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30 July 2021
Oswego County Woman Pleads Guilty to Possession with Intent to Distribute a Controlled SubstanceRead the Press Release
SYRACUSE, NEW YORK – Alisha Obey, age 35, of Fulton, New York, pled guilty yesterday to unlawfully possessing with the intent to distribute eutylone, a Schedule I controlled substance.
The announcement was made by Acting United States Attorney Antoinette T. Bacon and Kevin Kelly, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI).
As part of her guilty plea, Obey admitted that on July 14, 2019, November 8, 2019, and December 3, 2019, she possessed eutylone, which she intended to distribute to customers throughout Oswego County. Eutylone is a synthetic cathinone and has pharmacological effects on the central nervous system similar to other schedule I or II substances such as cocaine, methamphetamine, and MDMA.
Obey faces up to 20 years in prison, a fine of up to $1 million, and a term of post-release supervision of at least 3 years and up to life when she is sentenced by Senior United States District Judge Frederick J. Scullin, Jr. on December 1, 2021. 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.
The case was investigated by Homeland Security Investigations (HSI), Internal Revenue Service-Criminal Investigation (IRS-CI), and the Oswego County Drug Task Force, comprised of Special Agents of HSI, members of the City of Oswego Police Department, the Oswego County Sheriff’s Office, investigators from the Oswego County District Attorney’s Office, the SUNY Oswego Police Department and agents of the U.S. Border Patrol. The case is being prosecuted by Special Assistant United States Attorney Adrian LaRochelle.
Organizer of fraud and identity theft schemes pleads guilty to 10 federal countsRead the Press Release
COLUMBUS, Ohio – A Columbus man pleaded guilty in federal court today to a range of federal crimes, including fraud conspiracy, aggravated identity theft, money laundering, false claims to United States citizenship and firearms violations.
Nana Yaw Addo, 56, a citizen of Ghana, admitted his guilt to 10 separate counts today. He admitted to stealing an individual’s identity in order to create a fraudulent business and accompanying bank account, laundering the proceeds of “man in the middle” email scams, organizing the theft of lines of credit at furniture stores, printing and encoding fake credit cards, and illegally purchasing and possessing a firearm.
In total, the intended loss from Addo’s fraud was between half a million and $1.5 million.
According to Addo’s plea agreement, in 2018, he stole an individual’s identity and used the stolen identity to create a business called Focal Point Wireless. Addo fraudulently registered the company with an address on Cleveland Avenue in Columbus. The address matched that of Addo’s actual company, Beeps Computer Clinic.
Addo then laundered the proceeds of business email compromise scams through his American bank accounts.
For example, a co-conspirator compromised the email address of a supervisor at a separate victim company in order to initiate a wire transfer of more than $67,000 to an account Addo opened using the stolen identity.
An employee of the victim company received an email into his/her workplace email account purportedly from his/her supervisor telling the employee to initiate the wire transfer and that the supervisor would later provide an invoice. When the employee asked the supervisor about when to expect to receive the invoice, the victim company discovered the supervisor’s email had been compromised.
Bank records show Addo wired at least $20,000 of the victim company’s money into a Beeps Computer Clinic bank account and purchased $2,000 in money orders at Kroger.
Addo received and laundered the proceeds of a scam defrauding a second victim company of $80,499 in October 2018.
The next month, Addo laundered nearly $422,000 obtained by fraudsters through a “man in the middle” email scheme. In this type of scheme, the attacker impersonates a vendor or customer by mimicking email address domain names which appear to the same, but are, in reality, slightly different.
Addo admitted in his plea agreement that he served as a leader of credit card scams at furniture retailers. The defendant would send other people into retailers with victims’ stolen personal information in order to open lines of credit and order furniture. The furniture was then delivered to Addo’s business address on Cleveland Avenue. The stolen information was also used to print and encode fraudulent credit cards.
While searching his residence and business, law enforcement officials discovered more than 600 stolen credit card numbers.
Addo falsely claimed to be a United States citizen to get a driver’s license and lied on federal forms to purchase a firearm.
As part of his plea, Addo will pay nearly $214,000 in restitution.
Addo faces up to 20 years in prison for money laundering, up to 10 years in prison for each firearm crime, up to five years in prison for conspiring to commit wire fraud, up to three years in prison for falsely claiming to be a United States citizen and a mandatory term of two years in prison – to be served consecutively to any other imposed sentence – for aggravated identity theft.
Congress sets the minimum and maximum statutory sentences. Sentencing of the defendant will be determined by the Court based on the advisory sentencing guidelines and other statutory factors.
Vipal J. Patel, Acting United States Attorney for the Southern District of Ohio; Yvonne DiCristoforo, Special Agent in Charge, United States Secret Service; Bryant Jackson, Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation; and Vance Callender, Special Agent in Charge, Homeland Security Investigations (HSI), announced the plea entered into today before Chief U.S. District Judge Algenon L. Marbley. Assistant United States Attorneys Kelly A. Norris and Peter K. Glenn-Applegate are representing the United States in this case.
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Nurse Practitioners Sentenced to Prison for Health Care FraudRead the Press Release
GREAT FALLS – Two Montana nurse practitioners have been sentenced for conspiring to defraud Medicare of millions of dollars. Chief U.S. District Judge Brian Morris sentenced Janae Nichole Harper, 34, of Kalispell, to 12 months in prison and Mark Allen Hill, 54, of Edinburg, North Dakota to 9 months in prison. Both defendants will be placed on supervised release for 3 years after their release from prison. Additionally, Harper was ordered to pay $4,307,934.58 in restitution and Hill was ordered to pay $5,054,866 in restitution.
Harper was a licensed nurse practitioner in Montana, Missouri, Nevada, South Carolina and Wyoming and was enrolled as a medical provider with Medicare. Hill was a licensed nurse practitioner in Montana, Iowa, Maine, Minnesota, North Dakota, South Dakota and Washington.
In court documents filed in Harper’s case, the government alleged that from Nov. 18, 2017 through July 16, 2019, Harper worked with certain staffing and telemedicine companies to commit health care fraud and received money to sign brace orders that were prepared by telemarketers who had no medical training or certification. Harper routinely signed these orders for Medicare beneficiaries regardless of medical necessity. Harper signed approximately 7,673 brace orders, which resulted in $8,259,849 billed to Medicare, of which Medicare paid approximately $4,307,934. Harper was paid at least $94,395 for the orders she signed.
In court documents filed in Hill’s case, the government alleged that from Oct. 15, 2017 to April 24, 2019, Hill worked with certain staffing and telemedicine companies to commit health care fraud and received money to sign unnecessary brace orders for Medicare beneficiaries regardless of medical necessity, often without ever talking to the Medicare beneficiary to determine whether the braces were medically necessary. Hill signed approximately 7,097 brace orders, which resulted in $10,055,436 billed to Medicare, of which Medicare paid approximately $5,054,866. Hill was paid at least $124,900 for the orders he signed.
Both defendants previously pled guilty to conspiracy to commit health care fraud.
The cases were prosecuted by Assistant U.S. Attorney Michael A. Kakuk and Darren Halverson, Trial Attorney, and Robyn Pullio, former Trial Attorney, Fraud Section, Criminal Division of the Justice Department and investigated by the U.S. Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation.
Norwich Man Guilty of Distributing Fentanyl Analogues on Dark Web; Possessing Drugs, Firearm and AmmunitionRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, today announced that a federal jury in Bridgeport has found BARRY DUCLOS, 42, of Norwich guilty of fentanyl analogue trafficking, possession with intent to distribute fentanyl and carfentanil and firearm possession offenses.
The trial before U.S. District Judge Victor A. Bolden began on July 21 and the jury returned guilty verdicts this afternoon.
According to the evidence introduced during the trial, between approximately September 2017 and February 2018, Duclos operated a vendor page on the dark web “Dream Market.” Using the alias 1NOLEFB1, Duclos advertised the sale of fentanyl analogues on Dream Market. He then used the U.S. Mail to ship fentanyl analogues to customers who paid for the drugs using Bitcoin.
Duclos was arrested on a federal criminal complaint on February 12, 2018. A search of his residence at the time of his arrest revealed a YHM rifle with multiple magazines, two of which were extended magazines. The firearm was loaded with a round in the chamber. Investigators also located and fentanyl and carfentanil from the residence, along with a computer used by Duclos to access Dream Market.
Duclos was convicted in state court, in February 2001, of sale of narcotics and, in March 2017, of larceny in the third degree. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
The jury found Duclos guilty of seven counts of possession with intent to distribute and distribution of fentanyl analogues; one count of possession with intent to distribute fentanyl and carfentanil; one count of possession of ammunition by a convicted felon; and one count possession of a firearm in furtherance of a drug trafficking crime.
Duclos has been detained since his arrest. A sentencing date is not scheduled.
This matter was investigated by the U.S. Postal Inspection Service and the Drug Enforcement Administration, with the assistance of Homeland Security Investigations, U.S. Customs and Border Patrol, Connecticut State Police, Norwich Police Department, and Robertson County Tennessee Sherriff’s Office. This case is being prosecuted by Assistant U.S. Attorneys Lauren C. Clark and Patrick J. Doherty.
North Carolina Man Sentenced to 12 ½ Years for Meth Trafficking ConspiracyRead the Press Release
Acting United States Attorney Dennis R. Holmes announced that an Archdale, North Carolina, man who pleaded guilty to Conspiracy to Distribute a Controlled Substance was sentenced on July 28, 2021, by U.S. District Court Judge Karen E. Schreier.
Erick Anaya, age 31, was sentenced to 12 1/2 years in federal prison, followed by five years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Erick Anaya was indicted for Conspiracy to Distribute a Controlled Substance by a federal grand jury on October 22, 2020. He pleaded guilty on April 28, 2021.
During his involvement in the conspiracy, the Defendant transported approximately 30 pounds of methamphetamine to South Dakota from California. The defendant then dispersed methamphetamine to others for further distribution. The Defendant also collected money from people in South Dakota and transported that money back to the suppliers.
This case was investigated by the Unified Narcotics Enforcement Team (UNET), Drug Enforcement Agency, the South Dakota Division of Criminal Investigation, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. UNET is comprised of law enforcement from the Pennington County Sheriff’s Office, the Rapid City Police Department, South Dakota Division of Criminal Investigation, the South Dakota National Guard, and the South Dakota Highway Patrol. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.
Anaya was immediately returned to the custody of the U.S. Marshals Service.
Nampa Man Sentenced to 5 Years in Federal Prison for Drug TraffickingRead the Press Release
BOISE – Steven L. Lantz, 43, of Nampa, was sentenced to 60 months in federal prison for distribution of methamphetamine, announced Acting U.S. Attorney Rafael M. Gonzalez, Jr. today. Chief U.S. District Judge David C. Nye also ordered Lantz to serve five years of supervised release following his prison sentence.
According to court records, on January 21, 2020, law enforcement used a confidential informant to arrange the purchase of approximately two ounces of methamphetamine from Lantz. Lantz met the informant in Meridian and entered the informant’s vehicle. Lantz and the informant then drove to Boise, where Lantz obtained methamphetamine and sold it to the informant. Lantz pleaded guilty to the charge on May 12, 2021.
Lantz has a lengthy criminal history that includes convictions for domestic violence and robbery. At the time of this offense, Lantz was out on parole for the robbery conviction. Lantz has also been documented as a member of the Aryan Knights prison gang.
Acting U.S. Attorney Gonzalez applauded the efforts of the Treasure Valley Metro Violent Crimes Task Force, which led to charges. The Task Force is comprised of federal, state, and local agencies, including the Federal Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; Ada County Sheriff’s Office; Boise Police Department; Caldwell Police Department; Canyon County Sheriff’s Office; Meridian Police Department; Nampa Police Department; and Idaho Department of Correction, Bureau of Probation and Parole.
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.
This case was prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership and the State of Idaho to address gang crimes. The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth. For more information, visit www.treasurevalleypartners.org.
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Multi-Kilogram Fentanyl Trafficker Convicted at TrialRead the Press Release
Tampa, Florida – A federal jury has found Wilis A. Santiago Rivera (60, St. Petersburg) guilty of conspiracy to possess with the intent to distribute 400 grams or more of fentanyl. Santiago faces a minimum mandatory penalty of 10 years, and up to life, in federal prison. A sentencing date has not yet been set.
Santiago had been indicted on September 12, 2019.
According to evidence presented at trial, Santiago Rivera was intercepted on a court-authorized wiretap coordinating payment for 2 kilograms of fentanyl that he had previously received on consignment. Other intercepted calls captured Santiago Rivera’s attempts to sell additional kilograms of fentanyl.
This case was investigated by the Drug Enforcement Administration, the U.S. Postal Inspection Service, and the Tampa Police Department. It is being prosecuted by Assistant United States Attorney Callan Albritton.
This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at www.justice.gov/OCDETF.
Morris County Pharmacy Employee Admits to Kickback and Bribery SchemeRead the Press Release
NEWARK, N.J. – A pharmacy employee today admitted to conspiring to offer and pay bribes and kickbacks in exchange for having prescriptions steered to the Morris County, New Jersey pharmacy where she worked, Acting U.S. Attorney Rachael A. Honig announced today.
Magdalena “Maggie” Jimenez, 56, of Newark, New Jersey pleaded guilty by videoconference before U.S. District Judge Michael A. Shipp to an information charging her with conspiring to violate the federal anti-kickback statute.
According to documents filed in this case and statements made in court:
Jimenez worked as a pharmacy technician and sales representative for a pharmacy located in Morris County, New Jersey. From at least August 2019 to February 2020, Jimenez worked with other pharmacy personnel to pay kickbacks and bribes to a doctor’s employee in exchange for receiving numerous prescriptions from that doctor’s Jersey City office. Jimenez paid up to $150 for each prescription steered to the pharmacy, which resulted in monthly kickback payments of up to $2,500 cash. When Jimenez discussed the kickbacks and bribes, she instructed others to communicate in coded language. As a result of the scheme, the pharmacy received reimbursement payments from Medicare of approximately $539,000.
The conspiracy charge is punishable by a maximum of five years in prison and a fine of $250,000, or twice the gross gain or loss derived from the offense, whichever is greater. Sentencing is scheduled for Dec. 7, 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, and special agents with the U.S. Attorney’s Office, under the direction of Special Agent in Charge Thomas J. Mahoney.
The government is represented by Assistant U.S. Attorney Joshua L. Haber of the Health Care Fraud Unit.
Defense counsel: Peter Guadagnino, Esq., New York, NY
Mexican National and Repeat Felon Sentenced for Multiple Immigration CrimesRead the Press Release
TYLER, Texas – A Mexican national residing in Tyler has been sentenced to federal prison for violations related to unlawfully reentering the United States after having been deported to Mexico three times and being found unlawfully present in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.
Jose Daniel Sanchez-Escobar, also known as Jose Sanchez-Esquivel, 38, pleaded guilty on April 13, 2021 to being found unlawfully present in the United States after having been removed to Mexico and then reentering the U.S. without the permission of the Secretary for the Department of Homeland Security. Sanchez was sentenced to 41 months in federal prison on July 29, 2021 by U.S. District Judge Jeremy D. Kernodle. After this sentence was imposed, Judge Kernodle accepted Sanchez’s plea to violating the conditions of his supervised release in a previous conviction in 2017 for unlawful reentry after removal in the Eastern District of Texas and sentenced Sanchez to an additional 12 months in federal prison.
According to information presented in court, on April 22, 2013, Sanchez was convicted of fraud use or possession of identification in Smith County and sentenced to nine months in federal prison. On Oct. 22, 2013, Sanchez was ordered removed from the United States to Mexico by an immigration judge in Houston after a state felony conviction for fraud use or possession of identification information. Pursuant to this order, Sanchez was removed from the United States to Mexico on Oct. 23, 2013. After this removal, Sanchez reentered the United States.
On Sep. 28, 2017, Sanchez was convicted in the Eastern District of Texas of unlawful reentry after removal and sentenced to ten months and three year term of supervised release. On Dec. 6, 2017, Sanchez was removed to Mexico. After this removal, Sanchez reentered the United States and was arrested for unlawfully reentering the United States. On April 26, 2018, Sanchez was removed from the United States to Mexico a third time. After each of these removals, Sanchez reentered the United States without receiving the consent of the Secretary of the Department of Homeland Security to apply for readmission to the United States.
On April 12, 2020, Sanchez was found by Immigration and Customs Enforcement (ICE) officers at the Smith County Jail. He was in state custody after being arrested for driving while intoxicated. On Sep. 17, 2020, the federal grand jury returned a one count indictment charging Sanchez with unlawful reentry after removal.
This case was investigated by the Department of Homeland Security-Immigration Customs and Enforcement-Enforcement and Removal Operations (DHS/ICE/ERO) Dallas Field Office, the Smith County Sheriff’s Office, and the Tyler Police Department. This case was prosecuted by Assistant U.S. Attorney Allen Hurst.
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Maryland Woman Pleads Guilty to Defrauding Medicaid Out of Hundreds of Thousands of DollarsRead the Press Release
WASHINGTON – Sikirat Adunni Brown, 59, of Upper Marlboro, Md., pleaded guilty today to defrauding the D.C. Medicaid program out of more than $340,000.
The announcement was made by Acting U.S. Attorney Channing D. Phillips; Robert E. Bornstein, Acting Special Agent in Charge of the FBI Washington Field Office Criminal Division; Maureen R. Dixon, Special Agent in Charge of the U.S. Department of Health and Human Services’ Office of Inspector General for the region that includes Washington, D.C., and Daniel W. Lucas, Inspector General for the District of Columbia.
The Honorable Dabney L. Friedrich, who accepted Brown’s guilty plea, scheduled sentencing for Nov. 8, 2021. In addition to facing prison time, Brown faces financial penalties.
Brown admitted that, at various times between January 2014 and June 2020, she worked as a personal care aide for at least eight different home health agencies. The home health agencies employed her to assist D.C. Medicaid beneficiaries in performing activities of daily living, such as getting in and out of bed, bathing, dressing, and eating.
Brown was supposed to document the care that she provided to the Medicaid beneficiaries on timesheets and then submit the timesheets to the home health agencies, which would in turn bill Medicaid for the services that she rendered. In her guilty plea, Brown acknowledged that between 2014 and 2020, she caused the D.C. Medicaid Program to issue payments totaling $343,539 for services that she did not provide. As part of her scheme, she submitted false timesheets to different home health agencies claiming that she provided 20 hours or more of personal care aide services. She also claimed to provide services when she was traveling outside the D.C. metropolitan area. She paid kickbacks during the scheme to at least one beneficiary. She also acknowledged that she claimed to provide services to one beneficiary during the COVID-19 pandemic even though that beneficiary said she did not.
The FBI, the U.S. Department of Health and Human Services’ Office of Inspector General, the District of Columbia’s Office of the Inspector General’s Medicaid Fraud Control Unit, and the U.S. Attorney’s Office are committed to investigating and prosecuting individuals who defraud the D.C. Medicaid program.
Brown is the tenth former personal care aide in the last three years to plead guilty to defrauding Medicaid in the United States District Court for the District of Columbia. Five aides were sentenced to 13 months in prison; a sixth was sentenced to serve 15 months.
The government urges the public to provide tips and assistance to stop health care fraud. If you have information about individuals committing health care fraud, please call the Department of Health and Human Services’ Office of Inspector General hotline at (800) HHS‑TIPS [(800) 447-8477] or the D.C. Office of the Inspector General at (800) 724-TIPS [(800) 274-8477].
This case was prosecuted by Assistant U.S. Attorney Kondi Kleinman of the Fraud Section, with assistance from Paralegal Specialist Mariela Andrade.
Maryland Man Pleads Guilty to Sexually Abusing and Blackmailing WomanRead the Press Release
WASHINGTON – A Maryland man pleaded guilty today to sexually abusing and blackmailing a woman he met in August 2019 through a dating website, announced Acting U.S. Attorney Channing D. Phillips.
Steven B. Fabrizio, 57, of Chevy Chase, Md., pled guilty to one count each of blackmail and third-degree sexual abuse. He faces a statutory maximum of five years in prison on the blackmail charge and up to 10 years on the sexual abuse charge. Additionally, he will be required to register as a sex offender for 10 years. He is to be sentenced on Oct. 29, 2021, by the Honorable Marisa Demeo in the Superior Court of the District of Columbia.
According to the government’s evidence, Fabrizio met the woman on Aug. 19, 2019, after corresponding via a dating website and text. They had consensual sex, and Fabrizio gave her $400 in cash, as agreed upon beforehand. The next day, Fabrizio sought to set up another meeting, and the woman declined. At that point, Fabrizio sent the first in a series of texts to her, warning that the woman’s employer, parents, and landlord would be told about their sex-for-cash arrangement unless it continued. Similar texts followed, and the woman agreed to see him. During that second encounter, on Aug. 20, 2019, Fabrizio sexually abused her. Fabrizio later persisted with the texts, and the woman contacted the Metropolitan Police Department. He was arrested on Aug. 21, 2019.
In announcing the plea, Acting U.S. Attorney Phillips commended those who investigated the case from MPD’s Sexual Assault Unit. He also expressed appreciation for the work of those who handled the case for the U.S. Attorney’s Office, including former Victim Witness Specialist Juanita Harris, and Assistant U.S. Attorney Peter V. Taylor, who is prosecuting the matter.
Manhattan U.S. Attorney Announces Forfeiture of Oil Tanker Used to Violate Sanctions Against North KoreaRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, Mark J. Lesko, the Acting Assistant Attorney General for National Security, 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 entry of a judgment of forfeiture regarding the M/T Courageous, a 2,734-ton oil products tanker used to make illicit deliveries of petroleum products through ship-to-ship transfers with vessels flagged in the Democratic People’s Republic of Korea (“DPRK” or “North Korea”) and direct shipments to the North Korean port of Nampo. Payments to purchase the Courageous, to obtain oil for supplying to North Korea using the Courageous, and to procure necessary services for the Courageous were made using U.S. dollars through unwitting U.S. banks, in violation of U.S. law and United Nations Security Council resolutions. On April 23, 2021, a civil forfeiture action was filed against M/T Courageous. Criminal charges of conspiracy to evade economic sanctions on the DPRK and money laundering conspiracy are pending against the alleged owner and operator of the Courageous, KWEK KEE SENG, a Singaporean national who remains at large. U.S. District Judge Valerie E. Caproni issued today’s judgment of forfeiture.
The M/T Courageous
M/T CourageousManhattan U.S. Attorney Audrey Strauss said: “Today’s judgment reflects that the sanctions-evading ship, the Courageous, has been forfeited to the United States and will no longer be used to enable North Korea’s pattern of evading the global community’s prohibitions on support for that regime. Thanks to the extraordinary cooperation between U.S. and Cambodian law enforcement authorities, the Courageous is permanently out of service.”
According to documents filed in the civil forfeiture action and the allegations contained in the criminal complaint filed against KWEK KEE SENG in Manhattan federal court:[1]
Pursuant to the International Emergency Economic Powers Act (“IEEPA”) and the North Korea Sanctions and Policy Enhancement Act of 2016 (“NKSPEA”), the DPRK and individuals or entities that the Department of the Treasury, Office of Foreign Assets Control (“OFAC”) has determined are involved in the facilitation of proliferation of weapons of mass destruction are prohibited from engaging in transactions with U.S. persons or using the U.S. financial system. The United Nations Security Council has similarly imposed economic sanctions on North Korea, prohibiting among other things the conduct of ship-to-ship transfers with DPRK-flagged vessels and the provision of petroleum products to the DPRK.
KWEK and his co-conspirators engaged in an extensive scheme to evade these U.S. and U.N. sanctions by using vessels under their control to covertly transport fuel to North Korea, thereby providing a critical resource for the North Korean government and for DPRK-based companies. One of those vessels was M/T Courageous – formerly known as the Sea Prima – which was purchased by KWEK through front companies in order to further KWEK and his co-conspirators’ scheme to evade sanctions and launder money. Among other things, for a four-month period between August and December 2019, M/T Courageous illicitly stopped transmitting information regarding its location, during which time satellite imagery shows that M/T Courageous both engaged in a ship-to-ship transfer of more than $1.5 million worth of oil to a North Korean ship, the Saebyol, which had been designated by OFAC, and traveled to the North Korean port of Nampo. KWEK and his co-conspirators took additional steps to hide the scheme by (1) operating a series of shell companies, (2) lying to international shipping authorities about M/T Courageous’s dealings with North Korea, and (3) falsely identifying M/T Courageous as another ship in order to evade detection.
In furtherance of the scheme, KWEK and his co-conspirators arranged for a variety of payments denominated in U.S. dollars that were processed through U.S.-based correspondent accounts to purchase oil – including more than $1.5 million to purchase the oil that was transferred to the Saebyol, over $500,000 to buy M/T Courageous, and thousands more dollars to procure necessary services for M/T Courageous and another vessel, including registration fees, ship materials, and salary payments for crewmembers. KWEK and his co-conspirators overseas sought to conceal these sanctions-evading transactions by, among other things, using front companies to disguise the nature of the transactions; disguising location information for vessels carrying illicit shipments; and conducting ship-to-ship fuel transfers on the open sea in an attempt to hide their counterparties, such as the Saebyol.
Cambodian authorities seized M/T Courageous in March of 2020, and held the vessel pursuant to a U.S. seizure warrant, which was issued under seal on April 2, 2020. On April 23, 2021, the U.S. Attorney’s Office filed a civil forfeiture complaint against M/T Courageous and the case was subsequently assigned to Judge Caproni, who issued today’s judgment of forfeiture.
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Ms. Strauss praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division. Ms. Strauss also thanked the FBI Legal Attaché Office in Phnom Penh, Cambodia; the Department of Justice’s National Security Division, Counterintelligence and Export Control Section, Money Laundering and Asset Recovery Section’s Program Operations Unit, and Office of International Affairs; the United States Coast Guard; the Cambodian Ministry of Justice; and the Cambodian National Police, for their assistance.
The cases are being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys David W. Denton Jr. and Kimberly J. Ravener are in charge of the cases, with assistance from Trial Attorney Matthew McKenzie of the Counterintelligence and Export Control Section.
The charges in the complaint against KWEK are merely accusations, and KWEK is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the criminal complaint filed against KWEK and the description of that complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation as against KWEK.
Manhattan U.S. Attorney Announces Extradition of Two Pakistani Nationals for Attempted Heroin ImportationRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, and Anne Milgram, Administrator of the U.S. Drug Enforcement Administration (“DEA”), announced today the extradition of Maulabaksh Gorgeech and Niamatullah Gorgeech for attempting to import heroin into the United States. The defendants, both citizens of Pakistan, were taken into custody by Thai authorities in Bangkok, Thailand, on April 11, 2021, and extradited to the United States today from Thailand. They will be presented before United States Magistrate Judge Sarah Netburn later today.
U.S. Attorney Audrey Strauss said: “As alleged, Maulabaksh Gorgeech and Niamatullah Gorgeech trafficked in wholesale importation of heroin to the United States. Thanks to the DEA’s global reach and the assistance of law enforcement authorities in Thailand, the defendants are in U.S. custody and facing serious federal charges.”
DEA Administrator Anne Milgram said: “At a time when the United States is facing an opioid overdose epidemic of unprecedented proportions, it is critical that DEA stop the flow of heroin into the country before it makes its way to our communities. Directly because of DEA’s efforts, Maulabaksh Gorgeech and Niamatullah Gorgeech are now on American soil, facing significant criminal charges for their alleged crimes.”
According to the allegations contained in the Complaints charging the defendants,[1] which were unsealed today in Manhattan federal court:
Beginning in late 2019, MAULABAKSH GORGEECH and NIAMATULLAH GORGEECH, Asia-based drug traffickers, began communicating and meeting with individuals whom they believed were heroin traffickers interested in purchasing multi-kilogram quantities of heroin for importation into the United States. Those individuals were, in fact, confidential sources working at the DEA’s direction, and an undercover DEA agent posing as a New York-based heroin distributor. In March 2019, NIAMATULLAH GORGEECH caused a sample of approximately seven kilograms of heroin to be delivered in Afghanistan, with the understanding that those drugs would be transported to and sold in the United States. In July 2019, MAULABAKSH GORGEECH offered to provide as many as 100 kilograms of heroin for importation to the United States. In September 2019, MAULABAKSH GORGEECH caused another sample of approximately seven kilograms of heroin to be delivered in Afghanistan, for importation and sale in the United States. Following these sample shipments, MAULABAKSH GORGEECH and NIAMATULLAH GORGEECH planned to supply larger quantities of heroin for importation to and distribution within the United States.
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MAULABAKSH GORGEECH, 43, and NIAMATULLAH GORGEECH, 37, each a citizen of Pakistan, are charged with one count of attempting to import heroin into the United States, and MAULABAKSH GORGEECH is also charged with a second count of conspiracy to import heroin into the United States. Each count carries a maximum sentence of life in prison and a mandatory minimum sentence of 10 years in prison. The statutory minimum and maximum sentences 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 outstanding investigative efforts of the DEA’s Special Operations Division Bilateral Investigations Unit, and the OCDETF New York Strike Force; the DEA’s Bangkok, Islamabad, Kabul, and Bucharest Country Offices, and Guam Resident Office; the United States Central Command; U.S. Embassy in Bangkok’s Consul General’s Office and Diplomatic Security Service; the Royal Thai Government’s Office of the Attorney General - International Affairs Department, Royal Thai Police Narcotics Suppression Bureau - Sensitive Investigative Unit, and Ministry of Foreign Affairs; and the Australian Criminal Intelligence Commission. Ms. Strauss also thanked the U.S. Department of Justice’s Office of International Affairs for its ongoing assistance.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF funds investigations that identify, disrupt, and dismantle the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The case is being prosecuted by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Kimberly J. Ravener and Benjamin Woodside Schrier are in charge of the prosecution.
The charges contained in the Complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaints and the description of the Complaints set forth below constitute only allegations and every fact described should be treated as an allegation.
Man Sentenced to a Year and a Half in Federal Prison for Illegally Possessing Loaded Gun During Looting in Downtown ChicagoRead the Press Release
CHICAGO — A man who illegally possessed a loaded handgun during widespread looting in downtown Chicago last summer was sentenced today to 18 months in federal prison.
Chicago Police officers attempted to detain JAVONTE T. WILLIAMS for suspected looting near North State Street and East Lake Street in downtown Chicago at 5:00 a.m. on Aug. 10, 2020. As officers pursued and arrested Williams, a semi-automatic handgun fell from his body to the ground. The gun was loaded with multiple rounds of ammunition in the magazine and one in the chamber.
During the investigation, law enforcement uncovered multiple social media postings by Williams in which he boasted about looting in Chicago in the summer of 2020.
Williams, 28, of Chicago, pleaded guilty earlier this year to illegal possession of a firearm by a convicted felon. He was prohibited from possessing a gun after previously being convicted of a felony firearm offense in the Circuit Court of Cook County, for which he was sentenced to probation.
U.S. District Judge Virginia M. Kendall imposed the 18-month federal sentence after a hearing in U.S. District Court in Chicago.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kristen de Tineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; and David Brown, Superintendent of the Chicago Police Department. Valuable assistance was provided by the Cook County State’s Attorney’s Office in bringing the charge.
“During a night of complete lawlessness in the city of Chicago, the defendant put himself at ground zero and endangered the lives of law enforcement, the general public, and himself by carrying a loaded firearm in his waistband,” Assistant U.S. Attorney Christopher V. Parente argued in the government’s sentencing memorandum. “The illegal possession of a firearm by a felon is always a dangerous and serious offense.”
Williams’s sentencing was the second sentencing this week in federal court for illegal firearm possession during looting incidents in downtown Chicago last summer. Judge Kendall on Tuesday sentenced BRANDON PEGUES, of Riverdale, to a year in federal prison for illegally possessing a semiautomatic handgun on the Near South Side on May 31, 2020.
Man Sentenced for COVID-19 Relief FraudRead the Press Release
A Florida man was sentenced today to 33 months in prison for fraudulently seeking over $7,263,564 in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Andre Clark, 48, of Miramar, pleaded guilty to one count of conspiracy to commit wire fraud on May 14, 2021. According to court documents, Clark admitted that he obtained a PPP loan of $488,565 on behalf of his company, Top Choice LLC, based on falsified information and documents that a co-conspirator, James Stote, submitted on his behalf. Clark also admitted to recruiting friends and associates whom he referred to Stote for the purpose of submitting additional fraudulent PPP loan applications, sometimes in exchange for kickbacks. Clark admitted to seeking $6,774,999 in fraudulent PPP loans through other conspirators that he referred to the scheme. In addition to the prison sentence, Clark was ordered to pay $2,975,086 in restitution.
Additionally, two other co-conspirators were recently sentenced for their role in the scheme. On July 29, 2021, Tonye Johnson, 29, of Philadelphia, Pennsylvania, was sentenced to 18 months in prison. According to court documents, Johnson admitted to obtaining a fraudulent PPP loan of $389,627 for his company, Synergy Towing & Transport LLC, based on falsified information and documents. And on July 13, 2021, Tiara Walker, 38, of Miami Gardens, Florida, was sentenced to 12 months and a day in prison. According to court documents, Walker admitted to obtaining a fraudulent PPP loan of $258,575 for her company, Utilization Review Pros LLC, based on falsified information and documents. Both Johnson and Walker falsely inflated the number of employees and monthly payroll for their companies, and they worked with Stote and other co-conspirators to obtain their fraudulent loans.
James Stote was charged by complaint on June 24, 2020, with wire fraud, bank fraud, and conspiracy to commit wire fraud, and his case remains pending. A complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; Acting U.S. Attorney Juan Antonio “Tony” Gonzalez of the Southern District of Florida; Special Agent in Charge Michael J. De Palma of the IRS Criminal Investigation (IRS-CI) Miami Field Office; Special Agent in Charge George L. Piro of the FBI’s Miami Field Office; and Special Agent in Charge Amaleka McCall-Brathwaite of the SBA’s Office of Inspector General (SBA-OIG) Eastern Region made the announcement.
The IRS-CI, FBI, and SBA-OIG investigated the cases.
Trial Attorney Philip Trout of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys David Turken and David Snider of the U.S. Attorney’s Office for the Southern District of Florida prosecuted the cases.
The Fraud Section leads the department’s prosecution of fraud schemes that exploit the PPP. In the months since the PPP began, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. The Fraud Section has also seized more than $65 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at: https://www.justice.gov/criminal-fraud/ppp-fraud.
In May, 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 Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form
Louisiana Doctor Pleads Guilty to Workers’ Comp Fraud ConspiracyRead the Press Release
FAYETTEVILLE, Ark.—A Lake Charles, La., physician pleaded guilty today to one count of conspiracy to commit mail fraud, wire fraud, health care fraud, fraud to obtain federal employees’ compensation, and illegal remunerations (taking kickbacks), in connection with a scheme to defraud the U.S. government and private insurance companies by over-billing for unnecessary medications provided to workers’ compensation patients.
U.S. District Judge Timothy L. Brooks presided over the plea hearing, in which Robert Dale Bernauer, Sr., 74, waived indictment by a grand jury and pleaded guilty to a criminal information charging him with conspiracy to violate five different federal statutes. According to court documents, Bernauer, an orthopedic surgeon and clinician who practiced in Louisiana, made more than $1,000,000 off of the scheme, which ran from 2011 until 2017 and defrauded both federal and private workers’ compensation insurers.
Court documents allege that the basic premise of the scheme was that individuals associated with an Arkansas company recruited Bernauer to dispense pain creams and patches to his workers’ compensation patients by offering him a 50 percent split of the profits collected from successfully billing insurers. The company billed insurers at markups of anywhere from 1,500 to 2,000 percent—in other words, 15 to 20 times what the medications actually cost. The unnamed company acted as the billing agent for Bernauer, handling all of the paperwork and submitting the allegedly fraudulent claims to both the U.S. Department of Labor, Office of Workers’ Compensation Programs, which covers all federal employees, and to private insurers as well.
Bernauer admitted that both he and his co-conspirators knew he did not have a license to dispense medications from his clinic, which was required under Louisiana law, but proceeded anyway to sign two contracts under which he agreed to buy topical medications from the Arkansas company at set rates, and dispense them exclusively to his workers’ compensation patients. In turn, the contracts provided that Bernauer and the company would each get half of all amounts successfully collected from insurers.
Although such profit-splitting arrangements violated both federal and Louisiana laws, in pleading guilty Bernauer admitted he joined the scheme knowing it was, in his words, “too good to be true.” Bernauer further admitted he deliberately blinded himself to the illegality of the business arrangement, despite all the “red flags” he knew to be present. Bernauer’s plea agreement states that while not offering any excuses for his conduct, he joined in the conspiracy because he needed the money, and continued to participate due to expenses associated with his wife’s final illness.
Court documents indicate that Bernauer was not the only physician involved in this scheme, and the total financial harm to federal and private workers’ compensation insurers is not listed. However, Bernauer alone accounted for a loss of approximately $2,050,546, of which $664,176.50 was suffered by the federal agencies whose employees were Bernauer’s patients.
“The Department of Justice and this U.S. Attorney’s Office are committed to combatting health care fraud and holding accountable the perpetrators of schemes like the one alleged here,” said David Clay Fowlkes, Acting U.S. Attorney for the Western District of Arkansas.
“Today’s guilty plea highlights the commitment of the Department of Defense Inspector General, Defense Criminal Investigative Service, and our law enforcement partners to protect the integrity of the workers’ compensation program that serves our federal workforce,” said Special Agent in Charge Michael Mentavlos of the Defense Criminal Investigative Service Southwest Field Office. “Physicians, marketers and billing companies who attempt to take advantage of the program by paying and receiving kickbacks for prescribing unnecessary medications expose our workforce to potential physical harm and waste valuable taxpayer dollars.”
“An important mission of the Office of Inspector General is to investigate allegations of fraud related to the Department of Labor’s Office of Workers’ Compensation Programs. We will continue to work with our law enforcement partners and the Office of Workers’ Compensation Programs to protect the integrity of the department’s benefit programs and hold those who defraud them accountable as demonstrated in today’s guilty plea,” stated Steven Grell, Special Agent in Charge, Dallas Region, U.S. Department of Labor Office of Inspector General.
“Billing for unnecessary medications undermines the integrity of federal health care programs,” stated Jeffrey Breen, Special Agent in Charge at the Department of Veterans Affairs Office of Inspector General. “This guilty plea holds the defendant accountable for his criminal actions placing profits before his patients’ health. We thank our law enforcement partners for their collaboration in this important investigation.”
“Today’s guilty plea is a testament to the dedication and determination of the investigative and legal teams,” said Special Agent in Charge Scott Pierce, U.S. Postal Service Office of Inspector General, Southern Area Field Office. “The Postal Service spends hundreds of millions of dollars annually on health care related costs and these monies are critical to those who legitimately need medical services. As in this case, our criminal investigators will diligently pursue any individual or organization intent on defrauding the Postal Service with an eye on both federal prosecution and returning lost monies to the affected program.”
In his plea agreement, Bernauer promised to immediately start making amends, by within 30 days paying $664,176.30 directly to the Department of Labor, as restitution to the federal agencies that were primary targets of the fraudulent scheme, and a further $361,096.70 to the court clerk’s office, to be distributed to other insurers victimized by the conspiracy. Bernauer also acknowledged that he would be subject to an additional restitution order of approximately $1,025,273, as a shared obligation with any of his co-conspirators who are later convicted.
As a result of his guilty plea to the single conspiracy count, Bernauer may be sentenced to a maximum of five years in prison. The court will determine his sentence at a later date, after reviewing a pre-sentence investigation report prepared by the U.S. Probation Office, and considering the U.S. Sentencing Guidelines and other statutory factors.
The case was investigated by the Department of Defense, Defense Criminal Investigative Service, the Department of Labor Office of Inspector General, the Department of Veterans Affairs Office of Inspector General, the U.S. Postal Service Office of Inspector General, with the assistance of the Internal Revenue Service-Criminal Investigation, the Louisiana Department of Justice, the Louisiana State Board of Medical Examiners, and the Louisiana Board of Pharmacy.
Assistant U.S. Attorneys Steven Mohlhenrich and Hunter Bridges prosecuted the case for the United States.
Jury Convicts Registered Sex Offender of Attempted Enticement of a MinorRead the Press Release
PADUCAH, Ky. – A federal jury convicted a registered sex offender today of attempting to entice a minor to engage in sexual activity.
According to court documents and evidence presented at trial, Dustin R. Stone, age 29, of Greenville, Kentucky, was arrested on November 21, 2018, when he traveled to Paducah with the intent of having sex with a 13-year-old female he believed he was communicating with; in fact, Stone was communicating with undercover detectives with the Paducah Police Department. Stone sent sexually explicit text messages to the investigators and further solicited the encounter through a series of phone calls with an undercover female detective.
In 2014, Stone was previously convicted of Attempted Use of Electronic Means to Induce a Minor in a sex offense in Muhlenberg Circuit Court. He was ordered in that case to be placed on the sex offender registry for twenty years.
The jury found Stone guilty of Attempted Enticement and Commission of a Felony Involving a Minor by a Person Required to Register as a Sex Offender.
“Assistant U.S. Attorneys Leigh Ann Dycus and Raymond McGee did an outstanding job during the trial of this case,” stated Acting U.S. Attorney Michael A. Bennett. The investigation and prosecution of those who wish to sexually exploit and abuse our children is a high priority of this office. I commend the Paducah Police Department for their outstanding investigatory work which resulted in the successful prosecution of the Mr. Stone, a previously convicted sex offender.”
“I’m thankful for and appreciative of the hard work of the Paducah Police Department’s Criminal Investigations Unit for ensuring this predator is off the streets of Paducah and other communities,” said Paducah Police Chief Brian G. Laird. “Through our work and cooperation with the U.S. Attorney’s office, Stone was successfully prosecuted and convicted, and will not present a danger to our children for at least the next 20 years.”
Sentencing is scheduled for December 9, 2021. Under federal law, Stone is facing a mandatory sentence of not less than twenty years imprisonment. There is no parole in the federal system.
The General Investigations Unit of the Paducah Police Department is investigating the case.
This case is being prosecuted by Assistant United States Attorneys Leigh Ann Dycus and Raymond McGee.
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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."
Iranian National Charged with Illegally Exporting Laboratory Equipment to IranRead the Press Release
A federal grand jury in the District of Columbia returned an indictment today charging a Canadian national with the unlawful export of laboratory equipment from the United States to Iran, through Canada and the United Arab Emirates (UAE).
According to court documents, Reza Sarhangpour Kafrani, aka Reza Sarhang, 46, an Iranian national residing in Montreal, was indicted by a grand jury in the U.S. District Court for the District of Columbia on one count of conspiracy, two counts of violations of the International Emergency Economic Powers Act (IEEPA), one count of causing a failure to submit export information and six counts of money laundering. The indictment also includes a forfeiture allegation seeking all proceeds of the alleged crimes. Kafrani will be arraigned on the charges on a date to be determined by the court.
According to the indictment, Kafrani and a co-conspirator co-owned Prolife Global, Ltd., which was based in Canada, but conducted business in the United States and elsewhere. In November 2015, Kafrani began negotiating with a U.S. company to purchase mass spectrometry equipment for import to Canada. During those negotiations, Kafrani initially inquired about costs to ship and install the equipment in Montreal, Canada. Later, however, Kafrani asked a representative of the company if the installation costs were the same for the Middle East, and the representative of the company emailed Kafrani, saying, “You know there are sanctions in place for Iran.” Kafrani was unable to purchase the equipment from this company.
As alleged in the indictment, he then began negotiations with a second U.S. company for the purchase of similar mass spectrometry equipment in March 2016. Ultimately, he and a co-conspirator were able to purchase three mass spectrometers and an autosampler, used to automatically load samples into the mass spectrometer, for a total of approximately $110,739.
Chromatography and spectrometry analytical instruments, such as some of the laboratory equipment purchased by Kafrani, are controlled for nuclear nonproliferation reasons and therefore require a license to be exported from the United States to either Iran or the UAE. Specifically, a license is required from the Department of Commerce’s Bureau of Industry and Security (BIS) to export such items to the UAE, while a license is required from the Department of the Treasury, Office of Foreign Assets Control (OFAC), to export to Iran. The remaining laboratory equipment purchased by Kafrani may not be exported to Iran without a license from OFAC. Kafrani and his co-conspirator applied for an export license from OFAC on Nov. 16, 2015, and again April 23, 2016, but OFAC declined to grant either application. Kafrani’s co-conspirator applied for a license from BIS on March 28, 2016, but that application was returned without action by BIS because OFAC is responsible for administering the U.S. sanctions against Iran.
On Aug. 24, 2016, Kafrani and his co-conspirator directed the second U.S. company to ship one mass spectrometer to Canada, and then coordinated with a Canadian shipping company to reexport it to the UAE on Sept. 7, 2016. From there, they arranged for a UAE-based shipping company to reexport the item to Iran on Sept. 25, 2016.
In September 2016, Kafrani and his co-conspirator arranged for a Canada-based shipping company to pick up two more mass spectrometers and an autosampler directly from the second U.S. company, transport the items to Canada and then reexport them to the UAE Kafrani then hired a UAE-based transport company to reexport the items to Iran on Oct. 11, 2016.
Kafrani never told the second U.S. company that the items were ultimately destined for Iran, causing the firm to fail to file the legally required electronic export information. Kafrani also made, or caused to be made, six separate money transfers from bank accounts in Canada and elsewhere to bank accounts in the United States with the intent to promote the unlawful exports to Iran described above. Charges of conspiracy and failing to submit export information carry a statutory maximum of five years in prison. Violations of the IEEPA and money laundering charges carry a statutory maximum of 20 years in prison. The charges also carry potential financial penalties. If convicted, a federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Assistant Attorney General Mark J. Lesko of the Justice Department’s National Security Division (NSD); Acting U.S. Attorney Channing D. Phillips for the District of Columbia; Special Agent in Charge Kevin M. Kelly of the Homeland Security Investigations (HSI) Buffalo Field Office; Special Agent in Charge Jonathan Carson of the Department of Commerce’s New York Field Office, Office of Export Enforcement; Acting Special Agent in Charge Thomas Fattorusso of the IRS Criminal Investigation (IRS-CI) New York Field Office and Special Agent in Charge Stephen Belongia of the FBI’s Buffalo Field Office made the announcement.
Homeland Security Investigations (HSI), the Department of Commerce’s Office of Export Enforcement. IRS-Criminal Investigations, and the FBI are investigating the case.
Assistant U.S. Attorney Christopher Tortorice for the U.S. Attorney’s Office in the District of Columbia and Trial Attorney Beau Barnes of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case, with substantial assistance provided by former Assistant U.S. Attorney Jessica Brooks and former Trial Attorney Heather Alpino.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Iranian National Charged with Illegally Exporting Laboratory Equipment from the United States to IranRead the Press Release
WASHINGTON – A federal grand jury in the District of Columbia returned an indictment today charging a Canadian national with the unlawful export of laboratory equipment from the United States to Iran, through Canada and the United Arab Emirates (UAE).
According to court documents, Reza Sarhangpour Kafrani, aka Reza Sarhang, 46, an Iranian national residing in Montreal, was indicted by a grand jury in the U.S. District Court for the District of Columbia on one count of conspiracy, two counts of violations of the International Emergency Economic Powers Act (IEEPA), one count of causing a failure to submit export information and six counts of money laundering. The indictment also includes a forfeiture allegation seeking all proceeds of the alleged crimes. Kafrani will be arraigned on the charges on a date to be determined by the court.
According to the indictment, Kafrani and a co-conspirator co-owned Prolife Global, Ltd., which was based in Canada, but conducted business in the United States and elsewhere. In November 2015, Kafrani began negotiating with a U.S. company to purchase mass spectrometry equipment for import to Canada. During those negotiations, Kafrani initially inquired about costs to ship and install the equipment in Montreal, Canada. Later, however, Kafrani asked a representative of the company if the installation costs were the same for the Middle East, and the representative of the company e-mailed Kafrani, saying, “You know there are sanctions in place for Iran.” Kafrani was unable to purchase the equipment from this company.
As alleged in the indictment, he then began negotiations with a second U.S. company for the purchase of similar mass spectrometry equipment in March 2016. Ultimately, he and a co-conspirator were able to purchase three mass spectrometers and an autosampler, used to automatically load samples into the mass spectrometer, for a total of approximately $110,739.
Chromatography and spectrometry analytical instruments, such as some of the laboratory equipment purchased by Kafrani, are controlled for nuclear nonproliferation reasons and therefore require a license to be exported from the United States to either Iran or the UAE. Specifically, a license is required from the Department of Commerce’s Bureau of Industry and Security (BIS) to export such items to the UAE while a license is required from the Department of the Treasury, Office of Foreign Assets Control (OFAC) to export to Iran. The remaining laboratory equipment purchased by Kafrani may not be exported to Iran without a license from OFAC. Kafrani and his co-conspirator applied for an export license from OFAC on Nov. 16, 2015, and again April 23, 2016, but OFAC declined to grant either application. Kafrani’s co-conspirator applied for a license from BIS on March 28, 2016, but that application was returned without action by BIS because OFAC is responsible for administering the U.S. sanctions against Iran.
On Aug. 24, 2016, Kafrani and his co-conspirator directed the second U.S. company to ship one mass spectrometer to Canada, and then coordinated with a Canadian shipping company to reexport it to the UAE on Sept. 7, 2016. From there, they arranged for a UAE based shipping company to reexport the item to Iran on Sept. 25, 2016.
In September 2016, Kafrani and his co-conspirator arranged for a Canada-based shipping company to pick up two more mass spectrometers and an autosampler directly from the second U.S. company, transport the items to Canada, and then reexport them to the UAE Kafrani then hired a UAE-based transport company to reexport the items to Iran on Oct. 11, 2016.
Kafrani never told the second U.S. company that the items were ultimately destined for Iran, causing the firm to fail to file the legally required electronic export information. Kafrani also made, or caused to be made, six separate money transfers from bank accounts in Canada and elsewhere to bank accounts in the United States with the intent to promote the unlawful exports to Iran described above.
Charges of conspiracy and failing to submit export information carry a statutory maximum of five years in prison. Violations of the IEEPA and money laundering charges carry a statutory maximum of 20 years in prison. The charges also carry potential financial penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Assistant Attorney General Mark J. Lesko of the Justice Department’s National Security Division (NSD); Acting U.S. Attorney Channing D. Phillips for the District of Columbia; Special Agent in Charge Kevin M. Kelly of the Department of Homeland Security’s Homeland Security Investigations (HSI) Buffalo Field Office; Special Agent in Charge Jonathan Carson of Department of Commerce’s New York Field Office, Office of Export Enforcement; Acting Special Agent in Charge Thomas Fattorusso of the IRS Criminal Investigation (IRS-CI) New York Field Office and Special Agent in Charge Stephen Belongia of the FBI’s Buffalo Field Office made the announcement.
This case is being investigated by the Buffalo Field Office of the U.S. Department of Homeland Security’s Homeland Security Investigations (HSI), the New York Field Office of the Department of Commerce’s Office of Export Enforcement, the New York Field Office of IRS Criminal Investigation (IRS-CI) and the Buffalo Field Office of the FBI.
Assistant U.S. Attorney Christopher Tortorice for the U.S. Attorney’s Office in the District of Columbia and Trial Attorney Beau Barnes of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case, with substantial assistance provided by former Assistant U.S. Attorney Jessica Brooks and former Trial Attorney Heather Alpino.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Inmate Sentenced for Possessing Weapon at FCI BeckleyRead the Press Release
BLUEFIELD, W.Va. - An inmate at the Federal Correctional Institution (FCI) at Beckley was sentenced today for possessing a weapon at the correctional facility. Elijio Perez, 30, of Texas, was sentenced to 12 months in prison to run consecutively to the sentence he currently is serving.
According to court documents, Perez possessed a handcrafted weapon on March 31, 2020 while he was an inmate at the FCI Beckley. A staff member found the weapon after Perez had placed it on the floor between a desk and a wall in an office at the prison. The weapon was a piece of metal about 9 ½ inches long and sharpened to a point on one end. Perez admitted that the shank was designed and intended to be used as a weapon.
Acting United States Attorney Lisa G. Johnston made the announcement and commended the investigative work of the Federal Bureau of Prisons. Assistant United States Attorney Timothy D. Boggess handled the prosecution.
United States District Judge Frank W. Volk imposed the sentence.
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. 5:21-cr-00001.
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Huron Man Charged with Possession of a Firearm by a Prohibited PersonRead the Press Release
Acting United States Attorney Dennis R. Holmes announced that a Huron, South Dakota, man has been indicted by a federal grand jury for Possession of a Firearm by a Prohibited Person.
Yeh Thwin, age 23, was indicted on April 6, 2021. He appeared before U.S. Magistrate Judge Veronica L. Duffy on July 28, 2021, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in federal prison and/or a $250,000 fine, three years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about November 12, 2020, Thwin, having previously been convicted of a crime punishable by imprisonment for a term exceeding one year, knowingly possessed a Glock GmbH, Model 22C Gen 3, .40 Smith and Wesson caliber, semi-automatic pistol. That pistol had been shipped and transported in interstate and foreign commerce.
The charge is merely an accusation and Thwin is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorney Jeffrey C. Clapper is prosecuting the case.
Thwin was released on bond pending trial which has been set for October 5, 2021.
Haines City Man Convicted of Drug TraffickingRead the Press Release
GAINESVILLE, FLORIDA – Jose Roberto Garcia Arroyo, 45, of Haines City, Florida, has been sentenced to serve more than eleven years in federal prison for conspiracy to distribute more than 5 kilograms of cocaine and possession with intent to distribute more than 5 kilograms of cocaine. The sentence was announced by Jason R. Coody, Acting United States Attorney for the Northern District of Florida.
In May 2020, agents from the Federal Bureau of Investigation (FBI) received information that Garcia Arroyo, the maintenance supervisor at two local apartment complexes in Gainesville, was receiving shipments of cocaine from Puerto Rico through the United States Postal Service. FBI agents teamed up with agents from the United States Postal Inspection Service (USPIS) Office and the United States Postal Service Office of Inspector General. After researching parcel history associated with the two complexes, agents were able to determine that between August 2019 and June 2020, 110 parcels had been shipped from Puerto Rico, most weighing approximately 6 pounds. One of these historical parcels was interdicted by USPIS at a postal facility and found to contain 2 kilograms of cocaine. Agents were also able to determine that a shipment of parcels was in transit to the apartment complexes.
“This investigation demonstrates the effectiveness and collaborative efforts of our local and federal law enforcement partners, to identify and intercept shipments of illegal substances via the United States Mail,” said Acting U.S. Attorney Coody. “The sentence imposed should serve as a significant deterrent to those who would use the United States Postal Service to conduct illegal activities.”
A joint surveillance operation was conducted in Gainesville on June 11, 2020. During this operation, agents learned that Garcia Arroyo obtained 6 parcels from the postal carrier which had been shipped from Puerto Rico to addresses within the apartment complexes. Shortly thereafter, an Alachua County Sheriff’s Office (ACSO) deputy conducted a traffic stop on Garcia Arroyo’s vehicle and a subsequent search of the truck revealed 6 priority mail parcels in the truck’s bed. These parcels were each found to contain 2 kilograms of cocaine. A search warrant was executed at Garcia Arroyo’s maintenance office and priority mailboxes and a drug ledger were located and seized. On June 12, 2020, USPIS interdicted another priority mail parcel that had been shipped from Puerto Rico to the apartment complexes in Gainesville. This parcel was also found to contain 2 kilograms of cocaine.
“We appreciate and applaud the outstanding work by the investigative and legal teams,” said Special Agent in Charge Scott Pierce, U.S. Postal Service Office of Inspector General, Southern Area Field office. “As this sentence clearly shows, any individual or organization who chooses to use the U.S. Mail to further illicit narcotics trafficking activity will be aggressively investigated and held accountable for their illegal conduct.”
As a result of the combined investigative efforts of these law enforcement agencies, Garcia Arroyo was held accountable at sentencing for trafficking 234 kilograms of cocaine. Authorities were able to seize 16 kilograms of cocaine over the course of the investigation.
This sentencing resulted from the collaborative efforts of the Federal Bureau of Investigation, United States Postal Inspection Service Office, the United States Postal Service Office of Inspector General and the Alachua County Sheriff’s Office. Assistant United States Attorney Christopher Elsey 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.
Government Intervenes in False Claims Act Lawsuits Against Kaiser Permanente Affiliates for Submitting Inaccurate Diagnosis Codes to the Medicare Advantage ProgramRead the Press Release
The United States has intervened in six complaints alleging that members of the Kaiser Permanente consortium violated the False Claims Act by submitting inaccurate diagnosis codes for its Medicare Advantage Plan enrollees in order to receive higher reimbursements.
The Kaiser Permanente consortium members (collectively Kaiser) are Kaiser Foundation Health Plan Inc., Kaiser Foundation Health Plan of Colorado, The Permanente Medical Group Inc., Southern California Permanente Medical Group Inc. and Colorado Permanente Medical Group P.C. Kaiser is headquartered in Oakland, California.
“Medicare’s managed care program relies on the accuracy of information submitted by health care providers and plans to ensure that patients receive the appropriate level of care, and that plans receive the appropriate compensation,” said Deputy Assistant Attorney General Sarah E. Harrington of the Justice Department’s Civil Division. “Today’s action sends a clear message that we will hold health care providers and plans accountable if they seek to game the system by submitting false information.”
“The integrity of government health care programs must be protected,” said Acting U.S. Attorney Stephanie Hinds for the Northern District of California. “The Medicare Advantage Program maintains the health of millions, and wrongful acts that defraud the program cannot continue and will be pursued.”
“The federal government pays hundreds of billions of dollars every year to Medicare Advantage Plans,” said Acting U.S. Attorney Matt Kirsch for the District of Colorado. “The District of Colorado will vigorously pursue investigations with our partners to make sure that money supports necessary health care, not fraud.”
Under Medicare Advantage, also known as the Medicare Part C program, Medicare beneficiaries have the option of enrolling in managed care insurance plans called Medicare Advantage Plans (MA Plans). MA Plans are paid a per-person amount to provide Medicare-covered benefits to beneficiaries who enroll in one of their plans. The Centers for Medicare and Medicaid Services (CMS), which oversees the Medicare program, adjusts the payments to MA Plans based on demographic information and the diagnoses of each plan beneficiary. The adjustments are commonly referred to as “risk scores.” In general, a beneficiary with more severe diagnoses will have a higher risk score, and CMS will make a larger risk-adjusted payment to the MA Plan for that beneficiary.
Medicare requires that, for outpatient medical encounters, MA Plans submit diagnoses to CMS only for conditions that required or affected patient care, treatment or management during an in-person encounter in the service year. In order to increase its Medicare reimbursements, Kaiser allegedly pressured its physicians to create addenda to medical records after the patient encounter, often months or over a year later, to add risk-adjusting diagnoses that patients did not actually have and/or were not actually considered or addressed during the encounter, in violation of Medicare requirements.
The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done, in part, in these cases. The cases are consolidated in the Northern District of California and captioned United States ex rel. Osinek v. Kaiser Permanente, 3:13-cv-03891 (N.D. Cal.); United States ex rel. Taylor v. Kaiser Permanente, et al., 3:21-cv-03894 (N.D. Cal.); United States ex rel. Arefi, et al. v. Kaiser Foundation Health Plan, Inc., et al., 3:16-cv-01558 (N.D. Cal.); United States ex rel. Stein, et al. v. Kaiser Foundation Health Plan, Inc., et al., 3:16-cv-05337 (N.D. Cal.); United States ex rel. Bryant v. Kaiser Permanente, et al., 3:18-cv-01347 (N.D. Cal.); and United States ex rel. Bicocca v. Permanente Med. Group, Inc., et al., No. 3:21-cv-03124 (N.D. Cal.).
This matter was investigated by the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Offices for the Northern District of California and the District of Colorado, with assistance from HHS-OIG.
The claims in which the United States has intervened are allegations only, and there has been no determination of liability.
Government Intervenes in False Claims Act Lawsuits Against Kaiser Permanente Affiliates for Submitting Inaccurate Diagnosis Codes to the Medicare Advantage ProgramRead the Press Release
SAN FRANCISCO – The United States has intervened in six complaints alleging that members of the Kaiser Permanente consortium violated the False Claims Act by submitting inaccurate diagnosis codes for its Medicare Advantage Plan enrollees in order to receive higher reimbursements.
The Kaiser Permanente consortium members (collectively Kaiser) are Kaiser Foundation Health Plan Inc., Kaiser Foundation Health Plan of Colorado, The Permanente Medical Group Inc., Southern California Permanente Medical Group Inc. and Colorado Permanente Medical Group P.C. Kaiser is headquartered in Oakland, California.
“The integrity of government health care programs must be protected,” said Acting U.S. Attorney Stephanie Hinds for the Northern District of California. “The Medicare Advantage Program maintains the health of millions, and wrongful acts that defraud the program cannot continue and will be pursued.”
“Medicare’s managed care program relies on the accuracy of information submitted by health care providers and plans to ensure that patients receive the appropriate level of care, and that plans receive the appropriate compensation,” said Deputy Assistant Attorney General Sarah E. Harrington of the Justice Department’s Civil Division. “Today’s action sends a clear message that we will hold health care providers and plans accountable if they seek to game the system by submitting false information.”
“The federal government pays hundreds of billions of dollars every year to Medicare Advantage Plans,” said Acting U.S. Attorney Matt Kirsch for the District of Colorado. “The District of Colorado will vigorously pursue investigations with our partners to make sure that money supports necessary health care, not fraud.”
Under Medicare Advantage, also known as the Medicare Part C program, Medicare beneficiaries have the option of enrolling in managed care insurance plans called Medicare Advantage Plans (MA Plans). MA Plans are paid a per-person amount to provide Medicare-covered benefits to beneficiaries who enroll in one of their plans. The Centers for Medicare and Medicaid Services (CMS), which oversees the Medicare program, adjusts the payments to MA Plans based on demographic information and the diagnoses of each plan beneficiary. The adjustments are commonly referred to as “risk scores.” In general, a beneficiary with more severe diagnoses will have a higher risk score, and CMS will make a larger risk-adjusted payment to the MA Plan for that beneficiary.
Medicare requires that, for outpatient medical encounters, MA Plans submit diagnoses to CMS only for conditions that required or affected patient care, treatment or management during an in-person encounter in the service year. In order to increase its Medicare reimbursements, Kaiser allegedly pressured its physicians to create addenda to medical records after the patient encounter, often months or over a year later, to add risk-adjusting diagnoses that patients did not actually have and/or were not actually considered or addressed during the encounter, in violation of Medicare requirements.
The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done, in part, in these cases. The cases are consolidated in the Northern District of California and captioned United States ex rel. Osinek v. Kaiser Permanente, 3:13-cv-03891 (N.D. Cal.); United States ex rel. Taylor v. Kaiser Permanente, et al., 3:21-cv-03894 (N.D. Cal.); United States ex rel. Arefi, et al. v. Kaiser Foundation Health Plan, Inc., et al., 3:16-cv-01558 (N.D. Cal.); United States ex rel. Stein, et al. v. Kaiser Foundation Health Plan, Inc., et al., 3:16-cv-05337 (N.D. Cal.); United States ex rel. Bryant v. Kaiser Permanente, et al., 3:18-cv-01347 (N.D. Cal.); and United States ex rel. Bicocca v. Permanente Med. Group, Inc., et al., No. 3:21-cv-03124 (N.D. Cal.).
This matter was investigated by the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Offices for the Northern District of California and the District of Colorado, with assistance from HHS-OIG.
The claims in which the United States has intervened are allegations only, and there has been no determination of liability.
Georgia Man Sentenced to More Than 5 Years in Federal Prison for Role in Trafficking Meth in South CarolinaRead the Press Release
Columbia, South Carolina --- Acting United States Attorney M. Rhett DeHart announced today that Rondedrick Robinson, 26, of Decatur, Georgia, was sentenced to more than five years in federal prison, after pleading guilty to possessing with intent to distribute methamphetamine.
Evidence presented to the Court showed that, on February 25, 2020, officers from the Aiken County Sheriff’s Office made a traffic stop on a vehicle driven by Robinson. In a subsequent search of the vehicle, law enforcement located nearly 10 kilograms of methamphetamine. Further investigation revealed Robinson had been paid to deliver the narcotics from the Atlanta area to South Carolina.
Senior United States District Judge Joseph F. Anderson, Jr. sentenced Robinson to 70 months in federal prison, to be followed by a three-year term of court-ordered supervision. There is no parole in the federal system.
The case was investigated by the Aiken County Sheriff’s Office and the Drug Enforcement Administration (DEA).
Assistant United States Attorney Katherine Flynn prosecuted the case.
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Four Syracuse Men Charged with Fentanyl Trafficking ConspiracyRead the Press Release
SYRACUSE, NEW YORK – Four Syracuse men were indicted yesterday and charged with conspiracy to distribute fentanyl, and possessing controlled substances with the intent to distribute. The announcement was made by Acting U.S. Attorney Antoinette T. Bacon; Ray Donovan, Special Agent in Charge of the U.S. Drug Enforcement Administration (DEA), New York Field Division; and Chief Kenton Buckner, City of Syracuse Police Department.
- Raphael Frias, age 28, was charged with conspiring to distribute and possess with intent to distribute fentanyl, and possessing fentanyl with the intent to distribute. If convicted, Frias faces between 5 and 40 years in prison, a fine of up to $5 million, and a term of supervised release of at least 4 years and up to life.
- Carlos Esteras, age 40, was charged with conspiring to distribute and possess with intent to distribute fentanyl, and possessing fentanyl with the intent to distribute. If convicted, Esteras faces between 5 and 40 years in prison, a fine of up to $5 million, and a term of supervised release of at least 4 years and up to life.
- Adrian Esteras, age 37, was charged with conspiring to distribute and possess with intent to distribute fentanyl, and possessing cocaine with the intent to distribute. If convicted, Esteras faces up to 20 years in prison, a fine of up to $1 million, and a term of supervised release of at least 3 years and up to life.
- Shane Williams, age 30, was charged with conspiring to distribute and possess with intent to distribute fentanyl, and possessing a firearm and ammunition after being convicted of a felony. If convicted, Williams faces up to 20 years in prison, a fine of up to $1 million, and a term of supervised release of at least 3 years and up to life.
The charges in the indictment are merely accusations, and all defendants are presumed innocent unless and until proven guilty. 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.
The defendants were arrested on July 6, 2021, and are detained pending trial. At the time of the defendants’ arrests, law enforcement seized over 1,500 envelopes containing suspected fentanyl, a quantity of cocaine, and a loaded Smith & Wesson 9mm handgun.
This case is being investigated by the DEA, the Syracuse Police Department, the Onondaga County Sheriff’s Office, the Onondaga County District Attorney’s Office, the New York State Police, the New York State Division of Parole, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), and U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations, and is being prosecuted by Assistant U.S. Attorney Thomas Sutcliffe.
- Raphael Frias, age 28, was charged with conspiring to distribute and possess with intent to distribute fentanyl, and possessing fentanyl with the intent to distribute. If convicted, Frias faces between 5 and 40 years in prison, a fine of up to $5 million, and a term of supervised release of at least 4 years and up to life.
Former President and CEO of now bankrupt precious metals firm convicted of mail and wire fraud for Ponzi-type schemeRead the Press Release
Seattle – The former President & CEO of Northwest Territorial Mint, a now-bankrupt company dealing in precious metals, was convicted today in U.S. District Court in Seattle of 14 federal felonies resulting from a Ponzi-like scheme that defrauded customers of millions of dollars, announced Acting U.S. Attorney Tessa M. Gorman. After more than three weeks of testimony and evidence, the jury deliberated about two days before convicting Bernard Ross Hansen, 60, aka Ross B. Hansen of multiple counts of wire and mail fraud. The jury also convicted Vault Manager Diane Renee Erdmann, 48, of 13 counts of wire fraud and mail fraud following the trial. Sentencing for both Mr. Hansen and Ms. Erdmann is scheduled for October 29, 2021.
Northwest Territorial Mint (NWTM) operated both a custom business that involved the manufacturing of medallions and other awards, and a bullion business that involved the selling, buying, exchanging, storing, and leasing of gold, silver, and other precious metals. The company had offices in Federal Way and Auburn, Washington, but declared bankruptcy on April 1, 2016.
According to records in the case and testimony at trial, Hansen and Erdmann defrauded NWTM customers in a variety of ways. The evidence at trial showed that Hansen and Erdmann lied about shipping times for bullion, used customer money to expand the business to other states, and used customer money to pay their own personal expenses. In this way the company lacked enough assets to fulfill customer orders and used new customer money to pay off older customers in a Ponzi-like scheme. In total, over 2500 customers paid for orders, or made bullion sales or exchanges, that were either never fulfilled or never refunded. The total loss to these customers was more than $25,000,000.
In closing arguments, Assistant United States Attorney Benjamin Diggs told the jury “They tried to make this company look solid – like the metals they sold – but in fact it was a house of cards.”
In addition to the bullion customer fraud, the evidence at trial demonstrated that Hansen and Erdmann defrauded customers who paid NWTM to safely and securely store bullion in the NWTM vaults. Evidence and testimony at trial showed that Hansen and Erdmann used this bullion that was supposed to be in secure storage to fulfill other orders. In April 2016, the NWTM vaults were inventoried and all or part of the stored bullion for more than 50 customers was missing. The missing bullion was worth more than $4.9 million.
Each of the counts of conviction are punishable by up to 20 years in prison. U.S. District Judge Richard A. Jones will determine the appropriate sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The case was investigated by the FBI. The case was prosecuted by Assistant United States Attorneys Brian Werner and Benjamin Diggs.
Former Member of New Bedford Latin Kings Chapter Pleads Guilty to Racketeering ConspiracyRead the Press Release
BOSTON – A former member of the New Bedford Chapter of the Massachusetts Almighty Latin King and Queen Nation (Latin Kings) pleaded guilty yesterday to racketeering charges.
Jose Vasquez, a/k/a “King Fearless,” 28, pleaded guilty to conspiracy to conduct enterprise affairs through a pattern of racketeering activity, more commonly referred to as RICO conspiracy. U.S. Senior District Court Judge Rya W. Zobel scheduled sentencing for Nov. 3, 2021.
As stated during the plea hearing, Vasquez served as the Enforcer for the New Bedford Latin Kings Chapter. In his role as Enforcer, Vasquez admitted to approving a “mission” or shooting of a victim that took place in June 2019. This victim was targeted for obtaining and selling drugs from a source that was not sanctioned by the Latin Kings. Vasquez also admitted to his participation in a shooting of two victims in May 2018. During that incident, multiple Latin Kings members chased the two victims to a vehicle, surrounded the vehicle, and slashed their tires. Another Latin Kings member then fired gunshots at the two victims striking them. Both victims fled in the vehicle and survived. Vasquez admitted that these victims were targeted due to one of the victims having previously objected to Latin Kings members conducting drug transactions in the victim’s driveway.
The Latin Kings are a violent criminal enterprise comprised of thousands of members across the United States. The Latin Kings adhere to a national manifesto, employ an internal judiciary and use a sophisticated system of communication to maintain the hierarchy of the organization. As alleged in court documents, the gang uses drug distribution to generate revenue, and engages in violence against witnesses and rival gangs to further its influence and to protect its turf.
In December 2019, a federal grand jury returned an indictment alleging racketeering conspiracy, drug conspiracy and firearms charges against 62 leaders, members and associates of the Latin Kings. Vasquez is the 47th defendant to plead guilty in the case.
The RICO conspiracy charge provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Commissioner Carol Mici of the Massachusetts Department of Correction; and New Bedford Police Chief Joseph C. Cordeiro made the announcement today. Valuable assistance was also provided by the FBI North Shore Gang Task Force and the Bristol County and Suffolk County District Attorney’s Offices. Assistant U.S. Attorneys Philip A. Mallard and Lauren A. Graber of Mendell’s Criminal Division are prosecuting the case.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Boston Police Auto Repair Technician Agrees to Plead Guilty to Wire Fraud ChargesRead the Press Release
BOSTON – A former auto repair technician with the Boston Police Department’s (BPD) Fleet Management Division has been charged and has agreed to plead guilty in connection with a scheme to embezzle hundreds of thousands of dollars from the BPD.
Bahram Gharony, 36, of Boston, has agreed to plead guilty to two counts of wire fraud. A plea hearing has not yet been scheduled by the court.
According to the charging document, Gharony is alleged to have engaged in a scheme to defraud BPD’s Fleet Management Division of over $260,000 in automotive parts, tools and supplies between June 2017 and September 2020. It is alleged that Gharony used his position to order parts and supplies that he purported were for BPD, but were actually converted and sold to others by Gharony. In an effort to conceal the scheme, Gharony allegedly submitted fraudulent and altered invoices to BPD for the parts, tools and supplies he falsely claimed were ordered for the fleet. Additionally, Gharony purported that he had lawfully purchased the items through a discount available to BPD when selling the items to others.
The charges of wire fraud each provide for a sentence of up to 20 years in prison, three years of supervised release and fine of $250,000, or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; and Boston Police Acting Commissioner Gregory Long made the announcement. Assistant U.S. Attorney Neil J. Gallagher Jr. of Mendell’s Public Corruption & Special Prosecutions Unit is prosecuting the case.
The details contained in the charging document are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Bank Branch Manager Sentenced for Fraud SchemesRead the Press Release
INDIANAPOLIS – An Avon woman was sentenced to 3 years in prison for bank and mail fraud. She will also serve 2 years of supervised release and was ordered to pay over $315,000 in restitution.
According to court documents, Susan Fruits, 46, devised two separate fraud schemes. Fruits’ s bank fraud scheme targeted customers of the Brownsburg, Indiana bank where she served as branch manager. Fruits admitted in court that between 2017 and 2020, she perpetrated a scheme to withdraw money from customers’ Certificate of Deposit (CD) accounts without their knowledge. She digitally signed for the customers without their authorization, effectively forging their signatures, and then approved the withdrawals using her position as branch manager. In total, she stole more than $180,000 from the bank’s customers using this scheme.
Fruits mail fraud scheme targeted three children for whom she served as guardian and trustee of their inheritance. Fruits admitted that in mid-2015, one of Fruits’ s close friends died, leaving trust accounts for the friend’s three children. Fruits was named the trustee for the accounts, each of which had more than $50,000 in them. Over the course of eight months, Fruits spent all the money in the children’s accounts on unauthorized purchases.
To conceal her thefts, she created and mailed false bank statements purporting to show that the children’s accounts still had thousands of dollars in them. The three trust accounts had zero dollars left because Fruits had spent all the money.
Between the two schemes, Fruits admitted to stealing more than $315,000.
“Ms. Fruits’ actions were full of greed and selfishness,” said Acting U.S. Attorney John E. Childress. "It is sad to see someone abuse a position of trust for self-enrichment, especially at the cost of children who have already lost so much. Fruits has been brought to justice and the victims will receive what is due to them.”
"This sentencing sends a clear message that targeting not only those you serve, but innocent children, comes with a price,” said FBI Indianapolis Acting Special Agent in Charge Robert Middleton. “The FBI will continue to work with the United States Attorney's Office to ensure those who choose to put personal greed ahead of the law are identified and brought to justice.”
This case was investigated by the Federal Bureau of Investigation
Assistant U.S. Attorney Adam Eakman prosecuted the case.
Final Member of A Halifax County Multi-Kilogram Heroin Trafficking Organization SentencedRead the Press Release
NEW BERN, N.C. – A Princeville man was sentenced this week to 57 months in prison for conspiracy to distribute and possession with intent to distribute 1 kilogram or more of heroin and a quantity of marijuana.
According to court documents, Mario Marelle Scott, 44, was named in a Third Superseding Indictment filed on October 11, 2018. On November 13, 2019, Scott entered a plea of guilty.
In March 2016, members of the Tar River Regional Drug Task Force (TRRDTF), led by the Nash County Sheriff’s Office, learned that a drug trafficking organization was bringing large amounts of heroin from New Jersey to Nash, Edgecombe, and Halifax Counties. The organization would then sell the heroin in those counties.
On March 13, 2017, agents conducted a traffic stop of Herbert Lamont Cherry and Tony Ray Reams as they returned from Paterson, New Jersey. A search of the vehicle resulted in the seizure of 470 grams of heroin, which were packaged in 34,722 “bindles” or dosage units.
On August 16, 2017, agents conducted a traffic stop of Tara Finis Simmons and Charles Lee Wright as they returned from Paterson, New Jersey. The vehicle was searched and found to contain 110 grams of heroin and 13 grams of marijuana.
Agents then interviewed a series of witnesses, who indicated that the drug trafficking organization was led by Terrence Cornelius Clyburn, a/k/a “Tee.” Clyburn would arrange for the transportation of large amounts of heroin to North Carolina via couriers. Those couriers included Tony Reams, Herbert Cherry, Tara Simmons, and Charles Wright.
Other members of the organization would distribute the drugs in North Carolina, including Patrick Holiday, Tyshawn Reams, and Mario Scott.
From 2015 to 2017, Mario Scott and Patrick Holiday distributed approximately 100 grams of heroin each month in North Carolina for the organization. In total, Mario Scott was responsible for trafficking almost 10 kilograms of heroin.
Below are the results of the other cases in this investigation:
- Terrence Clyburn, Case No. 4:17-CR-0046-3: 147 months’ imprisonment.
- Patrick Direece Holiday, Case No. 4:17-CR-0046-5: 96 months’ imprisonment.
- Tyshawn Rayvon Reams, Case No. 4:17-CR-0046-4: 88 months’ imprisonment.
- Charles Lee Wright, Case No. 4:17-CR-0046-1: 60 months’ imprisonment.
- Tara Finis Simmons, Case No. 4:17-CR-0046-2: 28 months’ imprisonment
- Herbert Lamont Cherry, Case No. 4:17-CR-0025-FL-1: 47 months’ imprisonment.
- Tony Ray Reams, Case No. 4:17-CR-0025-FL-2: 71 months’ imprisonment.
G. Norman Acker, III, Acting U.S. Attorney for the Eastern District of North Carolina, made the announcement after sentencing by U.S. District Judge Louise W. Flanagan. The Nash County Sheriff’s Office, Edgecombe County Sheriff’s Office, Halifax County Sheriff’s Office, Wake County Sheriff’s Office, Bladen County Sheriff’s Office, Spring Hope Police Department and the Tarboro Police Department investigated the case and Assistant U.S. Attorney Scott A. Lemmon prosecuted the case.
This case is part of the United States Attorney’s Office’s Take Back North Carolina Initiative. This initiative emphasizes the regional assignment of federal prosecutors to work with law enforcement and District Attorney’s Offices on a sustained basis in those communities to reduce the violent crime rate, drug trafficking, and crimes against law enforcement. For additional information about this initiative, click here https://www.justice.gov/usao-ednc/tbnc.
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. 4:17-cr-00046-FL-6.
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Federal Jury Convicts Final Member of Drug Trafficking Organization Supplying Heroin to McAlester AreaRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that Michael Moses George, age 41, of Oklahoma City, Oklahoma was found guilty by a federal jury of Drug Conspiracy, in violation of Title 21, United States Code, Section 846. The jury trial began with testimony on Monday, July 26, 2021 and concluded on Wednesday, July 28, 2021 with the guilty verdict. Based on the jury’s verdict, the defendant is facing a term of imprisonment of not less than 10 years nor more than life.
During the trial, the United States presented evidence that beginning in July 2019, and continuing until December 2020, in the Eastern District of Oklahoma and elsewhere, George conspired with Dennis Dewayne Cantrell, Dennis Edward Cantrell, Randall Brent Cook, Jason Nathaniel Holland, Paul Casey Craig, Bree Angelica Osburn, Christina Michelle Ketchum, Stacie Renee Borrenkott, and Parker Bolin Mathiews to distribute more than a kilogram of heroin in the Eastern District of Oklahoma. Trial witnesses testified the defendant purchased heroin from co-conspirators and served as a major source of heroin for a co-conspirator in McAlester who sold to various persons in the McAlester area. DEA agents executed a search warrant of George’s Oklahoma City apartment at the time of his arrest. In the apartment they found nearly a pound of heroin, $20,000 in bundled cash, and four firearms. A search of the George’s cellphone revealed text messages demonstrating a history of selling heroin to people in the McAlester and Oklahoma City areas.
All of the other defendants originally indicted in the case have entered guilty pleas. The guilty verdict was the result of an investigation by the McAlester Police Department, the Oklahoma Bureau of Narcotics, District 18 Drug Taskforce, and the Drug Enforcement Administration.The Honorable John F. Heil, III, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma in Muskogee, presided over the trial and ordered the completion of a presentence report. Sentencing will be scheduled following completion of the report. George was remanded to the custody of the United States Marshal pending the imposition of sentencing.
Assistant United States Attorneys Ryan Conway and James Montoya represented the United States.
Federal Judge Closes Receivership in Petters Ponzi Scheme Case; More Than $722 Million Distributed to Victim InvestorsRead the Press Release
MINNEAPOLIS – United States District Judge Ann D. Montgomery has issued an order closing the receivership of Thomas J. Petters and discharging the Receiver in one of the nation’s largest and most complex Ponzi schemes. Through the efforts of the Receiver, the United States, and related bankruptcy trustees more than $722 million was distributed to victims and creditors.
In issuing the order, Judge Montgomery remarked that the receivership was “prompted by one of the largest and most complex Ponzi schemes in U.S. history.” Judge Montgomery went on to state that “the primary objective of the Receivership was to preserve assets for victims and creditors…After more than 120 public [court] hearings and nearly 3,300 [case] docket entries, the work of the Receiver has concluded.”
The United States commenced the receivership case in October of 2008 to enjoin the ongoing fraud by Petters and the other named defendants and to preserve all assets owned by the defendants for ultimate restitution and forfeiture in the criminal investigations of the defendants, which were pending at the time.
The United States immediately moved to freeze the assets of the named defendants, including all assets owned by Petters. On October 14, 2008, the Court issued the injunction against Petters and appointed Douglas A. Kelley as the Receiver of the assets of Petters and the other named defendants. At the time none of the defendants had yet been indicted.
The Receiver immediately began taking control of the assets and property owned by Petters and the other named defendants. Petters and the other defendants had created a vast web of more than 150 entities over the course of thirteen years – entities that were all propped up by fraud. Some of the entities, however, were legitimate businesses that employed innocent persons.
The Receiver placed several of the major entities into bankruptcy, including Sun Country Airlines and Polaroid Corporation, for the protection of innocent employees and creditors. Throughout the receivership, the Receiver also managed real estate, categorized assets, liquidated property, paid employees, commenced claw-back litigation, entered into settlement agreements, and worked in coordination with the bankruptcy and government forfeiture process to achieve an orderly disentanglement of the fraud.
“Following the criminal conviction of Tom Petters in 2009 for orchestrating a $1.9 billion Ponzi scheme, the work of recovering assets on behalf of victim investors and creditors had just begun,” said Acting U.S. Attorney W. Anders Folk. “Throughout this case the U.S. Attorney’s Office sought to remain transparent, thorough, and persistent in our pursuit of justice. I commend the work of the Receiver and all parties involved in recovering more than $722 million on behalf of victims.”
On December 1, 2008, Petters was indicted on multiple counts of mail fraud, wire fraud, money laundering, and conspiracy for orchestrating a $1.9 billion Ponzi scheme. On December 2, 2009, a federal jury found Petters guilty of all 20 counts against him, and he was later sentenced by U.S. District Judge Richard H. Kyle to 50 years in federal prison. Other defendants were convicted in related criminal proceedings. As part of their sentencing judgments, Petters and other defendants were ordered to forfeit assets obtained through their criminal activity, including real estate, bank, and investment accounts, vehicles, and other assets. Under federal law, the Department of Justice has the authority to distribute the proceeds of forfeited assets through the remission process to victim investors who lost money in connection with the scheme. The proceeds of all forfeited assets are being distributed to victim investors.
Fort Washakie Man Indicted for Abusive Sexual Contact with a MinorRead the Press Release
Acting United States Attorney Bob Murray announced today that ANNIN DAMIAN SOLDIERWOLF, 52, of Fort Washakie, Wyoming, was indicted by a federal grand jury on July 22, 2021, for Abusive Sexual Contact. The Indictment alleges that Soldierwolf knowingly engaged and attempted to engage in sexual contact with a minor.
Soldierwolf appeared on July 28, 2021 before United States Magistrate Judge Kelly Rankin and pleaded not guilty to the Indictment. A jury trial is set for September 20, 2021, in Casper before Chief United States District Court Judge Scott Skavdahl. The maximum penalty upon conviction is up to life in prison; five years to life of supervised release; up to a $5,000 special assessment fee pursuant to the Victims of Sex Trafficking Act of 2015; up to $250,000 fine and a $100 special assessment.
The investigation is being conducted by the Federal Bureau of Investigation and Assistant United States Attorney Kerry J. Jacobson is prosecuting the case.
The charges against Soldierwolf are merely accusations, and he is presumed innocent until proven guilty.
Ex-CEO of La Quinta Communications Services Company Sentenced to More Than 2 Years in Prison for Defrauding Lender to Tech IndustryRead the Press Release
RIVERSIDE, California – The former CEO of a La Quinta-based communication services company was sentenced today to 27 months in federal prison for fraudulently obtaining $5 million in bank loans by submitting sham financial documents that overstated his company’s net worth.
Richard Loren Lewis, 67, of La Quinta, was sentenced by United States District Judge John W. Holcomb, who also ordered him to pay $3,414,064 in restitution. Lewis pleaded guilty on May 7 to one count of bank fraud and one count of making a false statement to a financial institution.
From April 2013 to April 2016, Lewis, who was the CEO of Blue Wave Media Inc., schemed to defraud Silicon Valley Bank, a Santa Clara-based commercial bank that funds start-up technology companies.
Lewis submitted false financial documents to Silicon Valley Bank that misrepresented Blue Wave Media’s net worth, liquidity and revenue so the bank would lend millions of dollars to his company. The false financial statements claimed that Blue Wave Media had millions of dollars in cash deposits and millions of dollars more in revenue streams. In truth, Blue Wave Media had little to no cash on hand and little to no incoming revenue. Lewis’s misrepresentations caused the bank to approve four loans totaling $5 million.
Lewis executed the scheme by willfully causing a loan and security agreement to be signed with Silicon Valley Bank in April 2013 to secure a $500,000 loan. In January 2014, he submitted an amendment to the agreement to the bank to secure an additional $500,000 loan. In June 2014, Lewis willfully caused another amendment to the agreement to secure a $1 million loan, and, in April 2015, Lewis signed a third amendment to the agreement with the bank to secure a $3 million loan.
As a result of Lewis’s criminal activity, Silicon Valley Bank sustained actual losses of approximately $3,414,064.
The FBI investigated this matter.
Assistant United States Attorney Robert S. Trisotto of the Riverside Branch Office prosecuted this case.
District Man Sentenced to 33 Months in Prison for Accessing Child PornographyRead the Press Release
WASHINGTON – Brian Kampel, 44, of Washington, D.C., was sentenced today to 33 months in prison for accessing child pornography, announced Acting U.S. Attorney Channing D. Phillips, and Raymond Villanueva, Special Agent in Charge, Homeland Security Investigations (HSI), Washington, D.C.
Kampel pleaded guilty earlier this month in the U.S. District Court for the District of Columbia. He was sentenced by the Honorable Judge Dabney L. Friedrich. Following his prison term, he will be placed on supervised release for the rest of his life. In addition, he will be required to register as a sex offender for 15 years following his release from prison. Judge Friedrich also ordered Kampel to pay $39,000 in restitution to his victims.
According to the government’s evidence, Kampel was identified as part of a national investigation, conducted by the U.S. Department of Homeland Security Investigations (HSI), into a password-protected, fee-based website, that advertised child sexual abuse material.
After gaining access to the website, an individual could pay to purchase and download child pornography. This commercial website advertised that it offered users, like Kampel, 600,000 images and 400 hours of video. Kampel paid to purchase and download child pornography in August of 2017.
Following a search of Kampel’s residence, in September of 2019, law enforcement found a laptop computer with over 1,000 images depicting the sexual abuse of children as young as infants and toddlers. The forensic evidence in the case determined that Kampel had been accessing, downloading, and possessing child sexual abuse material for over eight years.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative. Project Safe Childhood is a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, 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 identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
In announcing the sentence, Acting U.S. Attorney Phillips and Special Agent in Charge Villanueva commended the work of those who investigated the case from the Department of Homeland Security, Homeland Security Investigations. They also commended the work of Assistant U.S. Attorney Amy E. Larson, who prosecuted the case.
Dark Web Narcotics Dealer “Fentmaster,” Responsible for Overdose Death, Sentenced to 15 Years in PrisonRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, announced that CHUKWUEMEKA OKPARAEKE, a/k/a “Emeka,” was sentenced today to 180 months in prison for importing and trafficking fentanyl analogues and other synthetic opioids through the dark web. OKPARAEKE previously pled guilty to distributing U-47700, a controlled substance analogue of AH-7921; importing 100 grams and more of acryl fentanyl, a controlled substance analogue of fentanyl, from Hong Kong; and making false statements to the Government regarding the proceeds of his offenses. Through his guilty plea, OKPARAEKE admitted that in November 2016, he sold U-47700 to an 18-year-old individual (the “Victim”), who died from an overdose after using the drug. OKPARAEKE further admitted that his narcotics offenses involved over 9 kilograms of acryl fentanyl, nearly 6 kilograms of U-47700, over a kilogram of furanyl fentanyl, as well as 12 grams of 4-ANPP. OKPARAEKE was sentenced in White Plains federal court by U.S. District Judge Nelson S. Román, who previously accepted OKPARAEKE’s guilty plea.
U.S. Attorney Audrey Strauss said: “Chukwuemeka Okparaeke previously admitted that he peddled highly addictive opioids over the darknet, including to an 18-year-old who died from them. Okparaeke also lied to agents and prosecutors about the whereabouts of Bitcoins representing millions of dollars in poison-peddling proceeds. Now Okparaeke will forfeit those proceeds and go to prison for his crimes.”
According to the allegations in the Superseding Information, Complaint, other court filings, and statements made during public court proceedings:
From at least July 2016 through March 2017, OKPARAEKE imported kilogram quantities of fentanyl analogues, including acryl fentanyl and furanyl fentanyl, and other synthetic opioids, including U-47700, from Hong Kong and China into the United States. To transact with customers and coordinate his narcotics sales, OKPARAEKE used a darknet website known as AlphaBay Market (“AlphaBay”), accessible only through a special software program that allows users to mask their identities and anonymize their internet traffic. Under the AlphaBay vendor name “Fentmaster,” OKPARAEKE engaged in more than 7,000 sales of synthetic opioids, which he shipped to customers throughout the United States using the U.S. Postal Service. OKPARAEKE’s narcotics trafficking generated criminal proceeds of at least 680.60963624 Bitcoins, worth millions of dollars.
In November 2016, OKPARAEKE sold three grams of U-47700 to the Victim, an 18-year-old living in Vancouver, Washington, in an AlphaBay transaction. The Victim used the drugs purchased from OKPARAEKE and died in a U-47700 overdose on November 10, 2016.
OKPARAEKE – who attended medical school before he began selling synthetic opioids on AlphaBay – used extensive measures to conceal his identity, including software to encrypt his internet traffic and communications sent from his cellphone. Using alter egos, he boasted online about his exploits as a darknet drug trafficker, offered advice to other drug dealers, and published a short story describing his criminal activities and his strategies for evading law enforcement. In January 2017, Customs and Border Protection (“CBP”), in conjunction with Homeland Security Investigations (“HSI”) and United States Postal Inspection Service (“USPIS”), intercepted several packages containing kilogram quantities of fentanyl analogues that OKPARAEKE had imported from Hong Kong. Subsequently, in March 2017, law enforcement searched a drug premises OKPARAEKE maintained in Kearny, New Jersey. During the search, law enforcement seized more than 10 kilograms of U-47700, acryl fentanyl, and furanyl fentanyl, as well as a quantity of 4-ANPP and approximately 82 mailing envelopes containing smaller amounts of those substances that OKPARAEKE had packaged for distribution to his customers.
On September 15, 2020, OKPARAEKE met with representatives of the U.S. Attorney’s Office for the Southern District of New York. During that meeting, OKPARAEKE falsely represented that the approximately 680 Bitcoins – worth millions of dollars – generated by his narcotics sales on AlphaBay were no longer in his possession and control, and that a third party had stolen the Bitcoins from him through hacking and other unauthorized access to OKPARAEKE’s electronic accounts. OKPARAEKE subsequently surrendered the 680 Bitcoins to USPIS and agreed to forfeit those proceeds as part of his plea agreement.
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In addition to the prison term, OKPARAEKE, 32, of Middletown, New York, was sentenced to five years of supervised release and ordered to forfeit $105,177.30 in United States currency and 680.60963624 Bitcoins, presenting proceeds of his narcotics trafficking.
Ms. Strauss praised the outstanding efforts of the USPIS, HSI, CBP, the Federal Bureau of Investigation, the Fairfax County, Virginia, Police Department, the Virginia Office of the Attorney General, the Middletown Police Department, and the Vancouver, Washington, Police Department for their investigative work and ongoing support and assistance with the case.
The case is being prosecuted by the Office’s White Plains Division. Assistant United States Attorneys Gillian Grossman, Olga I. Zverovich, and Sagar Ravi are in charge of the prosecution.
Cleveland City Councilman Convicted of Federal Program Theft, Tax Violations, Witness Tampering and Falsifying RecordsRead the Press Release
Acting U.S. Attorney Bridget M. Brennan announced that a federal jury found Cleveland City Councilman Kenneth Johnson, 75, guilty of all 15-counts charged in an indictment related to two federal program theft schemes Johnson organized and executed while serving as Ward 4 Councilman in the City of Cleveland. Garnell Jamison, 62, was also convicted of 11-counts for his role and participation in one of the schemes.
Following a seven-day trial, Johnson was convicted of two counts of conspiracy to commit federal program theft; six counts of federal program theft; five counts of aiding and assisting in the preparation of false tax returns; one count of tampering with a witness and one count of falsification of records in a federal investigation.
Jamison was convicted of 11-counts, including federal program theft, aiding and assisting in the preparation of false tax returns, tampering with a witness and falsification of records in a federal investigation. Jamison worked for the City of Cleveland as Johnson’s Executive Assistant, a position he held for over 20 years.
Johnson and Jamison were indicted by a grand jury on February 18, 2021.
Evidence presented at trial established that from January of 2010 through October of 2018, Johnson and Jamison devised a scheme to induce the City of Cleveland to issue reimbursement checks to Johnson for Ward 4 services that were never actually performed. Court records established that during this time frame, the City issued $1,200 monthly expense reimbursement checks to Johnson totaling approximately $127,200. Each reimbursement check from the City was deposited into Johnson’s personal bank account.
Additionally, Johnson was convicted of personally benefiting from federal Community Development Funds distributed to the Buckeye Shaker Square Development Corporation (BSSDC) from the City of Cleveland. From in or around December 2013 to in or around March 2018, prosecutors proved that the BSSDC issued approximately $50,000 in checks distributed to third-parties, which were later deposited or transferred the funds into bank accounts held or controlled by Johnson. Federal regulations prohibited Johnson, or his family members, from personally benefiting from these funds.
Furthermore, prosecutors proved that for calendar years 2014, 2015, 2016, 2017, and 2018, Johnson and Jamison submitted false and fraudulent Individual Income Tax Returns to the Internal Revenue Service. Court evidence and testimony proved that Johnson and Jamison knew that the returns were false and fraudulent in that each return understated Johnson’s total income by failing to report additional income and by inflating the value of Johnson’s itemized deductions.
Lastly, Johnson and Jamison were convicted of attempting to persuade and influence the testimony of a grand jury witness by providing that person with false and fraudulent information and records purporting to document charitable donations made by Johnson. In addition, Johnson and Jamison falsified a donation receipt with the intent to impede, obstruct and influence an investigation.
Johnson and Jamison will be sentenced on October 8, 2021.
This case was investigated by the Cleveland Division of the FBI, Department of Housing and Urban Development Office of Inspector General and IRS-Criminal Investigation. This case is being prosecuted by Assistant United States Attorneys Justin Seabury Gould and Megan R. Miller.
Charlottesville Dermatologist Sentenced for Diverting Pain MedicationRead the Press Release
CHARLOTTESVILLE, Va., – A dermatologist formerly employed at a dermatological practice in the City of Charlottesville was sentenced last week to 12 months’ probation, including a period of home confinement and electronic monitoring, for using the Drug Enforcement Administration (DEA) registration number of her co-workers to obtain prescription opioid pain medication.
Dr. Amalie Shaffner Derdeyn, 48, of Charlottesville, pleaded guilty in March 2021 to three counts of using the DEA registration numbers of another person to obtain one or more controlled substances.
According to court documents, between July 2015 and November 2016, Derdeyn diverted large quantities of injectable meperidine, a Schedule II pain medication, known by the brand name Demerol. She did so by using her own DEA registration number, as well as the DEA registration numbers of other physicians in the practice, without their knowledge or consent, to obtain the drugs from local pharmacies. As part of her plea agreement with the United States, Derdeyn agreed to pay $33,000 in restitution to victims no later than the date of her sentencing hearing, and to pay all remaining restitution before her period of probation ends. According to government filings, the restitution owed to victims may be as much as $45,000.
Acting U.S. Attorney Daniel P. Bubar of the Western District of North Carolina; and Jared Forget, Special Agent in Charge of the DEA’s Washington Division made the announcement.
The Drug Enforcement Administration investigated the case, with assistance from the Virginia State Police. Assistant U.S. Attorneys Kari Munro and Michael Baudinet prosecuted the case for the United States.
Central New York Man Pleads Guilty to Theft of Government PropertyRead the Press Release
SYRACUSE, NEW YORK – Frederick L. Guth, Jr., age 66, of Brewerton, New York, pled guilty yesterday to theft of Social Security retirement benefits.
The announcement was made by Acting United States Attorney Antoinette T. Bacon and John F. Grasso, Special Agent in Charge of the Social Security Administration, Office of the Inspector General, New York Field Office.
As part of his guilty plea, Guth admitted that from November 2016 until July 2018, he erroneously received a total of $33,812.00 in Social Security retirement benefits issued under the social security number and name of another person, and that he spent the benefits despite knowing that the benefits were not his and that he was not entitled to them.
Sentencing is scheduled for November 30, 2021, before Senior United States District Judge Thomas J. McAvoy in Binghamton, New York. Guth faces up to 10 years in prison, up to 3 years of supervised release, and a fine of up to $250,000 as a result of his conviction. Additionally, Guth has agreed to pay restitution to the Social Security Administration. 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 was investigated by the SSA Office of the Inspector General and is being prosecuted by Special Assistant U.S. Attorney Adrian S. LaRochelle.
Canadian National Charged with Sexual Abuse of MinorsRead the Press Release
MINNEAPOLIS – A Canadian national has been indicted by a federal grand jury on charges related to the sexual abuse of minors occurring on the Bois Forte Indian Reservation, announced Acting U.S. Attorney W. Anders Folk.
According to court documents, on June 22, 2018, Brady John Hillis, 32, of Kenora, Ontario, knowingly engaged in sexual contact with two minor victims who were under 12 years of age.
Hillis is charged with two counts of abusive sexual contact with a child under 12 years of age and one count of aggravated sexual abuse of a child under 12 years of age. Hillis made his initial appearance today in U.S. District Court before Magistrate Judge David T. Schultz.
This case is the result of an investigation conducted by the FBI and the Bois Forte Police Department.
Assistant U.S. Attorney Deidre Y. Aanstad is prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Cabarrus County Man Sentenced to Prison for Drug Trafficking and Firearm OffensesRead the Press Release
GREENSBORO, NC - Martin William Luther Hamilton, of Kannapolis, North Carolina, was sentenced today to 180 months in prison for distribution of fentanyl and possession of a firearm by a felon.
According to court documents, the Kannapolis Police Department received information from a confidential source that Hamilton was storing narcotics and firearms at his apartment at the Vibe at Kellswater Apartment Homes in Kannapolis. In February 2020, investigators conducted surveillance and a subsequent trash pull from Hamilton’s apartment complex after observing him discarding two trash bags from his truck into a public trash compactor. Contents of the bags later tested positive for traces of cocaine prompting the investigators to obtain search warrants for Hamilton’s truck and apartment.
On February 13, 2020, investigators executed the search warrants. A search of the apartment yielded large quantities of suspected heroin, suspected crack cocaine, and suspected cocaine hydrochloride, as well as a small amount of marihuana, numerous prescription pills, and supplies commonly used in the manufacturing of crack cocaine. A large amount of U.S. currency and a Glock .40 caliber firearm were also located in the apartment. The suspected heroin and cocaine were sent to the U.S. Customs and Border Protection Laboratories and Scientific Services Directorate in Savannah, Georgia, which later confirmed that various quantities of the substances contained fentanyl, cocaine, cocaine base, benzocaine, cocaine hydrochloride or mixtures thereof.
Hamilton, age 38, was charged with one count of possession with intent to distribute 280 grams or more of cocaine base, one count of possession with intent to distribute 400 grams or more of fentanyl, one count of possession of a firearm in furtherance of a drug trafficking crime, and one count of felon in possession of a firearm. On November 11, 2020, Hamilton pled guilty to one count of possession with intent to distribute 400 grams or more of fentanyl and one count of felon in possession of a firearm.
Hamilton was a convicted felon at the time of these offenses, having been convicted of Accessory After the Fact to Second Degree Murder, Assault with a Deadly Weapon with Intent to Kill, Discharging a Weapon Into an Occupied Dwelling or Moving Vehicle, Common Law Robbery, Second Degree Kidnapping, and Attempted Robbery with a Dangerous Weapon in 2011 in the Superior Court of Cabarrus County. Accordingly, at sentencing, the Court determined that Hamilton was an Armed Career Criminal.
In addition to the term of imprisonment, United States District Judge Loretta C. Biggs ordered Hamilton to serve five years of supervised release and to pay a $200 special assessment to the United States.
Sandra J. Hairston, Acting United States Attorney for the Middle District of North Carolina, made the announcement. The case was investigated by Homeland Security Investigations, along with the Kannapolis Police Department, and the federal Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Assistant U.S. Attorney Craig M. Principe.
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Browning Woman Sentenced to 8 Years in Prison for ManslaughterRead the Press Release
GREAT FALLS – Danielle Marie Marceau, also known as Danielle Marie Comesatnight, 35, of Browning, was sentenced on July 29, 2021 to 97 months in federal prison for fatally stabbing another individual during an argument. Marceau was also sentenced to three years of supervised release and ordered to pay $11, 735.90 in restitution by Chief U.S. District Judge Brian Morris.
In June 2020, Blackfeet Law Enforcement Services responded to Marceau’s residence in Browning, on the Blackfeet Indian Reservation, to conduct a welfare check on the victim. Officers found the victim’s body in the residence and determined the last time the victim had been seen alive was late on May 30, 2020 with Marceau. Both were intoxicated and had been arguing. Marceau admitted to killing the victim and that she had used a knife to stab the victim during an argument. In the days following the incident, Marceau told multiple family members they had been in a fight and that she stabbed the victim.
The defendant previously pleaded guilty to voluntary manslaughter.
Assistant U.S. Attorney Kalah A. Paisley prosecuted the case, which was investigated by the Federal Bureau of Investigation, Blackfeet Law Enforcement Services and Great Falls Police Department.
Broward Resident Pleads Guilty to Conspiracy to Commit Wire FraudRead the Press Release
Miami, Florida – Fifty-year old Broward County resident Jason Ganton pled guilty yesterday to participating in a fraud scheme that bilked investors out of more than $900,000.
During yesterday’s hearing before U.S. Magistrate Judge Bruce Reinhart in West Palm Beach, Ganton admitted his role in the scheme, which ran from 2015 to 2019. This included making baseless promises to would-be investors about the profitability of NIT Enterprises, a Palm Beach company that falsely marketed itself as being on the cusp of developing and producing radiation protective materials using an innovative technology. Ganton, who was not a licensed securities sales agent, also admitted to lying to investors by telling them that NIT was on the verge of making an initial public offering of stock. This created a false expectation that investors would double or triple their investments in a short amount of time. In fact, there was no IPO on the horizon for NIT. Ganton admitted that he reached most of his victims through cold calls and that he personally profited from the investor funds.
Ganton pled guilty to one count of conspiracy to commit wire fraud. U.S. District Judge Aileen Cannon, who sits in Fort Pierce, Florida, will sentence Ganton on a date to be announced. Ganton faces a maximum sentence of 20 years in federal prison.
As to the other defendants named in the information, the charges are mere allegations. Those defendants are presumed innocent unless and until proven guilty in a court of law.
The U.S. Securities and Exchange Commission (SEC) filed a parallel civil enforcement action against Ganton and others related to this activity.
Juan Antonio Gonzalez, Acting United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, FBI Miami, and Ronald L. Rubin, Commissioner, Florida Office of Financial Regulation (OFR), announced the guilty plea.
FBI Miami and OFR investigated this matter. SEC Miami Regional Office assisted.
Assistant U. S. Attorney Lothrop Morris is prosecuting this 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 at http://pacer.flsd.uscourts.gov under case no. 20-cr-80095.
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Boston Man Sentenced for Being a Felon in Possession of a Firearm and Failing to Register as a Sex OffenderRead the Press Release
BOSTON – A Boston man was sentenced yesterday in federal court in Boston for illegally possessing a firearm and ammunition and failing to register as a sex offender.
Shane Brown, 35, was sentenced by U.S. District Court Judge William G. Young to 37 months in prison and five years of supervised released. On March 10, 2021, Brown pleaded guilty to one count of being a felon in possession of a firearm and one count of failing to register as a sex offender in violation of the Sex Offender Notification and Registration Act (SORNA).
Brown, who was convicted of a sex offense in Virginia in 2013, moved from Virginia to Boston in or around May 2020. In May and June 2020, Brown was employed in security work around Greater Boston. Brown failed to register as a sex offender in Massachusetts prior to his arrest on state charges on July 2, 2020. At the time of his state arrest, an SCCY Industries, model CPX-2, 9mm caliber pistol loaded with seven 9mm Luger cartridges was found in Brown’s waistband. Due to a previous conviction for a crime punishable by more than one year in prison, Brown is prohibited from possessing firearms and ammunition.
Acting United States Attorney Nathaniel R. Mendell; John Gibbons, U.S. Marshal for the District of Massachusetts; Thomas L. Foster, U.S. Marshal for the Western District of Virginia; James Ferguson, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and Boston Police Acting Commissioner Gregory Long made the announcement today. Assistant U.S. Attorney Elianna Nuzum of Mendell’s Major Crimes Unit prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Antitrust Division Observes National Whistleblower Appreciation DayRead the Press Release
The Antitrust Division today commemorates National Whistleblower Appreciation Day, which celebrates individuals who act with courage to speak out and report crimes, including antitrust violations like price-fixing, bid rigging and market allocation conspiracies. Collusion among competitors undermines fair competition and harm consumers, and individuals who step forward to shine a light on illegal practices deserve recognition. This year marks the 243rd anniversary of the United States’ first whistleblower law and also the first year for the Criminal Antitrust Anti-Retaliation Act (CAARA), signed into law on Dec. 23, 2020.
“We acknowledge whistleblowers’ courage and conviction in the face of adversity — their protection has been critical in exposing illegal activity,” said Acting Assistant Attorney General Richard A. Powers for the Justice Department's Antitrust Division. “This year marks another milestone for these protections with the passage of the Criminal Antitrust Anti-Retaliation Act, a law that will further our efforts to root out antitrust crimes that undermine our economy and cheat American consumers, workers, and taxpayers of the benefits of free and fair competition.”
CAARA provides legal protections for employees who blow the whistle on criminal antitrust violations by prohibiting employers from taking punitive actions against whistleblowers for reporting these violations to their employer or assisting a federal government investigation into a criminal antitrust violation. The law protects employees, contractors, subcontractors and agents of the employer. Detecting antitrust violations can prevent or reduce harm to victims of antitrust crimes. For example, by some estimates, eliminating bid rigging could reduce government procurement costs by 20% — a significant sum when the budget for discretionary spending on public procurement is more than $580 billion, as it was in 2019.
Consistent with President Biden’s Executive Order on Promoting Competition in the American Economy, the Antitrust Division will continue to work in partnership with our colleagues at the U.S. Department of Labor to effectively implement CAARA’s whistleblower protections, including by offering antitrust training and providing guidance on federal antitrust law to the officials who administer CAARA at the Occupational Health and Safety Administration. To learn more about how to seek whistleblower protection under CAARA, please go to https://www.whistleblowers.gov/complaint_page.
The Antitrust Division maintains a Citizen Complaint Center, where concerned citizens may report antitrust concerns via email, U.S. mail or phone. The Procurement Collusion Strike Force, a department initiative led by the Antitrust Division, also encourages citizens to report complaints about antitrust and other crimes that affect government procurement at all levels — federal, state and local.
29 July 2021
Wholesale Supplier of Narcotics to East Baltimore Monument Street Drug Trafficking Organization Sentenced to More Than Eight Years in Federal Prison and Co-Defendant Drug Distributor Pleads Guilty to His Role in the Drug ConspiracyRead the Press Release
Baltimore, Maryland – U.S. District Judge Ellen L. Hollander sentenced Derek Crosby, age 40, of Baltimore, yesterday to 102 months in federal prison, followed by four years of supervised release for conspiracy to distribute fentanyl, heroin, cocaine, and crack cocaine in the Monument Street area of East Baltimore, and for possession with intent to distribute fentanyl.
Last week, co-defendant Malik Williams, a/k/a “Freaky,” age 32, of Baltimore pleaded guilty to conspiracy to distribute and possess with the intent to distribute cocaine, and to knowingly and intentionally possessing with intent to distribute cocaine.
The sentence and guilty plea were announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Assistant Special Agent in Charge Orville O. Greene of the Drug Enforcement Administration, Baltimore District Office; and Commissioner Michael Harrison of the Baltimore Police Department.
“There is no question that the excessive amount of violence in Baltimore stems in part from the drug trade, and getting wholesale narcotics dealers like Derek Crosby off the streets is an important component of our efforts to address the murders and shootings that steal lives and undermine our communities,” said Acting United States Attorney Jonathan Lenzner. “This Monument Street case is the kind of impactful investigation that federal, state and local partners can build through collaboration and a dedicated commitment to improving our communities.”
According to Crosby and Williams’ guilty pleas, in July of 2018, Drug Enforcement Administration (“DEA”) Strike Force Group 1 began an investigation of the Monument Street corridor in East Baltimore, which is known to support a high volume of street-level drug distribution and acts of violence associated with the drug trafficking. During the investigation, law enforcement identified multiple street-level drug trafficking “shops,” with the two most prominent located in the 400 block of North Montford Avenue at Jefferson Street (“the Montford DTO”) and in the 2400 block of East Monument Street at Port Street (the “Out the Mud,” or “OTM DTO”).
As detailed in their plea agreements, investigators identified Crosby as a wholesale distributor of cocaine, crack cocaine, heroin, and fentanyl and as a source of supply of the street-level Montford DTO, among others. Williams was identified as a drug distributor for the OTM DTO who agreed with his co-conspirators to acquire and to assist in distributing controlled substances to other persons. Investigators intercepted calls between Crosby and his co-conspirators and between Williams and his co-conspirators, discussing the distribution of drugs, including cocaine, crack cocaine, fentanyl and heroin.
Specifically, Crosby admitted that he owned a stash house in the 1700 block of Dallas Street in Baltimore, which he and his co-conspirators used to meet with customers and conduct drug transactions. According to his plea agreement, on June 19, 2019, law enforcement executed a search warrant at the Dallas Street residence owned by Crosby and recovered 677 grams of a fentanyl and heroin mixture, which Crosby admits he possessed with the intent to distribute for sale, and approximately 2.4 grams of crack cocaine. On June 21, 2019, a search warrant was executed on Crosby’s vehicle and law enforcement recovered a stolen .40 caliber semi-automatic pistol from a hidden compartment in the center console area. Crosby knew that he was prohibited from possessing a firearm as the result of a previous felony conviction. Further, Crosby admitted that he possessed the firearm in connection to his drug trafficking.
Throughout the course of his involvement in the conspiracy, it was reasonably foreseeable to Crosby, and within the scope of the conspiracy that he or other members of the conspiracy would distribute more than five kilograms of cocaine, and at least 400 grams of fentanyl, as well as quantities of crack cocaine and heroin, during the course of and in furtherance of the conspiracy.
Williams admitted that on October 30, 2018, he directed an undercover detective to a co-conspirator to purchased what the undercover detective thought was heroin, but was instead ten gelatin capsules containing a mixture of tramadol and fentanyl. On February 21, 2019, Williams sold an undercover detective four green top vials of cocaine. On June 25, 2019, Williams was arrested in the 2400 block of Monument Street and when Williams was searched, investigators recovered 48 grey top vials containing cocaine and 16 gel caps containing fentanyl. Williams admitted that on each of these three occasions he possessed the fentanyl and the cocaine with the intent to distribute them for sale.
Throughout the course of Williams’ involvement in the conspiracy, it was reasonably foreseeable to Williams, and within the scope of the conspiracy that he or other members of the conspiracy would distribute between 500 grams and two kilograms of cocaine, as well as quantities of crack cocaine, heroin and fentanyl, during the course of and in furtherance of the conspiracy.
Of the 25 defendants indicted in this case, 24—including Crosby and Williams—have pleaded guilty or been found guilty at trial. The remaining defendants have trial dates in November 2021.
Williams and the government have agreed that, if the Court accepts the plea, Williams will be sentenced to five years in federal prison. Judge Hollander has scheduled sentencing for Williams on September 17, 2021, at 2:00 p.m.
This prosecution was brought as a part of the Department of Justice’s Organized Crime Drug Enforcement Task Forces (OCDETF) Co-located Strike Forces Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations against a continuum of priority targets and their affiliate illicit financial networks. These prosecutor-led co-located Strike Forces capitalize on the synergy created through the long-term relationships that can be forged by agents, analysts, and prosecutors who remain together over time, and they epitomize the model that has proven most effective in combating organized crime. The specific mission of the Baltimore OCDETF Strike Force is to reduce violent, drug-related, and gang crime in the Baltimore area and surrounding region.
Acting United States Attorney Jonathan F. Lenzner commended the DEA and the Baltimore Police Department for their work in the investigation. Mr. Lenzner thanked Assistant U.S. Attorneys LaRai Everett and James T. Wallner, who are prosecuting the case.
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Union County Man Admits Conspiring to Commit Bank Fraud Using Checks Stolen from MailRead the Press Release
NEWARK, N.J. – A Union County, New Jersey, man admitted today to conspiring to commit bank fraud by soliciting U.S. Postal Service (USPS) employees to steal check books from the mail and depositing fraudulent checks, Acting U.S. Attorney Rachael A. Honig announced.
Brian Previlon, 28, of Elizabeth, New Jersey, pleaded guilty by videoconference before U.S. District Judge Kevin McNulty to an information charging him with one count of conspiracy to commit bank fraud.
According to documents filed in this case and statements made in court:
Beginning in summer 2019 through Oct. 22, 2019, Previlon conspired to fraudulently obtain money from victim financial institutions by, among other things, depositing checks stolen from the mail into accounts at victim financial institutions and withdrawing funds from those accounts before the victim financial institutions identified the fraudulent checks and blocked further withdrawals. Previlon and his co-conspirators arranged for USPS employees to steal blank check books from the mail in exchange for cash payments. USPS employees provided the checks to Previlon and his co-conspirators, who fraudulently forged the signatures of the accountholders and negotiated the checks by making them payable to individuals. Previlon and his co-conspirators obtained and attempted to obtain approximately $38,364 from victim financial institutions.
The conspiracy charge to which Previlon pleaded guilty is punishable by a maximum potential penalty of 30 years in prison and a fine of up to $1 million. Sentencing is scheduled for Dec. 3, 2021.
Acting U.S. Attorney Honig credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Rodney M. Hopkins, and special agents with the USPS-Office of Inspector General, Northeast Area Field Office, under the direction of Special Agent in Charge Matthew Modafferi, with the investigation leading to today’s plea. She also thanked the U.S. Secret Service, the New Jersey State Police, the Elizabeth Police Department, and the Secaucus Police Department for their assistance.
The government is represented by Assistant U.S. Attorney Elaine K. Lou of the Special Prosecutions Division in Newark.
Defense counsel: Georgina Giordano Pallitto Esq., Newark
U.S. Attorney issues update on action taken to prevent Paycheck Protection Program fraudRead the Press Release
ATLANTA – Acting U.S. Attorney Kurt Erskine issued an update on his office’s efforts to combat fraud related to schemes targeting the Paycheck Protection Program (PPP), a loan program created by Congress to help small businesses pay payroll, interest on mortgages, rent, and utilities during the COVID-19 pandemic.
“Along with our federal, state and local law enforcement partners, we continue to remain focused on investigating and prosecuting crimes involving PPP fraud,” said Acting U.S. Attorney Kurt R. Erskine. “Unfortunately, when criminals steal these funds, they take them out of the hands of those suffering financial hardship. Criminals should understand that the diversion of taxpayer money meant to help small businesses survive this crisis will be fully investigated and prosecuted.”
The U.S. Attorney’s Office for the Northern District of Georgia has charged dozens of people with federal crimes related to PPP fraud, including bank fraud, conspiracy, and money laundering. The cases involve a variety of criminal conduct, including business owners who inflated their payroll expenses to obtain larger loans than they otherwise would have qualified for, serial fraudsters who used shell companies to apply for loans, and organized criminal networks that submitted identical loan applications and supporting documents on behalf of more than one company. Most charged defendants not only obtained the loan proceeds under false pretenses, but they also used the loan proceeds for prohibited purposes, such as the purchase of houses, cars, jewelry, and other luxury items.
The PPP fraud cases prosecuted by The U.S. Attorney’s Office for the Northern District of Georgia include the following:
- United States v. Darrell Thomas, et al.: Twenty-two defendants were charged in an $11.1 million PPP loan fraud scheme orchestrated by Duluth, Georgia resident Darrell Thomas. Thomas and his team applied for fraudulent PPP loans on behalf of 14 businesses located in seven different states. Each loan application claimed that the businesses had between 59 and 69 employees and attached forged IRS tax forms and either a fake bank statement or payroll expense spreadsheet, many of which were substantively identical in multiple fraudulent applications. In reality, none of the businesses had employees or payroll expenses. After the PPP loan proceeds were deposited into the businesses’ accounts, the business owners transferred more than $5.5 million to accounts controlled by Thomas, and the funds were used to purchase luxury vehicles, jewelry, and to pay for other personal expenses. As a result of the investigation, the United States seized nearly $4 million in PPP funds, and six participants in the scheme, including Thomas, have pleaded guilty.
- U.S. v. Rodericque Jarmaine Thompson, et al.: Nine individuals, including the ringleader, Rodericque Jarmaine Thompson, have pleaded guilty to various federal charges arising from multiple bank-fraud conspiracies designed to obtain PPP loans under false pretenses. Each of the loan applications contained identical false information. For example, each loan application falsely claimed that the business had 16 employees and a monthly payroll of $120,000. Each application was supported by fraudulent quarterly tax returns that claimed the business owner had paid $358,819 in wages per quarter. In the application, the business owner swore that the loan proceeds would be used for payroll, utilities, lease payments, consistent with the PPP rules. The business owners agreed to kickback up to 50 percent of the loan amount to Thompson, as a fee for helping them obtain the loans. After receiving the loans, the business owners wrote multiple checks for $8,333.33 to individuals selected by Thompson, or to their friends and family members. All of the checks claimed to be for “payroll,” even though the individuals who received the checks were not employed by the businesses.
- U.S. v. Alicia Quarterman, et al.: The U.S. Postal Inspection Service and the Drug Enforcement Administration executed a search warrant at the home of Alicia Quarterman in Fayetteville, Georgia in connection with an ongoing narcotics trafficking investigation. A package containing methamphetamine hidden in dog food containers had been mailed to Quarterman’s home. As part of the search, law enforcement seized Quarterman’s cell phones and discovered a handwritten ledger with the personal and banking information of several individuals. That ledger and a subsequent search of Quarterman’s cell phone revealed an alleged Economic Injury Disaster Loans (EIDL) and PPP loan fraud scheme devised by Quarterman and Katrina Lawson of Houston, Texas, a former deputy sheriff for Fulton County. The scheme involved the submission of fraudulent business loan applications on behalf of their friends and family who did not actually own businesses. In total, the scheme involved 50 different individuals, including India Middleton of Accokeek, Maryland (a deputy sheriff in Arlington County, Virginia); James McFarland, Tranesha Quarterman (a former Army military policeman), Darryl Washington, Adarin Jones, and Katie Quarterman of Atlanta, Georgia; Nikia Wakefield of Rockville, Maryland; and Victor Montgomery of Washington, D.C. The ten defendants were indicted on March 16, 2021 on charges of wire fraud, bank fraud, mail fraud, money laundering, and conspiracy to commit wire fraud for attempting to steal over $774,000. The defendants used the loan proceeds to purchase luxury vehicles, a motorcycle, and an all-terrain four-wheeler.
- U.S. v. Maurice Fayne: Maurice Fayne, who starred in the reality TV show Love & Hip Hop: Atlanta, pleaded guilty to bank fraud and making false statements to a financial institution in connection with a fraudulent $3.7 million PPP loan application. Fayne falsely claimed that his trucking business had 107 employees and an average monthly payroll of $1,490,200. Fayne certified that the PPP loan proceeds would be used to “retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments, as specified under the Paycheck Protection Program Rule.” Instead, Fayne used the PPP loan proceeds to pay his past-due child support, pay restitution owed in a previous fraud case, make payments to associates who helped him run a Ponzi scheme, start a new business, purchase jewelry, and lease a Rolls-Royce. In addition, Fayne pleaded guilty to wire fraud and conspiracy in connection with a Ponzi scheme that caused approximately 20 people to invest over $5 million in Fayne’s fictitious trucking business. Fayne promised that he would use the investors’ money to operate the business. Instead, Fayne used the investors’ money to pay his personal debts and expenses, and to fund his extravagant lifestyle.
Indictments and other criminal charges referenced above are merely allegations, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Two Former Federal Medical Center Correctional Officers Indicted for Civil Rights Violations, including Sexual Abuse of InmatesRead the Press Release
LEXINGTON, Ky. – In separate indictments, two former Correctional Officers, who worked for the Bureau of Prisons’ Federal Medical Center in Lexington, have been indicted for federal civil rights and sexual abuse violations.
A federal grand jury sitting in Lexington returned an indictment charging Christopher Brian Goodwin, 45, of Winchester, Ky., of one count of deprivation of rights under color of law, one count of aggravated sexual abuse by force, seven counts of abusive sexual contact, three counts of sexual abuse of a ward, and one count of providing a prohibited object to an inmate.
Goodwin’s indictment alleges that on several occasions, between April 2019 and September 2019, he engaged in sexual conduct with four inmates in BOP custody. The indictment alleges that on at least one of those occasions, he sexually abused an inmate by using a threat that if the victim did not comply, they would be subjected to death, bodily injury, or kidnapping. Goodwin is also alleged to have provided cigarettes to an inmate
In a separate indictment, Hosea Lee, Jr., 42, of Phenix City, Al., was charged with two counts of deprivation of rights under color of law, two counts of aggravated sexual abuse by force or threat, eight counts of sexual abuse of a ward, two counts of abusive sexual contact, and one count of providing a prohibited object to an inmate.
Lee’s indictment alleges that, between August 2019 and December 2019, he engaged in sexual conduct with five inmates in BOP custody. It is alleged that Lee sexually abused two of the victims by using a threat that their families and children would be killed or harmed if they did not comply. Lee’s indictment also alleges that he was a drug treatment specialist and illegally provided Suboxone to an inmate, among other prohibited items.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky; William J. Hannah, Special Agent in Charge, Department of Justice Office of the Inspector General, Chicago Filed Office; and Edward J. Gray, Acting Special Agent in Charge, FBI, Louisville Field Office, announced the indictment.
The investigation preceding the indictment was conducted by the DOJ OIG and the FBI. The cases are being handled by Assistant U.S. Attorneys Tashena Fannin and Kate K. Smith.
Goodwin is scheduled to appear for his initial appearance on Friday, July 30 in Lexington, and Lee is scheduled to appear for his initial appearance on Friday, August 6, also in Lexington. For their respective charges, they each face up to one year in prison of the deprivation of rights under color of law charge; up to life in prison for the aggravated sexual abuse charges; up to 15 years for the sexual abuse of a ward charges; up to two years for the sexual abuse by force; up to 20 years for providing a narcotic to an inmate charge; and up to six months for providing other prohibited objects to an inmate. However, any sentence following a conviction would be imposed by the Court, after its consideration of the U.S. Sentencing Guidelines and the federal sentencing statutes.
Any indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial at which government must prove guilt beyond a reasonable doubt.
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