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3 June 2021
15 Indicted in Large-Scale Sacramento Cocaine and Heroin Trafficking ConspiraciesRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a 45-count indictment today against 15 defendants for a conspiracy to traffic cocaine, cocaine base, and heroin in the Sacramento area, Acting U.S. Attorney Phillip A. Talbert announced.
The indictment charges the following defendants: Tyrone Anderson, 40, of Sacramento; Maurice Bryant, 51, of Antelope; Yovanny Ontiveros, 41, of Sacramento; Alex White, 61, of North Highlands; Jason Tolbert, 44, of Sacramento; Andre Hellams, 38, of North Highlands; Michael Hampton, 57, of Vallejo; Steven Hampton, 61, of Sacramento; Wilmer Harden, 52, of Elk Grove; Charles Sidney Carter, 34, of Sacramento; Bobby Conner, 50, of Sacramento; Jerome Adams, 54, of North Highlands; Dwight Haney, 49, of Sacramento; Arlington Caine, 47, of Rio Linda; and Mark Martin, 62, of Sacramento.
The indictment charges Bryant, Harden, Anderson, Carter, Conner, Adams, Haney, Caine, Martin, White, Hellams, Tolbert, Steven Hampton, and Michael Hampton with conspiracy to distribute and possess with intent to distribute at least 5 kilograms of cocaine and 280 grams of cocaine base. The indictment also charges Anderson and Ontiveros with conspiracy to distribute and possess with intent to distribute heroin. During and in furtherance of these conspiracies, the indictment charges certain defendants with distributing cocaine and cocaine base, possessing with intent to distribute cocaine and cocaine base, possessing with intent to distribute heroin, possessing firearms as felons, and using communication facilities to facilitate drug trafficking offenses. According to court documents, between March 1, 2018, and May 19, 2021, law enforcement seized over 5 kilograms of cocaine, a kilogram of heroin, a half kilogram of cocaine base, and multiple firearms.
“This investigation and indictment results in the dismantling of a network of long-time leaders and organizers in a regional cocaine, heroin, and crack cocaine distribution chain that stretches beyond the Eastern District of California, through Southern California, and into Mexico,” said Acting U.S. Attorney Talbert.
“This criminal organization utilized an interstate drug pipeline that reached far beyond the Sacramento region,” said DEA Special Agent in Charge Wade R. Shannon. “These arrests underscore our commitment to rid communities of drug trafficking networks and the poison they peddle.”
“The FBI is proud to partner with its local, state, and federal Strike Force partners to disrupt and dismantle violent criminal organizations that threaten the safety of the communities we serve,” said Special Agent in Charge Sean Ragan of the FBI Sacramento Field Office. “Together, we are stronger, leveraging seamless communication and our individual strengths to identify and disrupt illegal drug distribution networks.”
“The success of this indictment highlights the importance and necessity of law enforcement partnerships across the spectrum,” said Special Agent in Charge Tatum King, who oversees HSI operations in Northern California. “Strong partnerships among federal, state and local law enforcement agencies are critical to apprehending those that profit from the purveyance of dangerous drugs to our communities.”
This case is the product of an investigation by the Drug Enforcement Administration, the Federal Bureau of Investigation, Homeland Security Investigations, the U.S. Marshals Service, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the U.S. Forest Service, the U.S. Postal Inspection Service, the Bureau of Land Management, the California Department of Corrections and Rehabilitation, the California Department of Justice, the California Highway Patrol, the Sacramento County Sheriff’s Office, and the Sacramento Police Department. Assistant U.S. Attorneys Cameron L. Desmond and Aaron D. Pennekamp are prosecuting the case.
If convicted of the conspiracy to distribute and possess with intent to distribute cocaine and cocaine base charge, Bryant, Harden, Anderson, Carter, Conner, Adams, Haney, Caine, Martin, White, Hellams, Tolbert, Steven Hampton, and Michael Hampton face a maximum statutory penalty of life in prison and a $10 million fine. If convicted of the conspiracy to distribute and possess with intent to distribute heroin charge, Bryant and Ontiveros face a maximum statutory penalty of 20 years in prison and a $1 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
This prosecution is part of the Organized Crime Drug Enforcement Task Forces (OCDETF) Strike Force Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. The Sacramento Strike Force is a co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations. The specific mission of the Sacramento Strike Force is to identify, investigate, disrupt, and dismantle the most significant drug trafficking organizations (DTOs) and transnational criminal organizations (TCOs) shipping narcotics, firearms, and money through the Eastern District of California, thereby reducing the flow of these criminal resources in California and the rest of the United States. The Sacramento Strike Force leads intelligence-driven investigations targeting the leadership and support elements of these DTOs and TCOs operating within the Eastern District of California, regardless of their geographic base of operations.
2 June 2021
Worcester Investment Advisor Charged with FraudRead the Press Release
BOSTON – A Worcester-based investment advisor was charged yesterday in federal court in Boston with defrauding his clients by stealing their funds and using them for various purposes, including to pay purported returns to other defrauded investors.
James Couture, 42, of Sutton, was charged with three counts of wire fraud and one count of aggravated identity theft. Couture will make an initial appearance in federal court at a later date.
As alleged in charging documents, from approximately 2009 to 2020, Couture misappropriated approximately $2.8 million from his clients by transferring funds out of his clients’ accounts for investment in fictitious funds and using the money for other purposes, including to purchase a client list from another investment advisor. Couture also allegedly used client money to pay fake investment returns to other clients he had defrauded. For example, in or about June 2016, Couture allegedly liquidated one client’s variable annuities to fund withdrawals by another client. It is also alleged that in December 2019 and January 2020, Couture sold one client’s mutual funds and raided a 401(k) plan he managed to fund withdrawals by another client, whose assets Couture purported were held in a mutual fund account, when in fact neither the funds nor the account actually existed.
The charges of wire fraud each provide for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000, or twice the gross gain or loss, whichever is greater. The charge of aggravated identity theft provides for a mandatory sentence of two years in prison to be served consecutive to any sentence imposed. 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; Ramsey E. Covington, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement today. The U.S. Securities & Exchange Commission provided valuable assistance with the investigation. Assistant U.S. Attorneys Kriss Basil and Sara Miron Bloom of Mendell’s Securities, Financial & Cyber Fraud Unit are prosecuting the case.
The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
William Kelly Pleads Guilty to Fraud Charges Related to the Jay Peak EB-5 AnC Vermont Project in Northeast VermontRead the Press Release
The United States Attorney’s Office announced that today William Kelly, 72, of Weston, Florida, pleaded guilty before Chief Judge Geoffrey W. Crawford in United States District Court in Rutland to two felony charges in connection with his involvement in the Jay Peak Biomedical Research Park EB-5 investment project, also called the AnC Vermont project.
Kelly pleaded guilty to conspiring with co-defendants Ariel Quiros, Jong Weon (Alex) Choi, and William Stenger in a multi-year wire fraud scheme to defraud immigrant investors seeking green cards through the EB-5 program. He also pleaded guilty to concealing material facts in a matter within the jurisdiction of a federal agency, namely United States Citizenship and Immigration Services (USCIS), which oversaw the EB-5 program.
According to court records and proceedings, the AnC Vermont project was designed to raise $110 million from 220 immigrant investors in order to construct and operate a biotechnology facility in Newport, Vermont. EB-5 immigrant investors could qualify for permanent resident status (commonly known as a green card) by investing $500,000 in a commercial enterprise approved by the Vermont EB-5 Regional Center (VRC), which had the authority to approve and monitor EB-5 projects in Vermont, and by USCIS. In order to obtain a green card, each investor needed to demonstrate to USCIS that his or her investment had created, or would soon create, ten jobs. From 2012 to 2016, approximately 169 investors invested approximately $85 million in the AnC Vermont project, in addition to paying approximately $8 million in “administrative fees.”
During the plea hearing, Kelly admitted that he and his co-conspirators misled AnC Vermont investors about how investor funds would be used, about how many jobs would be created by the project, and about the timeline for this job creation. For example, Kelly and others knew that it was necessary to demonstrate a plan to create at least 2,200 jobs in order to obtain USCIS approval of the AnC Vermont project, and that USCIS approval and business revenues were both important to investors. The jobs report for the project was directly based on hiring and financial projections generated by Kelly, Choi, and Stenger to justify the job creation number required for EB-5 approval. Kelly knew that no one had assessed whether the purported financial projections in the project’s business plan were reasonable. The job creation projections relied on three lines of business: clean room rentals, sales of stem cell products, and sales of artificial organs. Between 2012 and 2016, Kelly and his co-conspirators maintained the jobs numbers in spite of the fact that no one associated with the AnC Vermont project was making progress toward identifying customers for clean room rentals, acquiring commercially viable stem cell products, or developing the potential artificial organs.
During today’s hearing, Kelly also admitted that between March 2013 and October 2014, he helped Quiros and Stenger pay over $47 million in AnC Vermont investor money to Jay Construction Management, a Quiros-controlled entity that was designated as a pass-through corporation for approximately $52 million that was supposedly to be paid to AnC Biopharm, a company created and controlled by Choi in part to conceal Choi’s legal and financial problems. During this period, Kelly knew that Quiros forwarded less than $6 million from JCM to AnC Biopharm. Kelly knew that Quiros used approximately $21 million of the AnC Vermont investor funds sent to JCM to pay off a Raymond James loan that was used for expenses unrelated to the AnC Vermont project. In addition to the wire fraud conspiracy charge, Kelly admitted helping conceal from the VRC that Quiros had used the $21 million in AnC Vermont investor funds for purposes unrelated to the AnC Vermont project.
In the plea agreement, Kelly agreed to cooperate in the government’s ongoing matters. The plea agreement caps Kelly’s jail sentence at 36 months, so long as he abides by the terms of the agreement. The government agreed that it would not recommend a fine or forfeiture, but instead focus on seeking a restitution order for victims. The government requested that the Court delay Kelly’s sentencing pending his ongoing cooperation.
Co-defendant Quiros pleaded guilty to wire fraud conspiracy, money laundering, and concealment charges in August 2020 and currently awaits sentencing. Co-defendant Stenger has entered a not guilty plea to the pending charges, which are only allegations. Stenger is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law. The Court has scheduled his trial for October 2021. Co-defendant Choi remains at large.
Acting United States Attorney Jonathan Ophardt expressed his gratitude for the outstanding investigative assistance of the Federal Bureau of Investigation, the Criminal Investigation Divisions of the Internal Revenue Service, the Food and Drug Administration, and for the assistance of the Justice Department’s Fraud Section and Office of International Affairs. The prosecutors handling the case are Assistant U.S. Attorneys Nicole Cate and Paul Van de Graaf and Trial Attorney Jessee Alexander-Hoeppner, from the Department of Justice Criminal Division. William Kelly is represented by Robert Goldstein, Esq. and Mary Kehoe, Esq. Ariel Quiros is represented by Neil Taylor, Esq. and Robert Katims, Esq. William Stenger is represented by Brooks MacArthur, Esq. and David Williams, Esq.
Wayzata Man Sentenced to Prison for Arson of Minneapolis BankRead the Press Release
ST. PAUL, Minn. – A Wayzata man was sentenced today to 37 months in prison followed by three years of supervised release for conspiring to commit arson of a Minneapolis bank.
According to court documents, on May 28, 2020, Marc Bell Gonzales, 30, and others intentionally set fire to the Wells Fargo Bank branch building located at 3030 Nicollet Avenue South. Specifically, Gonzales poured gasoline from a red plastic canister onto the Wells Fargo Bank property while the surrounding crowd chanted, “burn it down!” Gonzales admitted that he acted with the intent to accelerate the burning of the Wells Fargo Bank building.
Acting U.S. Attorney W. Anders Folk for the District of Minnesota made the announcement after U.S. District Judge Eric C. Tostrud sentenced the defendant.
This case is the result of an investigation conducted jointly by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Minneapolis Police Department, and the Minnesota State Fire Marshal Division.
Assistant U.S. Attorney Andrew R. Winter prosecuted the case.
Wallingford Man Charged with Trafficking Oxycodone and CocaineRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, and Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration for New England, today announced that a federal grand jury in New Haven returned an indictment yesterday charging CHRISTOPHER M. LISCIO, 38, of Wallingford, with oxycodone and cocaine trafficking offenses.
As alleged in court documents, between February and April 2020, Liscio sold 2,000 30mg oxycodone pills. It is alleged that this narcotics trafficking activity occurred while Liscio was released on bond after he was arrested in February 2020 on state charges related to the alleged sexual assault of a minor.
Liscio was arrested on a federal criminal complaint on May 26, 2021. On that date, a search of his Wallingford residence revealed approximately 500 grams of cocaine, oxycodone pills and more than $20,000 in cash. He has been detained since his arrest.
The indictment charges Liscio with one count of conspiracy to possess with intent to distribute oxycodone and one count of possession with intent to distribute cocaine. Each charge carries a maximum term of imprisonment of 20 years.
Acting U.S. Attorney Boyle stressed that an indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Drug Enforcement Administration’s New Haven Tactical Diversion Squad, with the assistance of Homeland Security Investigations and the Wallingford Police Department. The Tactical Diversion Squad includes officers from the Bristol, East Windsor, Hamden, New Britain, West Haven, Newington, Manchester, Glastonbury and Watertown Police Departments.
This case is being prosecuted by Assistant U.S. Attorney Amanda S. Oakes.
Virginia Company Agrees to Settle Civil Fraud Allegations for Paycheck Protection Program LoansRead the Press Release
ALEXANDRIA, Va. – KC Investments Group, Inc. (KC Inc.) and its sole individual owner, Sunu P. KC, of Chantilly, have agreed to pay $230,414.65 to settle civil fraud allegations that KC Inc., through Sunu P. KC, obtained multiple loans during the first draw of the Paycheck Protection Program (PPP), announced Acting U.S. Attorney Raj Parekh for the Eastern District of Virginia.
The PPP was established in March 2020 as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and the program has been managed by the Small Business Administration (SBA). The PPP was intended to provide loans to qualified businesses to allow them to maintain payroll and operations through the COVID-19 pandemic. Each qualified business was allowed to receive only one PPP loan during the first phase of the program that ran from February 15, 2020 to December 31, 2020.
The government alleged that in April 2020, Sunu P. KC applied for PPP loans through both KC Inc. and his former company, KC Investments Group, LLC, the latter of which was not operating at the time. The government further alleged that in the loan applications, Sunu P. KC certified that KC Inc. would not receive multiple PPP loans, but both PPP loans were deposited into KC Inc.’s bank account.
As part of the resolution, KC Inc. and Sunu P. KC agreed to repay the second PPP loan within 30 days, together with the loan processing fee paid to the bank by the SBA, as well as an additional monetary amount pursuant to the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).
The resolution obtained in this matter was the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of Virginia and the SBA’s Office of General Counsel and Office of Inspector General.
The matter was investigated by Assistant U.S. Attorneys William Hochul and Kristin S. Starr.
The civil claims settled by this agreement are allegations only; there has been no determination of civil liability. A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.
Two USP Canaan Inmates Charged with Assault and Possession of A WeaponRead the Press Release
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Andrew Daniels, age 40, and Dontrace Blaine, age 34, inmates at United States Penitentiary Canaan, Waymart, Pennsylvania, were indicted on June 1, 2021, by a federal grand jury for assault and being in possession of a weapon in prison.
According to Acting United States Attorney Bruce D. Brandler, the indictment alleges that on November 8, 2020, Daniels and Blaine assaulted another individual with a sharp object and a combination lock wrapped in a bedsheet.
The matter is being investigated by the Federal Bureau of Prisons and the Federal Bureau of Investigation (FBI). Assistant United States Attorney James Buchanan is prosecuting the case.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for these offenses is ten years imprisonment. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offenses; the history and characteristics of the defendants; and the need to punish the defendants, protect the public and provide for the defendants’ educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Tulsa Woman Sentenced to 10 Years in Prison for Possession of Methamphetamine with Intent to DistributeRead the Press Release
A woman who led officers on a chase and was later discovered with methamphetamine was sentenced today in federal court, announced Acting U.S. Attorney Clint Johnson.
U.S. District Judge Terence C. Kern sentenced Brittany Paige Coffee, 27, of Tulsa, to 10 years in federal prison followed by five years of supervised release. In March, Coffee was convicted of possession with intent to distribute 500 grams or more of methamphetamine.
On Sept. 17, 2020, Tulsa Police Officers approached Paige’s vehicle and attempted to arrest fugitive Jose Pizane Ruiz, a passenger in the car. In response, Coffee drove out of the parking lot at a high rate of speed, almost running over officers. The vehicle was eventually involved in a collision near 1500 W. Highway 412. Coffee and Ruiz ran from the crash scene but were not apprehended at the time. Officers discovered three firearms in the wrecked vehicle.
Coffee and Ruiz were eventually located at a Tulsa residence in and around a different vehicle parked in the driveway. Officers arrested Coffee in the vehicle. Ruiz was arrested after a brief foot pursuit. Officers found a purse in the vehicle containing Coffee’s Oklahoma identification card as well as a black case containing 585 grams of methamphetamine.
Ruiz was also charged with possession of methamphetamine with intent to distribute. His case is currently pending in federal court, and he is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The Tulsa Police Department conducted the investigation. Assistant U.S. Attorney Joel-lyn A. McCormick prosecuted the case.
Tioga County Man Pleads Guilty to Failing to Register as a Sex OffenderRead the Press Release
SYRACUSE, NEW YORK – Paul Wyak, age 49, of Spencer, New York, pled guilty today to failing to register and update his registration as a sex offender after it was discovered that he had an e-mail address that he did not disclose to the New York State Division of Criminal Justice Services as required by the Sex Offender Registration and Notification Act (“SORNA”), announced Acting United States Attorney Antoinette T. Bacon and David L. McNulty, United States Marshal for the Northern District of New York.
As part of his guilty plea, Wyak admitted that from January 10, 2021 through February 8, 2021, he failed to register a Google e-mail address that he created on December 31, 2020, as required by SORNA.
Wyak was required to register as a sex offender because of his federal conviction in 2008 for distribution of child pornography. Wyak was sentenced on February 20, 2008, to serve 92 months’ incarceration, and a 25-year term of supervised release on that conviction.
In addition to his plea to the failure to register and update a registration as a sex offender, Wyak also admitted today to violating the terms of supervised release previously imposed after his 2008 conviction.
Sentencing is scheduled for October 5, 2021 before Senior United States District Judge Thomas J. McAvoy. In addition to any punishment for violating the terms of his supervised release, Wyak faces a maximum sentence of 10 years in prison, a fine of up to $250,000.00, and a term of supervised release of at least 5 years and up to life on the sex offender registration offense. 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 United States Marshals Service and is being prosecuted by Special Assistant U.S. Attorney Adrian S. LaRochelle as part of Project Safe Childhood. Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorney’s offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc
Three Plead Guilty to Misuse of Social Security Numbers and Other Charges as Part of Scheme to Obtain Tax InformationRead the Press Release
SYRACUSE, NEW YORK – Stephen Mockler, age 53, of Waverly, New York, Andrew Panessa, age 40, of Lake Ariel, Pennsylvania, and Sabrina Scott, age 52, of Granbury, Texas, pled guilty to charges related to their roles in a scheme to obtain confidential tax information from the Internal Revenue Service (IRS).
The announcement was made by Acting United States Attorney Antoinette T. Bacon and Special Agent in Charge William Kalb of the United States Treasury Inspector General for Tax Administration (“TIGTA”).
As part of their guilty pleas, Mockler, Panessa, and Scott admitted that Scott, while an employee of a private investigation firm in Texas, provided both Mockler and Panessa with personal identifying information about her firm’s investigative targets (including the targets’ social security numbers) and requested that Mockler and Panessa use that information to obtain confidential tax information. Mockler, who received requests for tax information from both Scott and Panessa, called the IRS and used the personal identifying information provided to him by Scott or Panessa to impersonate the taxpayer, answer the IRS’s security questions, and learn non-public information about the taxpayer. Mockler then sent that confidential tax information back to Panessa or Scott, who provided the information to the private investigation firm’s clients for a fee.
Mockler and Panessa each pled guilty to conspiracy to commit wire fraud, wire fraud, misuse of a social number, and aggravated identity theft. Each faces a maximum term of imprisonment of 20 years for each count of wire fraud and five years for each count of misuse of a social security number. The aggravated identify theft convictions require a two-year sentence to run consecutively to any term of imprisonment imposed for the wire fraud and misuse of a social security number counts. In addition, the maximum fine is $250,000, and the court could impose a term of post-imprisonment supervised release of up to three years.
Sabrina Scott pled guilty to conspiracy to misuse social security numbers and faces a maximum sentence of five years, a fine of $250,000, and a post-imprisonment term of supervised release of up to three years.
No sentencing date is currently set for Mockler or Panessa. Scott’s sentencing is scheduled for October 5, 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.
These cases were investigated by the United States Treasury Inspector General for Tax Administration (“TIGTA”) and are being prosecuted by Assistant U.S. Attorneys Michael D. Gadarian and Geoffrey J.L. Brown.
Texas Man Pleads Guilty to Receiving Kick Back Payments in Exchange for Referrals to OK CompoundingRead the Press Release
Adam Gallardo Arredondo, 59, of Waxahachie, Texas, pleaded guilty Monday to illegal remuneration for health care referrals. Arredondo admitted that he solicited and received checks from OK Compounding, a Tulsa pharmacy, in exchange for referring his patients’ compounding prescriptions. The compounding prescriptions were paid for by federal healthcare programs; therefore, the kickbacks paid to Arredondo violated federal law.
According to the plea agreement, the United States and Arredondo agreed to the following sentence – 36 months of supervised probation and restitution to be paid in the amount of $216,624.75. Arredondo further agreed to surrender his medical license. U.S. District Judge Gregory K. Frizzell will determine Arredondo’s final sentence at a hearing set for Sept. 24.
In the agreement, Arredondo stated that on January 1, 2013, he signed a Consulting Physicians Agreement with OK Compounding, located in Tulsa. The agreement stated that Arredondo would provide services in exchange for an hourly payment from OK Compounding. In his plea, Arredondo stated that he never provided the services listed in the Agreement but was instead paid for sending all of his patients’ compounding prescriptions to OK Compounding to be filled.
Arredondo also created the company, Taffinder Marketing, LLC, and recruited other physicians to enter into similar contracts with OK Compounding. Like Arredondo, those physicians did not perform the services in their contract; rather, they were paid to send their compounding prescriptions to OK Compounding. Arredondo’s company was paid a monthly fee for the recruitment services. On August 14, 2013, Arredondo received a $10,000 check from OK Compounding as payment for referring the prescriptions. The payment included prescriptions that were paid in whole or in part by the federal programs TRICARE, VA, Medicare and/or Office of Worker's Compensation Programs-Department of Labor.
TRICARE suffered a loss of $16,547.75 as a result of the crime.
Further losses incurred from other offenses not included in the plea agreement totaled $200,077.00. Those losses include:
Department of Labor: $14,746.58
Medicare $53,272.67
Tricare: $119,567.76
VA: $ 12,489.99
The Defense Criminal Investigative Service, the Department of Labor-Office of Inspector General, the Internal Revenue Service, the United States Postal Service-Office of Inspector General, Federal Bureau of Investigation, and United States Department of Health and Human Services-Office of Inspector General conducted the investigation. Assistant U.S. Attorney Melody Noble Nelson is prosecuting the case.
Texas Man Pleads Guilty to Hate Crime Charges After Using Dating App to Target Gay MenRead the Press Release
A Dallas man pleaded guilty Wednesday afternoon to federal hate crime charges, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah and Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division.
Daniel Jenkins, 22, pleaded guilty to one hate crime count, one hate crime conspiracy count, kidnapping, carjacking, and one count of using a firearm during a crime of violence. He is the last of four defendants to plead guilty to charges stemming from a scheme that targeted gay men on the dating app Grindr.
“These defendants brutalized multiple victims, singling them out due to their sexual orientation. We cannot allow this sort of violence to fester unchecked,” said Acting U.S. Attorney Prerak Shah. “The Department of Justice is committed to prosecuting hate crimes. In the meantime, we urge dating app users to remain vigilant. Unfortunately, predators often lurk online.”
"The Department of Justice and the Civil Rights Division are committed to confronting the scourge of hate-based violence gripping communities across our nation,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “We denounce hate-based violence in all of its forms, including violence targeting individuals based on sexual orientation and gender identity. We will continue to diligently investigate and prosecute violent, bias-motivated crimes to the fullest extent. As noted by Attorney General Garland, we stand ready to use every tool in our arsenal to address the rise in hate and we will work to hold perpetrators of hate-motivated violence accountable."
“Investigating hate crimes is one of the FBI's highest priorities because of the devastating impact they have on families and communities. We are committed to the pursuit of offenders and holding them accountable for perpetrating these harmful crimes,” said FBI Dallas Special Agent in Charge Matthew DeSarno. “No one should have to live in fear of violence because of who they are, where they are from or what they believe. We will continue working with our law enforcement and community partners to detect and prevent violent incidents motivated by hate or bias. We also urge the public to report any suspected hate crimes to the FBI and local law enforcement.”
According to court documents filed in connection with his guilty plea, Mr. Jenkins admitted that he and his co-conspirators used Grindr, a social media dating platform used primarily by gay men, to lure gay men to a vacant apartment and other areas in and around Dallas for robbery, carjacking, kidnapping, and hate crimes over the course of approximately a week in December 2017.
Mr. Jenkins admitted that he and his co-conspirators held victims against their will; pointed a handgun at victims and took their personal property, including their vehicles; and traveled to local ATMs to withdraw cash from the victims’ accounts. He further admitted that he and his co-conspirators physically injured at least one victim and taunted the victims based upon the co-conspirators’ perception of the men’s sexual orientation.
In March 2019, Mr. Jenkin’s co-conspirator Michael Atkinson pleaded guilty to conspiracy and kidnapping charges in connection with this case. In December 2019, Daryl Henry and Pablo Ceniceros-Deleon pleaded guilty to a federal hate crime and other charges in connection with this case. Sentencing for these three defendants is set for June 23.
Mr. Jenkins’ sentencing is set for Oct. 6. Pursuant to the terms of the plea agreement, he faces a sentence of up to 26 years in prison.
The FBI’s Dallas Field Office conducted the federal investigation; a separate criminal investigation is being conducted by the Dallas Police Department. Special Litigation Counsel Rose E. Gibson, Trial Attorney Kathryn Gilbert of the Justice Department’s Civil Rights Division, and Assistant U.S. Attorney Nicole Dana of the Northern District of Texas are prosecuting the case.
Statement of the U.S. Attorney's Office Regarding Incident in Manchester on May 26, 2021Read the Press Release
CONCORD – The United States Attorney’s Office for the District of New Hampshire is providing the public with additional information about an incident that took place on May 26, 2021, in Manchester.
On May 26, 2021, Deputy United States Marshals sought to arrest Benjamin Bennett, 41, of Concord at a location in Manchester.
Bennett was the subject of a federal arrest warrant that was the result of an investigation by the Drug Enforcement Administration, New Hampshire State Police, and the New Hampshire Attorney General’s Drug Task Force. He had been charged in a sealed complaint with possession of controlled substances with intent to distribute.
The complaint, which has now been unsealed, alleged that on March 4, 2021, Bennett was driving a vehicle that was stopped by the New Hampshire State Police in the Littleton area. Bennett was arrested for operating without a license and being a habitual offender. A later search of the vehicle resulted in the discovery of distributable quantities of suspected methamphetamine and heroin/fentanyl.
When approached by Deputy Marshals on May 26, 2021, Bennett is believed to have fired a weapon at the Deputy Marshals. Representatives of the Manchester Police Department and other law enforcement agencies responded to the scene. Law enforcement officers later found Bennett dead from a self-inflicted gunshot wound.
“This matter demonstrates the dangers that our brave federal, state, and local law enforcement colleagues face each day,” said Acting U.S. Attorney John J. Farley. “I am grateful to the Manchester Police, the United States Marshals Service, and all of the other law enforcement agencies who responded and assisted in this matter. Thanks to their professionalism and caution, no civilians or members of law enforcement officers were harmed during this incident.”
In addition to the United States Marshals Service and the Manchester Police Department, the following agencies also assisted in responding to this incident: the Federal Bureau of Investigation, Hillsborough County Sheriff’s Office, Nashua Police Department, Manchester Fire Department and American Medical Response.
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St. Louis Man Sentenced to 25 Years for Meth Trafficking, Discharging FirearmRead the Press Release
SPRINGFIELD, Mo. – A St. Louis, Missouri, man who shot a law enforcement officer before shooting himself was sentenced in federal court today for drug trafficking and illegally discharging a firearm in Joplin, Mo.
E.F. Fitchpatrick, Jr., 47, was sentenced by U.S. District Judge M. Douglas Harpool to 25 years in federal prison without parole. The court sentenced Fitchpatrick to 350 months in prison, but gave him credit for the 50 months that he has already served in state custody in connection with a related offense, resulting in a sentence of 300 months (25 years) in prison. Fitchpatrick was sentenced as a career offender due to his prior felony convictions.
On June 10, 2020, Fitchpatrick pleaded guilty to one count of conspiracy to distribute methamphetamine and one count of discharging a firearm during a drug-trafficking crime. Fitchpatrick admitted that he participated in a conspiracy to distribute 50 grams or more of methamphetamine from Feb. 18 to March 1, 2017. Fitchpatrick, who had been released from federal prison a few months earlier, was traveling back and forth to Texas to pick up methamphetamine in the weeks before his arrest. He picked up nearly a pound of methamphetamine in February 2017, which he distributed to several individuals in Joplin.
On March 1, 2107, law enforcement officers executed a search warrant at the Econolodge Inn and Suites at 3510 S. Rangeline Road in Joplin. After several failed attempts to open the room door with the hotel key card, officers attempted to ram the door, but were not able to get the door open. An Ozarks Drug Enforcement Team (ODET) detective used the battering ram to knock out the hotel room window. Another ODET detective reached in the window to move the curtain, and Fitchpatrick, who was standing in the bathroom doorway, shot the detective in the left side of his body before retreating to the bathroom and barricading himself inside.
Joplin police officers, utilizing a robot, were able to see that the bathroom door was closed with towels stuffed at the bottom of the door. After a couple of hours and numerous attempts and tactics, Fitchpatrick was taken into custody. Fitchpatrick had flushed the remaining drugs and shot himself in the face while barricaded inside the bathroom.
Inside the hotel room, officers found the Hi-Point .380-caliber semi-automatic handgun used in the shooting, drug paraphernalia, and items with methamphetamine residue.
This case was prosecuted by Assistant U.S. Attorney Jessica R. Sarff. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Ozarks Drug Enforcement Team, and the Joplin, Mo., Police Department.
Project Safe Neighborhoods
The U.S. Attorney’s Office is partnering with federal, state, and local law enforcement to specifically identify criminals responsible for significant violent crime in the Western District of Missouri. A centerpiece of this effort is Project Safe Neighborhoods, a program that brings together all levels of law enforcement to reduce violent crime and make neighborhoods safer for everyone. Project Safe Neighborhoods is an evidence-based program that identifies the most pressing violent crime problems in the community and develops comprehensive solutions to address them. As part of this strategy, Project Safe Neighborhoods focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Springfield Man Pleads Guilty to Meth Conspiracy, Illegal FirearmsRead the Press Release
SPRINGFIELD, Mo. – A Springfield, Missouri, man who illegally possessed nine firearms has pleaded guilty in federal court to his role in a conspiracy to distribute methamphetamine in Greene and Cass counties.
Christopher M. Iavolo, 42, pleaded guilty before U.S. District Judge M. Douglas Harpool on Tuesday, June 1, to one count of conspiracy to distribute methamphetamine and one count of possessing firearms in furtherance of a drug-trafficking crime.
By pleading guilty, Iavolo admitted that he participated in a conspiracy to distribute methamphetamine from May 10 to Nov. 8, 2018. During the conspiracy, Iavolo received methamphetamine from a co-defendant who made multiple trips to Texas to acquire kilogram-level quantities. Iavolo then distributed methamphetamine to others.
On Nov. 6, 2018, law enforcement officers executed a search warrant at Iavolo’s residence. Iavolo had a loaded Beretta .32-caliber semi-automatic pistol tucked inside the back of his pants. When officers searched a bedroom, they found a Masterpiece Arms 9mm semi-automatic pistol with an extended high capacity magazine in between the bed’s box spring and mattress. Underneath the bed, they found a loaded HK .22-caliber semi-automatic rifle, a loaded Romarm 7.62x39mm semi-automatic rifle, and a rifle case that contained two loaded Glock 9mm semi-automatic handguns, a loaded Cobra .380-caliber semi-automatic pistol, a loaded Star .45-caliber semi-automatic pistol, a loaded Jennings 9mm semi-automatic pistol, numerous handgun magazines, ammunition, a large knife, a rifle scope, and handgun holsters.
Officers also found a safe inside the bedroom closet that contained 33.37 grams of methamphetamine. The bag appeared as if there was once much more methamphetamine inside of it based upon the amount of residue. There was also a metal scoop inside the bag.
Iavolo told officers he traded methamphetamine for most of the firearms. Iavolo admitted to selling three to five ounces of methamphetamine each week for the past several months.
Co-defendants CMichael D. Johnson, 53, and Xlyona M. Sharp, 37, have also pleaded guilty.
Under federal statutes, Iavolo is subject to a mandatory minimum sentence of 15 years in federal prison without parole, up to a sentence of life in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Jessica R. Sarff. It was investigated by the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Springfield, Mo., Police Department, and the Pleasant Hill, Mo., Police Department.
Spokane woman sentenced to more than 10 years in prison for trafficking meth on Rocky Boy’s Indian ReservationRead the Press Release
GREAT FALLS – A Spokane, Washington, woman who admitted trafficking methamphetamine on the Rocky Boy’s Indian Reservation was sentenced today to 10 years and four months in prison followed by five years of supervised release, Acting U.S. Attorney Leif M. Johnson said.
Kristina Dawn Russette, 31, pleaded guilty on Feb. 24 to possession with intent to distribute controlled substances.
Chief U.S. District Judge Brian M. Morris presided. Chief Judge Morris continued Russette’s detention.
According to court documents, the government alleged that in 2019 and 2020, law enforcement officers learned from multiple individuals that Russette was supplying meth from the Spokane area to individuals on the Rocky Boy’s Indian Reservation.
The government alleged that in May 2020, Russette was driving a vehicle stopped in Washington for traffic violations. The vehicle was searched pursuant to a tribal search warrant and Russette’s consent and probation conditions. In a purse in the rear seating area were multiple bags containing about 1.5 pounds of meth. A passenger in the vehicle stated that he and Russette had picked up those drugs in Spokane. Investigators also obtained information from Facebook accounts in which Russette had used slang or code to communicate about drugs and to arrange for the distribution of drugs. In addition, individuals told investigators that Russette was a longtime supplier of large quantities of meth to persons on and around the Rocky Boy’s Indian Reservation.
Assistant U.S. Attorney Ethan R. Plaut prosecuted the case, which was investigated by the FBI, Chippewa Cree Law Enforcement Services, Tri-Agency Drug Task Force, Bureau of Indian Affairs, Kalispel Tribe Public Safety Department in Washington and the Airway Heights Police Department in Washington.
This case is part of Project Safe Neighborhoods, a U.S. Department of Justice initiative to reduce violent crime. Through PSN, federal, tribal, state and local law enforcement partners in Montana focus on violent crime driven by methamphetamine trafficking, armed robbers, firearms offenses and violent offenders with outstanding warrants.
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Scott County Man Sentenced to 30 Years in Prison on Child Pornography ChargesRead the Press Release
KNOXVILLE, Tenn. - On May 28, 2021 Preston Andrew Watson, age 30, was sentenced to 30 years in prison for production and distribution of child pornography by the Honorable Katherine A. Crytzer in the United States District Court for the Eastern District of Tennessee at Knoxville. After Watson is released from prison, the United States Probation Office will supervise him for 20 years. Upon his release from prison Watson will also be required to register with the state sex offender registry in any state in which he lives, works, or attends school.
Watson had previously pled guilty to the charges. According to documents filed in the case, Watson duped, extorted, and threatened minors located in the United States and abroad to obtain child pornography from his victims. Watson met his victims on social media websites. He developed an online relationship with them and then requested that they send him sexually explicit images of themselves. Watson threatened to send sexually explicit images of the minors to social media websites if the victims refused to comply with his demands for more sexually explicit images.
The investigation was conducted by the Department of Homeland Security, Homeland Security Investigations, and the Knoxville Police Department’s Internet Crimes Against Children unit.
Assistant U.S. Attorney Jennifer Kolman represented the United States in court.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006, by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, PSC 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 PSC, please visit www.justice.gov/psc. For more information about internet safety education click on the link for “Publications & Resources.”
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Rosebud Man Indicted for Failure to Register as a Sex OffenderRead the Press Release
Acting United States Attorney Dennis Holmes announced that a Rosebud, South Dakota, man has been indicted by a federal grand jury for Failure to Register as a Sex Offender.
Anthony Edward Farmer, age 37, was indicted on October 14, 2020. He appeared before U.S. Magistrate Judge Mark A. Moreno on June 1, 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, five years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
Farmer was convicted of Abusive Sexual Contact With a Child in June 2010. As a result of this conviction, he is required to register as a sex offender. It is alleged that between July 5, 2020, and October 14, 2020, Farmer, a person required to register under the Sex Offender Registration and Notification Act, and a sex offender by reason of conviction under Federal Law, failed to properly register as a sex offender and update his registration.
The charge is merely an accusation and Farmer is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Kirk Albertson is prosecuting the case.
Farmer was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Rochester Man Sentenced to 13 Years in Prison for Chinappi's Gun Store BurglariesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Luis D. Marcano-Agosto, 36, of Rochester, NY, who was convicted of theft of firearms from a Federal Firearms Licensee and possession of firearms by a convicted felon, was sentenced to serve 156 months in prison by U.S. District Judge Elizabeth A. Wolford. The defendant was also ordered to pay $41,500 in restitution to August Chinappi, the victim of the burglary and the former owner of Chinappi’s Firearms & Supplies.
Assistant U.S. Attorney Brett A. Harvey, who handled the case, stated that Marcano-Agosto, along with co-defendants Dakota Sarfaty and Marcos D. Guzman, broke into Chinappi’s Firearms & Supplies – a gun store located at 5016 West Ridge Road in Spencerport, NY – in the early morning hours on August 16, 2018, and stole a total of 87 firearms. Sarfaty entered the basement through the hole in the wall and, together with Marcano-Agosto and Guzman, stole the guns, almost all of which were handguns. Thereafter, Guzman, Sarfaty and Marcano-Agosto sold many of the firearms on the streets of Rochester. Sarfaty also previously broke into Chinappi’s Firearms & Supplies and stole six firearms on August 12, 2018.
To date, approximately 31 of the stolen firearms have been recovered by law enforcement. The remainder of the stolen firearms have not yet been recovered.
Sarfaty was convicted and sentenced to serve 175 months in prison, while Guzman was convicted and sentenced to serve 240 months in prison.
The sentencing is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division; the Monroe County Sheriff’s Office, under the direction of Sheriff Todd Baxter; and the Rochester Police Department, under the direction of Chief Cynthia Herrion-Sullivan.
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Richfield Man Sentenced to Prison for Arson of Target Corporation HeadquartersRead the Press Release
ST. PAUL, Minn. – A Richfield man was sentenced today to 33 months in prison followed by two years of supervised release for conspiring to commit arson of the Target Corporation’s headquarters building.
According to court documents, on Wednesday, August 26, 2020, Minneapolis experienced arson, rioting, and looting in response to false rumors regarding police involvement in the death of a murder suspect. After law enforcement released video footage demonstrating that the rumor was clearly false, Shador Tommie Cortez Jackson, 24, gathered with other rioters downtown. Jackson joined a crowd outside Target Corporation’s corporate headquarters building located at 1000 Nicollet Mall (“Target Headquarters”). Jackson used a construction sign to break through the glass doors into the building. After breaching the doors and entering the building, Jackson intentionally set a fire on a counter inside the mailroom. Jackson also attempted to light a second fire in the mailroom on top of cardboard boxes using a lighter and a bottle of ignitable liquid.
Acting U.S. Attorney W. Anders Folk for the District of Minnesota made the announcement after U.S. District Judge Patrick J. Schiltz sentenced the defendant.
This case is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Minneapolis Fire Department, and the Minneapolis, Bloomington, and Richfield Police Departments.
Assistant U.S. Attorneys Chelsea A. Walcker, Alexander D. Chiquoine, and Joseph S. Teirab prosecuted the case.
Registered Sex Offender Sentenced to 144 Months for Possessing Child PornographyRead the Press Release
MADISON, WIS. – Timothy M. O’Shea, Acting United States Attorney for the Western District of Wisconsin, announced that Anthony A. Atkins, 47, Webster, Wisconsin, was sentenced today by U.S. District Judge William M. Conley to 144 months in federal prison for possessing child pornography. This term of imprisonment will be followed by 15 years of supervised release. Atkins pleaded guilty to this charge on February 9, 2021.
On June 15, 2020, a probation officer took possession of three phones from Atkins, who was not allowed to have them. She did a preliminary search of the phones, observed what she believed to be child pornography, and turned the phones over to law enforcement. Law enforcement officials obtained a search warrant for the phones and found numerous images of child pornography.
In sentencing Atkins, Judge Conley expressed concern that Atkins had a sexual interest in children for the last 25 years and committed hands-on offenses in the past. Judge Conley also noted it was at least the third time Atkins violated his sex offender registry notification requirements.
The charge against Atkins was the result of an investigation conducted by the Burnett County Sheriff’s Office and the Wisconsin Department of Justice Division of Criminal Investigation. The prosecution of the case has been handled by Assistant U.S. Attorney Elizabeth Altman.
Region’s Top Federal Law Enforcement Officials Issue Plea to Migrants: Don’t Trust your Life to SmugglersRead the Press Release
Media Relations Director Kelly Thornton (619) 546-9726
NEWS RELEASE SUMMARY – June 2, 2021
SAN DIEGO – Following a wave of smuggling-related deaths in the region, San Diego’s top federal law enforcement officials made an emotional plea to migrants contemplating an illegal journey across the border: Don’t risk your life.
In less than a three-week span, four lives were lost and dozens of people had to be rescued from rough seas and hospitalized after multiple maritime smuggling events went terribly wrong.
“We are appealing to every person who is considering a desperate, perilous journey into the United States, whether in a boat, on foot, or crammed in the trunk of a car,” said Acting U.S. Attorney Randy Grossman. “Don’t do it. Do not put your life in the hands of smugglers. These people do not care about you. They will jam way too many people on a boat or in a car, just to make more money. They will direct you to hike in remote areas in dangerous weather conditions without adequate food, water or clothes. Smugglers care nothing for their customers. They care only about maximum profit.”
There were 25 migrant deaths in border areas in San Diego and Imperial counties from October through April, compared to 29 in all of FY 2020.
“Crossing the border illegally is extremely dangerous. Regardless of the crossing method, your life is at risk when placed in the hands of ruthless smugglers,” said U.S. Border Patrol San Diego Sector Acting Deputy Chief Patrol Agent Scott Garrett. “Smugglers will abandon their victims at the first sign of trouble, viewing them only as an expendable commodity.”
In the last three months, a number of people have been charged, entered guilty pleas, or received sentences in connection with smuggling deaths:
On Friday, May 28, a federal grand jury returned an indictment against Antonio Hurtado, the alleged captain of the boat that ran aground off Point Loma on May 2. In that incident, three people drowned and 30 were rescued in a heroic effort by U.S. Coast Guard, San Diego Lifeguards, and Border Patrol. Hurtado was charged with Attempted Bringing in Aliens Resulting in Death and other crimes. Many of the survivors who were interviewed by authorities said they had paid between $15,000 and $18,500 to be smuggled into the United States on the vessel.
In another case, today an indictment was returned charging Victor Alfonso Soto Aguilar and Jose Ramon Geraldo Romero with the same crime - Bringing in Aliens Resulting in Death. On May 20, one person died and other individuals were rescued in another maritime smuggling event. In predawn darkness, United States Border Patrol agents spotted numerous individuals in the ocean near La Jolla. A panga boat was also seen in the vicinity traveling further north. Border Patrol saw that the individuals in the ocean were in serious distress and desperately needed assistance. Lifeguards immediately responded and rescued eight people from the water. The panga then eventually came into shore near the Children’s Pool. A submerged victim was found nearby and did not survive. The migrants rescued from the water admitted that they were paying between $12,000 and $15,000 to be smuggled into the United States.
The tragedies are not limited to the ocean. Yesterday, Leobardo Soto-Toledo pleaded guilty to immigration crimes in January of this year involving a group of 14 migrants entering the United States through an underground drainage pipe during heavy rains. One man drowned and a woman was found floating unconscious; she was resuscitated by a Border Patrol Agent and treated at a hospital.
In April, two brothers from Chihuahua, Mexico, were sentenced in federal court to 5 1/2 years in prison for smuggling three sisters across treacherous terrain along the U.S.-Mexico border in an ill-fated trek that resulted in the tragic deaths of all threeyoung women. One of those sisters was the mother of a young child.
In March, Neil Edwin Valera, a U.S. citizen who resided in Tijuana, was sentenced to five years in prison in connection with the deaths of three Chinese migrants, including a mother and her 15-year-old son, who were found in the trunk of Valera’s BMW.
Also in March, Jose Cruz Noguez of Mexicali, Mexico, was indicted by a federal grand jury on immigration charges related to a March 2, 2021 smuggling event that led to the deaths of 13 Mexican and Guatemalan nationals in a crash of an overloaded vehicle near Holtville, California. That case is pending.
Grossman praised the prosecutors on these cases for their excellent work, and he thanked U.S. Border Patrol, Customs and Border Protection, Homeland Security Investigations and the Coast Guard, as well as the San Diego Lifeguards. “You put your own lives on the line to rescue migrants in distress whether in the desert, the mountains or the ocean. You are heroes and we are all grateful for your efforts to protect everyone in our community irrespective of their immigration status.”
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Randolph County man sentenced for meth distributionRead the Press Release
ELKINS, WEST VIRGINIA – Matthew Logan Lipscomb, of Kerens, West Virginia, was sentenced today to 76 months of incarceration for drug charges, Acting U.S. Attorney Randolph J. Bernard announced.
Lipscomb, 30, pled guilty to one count of “Distribution of Methamphetamine” in November 2019. Lipscomb admitted to selling methamphetamine, also known as “crystal meth” and “ice,” for $650 in April 2019 in Randolph County.
Assistant U.S. Attorney Stephen D. Warner prosecuted the case on behalf of the government. The Mountain Region Drug and Violent Crimes Task Force investigated.
U.S. District Judge Thomas S. Kleeh presided.
Plantation Man Who Used Child Pornography to Find “Sexual Nirvana” Sentenced to over 10 Years in PrisonRead the Press Release
Miami, Florida – A Plantation man convicted of possessing over 5,000 electronic images and videos depicting the sexual exploitation of children was sentenced today to 121 months in federal prison by U.S. District Judge Rodolfo A. Ruiz II, who sits in Ft. Lauderdale.
Tyler Washington, 26, used a social networking application to communicate with others who shared his interest in child pornography. Washington provided access to his collection of child sexual abuse material to users who agreed to send him videos of themselves masturbating to Washington’s collection. During one chat session that involved masturbating to a child sex abuse video, Washington claimed that the activity was “sexual nirvana” for him. On March 25, 2021, Washington pled guilty to possessing child sexual abuse material.
Acting U.S. Attorney Juan Antonio Gonzalez of the Southern District of Florida and Special Agent in Charge Anthony Salisbury of the Department of Homeland Security, Homeland Security Investigations (HSI), announced the sentence.
Homeland Security Investigations (HSI) Fort Lauderdale investigated the case with assistance from the Broward Sheriff’s Office, Plantation Police Department, and the Florida Department of Law Enforcement, all of which are members of the South Florida Internet Crimes Against Children Task Force.
Assistant U.S. Attorney Ajay Alexander prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov under case number 21-cr-60068.
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Physician Pleads Guilty in Medicaid Fraud ConspiracyRead the Press Release
A California man pleaded guilty today to conspiracy to commit health care fraud.
According to court documents, Keyvan Amirikhorheh, M.D, 61, of Seal Beach, worked as a physician at Los Angeles Community Clinic. Together with his co-defendants, Amirikhorheh defrauded the Family Planning, Access, Care and Treatment (Family PACT) program administered by Medi-Cal, the California Medicaid program, by submitting and causing the submission of fraudulent claims for family planning services, diagnostic testing, and prescriptions for non-existent patients.
Amirikhorheh is the final defendant to plead guilty. Hilda Haroutunian, 61, of Sun Valley, California pleaded guilty on Sept. 25, 2020, and is scheduled to be sentenced on Dec. 17; Lorraine Watson, 57, a physician’s assistant, of Valley Village, California, pleaded guilty on Oct. 9, 2020, and is scheduled to be sentenced on Sept. 10; Edmond Sarkisyan, 41, of North Hollywood, California, pleaded guilty on Jan. 29, and is scheduled to be sentenced on July 16; and Noem Sarkisyan, 65, of North Hollywood, California, pleaded guilty on March 5, 2020, and is scheduled to be sentenced on Sept. 3.
As alleged in court documents, between approximately March 2016 and April 2019, Los Angeles Community Clinic and associated laboratories and pharmacies submitted approximately $8,406,204 in claims to Medi-Cal and were paid approximately $6,660,028 as the result of this fraudulent scheme.
Amirikhorheh pleaded guilty to conspiracy to commit health care fraud. He is scheduled to be sentenced on Oct. 1, and faces a maximum penalty of 10 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Tracy L. Wilkison of the Central District of California; Assistant Director in Charge Kristi Koons Johnson of the FBI’s Los Angeles Field Office; Special Agent in Charge Timothy DeFrancesca of the U.S. Department of Health and Human Services Office of the Inspector General’s (HHS-OIG) Los Angeles Regional Office; and Special Agent in Charge Kris Lyle of the California Department of Justice made the announcement.
The FBI, Department of Health and Human Services-Office of Inspector General, and California Department of Justice are investigating the case, which was charged as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.
Trial Attorneys Alexis Gregorian and Claire Yan of the Criminal Division’s Fraud Section are prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program nearly $19 billion.
Pewaukee Man Sentenced for his Role in Directing COVID-19 Relief Fraud SchemeRead the Press Release
Acting U.S. Attorney Richard G. Frohling of the Eastern District of Wisconsin joined Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division and other federal officials in announcing that on June 2, 2021, Thomas Smith (age 46) of Pewaukee, Wisconsin, was sentenced to 57 months’ imprisonment for fraudulently obtaining over $1 million in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Smith will also be required to spend two years on supervised release following his prison sentence and was ordered to pay $ 960,000 in restitution.
Smith pleaded guilty to this offense on February23, 2021. According to court documents, Smith fraudulently sought over $1.2 million in PPP loans through applications to a federally insured financial institution on behalf of eight different companies. According to his plea agreement, Smith caused fraudulent loan applications to be submitted that made numerous false and misleading statements about the companies’ respective payroll expenses. Based on these representations, the financial institution approved and funded over $1 million in loans. Smith then directed his co-conspirators to send him portions of the PPP funds within days of receiving them and used the proceeds for personal expenses, he admitted.
The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding, and in December 2020, Congress authorized another $284 billion in additional funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1%. PPP loan proceeds must be used by businesses for payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
The FBI, SBA-OIG, FDIC-OIG, and IRS-CI investigated the case.
Trial Attorneys Laura Connelly and Leslie S. Garthwaite of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Stephen Ingraham of the Eastern District of Wisconsin are prosecuting the case.
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.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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Parkersburg Man Pleads Guilty to Federal Drug and Gun CrimesRead the Press Release
CHARLESTON, W.Va. – Shaun Price, 41, of Parkersburg pleaded guilty today to federal drug and gun crimes.
According to court documents, on December 7, 2020 an officer with the South Charleston Police Department attempted a traffic stop on Price’s vehicle in Cross Lanes. Price fled and led law enforcement in a high speed pursuit. The pursuit began in Cross Lanes and ended in South Charleston where officers were able to stop Price’s vehicle by using spike-strips. Officers recovered approximately 7.85 grams of meth and a loaded 9mm Taurus PT111 handgun from the vehicle. Price admitted that he intended to sell the methamphetamine and that he possessed the firearm to protect his drugs and money.
Price pleaded guilty to possession with intent to distribute five grams or more of methamphetamine and possession of a firearm in furtherance of a drug trafficking crime and faces a mandatory minimum of 10 years and up to life in prison when sentenced on September 2, 2021.
Acting United States Attorney Lisa G. Johnston made the announcement and commended the investigative work of the Drug Enforcement Administration (DEA) and the South Charleston Police Department.
Assistant United States Attorney Nick Miller is handling the prosecution. Senior United States District Court Judge John T. Copenhaver, Jr. presided over the hearing.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:21-cr-00051.
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Owner of Jacksonville Tax Preparation Business Sentenced to Federal Prison for Tax FraudRead the Press Release
Jacksonville, Florida – U.S. District Marcia Morales Howard has sentenced Kenyan Shondre Scott to 18 months in federal prison for aiding and assisting others with the filing of fraudulent tax returns and for filing fraudulent tax returns on his own behalf. Scott was also ordered to pay restitution to the United States for a tax loss of $553,403. He had pleaded guilty on February 24, 2021.
According to court documents and facts presented at his sentencing hearing, Scott was the owner and operator of a Jacksonville tax return preparation business, which he had opened in 2009. Between February 2014 and April 2018, Scott prepared and filed tax returns for others in which he falsely claimed, among other things, that the taxpayers had owned businesses and had incurred deductible business expenses, were entitled to general business tax credits and educational tax credits, and had incurred deductible unreimbursed employee expenses. These representations were false and substantially increased the clients’ tax refunds.
On his own tax returns, Scott significantly underreported the income he had earned from his tax preparation business as shown in the following chart:
Tax Year
Reported Adjusted Gross Income
Tax
Refund Claimed
Approximate True Adjusted Gross Income
Approximate Taxes Owed on True AGI
2013
$43,691
$51
$97,846
$36,928
2014
$39,552
$50
$279,898
$108,033
2015
$37,943
$49
$151,216
$57,230
2016
$28,072
$44
$193,898
$72,681
“We want everyone who files a tax return to take advantage of the deductions and credits to which they are entitled by law; however, no one is entitled to defraud the government," said Special Agent in Charge Brian Payne of IRS Criminal Investigation. “Today's sentencing of Kenyan Scott demonstrates that protecting taxpayer money is a matter we take very seriously. IRS Criminal Investigation will continue to vigorously pursue those who unjustly line their own pockets by preparing false claims for refunds for themselves and others.”
This case was investigated by the Internal Revenue Service – Criminal Investigation. It was prosecuted by Assistant United States Attorney Arnold B. Corsmeier.
Operation River Fork Defendant Pleads Guilty to Trafficking Crack CocaineRead the Press Release
PROVIDENCE, R.I. – A Woonsocket man, one of eighteen individuals arrested during a ten-month Project Safe Neighborhoods drugs and firearms investigation in Woonsocket, Providence, and Cranston in 2020, that resulted in the recovery of six loaded firearms and more than a kilo of crack cocaine, pleaded guilty today to a charge of distributing crack cocaine.
Bradley Dewalt, 29, admitted to the court that on February 27, 2020, at the direction of another person, already the subject of a Rhode Island FBI Safe Streets Gang Task Force investigation termed “Operation River Fork,” he contacted an individual seeking to arrange for the purchase of crack cocaine. Dewalt and that person met later that day in Bellingham, MA, where Dewalt sold the individual an ounce of crack cocaine for $1,150.
Dewalt, previously convicted on assault, drug trafficking, and firearm charges, and charged in this matter on October 6, 2020, by way of a federal criminal complaint, appeared today before U.S. District Court Judge Mary S. McElroy and pleaded guilty to distribution of crack cocaine. He is scheduled to be sentenced on August 17, 2020.
Anthony Medeiros, 30, of Woonsocket, the person that arranged for the contact between Dewalt and the person seeking to purchase crack cocaine, pleaded guilty in federal court on May 6, 2021, to conspiracy to distribute cocaine base and three counts of distribution of cocaine base. He is scheduled to be sentenced on July 27, 2021.
Dewalt's and Medeiros’s guilty pleas are announced by Acting United States Attorney Richard B. Myrus.
The cases are being prosecuted by Assistant United States Attorney Stacey P. Veroni.
These cases are being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
The Rhode Island FBI Safe Streets Gang Task Force consists of agents and law enforcement officers from the FBI, United States Marshals Service, Central Falls Police Department, Cranston Police Department, Pawtucket Police Department, Providence Police Department, West Warwick Police Department, Woonsocket Police Department, and Rhode Island State Police.
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Omaha Man Sentenced to 8 years for Distribution of Child PornographyRead the Press Release
Acting United States Attorney Jan Sharp announced that Joseph Knipe, age 43, of Omaha, Nebraska, was sentenced today in federal court in Omaha for distribution of child pornography. United States District Judge Brian C. Buescher sentenced Knipe to 8 years of imprisonment. There is no parole in the federal system. After completing his term of imprisonment, Knipe will begin a 10-year term of supervised release and will also be required to register as a sex offender.
On May 3, 2017, Knipe used his online DropBox account to transfer images of child pornography to other DropBox users. Agents later executed a search warrant of Knipe’s DropBox account and located about 2,000 images and 1,000 videos of child pornography. On October 31, 2019, agents executed a search warrant at Knipe’s residence in Omaha. Agents located a USB card containing about 105 images of child pornography. Knipe admitted to possessing child pornography.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
The case was investigated by the Omaha FBI's Child Exploitation and Human Trafficking Task Force.
Old Orchard Beach Man Pleads Guilty to Stealing Government PropertyRead the Press Release
PORTLAND, Maine: An Old Orchard Beach man pleaded guilty in federal court today to theft of government property, Acting U.S. Attorney Donald E. Clark announced.
According to court records, from about April 2014 to June 2016, Michael Gamash, 64, took scrap metal belonging to the U.S. Navy from dumpsters located on the Portsmouth Naval Shipyard (PNSY) and sold the metal to two area metal dealers. Gamash was an employee of PNSY at the time. When investigators from the Naval Criminal Investigative Service (NCIS) interviewed him, he admitted routinely taking scrap metal items from several dumpsters at PNSY and selling the metal. He acknowledged that he knew it was illegal to take the metal and sell it for his personal profit. In total, he received approximately $60,000 for the metal he took from PNSY.
Gamash faces up to 10 years in prison and a fine of up to $250,000. He also faces up to three years of supervised release. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
NCIS investigated the case.
Oconto Falls Woman Indicted on Federal Firearm ChargeRead the Press Release
Acting United States Attorney Richard G. Frohling of the Eastern District of Wisconsin announced that on June 2, 2021, a federal grand jury returned an indictment against Amber L. Bayer (age: 29) of Oconto Falls, Wisconsin.
The indictment alleges Bayer made a false statement to a licensed firearms dealer in violation of Title 18, United States Code, Sections 922(a)(6) and 924(a)(2). On or about December 4, 2020, Bayer is alleged to have misled a representative of Dunham’s Sports in Marinette, Wisconsin, by falsely claiming that she was purchasing a 9mm firearm for herself when, in fact, she was purchasing the firearm for another individual.
If convicted of the offense, Bayer faces a maximum penalty of up to ten years imprisonment and a $250,000 fine.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Marinette Police Department, the Marinette County Sheriff’s Office, and the Menominee (Michigan) Police Department. It will be prosecuted by Assistant United States Attorney Daniel R. Humble.
An indictment is only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government must prove him guilty beyond a reasonable doubt.
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North Carolina man sentenced for ginseng violationRead the Press Release
ELKINS, WEST VIRGINIA – David Changhyub Lee, of Raleigh, North Carolina, was sentenced today to one year probation and a fine of $4,250 for aiding and abetting the illegal transportation of ginseng across state lines, Acting U.S. Attorney Randolph J. Bernard announced.
Lee, 35, pled guilty to one count of “Interstate Transportation of Ginseng in Violation of State Law – Aiding and Abetting” in December 2020. Lee admitted to facilitating and purchasing nearly 15 pounds of ginseng for a total of $4250 from Randolph County and elsewhere and transported it to North Carolina.
This case was in violation of the federal Lacey Act (16 USC § 3371 et seq.), which prohibits the taking and interstate trafficking of protected plants and animals in violation of state law. Under 16 USC § 3373, it's a felony if the plant's market value exceeds $350.00. West Virginia's ginseng statute (WV Code 19-1A-3a) has various requirements for the ginseng market. One requirement is that ginseng not be transported to another state absent a certificate of origin from the West Virginia Division of Forestry.
Assistant U.S. Attorney Stephen D. Warner prosecuted the case on behalf of the government. The U.S. Fish and Wildlife Service and the West Virginia Natural Resources Police investigated.
U.S. District Judge Thomas S. Kleeh presided.
Nigerian National Arrested for Scheme to Conduct Cyber Intrusions to Steal Payroll DepositsRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Jonathan D. Larsen, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the arrest of CHARLES ONUS for charges in connection with a scheme to conduct cyber intrusions of multiple user accounts maintained by a company that provides human resources and payroll services to employers across the United States, in order to steal payroll deposits. ONUS was previously arrested on April 14, 2021, in San Francisco and detained, and he will be presented later today in Manhattan federal court before Magistrate Judge Sarah L. Cave. The case is assigned to U.S. District Judge Paul G. Gardephe.
Manhattan U.S. Attorney Audrey Strauss said: “Charles Onus allegedly participated in a scheme that stole nearly $1 million by hacking into a payroll processing company’s system to access user accounts and divert payroll to prepaid debit cards he controlled. As alleged, Onus did this as effectively as someone who commits bank burglary, but with no need for a blowtorch or bolt-cutters. Thanks to the FBI and IRS-CI, Onus is in custody and facing serious federal charges.”
FBI Assistant Director William F. Sweeney Jr. said: “Cyber intrusions ripple through everything our society relies upon – this one impacted people’s paychecks. The FBI’s goal is to prevent cyber criminals from causing harm and holding them accountable, but we can’t do it alone. Companies need to continuously improve their cyber hygiene and awareness. Taking steps like training the workforce to protect and frequently change passwords, and to use different login credentials across platforms, can have an impact. Each one of us, from the individual citizen to the biggest corporation, plays a critical role in defending the nation from cyberattacks.”
IRS-CI Special Agent in Charge Jonathan D. Larsen said: “IRS Criminal Investigation will always work with our law enforcement partners to track down those who try to breach our country’s tax and financial infrastructure. We will continually endeavor to bring to justice criminals who think they can comfortably steal from victims in America while hiding behind their computer screens.”
According to allegations in the Indictment filed in federal court[1]:
From at least in or about July 2017 through at least in or about 2018, ONUS participated in a scheme to conduct cyber intrusions of multiple user accounts maintained by a company that provides human resources and payroll services to employers across the United States (the “Company”), in order to steal payroll deposits processed by the Company.
During the course of the scheme, unauthorized access was obtained to over 5,500 Company user accounts through a cyber intrusion technique referred to as “credential stuffing.” During a credential stuffing attack, a cyber threat actor collects stolen credentials, or username and password pairs, obtained from other large-scale data breaches of other companies. The threat actor then systematically attempts to use those stolen credentials to obtain unauthorized access to accounts held by the same user with other companies and providers, to compromise accounts where the user has maintained the same password.
After ONUS successfully gained unauthorized access to a Company user account, he changed the bank account information designated by the user of the account so that ONUS would receive the user’s payroll to a prepaid debit card that was under ONUS’s control.
From at least in or about July 2017 through at least in or about 2018, at least approximately 5,500 Company user accounts were compromised and more than approximately $800,000 in payroll funds were fraudulently diverted to prepaid debit cards, including those under the control of ONUS. The compromised Company user accounts were associated with employers whose payroll was processed by the Company, including employers located in the Southern District of New York.
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ONUS, 34, a resident and national of the Federal Republic of Nigeria, was charged with one count of computer fraud for causing damage to a protected computer, which carries a maximum sentence of 10 years in prison; one count of computer fraud for unauthorized access to a protected computer to further intended fraud, and one count of receipt of stolen money, each of which carries a maximum sentence of five years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison to be served consecutively to any other sentence imposed.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Ms. Strauss praised the outstanding investigative work of the FBI and IRS-CI. Ms. Strauss also thanked the New York City Police Department, the FBI New York Cyber Task Force, U.S. Customs and Border Protection, and the FBI Field Office in San Francisco for their assistance in the investigation of this case.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Sagar K. Ravi is in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Nevada Man Admits Traveling to Pittsburgh for Sex with a MinorRead the Press Release
PITTSBURGH - A former resident of North Las Vegas, Nevada, pleaded guilty in federal court to one count of travel with intent to engage in illicit sexual conduct, Acting United States Attorney Stephen R. Kaufman announced today.
Renad Bautista, age 31, pleaded guilty to one count before Senior United States District Judge Joy Flowers Conti.
In connection with the guilty plea, the court was advised that on or about Dec. 5, 2019, until Dec. 9, 2019, Bautista travelled from Las Vegas to Pittsburgh with a motivating purpose of engaging in illicit sexual conduct with a minor whom he had been messaging on social media.
Judge Conti scheduled sentencing for September 21, 2021. The law provides for a total sentence of not more than 30 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Heidi M. Grogan is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the West Mifflin Police Department conducted the investigation that led to the prosecution of Bautista.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals, who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Montana Man Indicted on Federal Hate Crime and Firearm ChargesRead the Press Release
A federal grand jury in Billings, Montana, returned an indictment on May 20 charging a Montana man with hate crime and firearm violations for allegedly firing a gun into an individual’s house and threatening the individual with violent, homophobic slurs.
According to court documents, John Russell Howald, 44, of Basin, is charged with violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act, and with the use of a firearm during and in relation to a crime of violence. The indictment alleges that on March 22, 2020, in Basin, Howald attempted to injure an individual because of their actual and perceived sexual orientation by discharging a firearm into the individual’s house, stating that he wanted to “get rid of the lesbians [and] gays.” The offense included an attempt to kill the individual.
Howald is scheduled for an arraignment on June 29 before a U.S. Magistrate Judge in Great Falls. If convicted, Howald faces up to life in prison on the hate crime charge and a mandatory minimum of 10 years in prison, consecutive to any other sentence, on the firearm charge.
A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division and Acting U.S. Attorney Leif M. Johnson of the District of Montana made the announcement.
Assistant U.S. Attorney Brendan McCarthy of the District of Montana and Trial Attorney Eric Peffley of Civil Rights Division’s Criminal Section are prosecuting the case. The FBI, Bureau of Alcohol, Tobacco, Firearms and Explosives, and Jefferson County Sheriff’s Office investigated the case.
An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
For more information and resources on the department’s efforts to combat hate crimes, visit www.justice.gov/hatecrimes.
Montana Man Indicted on Federal Hate Crime and Firearm ChargesRead the Press Release
WASHINGTON - A federal grand jury in Billings, Montana, returned an indictment on May 20 charging a Montana man with hate crime and firearm violations for allegedly firing a gun into an individual’s house and threatening the individual with violent, homophobic slurs.
According to court documents, John Russell Howald, 44, of Basin, is charged with violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act, and with the use of a firearm during and in relation to a crime of violence. The indictment alleges that on March 22, 2020, in Basin, Howald attempted to injure an individual because of their actual and perceived sexual orientation by discharging a firearm into the individual’s house, stating that he wanted to “get rid of the lesbians [and] gays.” The offense included an attempt to kill the individual.
Howald is scheduled for an arraignment on June 29 before a U.S. Magistrate Judge in Great Falls. If convicted, Howald faces up to life in prison on the hate crime charge and a mandatory minimum of 10 years in prison, consecutive to any other sentence, on the firearm charge.
A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division and Acting U.S. Attorney Leif M. Johnson of the District of Montana made the announcement.
Assistant U.S. Attorney Brendan McCarthy of the District of Montana and Trial Attorney Eric Peffley of Civil Rights Division’s Criminal Section are prosecuting the case. The FBI, Bureau of Alcohol, Tobacco, Firearms and Explosives, and Jefferson County Sheriff’s Office investigated the case.
An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
For more information and resources on the department’s efforts to combat hate crimes, visit www.justice.gov/hatecrimes.
Missoula man sentenced to more than 12 years in prison for trafficking meth in Flathead and Missoula countiesRead the Press Release
MISSOULA – A Missoula man who admitted to trafficking large quantities of methamphetamine in Flathead and Missoula counties was sentenced today to 12 years and seven months in prison followed by five years of supervised release, Acting U.S. Attorney Leif M. Johnson said.
Dylan Roy Mace, 29, pleaded guilty on Feb. 10 to conspiracy to possess with intent to distribute meth.
U.S. District Judge Donald W. Molloy presided.
In court documents filed in the case, the government alleged that for about a year, beginning in November 2019, Mace and others conspired to distribute meth. Law enforcement began investigating Mace after receiving information that he was distributing ounce quantities of meth and was a partner with Leon Kavis in distributing the drug. Kavis has pleaded guilty to a conspiracy crime and is awaiting sentencing. Investigators learned from individuals that Mace sold meth in ounce quantities, received one-pound deliveries of meth on a weekly basis and that he and Kavis had been provided with 12 to 14 pounds of meth. Fourteen pounds of meth is the equivalent of about 50,736 doses. The government further alleged that Mace and Kavis used an East Missoula location to obtain and distribute meth. Law enforcement intercepted a package containing about five pounds of meth that was to have been delivered to the East Missoula location.
Assistant U.S. Attorney Jennifer S. Clark prosecuted the case, which was investigated by the FBI’s Montana Regional Violent Crime Task Force and the Missoula Police Department.
This case is part of Project Safe Neighborhoods, a U.S. Department of Justice initiative to reduce violent crime. Through PSN, federal, tribal, state and local law enforcement partners in Montana focus on violent crime driven by methamphetamine trafficking, armed robbers, firearms offenses and violent offenders with outstanding warrants.
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Michigan Man Living in the Philippines Sentenced to 78 Months in Prison for Child Exploitation OffenseRead the Press Release
Leonard C Boyle, Acting United States Attorney for the District of Connecticut, announced that JASON KELLER, 35, was sentenced today by U.S. District Judge Victor A. Bolden in Bridgeport to 78 months of imprisonment, followed by five years of supervised release, for coercing a minor girl to send him sexually explicit photos of herself through the internet.
According to court documents and statements made in court, in September 2018, Keller, while living in the Philippines, used the moniker “Eddie Buttered Toast” to contact a 14-year-old female in Connecticut and claim that he was a 17-year-old boy from Colorado. Keller then sent the minor victim numerous grooming emails that eventually coaxed the minor victim into sending photos of herself engaged in sexually explicit conduct to Keller. Some of the emails Keller sent to the minor victim included sexually explicit images of himself.
On December 19, 2018, a grand jury in New Haven returned an indictment charging Keller. Keller was located and arrested in the Philippines in June 2019. He was removed from the Philippines and returned to the U.S. on December 12, 2019. He has been detained since his arrest.
On December 2, 2020, Keller pleaded guilty to one count of receipt of child pornography.
Keller formerly resided in Dearborn Heights, Michigan.
This matter was investigated by Homeland Security Investigations (HSI) and the U.S. Marshals Service, International Investigations Branch, with the assistance of the Philippine Bureau of Immigration, Fugitive Search Unit. The case was prosecuted by Assistant U.S. Attorney Lauren Clark.
Acting U.S. Attorney Boyle thanked the U.S. Department of Justice’s Office of International Affairs for its assistance in this matter.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
Meth trafficking sends Missoula man to prison for 100 monthsRead the Press Release
MISSOULA – A Missoula man who admitted to possessing with the intent to distribute methamphetamine after law enforcement officers found the drug in his hotel room was sentenced today to 100 months in prison and to five years of supervised release, Acting U.S. Attorney Leif M. Johnson said.
Demetrius Demon McVay-Hite, 36, pleaded guilty on Jan. 26 to possession with intent to distribute meth.
U.S. District Judge Donald W. Molloy presided.
In court documents filed in the case, the government alleged that on March 1, 2020, Missoula Police Department officers executed a Montana search warrant on McVay-Hite’s hotel room and recovered more than one ounce of meth. During an investigation, law enforcement learned from numerous individuals that McVay-Hite was involved in distributing meth.
Assistant U.S. Attorney Tara J. Elliott prosecuted the case, which was investigated by the FBI’s Montana Regional Violent Crime Task Force and the Missoula Police Department.
This case is part of Project Safe Neighborhoods, a U.S. Department of Justice initiative to reduce violent crime. Through PSN, federal, tribal, state and local law enforcement partners in Montana focus on violent crime driven by methamphetamine trafficking, armed robbers, firearms offenses and violent offenders with outstanding warrants.
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Mescalero man pleads guilty abusive sexual contact with a childRead the Press Release
ALBUQUERQUE, N.M. – Troy Douglas Blaylock, Sr., 58, of Mescalero, New Mexico, and an enrolled member of the Mescalero Apache Tribe, pleaded guilty on June 1 in federal court to knowingly engaging in sexual contact with a minor under 12 years old in Indian Country. Blaylock will remain in custody pending sentencing.
In the plea agreement, Blaylock admitted to engaging in sex with a nine-year old victim at his residence on the Mescalero Apache Reservation on or about August 20, 2020. The victim is also an enrolled member of the Mescalero Apache Tribe.
By the terms of the agreement, Blaylock faces 22 years in federal prison.
The FBI investigated this case with assistance from the Bureau of Indian Affairs. Assistant U.S. Attorneys Marisa A. Ong and Dustin Segovia are prosecuting the case.
Medical Doctor Sentenced for Drug Trafficking and Health Care Fraud OffensesRead the Press Release
KNOXVILLE, Tenn. – On May 27, 2021, Michael LaPaglia, 49, was sentenced to 18 months imprisonment by the Honorable Katherine A. Crytzer in the United States District Court for the Eastern District of Tennessee at Knoxville. LaPaglia was also ordered to pay restitution to the health care providers who were victims in this case.
According to documents filed with the court, LaPaglia, a medical doctor, who previously lost his authorization to write prescriptions for controlled substances, had pleaded guilty to an information charging him with one count of conspiring to distribute controlled substances and one count of making a material false statement in connection with the delivery of health care benefits. The charges stem from LaPaglia’s involvement in a mobile Suboxone clinic through which LaPaglia issued prescriptions for Suboxone, Clonazepam, diazepam, and Pregabalin in the name of another doctor.
In the spring of 2018, in the Eastern District of Tennessee, investigators with Federal Bureau of Investigation ("FBI") and Department of Health and Human Services ("HHS") responded to a complaint that LaPaglia was issuing prescriptions for Suboxone without the authority to do so. Investigators learned that LaPaglia would meet patients at his home and in parking lots where, without any meaningful examination, LaPaglia would give the drug customers prescriptions (signed by another doctor) for controlled substances. Customers were charged $300 cash per monthly visit. The customers would then take their prescriptions to be filled at pharmacies, where a number of them used their health insurance to pay for the controlled substances.
"The public places great trust in our medical professionals, and our office is committed to safeguarding that trust through the vigorous enforcement of federal laws," said Acting United States Attorney Francis M. Hamilton III. "Doctors are supposed to help people, not hurt them, and those who abuse their position by illegally prescribing opioids will be prosecuted."
"Tennessee remains at the epicenter of the opioid crisis. Opioid abuse destroys lives, and it devastates families. It is extremely disappointing when caregivers allow greed and selfishness to violate their oath to help those in need. The FBI along with our federal, state, and local partners will continue to investigate and hold those accountable to face the consequences of their actions,” said Joseph E. Carrico, Special Agent-in-Charge of the Knoxville office of the Federal Bureau of Investigation.
"Protecting the health and safety of Medicare and Medicaid patients is our number one priority,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. "This provider’s reckless actions not only eluded his prescribing restrictions but endangered the health and safety of these patients."
The charges were the result of an investigation by FBI, HHS, and the Drug Enforcement Administration (DEA). This case was brought as part of the Opioid Fraud and Abuse initiative, a comprehensive national strategy that focuses on investigations and prosecutions of medical providers who prescribe opioids outside of the course of professional medical practice and for no legitimate purpose.
Assistant United States Attorneys Anne-Marie Svolto and David Lewen represented the United States.
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Manhattan U.S. Attorney Files Suit Against Eleven Skilled Nursing Facilities and Their Management Company, Owner, and A Senior Employee for Fraudulently Billing Medicare for Unnecessary ServicesRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of the Inspector General (“HHS-OIG”), announced today that the United States has filed a civil healthcare fraud lawsuit against ISSAC LAUFER, TAMI WHITNEY, MONTCLAIR CARE CENTER, INC., EAST ROCKAWAY CENTER LLC, EXCEL AT WOODBURY FOR REHABILITATION AND NURSING, LLC, LONG ISLAND CARE CENTER INC., TREETOPS REHABILITATION & CARE CENTER LLC, SUTTON PARK CENTER FOR NURSING & REHABILITATION, LLC, SUFFOLK RESTORATIVE THERAPY & NURSING, LLC, OASIS REHABILITATION AND NURSING, LLC, FOREST MANOR CARE CENTER, INC., SURGE REHABILITATION & NURSING LLC, QUANTUM REHABILITATION & NURSING LLC, and PARAGON MANAGEMENT SNF LLC (collectively the “Defendants”). The lawsuit seeks damages and civil penalties under the False Claims Act for fraudulently billing Medicare for unreasonable and unnecessary services provided to patients at eleven skilled nursing facilities located in New York (the “Facilities”).
The complaint alleges that, during the period from at least January 2010 through September 2019, Defendants systematically kept patients at the Facilities longer than necessary in order to maximize the amount billed to Medicare for the patients’ stays. During those stays, the Facilities systematically put patients on higher levels of rehabilitation therapy than necessary based on their actual clinical needs in order to bill Medicare at the highest rate. ISSAC LAUFER, who is a part owner of ten of the eleven Facilities and operates all eleven Facilities through PARAGON MANAGEMENT SNF LLC, and TAMI WHITNEY, the Coordinator of Rehabilitation Services for the Facilities, instructed and pressured staff to engage in these fraudulent practices. As a result, according to the complaint, the Facilities submitted, or caused to be submitted, false claims for payment for rehabilitation services that were unreasonable and unnecessary, or in some cases, did not even involve the provision of skilled therapy.
U.S. Attorney Audrey Strauss said: “As alleged, ISSAC LAUFER, TAMI WHITNEY and the skilled nursing facilities ISSAC LAUFER owns and/or operates prioritized profits above their obligation to focus on their patients’ actual medical needs. In clear violation of the governing regulations, the Defendants fraudulently inflated their Medicare reimbursements by unnecessarily prolonging patient stays and billing for therapy that offered little or no clinical benefit. This Office will continue vigorously to pursue companies and individuals who engage in these practices at the expense of the public fisc.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “The Medicare program is designed to protect both beneficiaries and taxpayers. When medical providers bill for unnecessary or improper services, patient care is put at risk and the financial integrity of our federal health care system is compromised. Working with our law enforcement partners, we will continue to ensure that medical providers are held accountable for their billing practices and the services they provide.”
The following allegations are based on the Complaint that was filed in White Plains federal court today:
The eleven facility defendants are skilled nursing facilities located in the New York metropolitan area. LAUFER is a part owner of ten of the eleven Facilities and operates all eleven Facilities through PARAGON MANAGEMENT SNF LLC. WHITNEY is the Coordinator of Rehabilitation Services for the Facilities and as such is involved in decisions regarding the provision of, and billing for, rehabilitation services.
From at least January 2010 through September 2019, the Defendants systematically kept Medicare patients at the Facilities longer than reasonable or necessary, and put those patients on higher levels of rehabilitation therapy than reasonable or necessary. These practices were designed to increase the amounts billed to Medicare beyond what was justified based on patients’ clinical needs. In some instances, the Facilities went so far as to intentionally limit patients’ progress in order to create the appearance of a continued need for services. In one instance, WHITNEY reported to LAUFER that the Facilities should not allow patients to go to the bathroom by themselves because they would then “think they are ready to go home.”
LAUFER and WHITNEY directed the Facilities to engage in this conduct. Specifically, WHITNEY carefully tracked the length of stay for each Medicare patient and expected staff at the Facilities to justify discharges scheduled to take place before the patient’s stay approached 100 days—the maximum compensable by Medicare. Together with management at the Facilities, WHITNEY devised strategies for extending patient stays, including giving patients unnecessary tests to gauge their balance proficiency at the point they were ready for discharge to create a pretext for extending their stays. WHITNEY reported on the success of these “discharge prevention” measures to Laufer, noting both areas where these measures succeeded and those where the Facilities had to work harder to prolong patient stays—such as for patients who were “younger and smarter” or “high level.” LAUFER, in turn, received daily updates from the Facilities reporting the number of Medicare patients who had been discharged, and, on a number of occasions, instructed WHITNEY to curb discharges. LAUFER gave these instructions without any information about the patients’ clinical needs and made explicit that they were designed to increase revenue.
WHITNEY, with LAUFER’S knowledge, also instructed the Facilities to provide virtually all Medicare patients with therapy at the “Ultra High”—i.e., highest billing—level, without regard to the patients’ needs or whether, due to their conditions, they could benefit from this intense therapy. To qualify for the Ultra High level, a patient must receive at least 720 minutes of skilled therapy services (i.e., physical, occupational or speech therapy requiring the services of a trained therapist) per week. Employees understood that there was virtually no wiggle room when it came to determining how much rehabilitation therapy a patient would receive. The pressure to provide this level of therapy in turn led the Facilities to bill for services that did not actually qualify as skilled therapy and thus were not eligible for Medicare reimbursement (such as simply moving the limbs of patients with severe cognitive impairments or assisting with routine self-care tasks).
LAUFER and WHITNEY’S efforts to keep Medicare patients at the Facilities for as close as possible to 100 days and to provide almost all patients, without regard to need, with therapy at the Ultra High level succeeded. During the relevant period, the Facilities were significant outliers, compared to other skilled nursing facilities, with respect to Medicare patients’ average length of stay and levels of rehabilitation therapy.
These practices resulted in the Facilities submitting claims to Medicare for rehabilitation therapy that was not reasonable or necessary, was billed at a higher rate than appropriate, or did not involve the provision of skilled services and, accordingly, were ineligible for payment. In addition, the Facilities made or used false statements and records that were material to false claims submitted to Medicare for payment for rehabilitation therapy that was unreasonable, unnecessary, or unskilled.
The Government intervened in a private whistleblower lawsuit before the Honorable Cathy Seibel that had previously been filed under seal pursuant to the False Claims Act.
Ms. Strauss thanked HHS-OIG for its assistance with the case.
The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Jacob Bergman and Rachael Doud are in charge of the case.
Manhattan U.S. Attorney Announces $692,000 Settlement Resolving Fraud Claims Against Contractor and Its Owners for Failing to Comply with DBE Rules on the Tappan Zee Bridge Replacement ProjectRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, and Brian C. Gallagher, Acting Special Agent in Charge of the U.S. Department of Transportation Office of Inspector General Northeastern Region (“DOT-OIG”), announced today that the United States filed and settled a civil fraud lawsuit against NAUGHTON ENERGY CORPORATION (“NAUGHTON ENERGY”) and two of its owners, its president, MARIETTE NAUGHTON, and her husband, JOSEPH NAUGHTON (collectively, “Defendants”). NAUGHTON ENERGY, a Pennsylvania-based fuel distributor, supplied diesel fuel to vehicles and equipment used in connection with the federally funded New NY Bridge Project (the “NNYB Project”), a construction project to replace New York’s Governor Malcolm Wilson Tappan Zee Bridge. The settlement resolves the United States’ allegations in a False Claims Act lawsuit that Defendants fraudulently caused the submission of false claims by causing the prime contractor on the NNYB Project (the “Prime Contractor”) to misrepresent compliance with Disadvantaged Business Enterprise (“DBE”) rules, which require participation of businesses owned by women and minorities. Specifically, the United States alleged that NAUGHTON ENERGY, MARIETTE NAUGHTON, and JOSEPH NAUGHTON misrepresented to the Prime Contractor that NAUGHTON ENERGY was solely performing millions of dollars of work on the NNYB Project when in fact much of that work was performed by a non-DBE subcontractor. As part of the settlement approved yesterday by U.S. District Judge Valerie E. Caproni, NAUGHTON ENERGY, MARIETTE NAUGHTON, and JOSEPH NAUGHTON admit and accept responsibility for conduct alleged in the Government’s complaint and, pursuant to the terms of a settlement based on their ability to pay, have agreed to pay $692,000 over the next five years to the United States.
Manhattan U.S. Attorney Audrey Strauss said: “DBE participation goals create opportunities for DBEs to work on federally funded construction projects. When DBEs fail to disclose the involvement of non-DBEs in their work, they effectively divert resources to ineligible firms and undermine the DBE program’s goal of creating an environment in which businesses owned by women and minorities can compete fairly for United States Department of Transportation-assisted contracts.”
USDOT-OIG Acting Special Agent in Charge Brian C. Gallagher, said: “The settlement reached today only strengthens our resolve in pursuing those whose spurious actions prevent the legitimate participation of disadvantaged enterprises (DBE) in federally funded transportation projects. While the integrity of DOT’s DBE program was compromised in this instance, we remain steadfast working alongside our law enforcement and prosecutorial partners to ensure funds designated to support disadvantaged small businesses are used for their intended benefit and purpose.”
As alleged in the Complaint, from August 1, 2013, through January 16, 2020, Defendants caused the submission of false claims for payment to the United States Department of Transportation (the “DOT”). Specifically, Defendants represented that NAUGHTON ENERGY, a certified DBE, provided fuel, trucking, and manpower services without assistance from a subcontractor. The Complaint alleges that, from the outset of their involvement on the NNYB Project, Defendants represented that they could deliver diesel fuel to the work site wholly independently. However, Defendants lacked both a fuel truck with sufficient capacity and employees with the necessary union affiliation to effectively make these deliveries. Defendants, therefore, arranged for a non-DBE subcontractor (“Subcontractor Y”) to supply the required fuel delivery truck (the “Project Truck”) and union personnel. In exchange, Defendants shared half of their profits from the NNYB Project with Subcontractor Y. Defendants never disclosed this arrangement to the Prime Contractor, and instead, made concerted efforts to give the false appearance that NAUGHTON ENERGY performed the work unassisted. These efforts included: (1) arranging a sham transaction wherein Subcontractor Y transferred ownership of the Project Truck, worth over $10,000, to NAUGHTON ENERGY for a mere $1; and (2) placing the owner of Subcontractor Y on NAUGHTON ENERGY’s payroll, to give the false impression that NAUGHTON ENERGY employees performed all of the services at issue. Even after the Prime Contractor’s DBE program manager directly inquired as to Subcontractor Y’s involvement, Defendants continued to falsely state that NAUGHTON ENERGY performed its work without any subcontractor involvement.
As part of the settlement, Defendants admitted conduct alleged in the Complaint, including that:
* Prior to beginning work on the project, Defendants contacted a non-DBE company, Subcontractor Y, to assist NAUGHTON ENERGY with providing diesel fuel services to the Prime Contractor.
* NAUGHTON ENERGY used Subcontractor Y to provide diesel fuel services on the project because: (1) absent an agreement with Subcontractor Y regarding the use of its truck, NAUGHTON ENERGY did not have a fuel delivery truck with sufficient capacity to effectively provide diesel fuel services for the project; and (2) NAUGHTON ENERGY lacked the affiliation with the requisite union necessary to have its own staff work on the project
* Defendants did not disclose this arrangement to the Prime Contractor. Instead, Defendants took the following actions that made it appear that no subcontractor was involved in providing NAUGHTON ENERGY’s services: (1) Defendants negotiated with Subcontractor Y to transfer title of the Project Truck to NAUGHTON ENERGY for $1; and (2) Defendants placed an owner of Subcontractor Y on NAUGHTON ENERGY’s payroll.
* Defendants failed to disclose Subcontractor Y’s involvement in the work performed on the project.
Ms. Strauss praised the outstanding investigative work of DOT-OIG. She also thanked the New York State Office of the Inspector General for its assistance. This case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Jessica Jean Hu is in charge of the case.
Man admits meth trafficking crime after law enforcement seizes 10 pounds of the drug destined for ButteRead the Press Release
MISSOULA – A man accused of trafficking methamphetamine in Montana admitted to charges today after law enforcement recovered a package containing 10 pounds of the drug that was addressed to his residence in Butte, Acting U.S. Attorney Leif M. Johnson said today.
Steven Douglas Shipe, 52, pleaded guilty to conspiracy to possess with intent to distribute meth. Shipe faces a mandatory minimum 10 years to life in prison, a $10 million fine and at least five years of supervised release.
U.S. Magistrate Judge Kathleen L. DeSoto presided. Sentencing was set for Sept. 29. Shipe was released pending further proceedings.
The government alleged in court documents that law enforcement learned Shipe was involved in drug trafficking in Montana and purchased about one ounce of meth from Shipe on June 19, 2019. Law enforcement also learned that Shipe was receiving packages of meth in the mail. Investigators recovered a package containing approximately 10 pounds of meth that was addressed to Shipe’s residence in Butte. Ten pounds of meth is the equivalent of 36,240 doses. The drugs were intercepted in Bakersfield, California, and the shipping label reflected that the parcel was sent from another individual in that city. In addition, Shipe used local co-conspirators to arrange and help with the meth deals. In many instances, local co-conspirators would bring prospective buyers to Shipe’s house to complete the transactions.
Assistant U.S. Attorney Ryan G. Weldon is prosecuting the case, which was investigated by the Montana Division of Criminal Investigation, Drug Enforcement Administration, Homeland Security Investigations and the U.S. Postal Service.
This case is part of Project Safe Neighborhoods, a U.S. Department of Justice initiative to reduce violent crime. Through PSN, federal, tribal, state and local law enforcement partners in Montana focus on violent crime driven by methamphetamine trafficking, armed robbers, firearms offenses and violent offenders with outstanding warrants.
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Man Sentenced to 7 Years for Arson During June 2020 Civil Unrest in MadisonRead the Press Release
MADISON, WIS. – A Madison, Wisconsin man pleaded guilty and was sentenced today on a federal charge of arson during the civil unrest in Madison in June 2020. Marquon Clark, 26, pleaded guilty before U.S. District Judge James D. Peterson, who imposed a sentence of 7 years in federal prison.
On June 24, 2020, Clark threw projectiles through windows of the City-County Building on Martin Luther King Jr. Boulevard in Madison and then threw a lit roll of paper towels through the broken windows. The building, which houses city and county government offices, was occupied by over 250 people at the time, including 182 adults and juveniles being held in the jail. Clark’s actions led to a fire in the City-County Building that resulted in approximately $105,000 in damages and clean-up costs.
“Legitimate protest is a central Constitutional right and American value. Arson is simply not part of any legitimate protest. This crime endangered the lives of everyone in the City-County building including the minors in juvenile detention,” said Timothy M. O’Shea, Acting U.S. Attorney for the Western District of Wisconsin. “We will work with our local, state and federal law enforcement partners to hold accountable those who engage in such conduct without regard for the potentially deadly consequences.”
“Arson is inherently dangerous, and we simply cannot allow it in our communities,” said ATF Special Agent in Charge Terry Henderson, of the St. Paul Field Division. “I hope this sentencing acts as a significant deterrent for others who may consider committing this heinous crime. We are thankful that Clark’s criminal actions did not cost anyone their life and that justice can be served in this case.”
In imposing the sentence, Judge Peterson noted that Clark’s crime was extremely dangerous and created a serious risk of harm to people inside the City-County Building. Judge Peterson also noted that a lengthy prison sentence was warranted in light of Clark’s extensive criminal history, which includes two violent crimes. Judge Peterson also ordered Clark to pay restitution in the full amount of damages and clean-up costs at the City-County Building.
The charge against Clark was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Dane County Sheriff’s Office; Madison Police Department; and the Madison Fire Investigation Team.
Man Sentenced for his Role in Directing COVID-19 Relief Fraud SchemeRead the Press Release
A Wisconsin man was sentenced today to 57 months in prison for fraudulently obtaining over $1 million in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Thomas Smith, 46, of Pewaukee, pleaded guilty on Feb. 23. According to court documents and statements, Smith fraudulently sought over $1.2 million in PPP loans through applications to a federally insured financial institution on behalf of eight different companies. According to his plea agreement, Smith caused to be submitted fraudulent loan applications containing numerous false and misleading statements about the companies’ respective payroll expenses. Based on these representations, the financial institution approved and funded over $1 million in loans. Smith then directed his co-conspirators to send him portions of the PPP funds.
In addition to the prison sentence, Smith was ordered to pay $960,000 in restitution.
The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding, and in December 2020, Congress authorized another $284 billion in additional funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1%. PPP loan proceeds must be used by businesses for payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Richard G. Frohling of the Eastern District of Wisconsin; Special Agent in Charge Sharon Johnson of the SBA’s Office of Inspector General (SBA-OIG) Central Region; Special Agent in Charge Robert E. Hughes of the FBI’s Milwaukee Field Office; Acting Special Agent in Charge Fran L. Mace of the Federal Deposit Insurance Corporation – OIG (FDIC-OIG); and Executive Special Agent in Charge Kathy Enstrom of the IRS Criminal Investigation (IRS-CI) Chicago Field Office made the announcement.
The FBI, SBA-OIG, FDIC-OIG, and IRS-CI investigated the case.
Trial Attorneys Laura Connelly and Leslie S. Garthwaite of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Stephen Ingraham of the Eastern District of Wisconsin are prosecuting the case.
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.
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.
Las Vegas Man Sentenced for Stealing Nearly $185,000 from Nevada's Unclaimed Property FundRead the Press Release
LAS VEGAS, Nev. — A Las Vegas man was sentenced on Tuesday to five years and 10 months in prison for assuming others’ identities to steal nearly $185,800 from the Nevada State Treasurer’s Unclaimed Property Fund.
According to court documents, from February 2011 to August 2014, John Badea, 69, and co-defendant Radu Gal, 66, both of Las Vegas, repeatedly stole money belonging to individual victims that had been held in trust by the Nevada State Treasurer’s Unclaimed Property Division. As part of their fraudulent scheme, Badea and Gal searched the Unclaimed Property Division website to identify potential victims who were owed unclaimed property, obtained those victims’ personal identifying information using a ruse, and then submitted fraudulent claims to the Unclaimed Property Division using the victim’s identities.
Badea opened bank accounts in the names of stolen identities and deposited stolen unclaimed property funds into those accounts. He used the stolen funds for personal gain and to further the fraudulent scheme. Through their scheme, Badea and Gal submitted more than 143 false claims and impersonated more than 100 persons. They unlawfully obtained checks from the Unclaimed Property Division totaling approximately $185,872.
Badea pleaded guilty in December 2020 to one count of conspiracy to commit mail fraud, one count of mail fraud, and one count of aggravated identity theft. Badea was sentenced by U.S. District Judge Andrew P. Gordon. Gal pleaded guilty in February 2021 to one count of conspiracy to commit mail fraud and one count of aggravated identity theft. Gal is scheduled to be sentenced on August 4, 2021.
"We are committed to working with our law enforcement partners to pursue those who conspire to steal Social Security numbers and the identities of innocent people for their personal gain,” said Gail S. Ennis, Inspector General of Social Security. "I thank the FBI and the Las Vegas Metropolitan Police Department for their efforts and the United States Attorney’s Office for prosecuting this case.”
Acting U.S. Attorney Christopher Chiou for the District of Nevada, Special Agent in Charge Aaron C. Rouse of the FBI, and Inspector General Ennis of the Social Security Administration’s Office of the Inspector General (SSA OIG) made the announcement.
This case was investigated by the FBI, the SSA OIG, and the Las Vegas Metropolitan Police Department. Assistant U.S. Attorney Kimberly Frayn prosecuted the case.
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Jury Convicts Virginia Man for Role in Armed RobberyRead the Press Release
RICHMOND, Va. – Last Friday, a federal jury in Richmond convicted Ronnell Kareem Levon Johnson, 27, of Norfolk, for his role in robbing a Sprint Store in Colonial Heights in January 2019.
“As the evidence at trial demonstrated, the defendant and his co-conspirator participated in an armed robbery in which they restrained and frightened the victims,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “Thanks to the thorough investigative efforts of our law enforcement partners and the trial team, the defendant has been held accountable for his role in jeopardizing the safety of our community members.”
According to court records and evidence presented at trial, on the afternoon of January 7, 2019, Johnson and his co-conspirator, T.R., traveled from the Norfolk area to Colonial Heights to commit a violent armed robbery of a Sprint Store. During the robbery, T.R. brandished a loaded .40 caliber Ruger semi-automatic pistol and forced two employees into a back room of the store, where he let Johnson in through the back entrance. Johnson entered the store and started gathering Sprint Store merchandise into a bag.
Johnson and T.R. then held the two employees hostage in the back room, and attempted to tie up both employees while they completed the robbery. Due to a time-delay lock on the store’s safe, the defendants had to wait approximately twenty minutes for the safe to open. During that time, two separate customers entered the front of the store. T.R. let one of the employees assist each customer, along with a warning that the employee would be killed if he tried to alert anyone about the crime. The employee followed those instructions and the final customer left without incident. Minutes after the second customer departed, the time-delay lock on the safe opened, allowing Johnson and T.R. to steal dozens of cellular telephones and other store merchandise valued at approximately $25,000.
During a court-authorized search of T.R.’s residence, officers recovered the loaded .40 caliber Ruger semi-automatic pistol used in the robbery, various stolen Sprint Store items, and other evidence. T.R. later pleaded guilty for his role in the armed robbery, as well as additional charges. Using toll records and cellular tower data, law enforcement later identified Johnson as T.R.’s co-conspirator in the armed robbery based on Johnson’s travel to and from the Colonial Heights Sprint Store on January 7, 2019, along with other evidence.
The jury convicted Johnson on one count of robbery affecting commerce. Johnson faces a maximum penalty of 20 years in prison when sentenced on August 13. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia; Charlie J. Patterson, Special Agent in Charge of the ATF’s Washington Field Division; Colonel Gary T. Settle, Superintendent of Virginia State Police; and Colonel Jeffrey W. Faries, Chief of Colonial Heights Police, made the announcement after Senior U.S. District Judge Robert E. Payne accepted the verdict. Assistant U.S. Attorneys Kenneth R. Simon, Jr. and Michael Gill are prosecuting the case.
This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:20-cr-133.
Jefferson Parish Westbank Man Sentenced for Distribution of HeroinRead the Press Release
NEW ORLEANS – U.S. Attorney Duane A. Evans announced today that BRYAN JOSEPH, age 46, was sentenced on a one-count superseding bill of information for distributing heroin in Jefferson Parish. United States District Court Judge Jane Triche Milazzo sentenced JOSEPH to serve 240 months in federal prison. JOSEPH was placed on 3 years of supervised release and ordered to pay a mandatory $100.00 special assessment cost.
According to court documents, on October 14, 2018, deputies with Jefferson Parish Sheriff’s Office were dispatched to a McDonald’s restaurant located in Harvey, Louisiana. When deputies arrived, they were advised that an unresponsive male was found in a bathroom stall. Deputies found an uncapped needle, needle cap, bent spoon and corner of a cellophane bag near the body. Detectives reviewed the store’s video surveillance and saw the victim arrive to the restaurant on a bicycle and enter the bathroom. The victim never exited the bathroom. Subsequently, Jefferson Parish Sheriff’s Office contacted the Federal Bureau of Investigation who then assisted with the investigation. Through the investigation, agents determined that JOSEPH sold the victim a quantity of heroin prior to the victim’s death. Jefferson Parish Forensic Center conducted an autopsy, which concluded that the victim died as a result of the toxic effects of heroin and fentanyl.
After agents identified JOSEPH as a suspect in the victim’s death, they successfully purchased heroin from JOSEPH on October 23, 2018 and October 25, 2018. On October 31, 2018, agents executed a search warrant at JOSEPH’s residence and located approximately 68.8 grams of heroin, approximately 156 grams of marijuana, digital scales and sandwich bags.
U.S. Attorney Evans praised the work of the Federal Bureau of Investigation, Gang Task Force, and Jefferson Parish Sheriff’s Office in investigating this matter. Assistant United States Attorney Nolan D. Paige was in charge of the prosecution.
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