Protection. Assistant U.S. Attorneys Francisco J. Rodriguez and David Fawcett are prosecuting the case.
Ten Defendants in Synthetic Identity Fraud Ring Convicted of Bank Fraud, Wire Fraud, and Related ChargesRead the Press Release
RALEIGH, N.C. – Eight defendants pleaded guilty today to offenses contained in a 50-count, 2nd Superseding Indictment charging various forms of Bank Fraud, Wire Fraud, Conspiracy to Commit Bank Fraud, Making False Statements to a Bank on Loan, Aggravated Identity Theft, and Perjury. Two additional defendants previously pleaded guilty in connection with the same scheme.
The indictment charges that defendant Michael Griffin, operating from his business location in Raleigh and home in Knightdale, accepted fees from clients for alleged credit repair services. The indictment alleges that, in reality, Griffin was creating fictitious credit profiles and fraudulently altering client credit data through the use of fictitious police reports.
The indictment further charges that various defendants, many of whom were family, conspired with Griffin to defraud Synchrony Bank, a Lowe’s credit card provider, by opening credit accounts in the name of fraudulent identities, cashing out the accounts through prepaid card purchases, and then defaulting on the credit accounts. The indictment also charges various defendants with similar frauds against other banks, including Capital One and Discover.
Regina Griffin (Michael Griffin’s sister), 49, of Raleigh, North Carolina, pled guilty to Count 29 of the 2nd Superseding Indictment, which charged False Statement to Influence a Bank on a Loan, in violation of Title 18, United States Code, Section 1014. The offense occurred between February 11, 2019 and March 19, 2019, and involved Alcova Mortgage, LLC.
Angela Griffin (Michael Griffin’s wife), 53, of Knightdale, North Carolina, pled guilty to Count 13 of the 2nd Superseding Indictment, which charged Bank Fraud and Aiding and Abetting, in violation of Title 18, United States Code, Sections 1344 and 2. The offense occurred between November 21, 2017 and December 21, 2017 and involved Synchrony Bank.
Creshun Alexandria Griffin (Michael Griffin’s daughter), 27, also of Knightdale, pled guilty to Count 16 of the 2nd Superseding Indictment, which charged Bank Fraud and Aiding and Abetting, in violation of Title 18, United States Code, Sections 1344 and 2. The offense occurred between August 11, 2017 and December 31, 2018, and involved Capital One Bank.
Sharon Annita Edmond (Michael Griffin’s sister), 57, of Raleigh, pled guilty to Count 25 of the 2nd Superseding Indictment, which charged Wire Fraud and Aiding and Abetting, in violation of Title 18, United States Code, Sections 1343 and 2. The offense occurred on or about April 16, 2018 and involved Strategic Funding Partners, doing business as Merchant Cash Group.
Katina Griffin Perry (Michael Griffin’s sister), 48, of Raleigh, pled guilty to Count 27 of the 2nd Superseding Indictment, which charged Wire Fraud, in violation of Title 18, United States Code, Section 1343. The offense occurred between August 21, 2017 and September 19, 2017 and involved Kia Motor Finance.
Harvey Griffin (Michael Griffin’s brother) 47, of Raleigh, pled guilty to Count 11 of the 2nd Superseding Indictment, which charged Bank Fraud and Aiding and Abetting, in violation of Title 18, United States Code, Sections 1344 and 2. The offense occurred between October of 2017 and January of 2018 and involved Synchrony Bank.
Melvin Griffin (Michael Griffin’s brother), 45, of Knightdale, pled guilty to Count 18 of the 2nd Superseding Indictment, which charged Bank Fraud and Aiding and Abetting, in violation of Title 18, United States Code, Sections 1344 and 2. The offense occurred between October 5, 2017 and August 31, 2018, and involved Discover Bank.
Jasmine Mariah Davis, 29, of Lakeland, Florida, pled guilty to Count 12 of the 2nd Superseding Indictment, which charged Bank Fraud and Aiding and Abetting, in violation of Title 18, United States Code, Sections 1344 and 2. The offense occurred between October of 2017 and February of 2018 and involved Synchrony Bank.
Acting United States Attorney G. Norman Acker, III stated, “The charges in this case largely involve the use of a false Social Security Number to obtain money, credit, or other valuables, under a false identity. Synthetic identity frauds such as these often involve the use of what are referred to as “CPNs” or alternate “credit profile numbers.” These are nothing but fancy sounding terms for Social Security Numbers that do not belong to you. The public needs to know that when you place a fraudulent Social Security Number or CPN on a bank credit application or loan document – you are committing a fraud, and you could face federal prison time for it.”
The maximum punishment for committing Bank Fraud and Conspiracy to Commit Bank Fraud, violations of Title 18, United States Code, Sections 1344 and 1349, is not more than 30 years in prison. The maximum punishment for Wire Fraud, a violation of Title 18, United States Code, Section 1343, is not more than 20 years imprisonment. The maximum punishment for Making a False Statement to a Bank on a Loan is not more than 30 years in prison.
The sentencings for each of these defendants are not yet scheduled, but will occur as early as October 2021.
Shawn Allen Farmer, 52, of Cary, North Carolina, also named in the Second Superseding Indictment, previously pled guilty to Bank Fraud and Aiding and Abetting, in violation of Title 18, United States Code, Sections 1344 and 2, and Making False Claims, in violation of Title 18, United States Code, Section 287. Farmer was sentenced on May 27, 2021 to 15 months in prison, and ordered to pay $42,783 in restitution.
Tyrone Edmonds, 47 of Weldon, North Carolina, also named in the Second Superseding Indictment, previously pled guilty on February 8, 2021 to Count 6, which charged Bank Fraud and Aiding and Abetting, in violation of Title 18, United States Code, Sections 1344 and 2. The offense occurred between July of 2017 and August of 2018, and involved Synchrony Bank. The sentencing is not yet scheduled but will also occur as early as October of 2021.
Charges against Michael Griffin, Jasper Deonta Goodman, and Coscina Brooks, also named in the Second Superseding Indictment, remain pending. An indictment is an allegation of a crime. The defendant is presumed under the law to be innocent until proven guilty.
G. Norman Acker, III, Acting U.S. Attorney for the Eastern District of North Carolina made the announcement. The investigation was conducted by the Internal Revenue Service Criminal Investigation with the assistance of the United States Marshals Service and the United States Postal Inspection Service. Assistant United States Attorney William M. Gilmore represents the United States.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:20-CR-245-1D(2).
Tehama County Woman Pleads Guilty in Refund Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — Sabrina Raylene Toilolo, 26, of Corning, pleaded guilty today to conspiracy to commit wire fraud for her participation in a refund‑fraud scheme, Acting U.S. Attorney Phillip A. Talbert announced.
In June 2020, a federal grand jury returned a 14-count superseding indictment against her and her previously charged co-defendant Johnathon Ward, charging them with conspiracy to commit wire fraud, wire fraud, and aggravated identity theft.
According to court documents, between July 2017 and September 2019, Sabrina Toilolo, Johnathon Ward, Monica Nunes, and Talalima Toilolo conspired to defraud financial institutions using a scheme that exploited the merchant refund process used by businesses and retail establishments to refund customers for returns, reimbursements, and erroneous charges.
The defendants committed this scheme by stealing or purchasing point-of-sale (POS) terminals used by businesses to process bankcard transactions. The defendants programmed each terminal to make it appear as if it was authorized by a particular retail merchant, connected the terminals to payment processing intermediaries, and executed refund transactions even though no purchases had been made. The payment processors, falsely believing the terminals were authorized, approved the refunds and caused the merchants’ payment processors to transfer funds to the defendants’ fraudulent accounts. The defendants then drained the stolen funds from the accounts and distributed them among members of the conspiracy.
This case is the product of an investigation by the Regional Enforcement Allied Computer Team (REACT) Task Force, which includes investigators from the Santa Clara County District Attorney’s Office and the Federal Bureau of Investigation. Special Assistant U.S. Attorney Robert J. Artuz is prosecuting the case.
Sabrina Toilolo is scheduled to be sentenced by U.S. District Judge Morrison C. England Jr. on September 23, 2021. She faces a maximum statutory penalty of 20 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.
On April 2, Nunes was sentenced to 12 and a half years in prison. On February 11, Talalima Toilolo was sentenced to10 years in prison. Charges against Ward are pending. The charges are only allegations; he is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Sussex County Man Admits Fraudulently Obtaining $5.6 Million Loan Meant to Help Small Businesses During COVID-19 PandemicRead the Press Release
NEWARK, N.J. – A Sussex County, New Jersey, man today admitted fraudulently obtaining a federal Paycheck Protection Program (PPP) loan of over $5 million, Acting U.S. Attorney Rachael A. Honig announced.
Azhar Sarwar Rana, 30, of Newton, New Jersey, pleaded guilty before U.S. District Judge Esther Salas to an information charging him with one count of bank fraud and one count of money laundering. Rana was previously arrested on Dec. 12, 2020, after he booked a same-day flight to Pakistan; he was charged by complaint and made his initial appearance on Dec. 14, 2020.
According to documents filed in this case and statements made in court:
Rana submitted a fraudulent PPP loan application to a lender on behalf of a corporate entity, Azhar Sarwar Rana LLC, that purportedly invested in real estate development. The application falsified payroll and tax information and included internally inconsistent listings of the number of company employees. New Jersey Department of Labor records showed that Azhar Sarwar Rana LLC paid no wages in 2019, and the minimal wages it purportedly paid in 2020 were mostly to individuals whose submitted Social Security numbers did not correspond to their submitted names.
Based on Rana’s alleged misrepresentations, the lender approved Rana’s PPP loan application and provided Azhar Sarwar Rana LLC with approximately $5.6 million in federal COVID-19 emergency relief funds meant for distressed small businesses. Rana used the fraudulently obtained PPP loan proceeds to pay for numerous personal expenses, including to invest millions in the stock market, make a payment to a luxury car dealership, and send hundreds of thousands of dollars to accounts in Pakistan.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
The count of bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine; the count of money laundering carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain to the defendant or gross loss to the victim, whichever is greater. Sentencing is scheduled for Nov. 3, 2021.
Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; special agents of the Social Security Administration Office of the Inspector General, New York Field Division, under the direction of Special Agent in Charge John F. Grasso; and special agents of the U.S. Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Peter C. Fitzhugh in New York, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jennifer S. Kozar of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Spokane Repeat Federal Offender Convicted of Felon in Possession of a Firearm and AmmunitionRead the Press Release
Spokane – Today, Joseph H. Harrington, Acting United States Attorney for the Eastern District of Washington, announced that on June 30, 2021, a federal jury in Spokane, Washington, convicted Randy D. McReynolds (a/k/a “Randall D. McReynolds,” “Randy Del McReynolds”) of Felon in Possession of a Firearm and Ammunition in violation of 18 U.S.C. § 922(g)(1), 924(a)(2).
According to court documents, United States Probation received a tip that McReynolds was in possession of firearms inside his home. They conducted a probationary search and found two backpacks containing a 357 revolver and ammunition as well as ammunition for a 9mm pistol. During the trial, McReynolds presented evidence that the handgun and ammunition belonged to his son-in-law and that he was unaware of its presence in his home. The government challenged this evidence through recorded jail calls. The jury found that McReynolds constructively possessed the firearm and ammunition.
Acting United States Attorney Harrington said, “Prosecuting firearm-related crimes continues to be a priority here in the Eastern District of Washington. Individuals serving a term of court-ordered supervised release, like McReynolds was in this case, are subject to robust enforcement by the United States Probation Office of release conditions. The community impact of such enforcement effort keeps firearms out of the hands of convicted felons and holds them accountable for their conduct. I commend the efforts of the officers with the Probation Office and the ATF who successfully investigated this case.
This case was prosecuted under the Project Safe Neighborhoods (PSN) program. PSN is a federal, state, and local law enforcement collaboration to identify, investigate, and prosecute individuals responsible for violent crimes in our neighborhoods. The U.S. Attorney’s Office is partnering with federal, state, local, and tribal law enforcement to specifically identify the criminals responsible for violent crime in the Eastern District of Washington and pursue criminal prosecution.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosive and the United States Probation Office for the Eastern District of Washington. This case was prosecuted by Michael J. Ellis and Timothy J. Ohms, Assistant United States Attorneys for the Eastern District of Washington.
South Bay Man Arrested on Federal Child Pornography Charges Alleging He Paid Impoverished Filipino Boys to Film Sex ActsRead the Press Release
LOS ANGELES – Federal authorities have arrested a Redondo Beach man on charges of producing child pornography, allegedly by developing a relationship with at least one boy in the Philippines who performed sex acts online in exchange for money.
Billy Frederick, 51, was arrested Wednesday morning without incident by special agents with Homeland Security Investigations. During his initial court appearance late Wednesday afternoon, a United States magistrate judge ordered Frederick jailed without bond pending trial. The criminal complaint naming Frederick was unsealed this afternoon.
According to the complaint filed on June 22, Frederick stored in his Google accounts various images and videos depicting child pornography, at least some of which he obtained from video calls on Google Hangout. The affidavit in support of the complaint details one video from July 2020 in which a boy, who appears to be between 11 and 14 years old, engages in sexual activity while Frederick records the video call. In messages sent relating to the video call, the victim calls Frederick “master.”
The investigation also uncovered chats between Frederick and the victim prior to the video call in which the boy asks to borrow money to purchase underwear. Immediately after the call, Frederick chatted online with the boy, who asked for money to be sent to his brother.
The affidavit outlines other online chats from 2020 between Frederick and a person claiming to be relative of the victim seen on the Google Hangout video. In one chat, after telling Frederick that the victim had broken his leg and required medical aid, the relative wrote, “we’re just poor so I agree to my [relative] for what his doing,” according to the affidavit.
During a search of one of Frederick’s online accounts, “I discovered many CSAM [child sexual abuse material] images of young nude male minors ranging from approximately 6 years of age to 15 years of age,” according to the affidavit by an HSI special agent. “Further, I discovered messages where Frederick would discuss the solicitation of CSAM of young boys, including enticement to engage in sexually explicit activity.”
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Frederick is charged with production of child pornography for transportation into the United States, an offense that carries a mandatory minimum sentence of 15 years in federal prison and a statutory maximum penalty of 30 years.
Frederick is scheduled to be arraigned in this case on July 22.
Homeland Security Investigations is investigating this matter.
Assistant United States Attorney Kathy Yu of the Violent and Organized Crime Section is prosecuting this case.
Six Houston Residents Indicted for Conspiracy to Steal from Bank ATMsRead the Press Release
KANSAS CITY, Mo. – Six Houston, Texas, residents have been indicted by a federal grand jury for their roles in a conspiracy to travel across the country breaking into bank ATMs and stealing the money inside, including at least one theft in Kansas City, Missouri.
Deandre J. Gilliam, 19, Ladarious S. Thomas, 28, Jamarkus D. Bogany, 19, J’Korean K. Hadnott, 19, Ocatvious Q. Waiters, 20, and Clayton J. Brown, 21, were charged in a three-count indictment returned under seal by a federal grand jury in Kansas City, Mo., on June 23, 2021. That indictment was unsealed and made public today upon the arrest and initial court appearances of Gilliam, Thomas, Bogany, Waiters, and Brown in U.S. District Court in Houston. Gilliam, Thomas, Bogany, Waiters, and Brown are being held in federal custody in the Southern District of Texas pending a detention hearing in that district tomorrow.
The federal indictment alleges the defendants, along with additional co-conspirators not identified or charged in the indictment, participated in a conspiracy from Nov. 10, 2019, to March 6, 2020, to travel in groups or teams from Texas to other states, including Missouri and Kansas, to steal from banks by forcing open ATMs and stealing tens of thousands of dollars from the cash boxes.
According to the indictment, conspirators would steal a large pick-up truck for the theft. They attached tow chains with hooks to the pick-up truck, then searched for a suitable ATM to burglarize. After conducting surveillance and with some conspirators serving as lookouts, the indictment says, conspirators used pry bars or tow chain hooks to forcibly pry open or pry apart the ATM’s protective metal encasement. After the ATM had been opened or disassembled, the conspirators would then remove the ATM canisters containing cash. They then abandoned the stolen truck and traveled back to Texas.
The indictment alleges that all six defendants left Houston on March 5, 2020, and traveled to the Kansas City metropolitan area in three separate vehicles. Conspirators allegedly stole a Ford F-250 pickup on March 6, 2020, that was parked on the street in Fairway, Kansas. At approximately 5:30 a.m. the same day, the indictment says, conspirators connected tow chains to the stolen Ford F-250 and to the door of an ATM at Chase Bank, 1614 E. 63rd Street in Kansas City, Mo. They used the force of acceleration from the truck to remove the exterior metal panel of the ATM, then removed canisters that contained a total of $150,220 from inside the damaged ATM. They abandoned the stolen truck in the parking lot of a nearby apartment building.
Later the same day, the indictment says, law enforcement officers in Montgomery County, Texas, spotted the three vehicles being driven by the defendants, who were traveling in tandem southbound on Interstate 45. Officers attempted to stop all three vehicles; Hadnott and Waiters pulled over to the shoulder, but the other vehicles attempted to flee from law enforcement. A Jeep Cherokee occupied by Brown and another, unnamed conspirator fled from officers at speeds between 80-115 miles per hour before it crashed and they were apprehended. A Chevrolet Impala occupied by Thomas, Gilliam, and Bogany fled from officers at speeds between 90-125 miles per hour before all three defendants fled from the vehicle on foot. Thomas, the driver, was taken into custody after a foot chase. With the assistance of air surveillance, Bogany and Gilliam were located and arrested. Gilliam was carrying a Spiderman backpack that contained approximately $72,385 (primarily in $20 bills). One of the Impala occupants dropped a duffle bag while running from the police. This bag was retrieved by an unknown female before police officers could recover it.
The federal indictment charges each of the defendants with one count of conspiracy, one count of bank theft, and one count of transporting stolen property across state lines.
The charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges 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. Attorney Brent Venneman. It was investigated by the FBI Field Offices in Kansas City, Mo., and Houston, Texas, the Kansas City, Mo., Police Department, the Houston Police Department, the Montgomery County, Texas, Sheriff’s Department, the Texas Department of Public Safety, and the Montgomery County Constable.
Schuylkill County Man Pleads Guilty to Methamphetamine TraffickingRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Tyler Kegolis, age 34, formerly of Frackville, Pennsylvania, pleaded guilty on June 30, 2021, before U.S. District Court Judge Malachy E. Mannion to distribution of crystal methamphetamine.
According to Acting United States Attorney Bruce D. Brandler, Kegolis admitted to distributing highly pure crystal methamphetamine in the Schuylkill County area between December 2018 and February 2019.
This matter was investigated by the Federal Bureau of Investigation, the Pennsylvania State Police, and the Schuylkill County Drug Task Force. Assistant U.S. Attorney Robert J. O’Hara is prosecuting the case.
Judge Mannion ordered that a presentence report be completed for Kegolis. Sentencing will be scheduled at a later date.
This case is part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local and tribal enforcement and the local community to develop effective, locally-based strategies to reduce crime.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The charge carries a mandatory minimum sentence of ten years in prison. The maximum sentence under federal law is up to life in prison, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Resident of Hong Kong Who Smuggled Endangered Glass Eels from the United States Pleads GuiltyRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, and Edward Grace, Assistant Director of the Office of Law Enforcement for the U.S. Fish and Wildlife Service, announced that KING SHEUNG CHAN, also known as “Nelson,” 30, a permanent resident of Hong Kong of the People’s Republic of China, waived his right to be indicted and pleaded guilty today in Bridgeport federal court to one count of attempted smuggling of glass eels from the United States.
According to court documents and statements made in court, there is strong foreign demand for the export of live juvenile American glass eels, commonly called “glass eels” or “elvers,” to large “eel farms” in mainland China where the baby eels are raised to adult size for human consumption. Along the Atlantic Coast, the commercial harvest of glass eels is legal only in South Carolina and Maine, with Maine using a heavily regulated quota system. In recent years, the legal price for glass eels has generally fluctuated between $3,000 and $5,000 per kilogram.
The illegal harvest and sale of glass eels to overseas buyers have damaged American eel populations and their long-term vitality. Since 2014, the International Union for the Conservation of Nature has listed the American eel as “Endangered.”
Chan worked for Asia Aquatic Company, Ltd., based in Hong Kong, and a Canadian company named Laknock Trading. Chan’s job was to procure glass eels from countries in North America and Europe, and to have them shipped via overnight air to Hong Kong.
On April 7, 2021, Chan packed 19.3 kilograms of live glass eels worth approximately $86,000 that had been stored at a Connecticut facility. Chan was told by undercover U.S. Fish and Wildlife Service (FWS) officers who were posing as fisherman that these glass eels had been unlawfully harvested from Virginia, Maryland and Massachusetts. After packing the glass eels in oxygenated bags, he paid $29,500 to the undercover officers and drove the live cargo to JFK Airport.
Later that afternoon, Chan met the freight forwarder near JFK Airport that was handling the in-transit shipment of 10 boxes shipped by Laknock Trading from Canada. Chan had arranged for the shipment of the boxes, which contained bags of dead glass eels with a few live ones mixed in. Chan opened the boxes, took out the bags of dead glass eels, and replaced them with the bags of live glass eels packed a few hours before in Connecticut. Chan resealed the boxes and returned them to the freight forwarder, which transported the shipment to the airline cargo area for export to Hong Kong. Shortly thereafter, FWS officers arrested Chan and seized the glass eels from the airline cargo area. FWS later released the glass eels into the wild.
In pleading guilty, Chan admitted that, in 2017, he illegally smuggled 103 kilograms of glass eels, valued at approximately $340,000, from the U.S. to Hong Kong. Some of those glass eels had been illegally harvested in Connecticut.
“I commend the U.S. Fish and Wildlife Service for holding accountable those individuals who drive this illegal market and deplete an important American wildlife resource for their selfish gain,” said Acting U.S. Attorney Boyle. “We shall continue to investigate and prosecute those actors, foreign and domestic, who profit from this illicit, lucrative trade.”
“In addition to the robust legal trade of American juvenile eels, or elvers, they are also subject to poaching and international trafficking,” said Edward Grace, the Assistant Director of the Office of Law Enforcement for the U.S. Fish and Wildlife Service. “Our natural resources are important to the American public and to its economy. Working with our state and federal partners, the defendant was arrested and prosecuted in the United States for his crimes. His guilty plea sends a message to all wildlife traffickers, you will be caught and you will be prosecuted.”
Chan has been detained since his arrest. He is scheduled to be sentenced by U.S. District Judge Michael P. Shea on September 30, 2021, at which time he faces a maximum term of imprisonment of 10 years and a fine of up to $250,000.
This matter is being investigated by the U.S. Fish and Wildlife Service, Office of Law Enforcement. This case is being prosecuted by Assistant U.S. Attorney Hal Chen.
Plaquemines Parish Man Sentenced for Federal Drug Trafficking CrimeRead the Press Release
NEW ORLEANS – U.S. Attorney Duane A. Evans announced that DALE PHILLIPS, age 40, a resident of Plaquemines Parish, Louisiana, was sentenced on June 30, 2021 to 151 months imprisonment after previously pleading guilty to one count of distributing cocaine in violation of Title 21, United States Code, Section 841.
According to the Indictment, PHILLIPS conspired with others to distribute cocaine, obtained from the Houston, Texas area, in Plaquemines Parish.
The Honorable U.S. District Judge Jane Triche Milazzo sentenced PHILLIPS as a “Career Offender” to 151 months imprisonment and payment of a $100 special assessment fee, to be followed by a three-year term of supervised release.
The case was prosecuted by Assistant United States Attorney Maurice Landrieu and was investigated by the United States Drug Enforcement Administration and the Plaquemines Parish Sheriff’s Office.
Pittsburgh Felon Admits Illegally Possessing Multiple Drugs and Violating Firearms LawsRead the Press Release
PITTSBURGH, PA- A former resident of Pittsburgh, Pennsylvania, has pleaded guilty in federal court in Pittsburgh to violating federal narcotics and firearms laws Acting United States Attorney Stephen R. Kaufman announced today.
Che Williams, age 34, pleaded guilty before United States District Judge Marilyn Horan.
According to information provided to the court, on November 19, 2019, Williams conspired to distribute one kilogram or more of heroin, 280 grams or more of crack cocaine, 100 grams or more of acetyl fentanyl and valeyrl fentanyl, and 400 grams or more of fentanyl, and possessed with intent to distribute 40 grams or more of fentanyl and possessed firearms and ammunition as a convicted felon. As a conviction felon, it is in violation of federal law to possess any firearms and/or ammunition. Williams also pleaded guilty to knowingly participating in a conspiracy to distribute and possess with intent to distribute 400 grams or more of fentanyl from September 2017 to November 2019.
Judge Horan scheduled sentencing for Nov. 10, 2021 at 9:30 a.m. As to Count One of the Information, the law provides for a total sentence of not more than 40 years’ imprisonment, a $5,000,000 fine or both. As to Count Two of the Information, the law provides for a total sentence of not more than ten years, a $250,000 fine or both. Under the law, Count One of the Indictment provides for a total term of imprisonment of not less than ten years with a fine not to exceed $10,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court ordered Williams to remain in the custody of the U.S. Marshals Service.
Assistant United States Attorney Brendan T. Conway is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation conducted the investigation that led to the prosecution of Che Williams.