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Tuesday 23 February 2021
Marshall County woman sentenced for drug chargeRead the Press Release
WHEELING, WEST VIRGINIA – Phoebe E. Harmon, of Cameron, West Virginia, was sentenced today to 30 months of incarceration for a drug charge, U.S. Attorney Bill Powell announced.
Harmon, 41, pled guilty to one count of “Distribution of Methamphetamine” in November 2020. Harmon admitted to selling methamphetamine in April 2020 in Marshall County.
Assistant U.S. Attorney Clayton J. Reid prosecuted the case on behalf of the government. The Marshall County Drug Task Force, a HIDTA-funded initiative, investigated.
U.S. District Judge John Preston Bailey presided.
Man Pleads Guilty to Directing COVID-Relief Fraud SchemeRead the Press Release
A Wisconsin man pleaded guilty today for his role in 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.
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 Small Business Administration’s Office of Inspector General (SBA-OIG) Central Region, Special Agent in Charge Robert E. Hughes of the FBI’s Milwaukee Field Office, Special Agent in Charge John Crawford of the Federal Deposit Insurance Corporation OIG (FDIC-OIG), and Acting Special Agent in Charge Tamera D. Cantu of the IRS Criminal Investigation (IRS-CI) Chicago Field Office made the announcement.
Thomas Smith, 46, of Pewaukee, pleaded guilty today to one count of bank fraud and is scheduled to be sentenced June 2.
As part of his guilty plea, Smith admitted that he fraudulently sought over $1.2 million in PPP loans through applications to an 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.
This case was investigated by the SBA-OIG, FBI, FDIC-OIG, and IRS-CI. 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 $60 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.
Malden Man Indicted on Murder-for-Hire ChargeRead the Press Release
BOSTON – A Malden man was indicted by a federal grand jury today in connection with attempting to hire a contract killer – who was actually an undercover federal agent – to murder his wife.
Massimo Marenghi, 54, was indicted on one count of murder-for-hire. Marenghi was charged by criminal complaint and arrested in January 2021. After a detention hearing on Feb. 10, 2021, U.S. Magistrate Judge Jennifer C. Boal ordered Marenghi detained pending trial.
According to charging documents, an individual reported to law enforcement that Marenghi had complained about his wife seeking a restraining order against him. Marenghi allegedly asked the individual for assistance in killing his wife. At the direction of federal agents, the individual introduced Marenghi to an undercover agent who posed as a contract killer. On Jan. 20, 2021, Marenghi met with the undercover agent and allegedly sought help to “eliminate” his problem. Marenghi provided the undercover agent with a photograph of his wife’s residence and explained how to evade detection by cameras while approaching the residence.
It is alleged that on Jan. 29, 2021, Marenghi again met with the undercover agent and discussed moving forward with the killing of his wife. Marenghi provided $1,500 cash as a deposit for the murder and explained that the sooner the “demolition job” takes place, the sooner he will be able to pay the balance owed. He also allegedly provided the undercover agent with a photograph of his wife, the hours of operation of her place of business and a schedule indicating the he would have custody of his children, which he said would be the “best time for the construction work to start.”
On the charge of murder-for-hire, Marenghi faces a sentence of up to 10 years in prison, three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement today. The Malden Police Department provided valuable assistance with the investigation. Assistant U.S. Attorney Adam Deitch of Lelling’s Major Crimes Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Leader of Internet Marketing Schemes Charged with Defrauding Customers and Financial Institutions of Millions of DollarsRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging Larby Amirouche with conspiracy to commit bank and wire fraud, bank fraud, making false statements to banks and conspiracy to commit money laundering. These charges are brought in connection with a series of internet marketing schemes that utilized internet e-commerce websites to defraud consumers and financial institutions. Amirouche was arrested today and will make his initial appearance this afternoon in federal court in Chicago, Illinois.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York Field Office (IRS-CI), announced the arrest and the charges.
“Amirouche was the alleged ringleader of an elaborate internet marketing scheme designed to fleece unwitting consumers and financial institutions,” stated Acting United States Attorney DuCharme. “This Office is committed to protecting consumers from fraudulent marketing practices and ensuring integrity in the e-commerce marketplace.”
“Amirouche allegedly victimized unsuspecting consumers by creating a web of lies in layering financial transactions to ultimately defraud these victims for his own personal gain,” stated IRS Special Agent-in-Charge Larsen. “IRS-Criminal Investigation stands at the ready to follow the money and unravel these fraudulent schemes to protect the integrity of our financial system.”
As detailed in the indictment and other court documents, Amirouche was the managing member of Angry Elephant Marketing LLC and Purple Whale Management LLC. Between January 2012 and April 2016, Amirouche allegedly orchestrated a series of internet marketing schemes that utilized internet e-commerce websites that purported to sell various types of dietary supplements, hair care products, skin care products, testosterone and web-based business tutorials. Amirouche and his co-conspirators earned illegal profits by (1) charging consumer credit cards for products that were ordered, but never delivered to the consumer; (2) charging consumer credit cards for products that were not purchased by the consumers and (3) repeatedly charging consumers for products that they had ordered from Amirouche’s websites.
Amirouche and his co-conspirators set up dozens of shell companies fronted by nominees they recruited to distance themselves from the fraudulent schemes and maximize the ill-gotten profits. The profits were funneled to a bank account that was in the name of a nominee, but was actually controlled by Amirouche. From that account, Amirouche sent over $1.3 million to bank accounts in the names of other companies he controlled.
Amirouche and his co-conspirators also fraudulently established bank and merchant accounts for the shell companies so they could process credit card transactions and collect and transfer the proceeds of their crimes.
In addition, Amirouche and his co-conspirators concealed material information from the financial institutions that supported the merchant card accounts. The misrepresentations were designed to prevent the financial institutions from discovering the frauds, which would have led to the financial institutions shutting off the accounts for the websites and stopping payment of funds to Amirouche.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces up to 20 years’ imprisonment.
The government’s case is being handled by the Office’s Business & Securities Fraud Section. Assistant United States Attorneys David Pitluck and Michael Keilty are in charge of the prosecution.
The Defendant:
LARBY AMIROUCHE
Age: 31
Chicago, IllinoisE.D.N.Y. Docket No. 21-CR-64 (RPK)
Justice Department Sues to Shut Down Florida Tax Return PreparersRead the Press Release
The United States has filed a complaint in the U.S. District Court for the Southern District of Florida seeking to bar three Miami Gardens-area tax return preparers and their businesses and franchises, from owning or operating a tax return preparation business and preparing tax returns for others, the Justice Department announced today. The United States has simultaneously filed a request for a preliminary injunction that would immediately prohibit defendants from further preparing taxes during the pendency of the suit.
The civil suit against John L. Gay Jr., Tammi King, and Norman G. Williams Jr. also seeks an order requiring defendants to disgorge ill-gotten return preparation fees obtained through their alleged misconduct. According to the complaint, Gay is the owner of The Tax Doctor LLC, and operates three locations in the Miami Gardens-area under that name. The complaint further alleges that The Tax Doctor LLC has two franchises, one in Miami and one in Ft. Lauderdale, that are owned and operated by King under the names Kingsworld Financial Services Inc. and Brightstar Management Corp. The complaint also alleges that Williams works as one of King’s tax return preparers as a second job.
According to the complaint, defendants manipulated Florida-area taxpayers’ returns — often without taxpayers’ knowledge — to significantly understate their tax liabilities or falsely render them eligible for tax credits. The complaint alleges they did so by fabricating charitable contributions, unreimbursed employee expenses, residential energy credits, and head-of-household filing status, as well as by fabricating business income or expenses in order to overstate claims for earned income tax credits. According to the complaint, defendants’ consistent understatement of liabilities and overstatement of refunds has resulted in millions of dollars of lost tax revenue to the United States.
As an example, the complaint alleges that Williams claimed more than $1.3 million in false or inflated charitable contributions for 96 of his fellow firefighters in 2020 alone. These individuals, and many other of defendants’ customers, are now liable for repayment of income tax refunds wrongly claimed in their names, plus penalties and interest.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. More information can also be found here. The IRS has information on its website for choosing a tax preparer and has launched a free directory of federal tax preparers. In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Judge sentences St. Louis man for possession with the intent to distribute fentanylRead the Press Release
ST. LOUIS – United States District Judge Stephen R. Clark sentenced Larry Wilkins to 75 months in prison today. The 38-year-old St. Louis, Missouri resident pleaded guilty to one count of possession with intent to distribute fentanyl.
Beginning in October 2017, Federal Bureau of Investigation agents conducted an investigation into the distribution of controlled substances, including fentanyl, and identified Wilkins and three co-defendants as distributors. Investigators obtained court authorization to install a federal GPS tracking warrant for a vehicle driven by one of Wilkins’s co-defendants. The tracking device revealed the vehicle repeatedly traveled to a residence in the 24000 block of Sweet Lane in Waynesville, Missouri.
Agents’ observed multiple cars, including the one equipped with a GPS, made brief stops at the residence and departed shortly after, which is commonly associated with narcotics sales. The court issued a search warrant for this residence on February 14, 2018 during which they seized a home surveillance system, various firearms, cell phones and narcotics and took one of Wilkins’s co-defendants into custody.
A search warrant obtained and executed on the seized home surveillance system revealed Wilkins and a co-defendant were using the home on Sweet Lane to distribute narcotics, including fentanyl, in Waynesville.
In October 2018, investigators learned Wilkins was distributing fentanyl in the parking lot of an apartment complex located in the 10000 block of Sheffingdel Court in in St. Louis. On October 30, 2018, investigators observed Wilkins drive a Cadillac STS Sedan onto the parking lot and park near a dumpster. A person got out of another vehicle and entered the front passenger seat of the Cadillac STS Sedan.
Investigators approached the Cadillac STS Sedan, saw a loaded Remington RP45 semi-automatic pistol between the driver’s seat and center console and forced open the driver’s door of the Cadillac STS Sedan. Wilkins and the passenger were removed from the vehicle and investigators discovered a clear plastic bag sticking out from a vent on the back of the console which contained 69 smaller plastic baggies containing fentanyl.
"Working together with other agencies pays off and helps rid our communities of drugs and illegal possession of firearms," said Pulaski County Sheriff Jimmy Bench.
“The joint cooperation between local and federal agencies is imperative to the successful apprehension and prosecution of individuals who engage in continuing criminal activity,” said St. Louis County Police Chief Mary Barton.
The FBI, Pulaski County Sheriff’s Department and St. Louis County Police Department investigated the case. Assistant United States Attorney Geoffrey Ogden is handling the case.
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Honduran National Is Sentenced to 20 Years in Prison for KidnappingRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Robert J. Conrad Jr sentenced Luis Analberto Pineda-Anchecta, 38, a Honduran national, to 240 months in prison and five years of supervised release on kidnapping charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.
Ronnie Martinez, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Charlotte, and Chief Johnny Jennings of the Charlotte Mecklenburg Police Department (CMPD), join U.S. Attorney Murray in making today’s announcement.
According to filed court documents, evidence presented at Pineda-Anchecta’s trial and today’s sentencing hearing, on or about May 15, 2019, CMPD officers arrested Pineda-Anchecta on several state charges, including Assault on a Female and Communicating Threats against his ex-girlfriend, identified in court documents as F.M. Two days following his arrest, Pineda-Anchecta was released from state custody on bond. As trial evidence established, in the evening of May 21, 2019, F.M. was approached by two masked men as she was walking to her vehicle parked at her apartment complex in Charlotte. The victim recognized one of the masked men as Pineda-Anchecta, who grabbed the victim by the arm, stuffed a cloth in her mouth, and wrapped a cord or rope around her head so the cloth would stay in place. Pineda-Anchecta and the other masked man forced F.M. against her will into the passenger seat of a vehicle, and Pineda-Anchecta told F.M. “I love you and I’m going to kill you.” According to trial evidence, the other masked individual did not accompany Pineda-Anchecta and F.M. in the vehicle.
Pineda-Anchecta then drove his vehicle on Lancaster Highway. Court records show that that while Pineda-Anchecta was driving, he maintained a tight grip on the plastic rope tied around the victim’s face. After traveling a short while on Lancaster Highway, Pineda-Anchecta parked his vehicle on the side of the road near a wooded area and turned off the vehicle’s engine. Pineda-Anchecta maintained his grip on the plastic rope around F.M.’s face and pulled the victim out of the car. He then dragged the victim to wooded area off of Lancaster Highway with which he was familiar, as the defendant had gone fishing there on previous occasions.
Following a struggle between Pineda-Anchecta and F.M., the victim was able to escape and run into the middle of the highway and was assisted by motorists who stopped to offer help. According to court records, the victim identified Pineda-Anchecta as the person who had assaulted her. Pineda-Anchecta left the scene on foot. After obtaining a search warrant, CMPD officers searched Pineda-Anchecta’s vehicle, from which they recovered a spool of plastic rope similar to the rope wrapped around the victim’s face during the course of the kidnapping. Law enforcement also located the victim’s phone in Pineda-Anchecta’s vehicle. On June 23, 2020, a federal jury convicted Pineda-Anchecta of kidnapping following a two-day trial.
In determining today’s sentence, Judge Conrad noted that this incident was “a series of violent acts between the defendant and victim that escalated over time and culminated into this offense.” Judge Conrad enhanced the sentence after noting that “this was not a mere kidnapping, but that the defendant intended to kill the victim.”
Pineda-Anchecta is currently in federal custody and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility. The defendant will also be subject to deportation proceedings upon the completion of his federal sentence. Pineda-Anchecta was previously convicted of illegal reentry by a deported alien and was sentenced to seven months in prison.
In making today’s announcement U.S. Attorney Murray commended ICE’s Homeland Security Investigations and CMPD for their investigation of this case. He also thanked ICE’s Enforcement and Removal Operations for their assistance.
Assistant U.S. Attorneys Kenneth Smith and Regina Pack, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
Hartford Gang Member Sentenced to 5 Years in Federal Prison for Selling Fentanyl, CrackRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that ELIAS GUZMAN, also known as “Bebo” and “Fat Boy,” 29, of Hartford, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 60 months of imprisonment, followed by three years of supervised release, for distributing fentanyl and crack cocaine.
According to court documents and statements made in court, this matter stems from an FBI Northern Connecticut Gang Task Force and Hartford Police Department investigation into drug trafficking and related criminal acts committed by members and associates of the Los Solidos and Latin Kings street gangs in Hartford’s South End. Between November 2019 and March 2020, investigators made six controlled purchases of crack cocaine and/or fentanyl from Guzman, a member of the Latin Kings. Most of the drug sales occurred at Guzman’s residence on Benton Street.
Guzman has been detained since his arrest on April 8, 2020. On October 14, he pleaded guilty to one count of possession with intent to distribute, and distribution of, fentanyl and cocaine base (“crack”).
Guzman’s criminal history includes four state convictions, the most recent of which was in 2016 and involved his possession of eight firearms, ammunition, gun paraphernalia, and assorted drugs, including crack and heroin/fentanyl. He was on special parole at the time of his federal arrest in April 2020.
The FBI’s Northern Connecticut Gang Task Force includes members of the Hartford Police Department, East Hartford Police Department, New Britain Police Department, West Hartford Police Department, Connecticut State Police and Connecticut Department of Correction. This case is being prosecuted by Assistant U.S. Attorney Brian P. Leaming.
Gregory Smith Sentenced to 314 Months in PrisonRead the Press Release
HAMMOND – Gregory Smith, 28 years old, of Hammond, Indiana, was sentenced by U.S. District Court Senior Judge James T. Moody upon entry of a guilty plea, announced Acting United States Attorney Gary T. Bell. Smith pled guilty to seven counts of Hobbs Act robbery, one count of discharging a firearm during a crime of violence and one count of brandishing a firearm during a crime of violence.
Smith received a sentence of 314 months in prison, 2 years supervised release and was ordered to pay $734,975.51 in restitution.
According to documents filed in the case, between November 13 and 19, 2015, Smith, with the assistance of two accomplices, robbed seven businesses at gunpoint in Hammond, Indiana. During one of the robberies, Smith shot and permanently injured a liquor store clerk. Smith was on probation at the time of the robbery spree. He had prior felony convictions for burglary and theft and also has a pending attempted residential entry charge.
This case was investigated by the Federal Bureau of Investigation GRIT Task Force and the Hammond Police Department and prosecuted by Assistant United States Attorney Jennifer Chang.
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Grand Jury Indicts Buffalo Man Who Escaped from A Halfway House Following Federal Prison TermRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. – U.S. Attorney James P. Kennedy, Jr. announced today that a federal grand jury has returned an indictment charging Rashaad Samuel, 31, of Buffalo, NY, with escape. The charge carries a maximum penalty of five years in prison and a $250,000 fine.
Assistant U.S. Attorney Meghan A. Tokash, who is handling the case, stated that according to the indictment, in May 2018, the defendant was sentenced to serve 48 months in prison by U.S. District Judge Richard J. Arcara following his conviction on federal drug charges. On June 25, 2020, Samuel was released from the Pollock Federal Correctional Center in Pollock, Louisiana, and transferred to the Volunteers of America – Western New York Residential Reentry Center with a projected release date of October 4, 2020. On September 26, 2020, the defendant escaped from the reentry center.
The defendant was captured by the U.S. Marshals Service on February 22, 2021, following a slow speed chase that ended with Samuel crashing into another vehicle.
The indictment is the result of an investigation by the United States Marshals Service, under the direction of Marshal Charles Salina.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Founder of International Cryptocurrency Companies Indicted in Multi-Million Dollar Securities Fraud SchemeRead the Press Release
BROOKLYN, NY – Earlier today, in federal court in Brooklyn, an indictment was unsealed charging Krstijan Krstic with conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud and conspiracy to commit money laundering for his alleged participation in a cryptocurrency scheme in which he solicited U.S. investors using two fraudulent online investment platforms.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division, Kristi K. Johnson, Assistant Director-in-Charge, Federal Bureau of Investigation, Los Angeles Field Office (FBI), and Ryan L. Korner, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, Los Angeles Field Office (IRS-CI), announced the indictment.
“As alleged, Krstic convinced U.S. investors to pour millions of dollars into fraudulent cryptocurrency schemes through misrepresentations and false statements, and then ran off with their money,” stated Acting U.S. Attorney DuCharme. “This Office is committed to vigorously prosecuting those who cheat investors." Mr. DuCharme expressed his grateful appreciation to the U.S. Securities and Exchange Commission, New York Regional Office, for its assistance with the case.
“Mr. Krstic and others devised fraudulent platforms which purported to offer sophisticated options appealing to bitcoin investors, then fabricated positive reports about the company in an attempt to add legitimacy to the scheme,” stated FBI Assistant Director-in-Charge Johnson. “Cryptocurrency scams are on the rise. The charges against Mr. Krstic should send a message that the FBI and our partners take securities fraud very seriously and will hold accountable individuals who steal from American investors.”
“Today’s indictment of Kristijan Krstic highlights just how seriously IRS Criminal Investigation and the federal law enforcement community are taking criminal activity related to cryptocurrency and online fraud schemes,” stated Special Agent-in-Charge Korner. “Under the cloak of an international online digital currency exchange, $7 million in investor funds from B2G and Start Options were allegedly funneled from unwitting investors directly to Krstic’s pocket. Whether online or on the streets, financial crime never pays, and IRS Criminal Investigation will continue to work tirelessly to ensure those who are involved are brought to justice.
As alleged in the indictment, Krstic was the founder of two digital-asset investment platforms, “Start Options” and “B2G,” and also served as the chief financial officer of Start Options. Between approximately 2017 and 2018, Krstic and others fraudulently induced U.S.-based investors to purchase securities in the form of investment contracts in Start Options and B2G. To perpetuate the fraud, Krstic used the alias “Felix Logan” and created the Twitter handle “@felixlogan_cfo” to communicate with investors in Start Options and B2G.
Start Options purported to be an online investment platform that provided cryptocurrency mining and digital-asset trading services, including trading in cryptocurrencies, commodities, stocks and indices. Start Options also claimed that it was “the largest Bitcoin exchange in euro volume and liquidity” and that it was “consistently rated the best and most secure Bitcoin exchange by independent news media.” B2G purported to be an “ecosystem” that would allow users to trade B2G tokens, as well as digital and fiat currencies, “on a secure, comprehensive platform.” Krstic and others represented that once investors opened a B2G account, a deposit of B2G “open[ed] a door to all the curtains inside Aladdin’s cave. Dollars buy B2G; B2G tokens can be exchanged back into dollars, or for Euros, or for other national fiat currencies. B2G holdings can be traded for original bitcoin or other altcoins.”
In reality, the money sent by investors in Start Options and B2G was never invested as promised, and instead was funneled to a Philippines-based financial account and digital-currency wallet, and to a U.S.-based promoter of the fraud. Subsequently, the U.S.-based promoter transferred approximately $7 million in investor funds from B2G and Start Options to Krstic, and Krstic thereafter stopped responding to all communications and absconded with those investors’ funds. A press release issued by Start Options falsely claimed that the company had been sold to Russian venture capitalists.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Kristic faces up to 20 years’ imprisonment.
This case was investigated by the FBI and IRS-CI. The prosecution is being handled by the Business & Securities Fraud Section of the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section. Assistant U.S. Attorneys Kaitlin T. Farrell, Hiral D. Mehta and David C. Pitluck of the Eastern District of New York, assisted by a Special Agent of the Eastern District of New York’s Business & Securities Fraud Section and Trial Attorney Kevin Lowell of the Criminal Division are prosecuting the case. Assistant U.S. Attorney Laura D. Mantell of the Eastern District of New York’s Civil Division is handling forfeiture matters.
The Defendant:
KRISTIJAN KRSTIC
Age: 45
SerbiaE.D.N.Y. Docket No.: 21-CR-
Former Winchester Man Sentenced for Making False Statements During Acquisition of a FirearmRead the Press Release
CONCORD - Tyrone Morris-Janey, 30, formerly of Winchester, was sentenced to time served, three years of supervised release, and one year of home confinement for making false statements during the acquisition of a firearm, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, ATF and Boston Police Department personnel recovered a Ruger model LCP, .380 caliber pistol with an obliterated serial number. The BPD crime laboratory was able to recover the serial number and ATF traced the firearm to Morris-Janey. A further investigation revealed that from January 8, 2019, through July 31, 2019, Morris-Janey purchased six firearms. During the purchases of the firearms, Morris-Janey claimed that he was the actual purchaser of the firearms which was not true. He later admitted that he purchased the firearms for another person. In addition, during the purchase of three of the firearms, Morris-Janey falsely claimed he lived at a New Hampshire address.
Morris-Janey previously pleaded guilty on September 18, 2020.
“Making a false statement on a federal firearms purchase form is a serious crime,” said U.S. Attorney Murray. “Buying guns for an unnamed person who may be prohibited from possessing them can endanger everyone. In order to maintain public safety, we will continue to work closely with the ATF and our other law enforcement partners to identify and prosecute those who unlawfully buy guns for others or who otherwise lie in order to purchase guns.”
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, with assistance from the Boston Police Department. The case was prosecuted by Assistant U.S. Attorney Debra Walsh.
The case is part of ATF’s Project Safe Neighborhoods initiative, which is a federally-funded program intended to reduce gun violence through law enforcement training, public education, and aggressive law enforcement efforts to investigate and prosecute gun-related crimes.
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Former Sales Representative Indicted in Compounded Prescription Drug SchemeRead the Press Release
NEWARK, N.J. – A former sales representative was arrested today for his role in a scheme to defraud public health benefits programs by billing for medically unnecessary compounded prescriptions, Acting U.S. Attorney Rachael A. Honig announced.
Matthew Puccio, 38, of Randolph, New Jersey, was indicted by a federal grand jury on Feb. 17, 2021, for conspiracy to commit health care fraud. He will be arraigned at a date to be determined.
According to the indictment returned yesterday:
Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredients in the prescription.
Between November 2014 and March 2016, Puccio participated in a conspiracy that involved the submission of fraudulent prescriptions for compounded medications to public health benefits programs. The scheme centered on marketing companies recruiting and paying sales representatives, such as Puccio, to obtain compounded medications for themselves and others regardless of medical necessity, and by specifically targeting health plans that reimbursed for compounded medications at high rates.
Puccio exploited this opportunity through working as a sales representative for several compounding pharmacies. He targeted individuals who had health plans that covered compounded medications and then convinced those individuals to obtain prescriptions for compounded medications, regardless of medical necessity. Puccio and others induced two New Jersey based physicians to sign medically unnecessary prescriptions for beneficiaries that he and others had recruited.
Once the prescriptions were written, they were filled by the compounding pharmacies with which Puccio worked. The compounding pharmacies would then receive reimbursement from the health plans and would pay Puccio a percentage of the reimbursement amount.
The charge of conspiracy to commit health care fraud carries a maximum sentence of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Acting Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s indictment.
The government is represented by Assistant U.S. Attorneys Emma Spiro and Sean M. Sherman of the U.S. Attorney’s Office’s Opioid Abuse Prevention and Enforcement Unit in Newark.
The charge and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Former SCANA CEO to Plead Guilty Tomorrow to Conspiracy to Commit Mail and Wire FraudRead the Press Release
Columbia, South Carolina --- United States Attorney Peter M. McCoy, Jr. announced that Kevin B. Marsh, former SCANA Corporation (SCANA) Chief Executive Officer and former Chairman of its Board of Directors, is scheduled to plead guilty tomorrow – Wednesday, February 24 – in federal court to conspiracy to commit mail and wire fraud. The hearing is scheduled for 10:00 a.m. at the Matthew J. Perry Federal Courthouse, 901 Richland Street, Columbia, before the Honorable Mary G. Lewis.
U.S. Attorney McCoy will be available for media questions after the hearing.
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Former Physical Therapy Clinic Owner Arrested for Health Care FraudRead the Press Release
BOSTON – The former owner of several physical therapy clinics in Greater Boston was arrested on health care fraud charges today as he attempted to board an international flight at John F. Kennedy International Airport.
Chang Goo Yoon, 59, a South Korean national who most recently resided in Waltham, was charged with health care fraud. Yoon will make an initial appearance in federal court in the Eastern District of New York tomorrow.
According to the charging document, from 2009 to 2020, Yoon was the owner and operator of several physical therapy clinics in Allston, Waltham and Brookline. It is alleged that Yoon billed patients for non-existent physical therapy appointments. Specifically, Yoon allegedly billed patients for appointments that they canceled or never attended, including appointments while the patient was overseas. Yoon also billed claims using a former employee’s name and healthcare provider identifier even though she did not provide the claimed services. It is further alleged that Yoon billed patients for services on dates when he was not present at the clinic, but instead was at the Golden Nugget casino in Atlantic City, N.J. or the MGM Grand casino in Springfield, Mass.
The charge of health care fraud provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Anthony DiPaolo, Chief of Investigations of the Insurance Fraud Bureau of Massachusetts; and Matthew Modafferi, Inspector in Charge of the U.S. Postal Service Office of Inspector General, Northeast Area Field Office made the announcement today. Assistant U.S. Attorney Elysa Q. Wan of Lelling’s Health Care Fraud Unit is prosecuting the case.
The details contained in the charging document are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Member of Latin Kings Massachusetts State Leadership Pleads Guilty to Racketeering ConspiracyRead the Press Release
BOSTON – The former Second-in-Command, or Cacique, of the Massachusetts Almighty Latin King and Queen Nation (“Latin Kings”) pleaded guilty today to racketeering charges.
Angel Roldan, a/k/a “King Big A,” 35, pleaded guilty to conspiracy to conduct enterprise affairs through a pattern of racketeering activity, more commonly referred to as RICO conspiracy. U.S. Senior District Court Judge Rya W. Zobel scheduled sentencing for July 7, 2021.
From at least 2018 through 2019, Roldan served as the Cacique, or second-in-command, of the Latin Kings in Massachusetts. As part of this leadership role, Roldan sought out “paperwork” concerning Latin Kings members who provided information to law enforcement. Once the informant and status as an informant was confirmed, Roldan organized violence against them, both inside the prison system and on the street. During the investigation, Roldan was also captured on a recording selling a cooperating witness approximately 100 grams of fentanyl and a firearm.
The Latin Kings are a violent criminal enterprise comprised of thousands of members across the United States. The Latin Kings adhere to a national manifesto, employ an internal judiciary and use a sophisticated system of communication to maintain the hierarchy of the organization. As alleged in court documents, the gang uses drug distribution to generate revenue, and engages in violence against witnesses and rival gangs to further its influence and to protect its turf.
In December 2019, a federal grand jury returned an indictment alleging racketeering conspiracy, drug conspiracy and firearms charges against 62 leaders, members and associates of the Latin Kings. Roldan is the 36th defendant to plead guilty in the case.
The RICO conspiracy charge provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Commissioner Carol Mici of the Massachusetts Department of Correction; and New Bedford Police Chief Joseph C. Cordeiro made the announcement today. Valuable assistance was also provided by the FBI North Shore Gang Task Force and the Bristol County and Suffolk County District Attorney’s Offices. Assistant U.S. Attorneys Philip A. Mallard and Lauren Graber of Lelling’s Criminal Division are prosecuting the case.
The operation was conducted by a multi-agency task force through the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply. More information on the OCDETF program is available here: https://www.justice.gov/ocdetf/about-ocdetf.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Florida Resident Mohamed Suliman Indicted for Attempting to Provide Material Support to ISISRead the Press Release
GAINESVILLE, Florida – A federal grand jury returned an indictment today charging Mohamed Fathy Suliman with attempting to provide material support to the Islamic State of Iraq and Syria (ISIS), a designated foreign terrorist organization. Suliman, formerly of Gainesville, was previously charged by a criminal complaint and made his initial appearance on February 1. He was arrested by the FBI following his expulsion from a foreign country. Lawrence Keefe, United States Attorney for the Northern District of Florida, announced the indictment.
“Protecting national security is a top priority of this office,” said U.S. Attorney Keefe. “We are absolutely committed to deterring, disrupting and dismantling the plans of anyone who seeks to support a designated foreign terrorist organization. Together with our law enforcement partners, we stand ready to counter any threats to our nation or to our fellow citizens.”
The prior complaint filed in the case alleged that Suliman, 33, a U.S. citizen, left Gainesville, Florida, travelled to Turkey, and attempted to enter Syria illegally in 2014 in an effort to join and support ISIS. According to the complaint affidavit, Suliman made a one-way flight reservation in June 2014, from Orlando, Florida, to Alexandria, Egypt, with stops in Chicago, Illinois, and Istanbul, Turkey. Suliman initiated his travel on June 12, 2014, but when he arrived in Istanbul, Turkey, rather than traveling on to Egypt, Suliman paid cash for a one-way airline ticket to the Turkish/Syrian border town of Gaziantep, Turkey.
On June 14, 2014, Suliman was arrested by Turkish authorities for illegally crossing into Syria from Turkey. During an interview of Suliman by an FBI agent in 2018, the indictment alleges that Suliman stated he had researched how to get to Syria, and had purchased the plane ticket to Egypt to disguise his true travel plans from family and others. Suliman also allegedly admitted that he purchased the airline ticket to Gaziantep, Turkey, with cash to avoid creating an electronic record of the purchase. Suliman went on to admit that he attempted to enter Syria and was arrested by Turkish authorities.
“The FBI Jacksonville Joint Terrorism Task Force will spare no resource in our work to protect Americans from threats posed by violent foreign terrorist organizations,” said Rachel L. Rojas, Special Agent in Charge of the FBI Jacksonville Division. “This case illustrates our steadfast commitment and tireless efforts to identify and bring to justice those who threaten our national security by assisting those organizations and promoting violent extremism.”
Suliman’s arraignment hearing is scheduled for March 3, at 2:30 p.m. EST, at the U.S. Courthouse in Gainesville. If convicted, Suliman faces a maximum of 20 years’ imprisonment and a $250,000 fine.
This indictment resulted from an investigation by the FBI. Assistant U.S. Attorney Stephen M. Kunz is prosecuting this case with the assistance of Trial Attorney Elisabeth Poteat of the National Security Division’s Counterterrorism Section. The Department’s Office of International Affairs also provided assistance.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to due process, to include a fair trial, during which it is the government’s burden to prove guilt beyond a reasonable doubt at trial.
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Press Release - U.S. v. Suliman Indictment Suliman IndictmentFormer Erie Man Had Tens of Thousands of Images and Movies of Child Sexual ExploitationRead the Press Release
ERIE, Pa. - A former resident of Erie, Pennsylvania, pleaded guilty in federal court to charges of violating federal laws relating to the sexual exploitation of children, United States Attorney Scott W. Brady announced today.
Adam Gregory Ryzinski, 42, pleaded guilty to two counts before United States District Judge Stephanie L. Haines.
In connection with the guilty plea, the court was advised that Ryzinski received and possessed tens of thousands of computer images and movies depicting prepubescent minors, as young as infants and toddlers, being sexually abused.
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.
Judge Haines scheduled sentencing for June 24, 2021 at 10:30 a.m. The law provides for a total sentence of 40 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Pennsylvania State Police conducted the investigation that led to the prosecution of Ryzinski.
Former CEO of Publicly Traded Biopharmaceutical Company Sentenced for Accounting FraudRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, announced that PARKER H. PETIT, the former chief executive officer of MiMedx Group, Inc. (“MiMedx”), a publicly traded biopharmaceutical company, was sentenced today in Manhattan federal court to one year in prison for orchestrating a multimillion-dollar scheme to fraudulently inflate MiMedx’s revenue. PETIT and co-defendant William Taylor were found guilty on November 19, 2020, following a four-week jury trial before U.S. District Court Judge Jed S. Rakoff, who imposed today’s sentence.
Manhattan U.S. Attorney Strauss said: “Parker Petit used secret agreements and corrupt financial inducements with four distributors to materially misstate the quarterly and annual sales revenue of MiMedx. He deceived the SEC, auditors, and the investing public. Now he has been sentenced to prison for his crimes.”
According to the allegations contained in the Indictment and the evidence presented at trial:
MiMedx was headquartered in Marietta, Georgia, and its securities traded under the symbol “MDXG” on the NASDAQ. MiMedx sold regenerative biologic products, such as skin grafts and amniotic fluid, both directly to end users, such as public and private hospitals, and to various stocking distributors, which, in turn, resold the product to end users.
One of the most critical financial metrics disclosed in MiMedx’s public filings with the Securities and Exchange Commission (“SEC”), and touted in MiMedx’s accompanying press releases, was MiMedx’s quarterly and annual sales revenue. Under Generally Accepted Accounting Principles (GAAP) and SEC guidance, a company like MiMedx that engages in the sale of products through a distributor may recognize revenue upon transfer of the product to a distributor if certain requirements are satisfied, including that delivery has occurred or services have been rendered, the seller’s price to the buyer is fixed or determinable, and collectability of payment is reasonably assured. PETIT and Taylor, MiMedx’s former chief operating officer, repeatedly demonstrated and touted their understanding of these rules governing revenue recognition. They also publicly identified revenue as the principal metric reflecting MiMedx’s growth, and touted MiMedx’s consistent record of quarter-over-quarter revenue growth and meeting or exceeding revenue guidance in 17 consecutive quarters, from 2011 through year-end 2015. By 2015, however, it became increasingly difficult for MiMedx to reach its revenue guidance due to decreased demand from certain distributors and the increasingly aggressive revenue targets that MiMedx had publicly announced.
Confronted with the difficulties faced by MiMedx in meeting its quarterly and annual revenue guidance by legitimate means, PETIT and Taylor orchestrated a fraudulent scheme to falsely recognize revenue upon the shipment of MiMedx product to four stocking distributors, CPM, SLR, Stability Biologics (“Stability”), and First Medical, in the second through fourth quarters of 2015. PETIT and Taylor caused MiMedx to report fraudulently inflated revenue figures to the investing public in order to ensure that the reported figures fell within MiMedx’s publicly announced revenue guidance, and to fraudulently convey to the investing public that MiMedx was accomplishing consistent growth quarter after quarter, as PETIT and Taylor had falsely touted to the investing public. The fraudulent scheme involved the following central features:
- As to CPM, in the second quarter of 2015, PETIT and Taylor caused MiMedx fraudulently to recognize $1.4 million in revenue by (1) making a $200,000 sham “consulting” payment to CPM’s owner to bribe CPM to buy MiMedx product and (2) secretly agreeing to send CPM approximately $1.1 million of product it did not want and did not intend to sell, while promising that CPM could return the product to MiMedx and swap it for different product in a subsequent quarter. PETIT and Taylor entered into the sham “consulting” agreement to conceal that the payment was a bribe to purchase product, and CPM’s owner performed no consulting work for the payment. Neither PETIT nor Taylor disclosed to MiMedx’s outside auditors the “consulting” payment or product swap.
- As to SLR, in the third quarter of 2015, PETIT and Taylor caused MiMedx fraudulently to recognize $4.6 million in revenue by booking the revenue despite understanding that SLR would not make a timely payment for the product, and certainly would not do so within contractual terms. To hide from MiMedx’s auditors that the collectability of payment from SLR was questionable, during the fourth quarter 2015, PETIT arranged for his adult children to use a shell company to loan money to SLR (money that came from a trust fund established by PETIT for their benefit), with the understanding that the loan proceeds would be used in substantial part to pay down SLR’s debt to MiMedx. PETIT did not disclose the loan to MiMedx’s outside auditors and made false and misleading statements to the auditors about SLR’s ability to pay MiMedx.
- As to Stability, in the third and fourth quarters of 2015, PETIT and Taylor caused MiMedx improperly to recognize $2.6 million of revenue, where they (1) failed to agree with Stability on the essential terms of the deal, including when payment was due; (2) reached a secret understanding that Stability could swap or return unwanted product in subsequent quarters; and (3) understood that Stability could not pay for the product in a timely fashion. In fact, PETIT granted the right of return to Stability in a back-dated letter he hid from MiMedx’s internal accountants and outside auditors.
- As to First Medical, in the fourth quarter of 2015, Taylor caused MiMedx improperly to recognize $2.2 million in revenue by making an undisclosed promise to First Medical that it could return any product that it could not sell and that MiMedx would not leave First Medical with any losses. To carry out the scheme, Taylor sent two emails four seconds apart to First Medical. The first was a “cover story” that purported to require payment within a fixed period, as required by MiMedx’s accountants. Taylor forwarded the first email to MiMedx’s accounting department. The second email, sent only four seconds after the first, memorialized the true terms of the deal, which involved an agreement to defer payment and take back product if it could not be sold. Taylor hid the second email from MiMedx’s internal accountants and outside auditors. Taylor also arranged for a false audit “confirmation,” which falsely represented that First Medical was required to pay within a fixed period and omitted the true terms of the deal, to be provided to MiMedx’s outside auditors.
PETIT’s and Taylor’s fraudulent manipulation of MiMedx’s revenue caused MiMedx to report materially inflated revenue in the second, third, and fourth quarters of 2015, and for the full year 2015. In its 2015 10-K, MiMedx reported annual revenue that was fraudulently inflated by approximately $8.2 million. Absent this fraudulent inflation of revenue, MiMedx would have missed both (1) its quarterly revenue guidance in the third and fourth quarters of 2015 and annual revenue guidance for 2015 and (2) analyst revenue consensus for the second through fourth quarters of 2015 and the full year 2015. PETIT’s offense caused approximately $35 million in losses to MiMedx shareholders.
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In addition to his prison term, PETIT, 81, of Marietta, Georgia, was ordered to pay a fine of $1 million.
Taylor was found guilty of conspiracy to commit securities fraud, to make false statements in filings with the SEC, and to mislead auditors. Taylor will be sentenced tomorrow at 4:00 p.m. before Judge Rakoff.
Ms. Strauss praised the investigative work of the United States Postal Inspection Service and thanked the SEC, which brought a separate civil action.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Edward A. Imperatore, Scott A. Hartman, and Daniel M. Tracer are in charge of the prosecution.
Federal Jury Convicts Jail EscapeeRead the Press Release
United States Attorney Richard W. Moore of the Southern District of Alabama announced that on February 9, 2021, a South Alabama jury convicted Reginald Howell of Mobile, Alabama, of one charge of Escape. Howell is scheduled to be sentenced on May 7, 2021, before United States District Judge Kristi DuBose. The maximum penalty that could be imposed for the offense is five years in prison and a fine of $250,000.
In October 2020, Reginald Howell was housed in the Conecuh County Jail pending trial in the Southern District of Alabama on a 14-count indictment alleging multiple counts of robbery, conspiracy to possess with intent to distribute controlled substances, burglary involving controlled substances, and brandishing a firearm. Howell escaped from the jail, then returned, using bolt cutters to cut his way back through the jail’s perimeter fences. The investigation indicates that Howell returned to the jail to smuggle contraband into the facility. Howell’s trial on the remaining charges against him is scheduled for April 2021.
The case was investigated by the Drug Enforcement Administration and the Conecuh County Sheriff’s Office and was prosecuted by Assistant United States Attorneys Kasee Heisterhagen and Deborah Griffin.
Federal Indictment Charges Suburban Chicago Man with Trafficking Fentanyl and Illegally Possessing Loaded GunsRead the Press Release
CHICAGO — A federal grand jury has indicted a suburban Chicago man for allegedly trafficking fentanyl, cocaine, and heroin, and illegally possessing loaded handguns.
A 12-count indictment returned in federal court in Chicago charges DENNIS GERMAN, 34, of Robbins, Ill., with using the firearms in furtherance of his drug-trafficking activities in 2019 and 2020. The indictment also accuses German of conspiring with two others – NICOLE SCHMIDT, 34, of Midlothian, Ill., and JOHN P. SEIWERT, 40, of Orland Park, Ill. – to traffic cocaine and heroin in Robbins last year. A fourth defendant – MARCUS WASHINGTON, 23, of Markham, Ill. – is charged in the indictment with trafficking cocaine and illegally possessing a loaded handgun in Robbins in 2019.
German, Seiwert, and Washington are in law enforcement custody, and an arrest warrant has been issued for Schmidt. Arraignments for German and Washington are set for March 2, 2021, before U.S. District Judge Matthew F. Kennelly. Arraignment for Seiwert is set for March 5, 2021, before Judge Kennelly.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Kristen deTineo, Special Agent-in-Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives in Chicago. Substantial assistance was provided by the Midlothian Police Department, Orland Park Police Department, and Dolton Police Department. The government is represented by Assistant U.S. Attorneys Maureen Merin and Ramon Villalpando.
“Fentanyl, heroin, and cocaine are extremely potent drugs that have wreaked havoc in too many of our communities,” said U.S. Attorney Lausch. “We will continue to focus our efforts on individuals and groups who traffic these dangerous drugs and prosecute those offenders in federal court.”
“Individuals who possess firearms in furtherance of drug trafficking activity pose a significant threat to public safety,” said ATF SAC deTineo. “We will continue to investigate individuals in partnership with the United States Attorney’s Office to ensure the safety of the community.”
The charges in the indictment and the maximum sentence for each count are as follows:
- German: Two counts of possession of a firearm in furtherance of a drug trafficking crime (life in prison, with a mandatory minimum of five years); four counts of possession of a controlled substance with intent to deliver (20 years); one count of maintaining a residence for the purpose of manufacturing and distributing a controlled substance (20 years); two counts of illegal possession of a firearm as a previously convicted felon (ten years); and one count of conspiracy to possess a controlled substance with intent to deliver (20 years).
- Schmidt: One count of possession of a controlled substance with intent to deliver (20 years); and one count of conspiracy to possess a controlled substance with intent to deliver (20 years).
- Seiwert: One count of conspiracy to possess a controlled substance with intent to deliver (20 years).
- Washington: One count of possession of a controlled substance with intent to deliver (20 years); and one count of illegal possession of a firearm as a previously convicted felon (ten years).
The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.
Father and Son Who Defrauded Numerous State Affordable Care Act Programs Sentenced to PrisonRead the Press Release
Two California residents were sentenced today by U.S. District Judge Alvin W. Thompson in Hartford for defrauding Affordable Care Act programs in at least 12 states of more than $27 million. JEFFREY WHITE, 63, was sentenced to 36 months of imprisonment and three years of supervised release, and NICHOLAS WHITE, 35, was sentenced to 13 months of imprisonment and three years of supervised release. Both defendants reside in Twin Peaks, California.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the sentencings occurred via videoconference.
U.S. Attorney John H. Durham of the District of Connecticut, Special Agent in Charge Phillip Coyne of the Boston Regional Office of the Office of the Inspector General of the Department of Health and Human Services, Special Agent in Charge David Sundberg of the FBI’s New Haven Division, Acting Special Agent in Charge Ramsey E. Covington of IRS Criminal Investigation in New England, and Inspector in Charge Joseph W. Cronin of the Boston Division of the U.S. Postal Inspection Service made the announcement.
According to court documents and statements made in court, Jeffrey White and his son, Nicholas White, conspired to defraud health care plans operating under the Affordable Care Act (“ACA,” commonly referred to as “Obamacare”) in Connecticut and other states by fraudulently enrolling individuals in ACA plans in states where the individuals did not live. In order to further the conspiracy, the Whites created phony residential leases using fictitious landlords in various states, including locations in Danbury, Farmington, Hartford and Norwalk, Connecticut. The Whites also used an online application to obtain false cell phone numbers for the individuals with area codes that made it appear that the individuals lived at the fictitious addresses, and provided the false cell phone numbers to the ACA plans. If anyone at the ACA plan called the false local number, the call would ring through to a phone controlled by the Whites.
In order to enroll the individuals in an ACA plan, the Whites paid the insurance premiums for the individuals, and also paid to have the individuals transported to California where the individuals were placed in expensive residential substance abuse treatment programs. The treatment programs then billed the ACA plans for thousands of dollars of treatment each week, including claims for expensive laboratory tests such as blood or urine toxicology screenings.
The treatment programs paid the Whites thousands of dollars in kickbacks for each referral, and some programs arranged for the Whites to receive a percentage of the money the treatment programs received from the ACA health insurance plans. In order to maximize their proceeds from the fraud scheme, the Whites enrolled the individuals in ACA plans in states that paid the highest amount for substance abuse treatment, even though the individuals did not live in those states.
The Whites have admitted that their scheme resulted in more than $27 million in losses to ACA plans across the country, including plans in Connecticut, Arizona, California, Delaware, Indiana, Kentucky, New Jersey, Ohio, Oregon, Pennsylvania, Tennessee, and Texas.
Although the Whites personally profited approximately $1 million through this scheme, they were ordered to pay restitution in the approximate amount of $27,617,000.
October 12, 2018, Jeffrey White and Nicolas White each pleaded guilty to one count of conspiracy to commit health care fraud.
Jeffrey and Nicholas White, who are released on bond, are required to report to prison on August 24 and May 5, respectively.
U.S. Attorney Durham noted that this case is believed to be the first of its kind involving fraudulent enrollment of individuals in ACA plans on a national scale.
This investigation has been conducted by the Office of the Inspector General of the U.S. Department of Health Human Services, the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigation Division, and the U.S. Postal Inspection Service.
U.S. Attorney Durham thanked the Connecticut Affordable Care Act exchange, known as Access Health CT, and the U.S. Attorney’s Office for the Central District of California for their assistance with the investigation.
This case was prosecuted by Assistant U.S. Attorney David J. Sheldon with the assistance of Auditor Susan N. Spiegel.
Fake whistleblower sentenced to federal prison for trying to frame a former acquaintance for violating patient privacyRead the Press Release
SAVANNAH, GA: A Rincon man who portrayed himself as a whistleblower while falsely accusing a former acquaintance of violating patient privacy has been sentenced to federal prison.
Jeffrey Parker, 44, of Rincon, Ga., was sentenced to six months in prison by U.S. District Court Judge Lisa Godbey Wood after pleading guilty to one count of False Statements, said David H. Estes, Acting U.S. Attorney for the Southern District of Georgia. Parker also was fined $1,200 and after completion of his prison term must serve three years of supervised release. There is no parole in the federal system.
“Our law enforcement partners work tirelessly to protect the community by solving real crimes, and cases like this only divert time and resources from critical tasks,” said Acting U.S. Attorney Estes. “Jeffrey Parker’s fake complaint needlessly alarmed the victim and health care workers, but his scheme ultimately unraveled under the questioning of a perceptive FBI agent.”
As outlined in court documents and testimony, Parker admitted that he “engaged in an intricate scheme” in October 2019 when he contacted the U.S. Department of Justice (DOJ) to claim that a former acquaintance had violated privacy provisions of the Health Insurance Portability and Accountability Act (HIPAA).
Parker created email addresses using the names of real individuals and pretended to be these individuals to make it appear as if the acquaintance committed a crime. He sent the emails to the hospital where the acquaintance worked, to the DOJ, and to the FBI, and then claimed to have received threatening messages in retaliation for acting as a whistleblower. FBI agents quickly responded by acting to ensure Parker’s safety and investigate his allegations, and under subsequent questioning, Parker admitted concocting the scheme in an attempt to harm the former acquaintance.
“Many hours of investigation and resources were wasted determining that Parker's whistleblower complaints were fake, meant to do harm to another citizen,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Before he could do more damage, his elaborate scheme was uncovered by a perceptive agent and now he will serve time for his deliberate transgression.”
The case was investigated by the FBI, and prosecuted for the United States by Assistant U.S. Attorney Patrick Schwedler.
Fairport Man Faces up to 20 Years in Prison After Pleading Guilty to Multiple Drug ChargesRead 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 Adam J. Cole, 32, of Fairport, NY, pleaded guilty before U.S. District Judge Charles J. Siragusa to possessing with intent to distribute MDA, marijuana, and cocaine. The charges carry a maximum penalty of 20 years in prison and a $1,000,000 fine.
Assistant U.S. Attorney Katelyn M. Hartford, who is handling the case, stated that on November 27, 2019, investigators executed a search warrant at the defendant's residence on Pannell Circle in Fairport. During the search, they recovered approximately 58 pounds of marijuana, 322 pills containing MDA, approximately 23 grams of cocaine, drug paraphernalia, approximately $4,300 in United States currency, which represented proceeds from drug trafficking activities. Investigators also recovered two firearms and ammunition. As part of his drug trafficking activities, Cole used his Pannell Circle residence for the purposes of storing, processing, and distributing controlled substances.
In addition, on November 22, 2019, in the Town of Victor, NY, the defendant sold approximately 116 grams of marijuana to another person in exchange for cash. On November 27, 2019, in the area of High Street in Victor, Cole possessed approximately 223 grams of marijuana in his vehicle.
The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division; the Ontario County Sheriff’s Office, under the direction of Kevin Henderson; and the Canandaigua Police Department, under the direction of Chief Mathew Nielsen.
Sentencing is scheduled for May 18, 2021, at 9:15 a.m. before Judge Siragusa.
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Elkins woman sentenced for methamphetamine distributionRead the Press Release
ELKINS, WEST VIRGINIA – Courtney Marie Zirkle, of Elkins, West Virginia, was sentenced today to 41 months of incarceration for methamphetamine distribution, U.S. Attorney Bill Powell announced.
Zirkle, age 37, pled guilty to one count of “Possession with Intent to Distribute Methamphetamine” and one count of “Unlawful Possession of a Firearm” in August 2020. Zirkle admitted to having methamphetamine in January 2019 in Randolph County. Zirkle, who is prohibited from having a firearm, also admitted to having a .40 caliber semi-automatic pistol.
Assistant U.S. Attorney Stephen D. Warner prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Mountain Region Drug & Violent Crimes Task Force investigated.
U.S. District Judge Thomas S. Kleeh presided.
Department of Justice Issues Statement Regarding Federal Civil Rights Review into March 2020 Police Encounter with Daniel PrudeRead the Press Release
Pamela Karlan, Principal Deputy Assistant Attorney General for the Civil Rights Division of the Department of Justice, James P. Kennedy Jr., U.S. Attorney for the Western District of New York, and Stephen A. Belongia, Special Agent in Charge of the FBI Buffalo Field Office, released the following statement:
“The U.S. Attorney’s Office for the Western District of New York, the Civil Rights Division at the Department of Justice, and the Federal Bureau of Investigation are aware that a grand jury empaneled by the New York State Attorney General’s Office has concluded its investigation of the various officers of the Rochester Police Department who encountered Daniel Prude on March 23, 2020, and determined that no charges would be filed. We intend to review the comprehensive report issued by the New York State Attorney General, as well as any other relevant materials, and will determine whether any further federal response is warranted.”
Department of Justice Issues Statement Regarding Federal Civil Rights Review into March 2020 Police Encounter with Daniel PrudeRead the Press Release
Pamela Karlan, Principal Deputy Assistant Attorney General for the Civil Rights Division of the Department of Justice, and James P. Kennedy Jr., U.S. Attorney for the Western District of New York, and Stephen A. Belongia, Special Agent in Charge of the FBI Buffalo Field Office, released the following statement:
“The U.S. Attorney’s Office for the Western District of New York, the Civil Rights Division at the Department of Justice, and the Federal Bureau of Investigation are aware that a grand jury empaneled by the New York State Attorney General’s Office has concluded its investigation of the various officers of the Rochester Police Department who encountered Daniel Prude on March 23, 2020, and determined that no charges would be filed. We intend to review the comprehensive report issued by the New York State Attorney General, as well as any other relevant materials, and will determine whether any further federal response is warranted.”
Cross Lanes Man Pleads Guilty to Federal Gun CrimeRead the Press Release
CHARLESTON, W.Va. – United States Attorney Mike Stuart announced that Derrick Clark, 30, of Cross Lanes, pled guilty to being a felon in possession of a firearm. Clark faces up to ten years in federal prison when he is sentenced on May 21, 2021.
On April 13, 2017, law enforcement officers executed a search warrant on Clark’s apartment in Cross Lanes. Inside, officers located three handguns: a black, semi-automatic 9mm Taurus; a black, .32 caliber semi-automatic Savage; and a black, 9mm semi-automatic C9 Highpoint. Officers also located assorted ammunition. Clark was prohibited from possessing the firearms due to a previous felony conviction in Kanawha County Circuit Court for fleeing in a vehicle with reckless indifference to the safety of others.
The Drug Enforcement Administration (DEA) and the Kanawha County Sheriff’s Office conducted the investigation. Assistant United States Attorney L. Alexander Hamner is in charge of the prosecution. The plea hearing was held before Senior United States District Judge David A. Faber.
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. 2:18-cr-00103.
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Convicted Murderer Pleads Guilty to Federal Firearms ChargeRead the Press Release
TYLER, Texas – A Tyler, Texas man has pleaded guilty to a federal firearms violation in the Eastern District of Texas, announced Acting United States Attorney Nicholas J. Ganjei today.
Eric Cadell Gipson, 56, pleaded guilty to being a felon in possession of a firearm today before United States Magistrate Judge K. Nicole Mitchell.
According to information presented in court, on June 2, 2020, Gipson, a convicted felon, arranged for the purchase of 9mm pistol. Six days later, on June 8, 2020, Gipson took possession of the firearm. Gipson, having been previously convicted of murder, robbery and theft, was prohibited by law from owning or possessing firearms or ammunition.
“Prohibiting the possession of firearms by convicted felons is a critical component of keeping our communities safe, said Acting United States Attorney Nicholas J. Ganjei. “The Eastern District of Texas remains committed to keeping guns out of the hands of the most dangerous members of society.”
A federal grand jury returned an indictment charging Gipson with federal violations on Oct. 29, 2020. Under federal statutes, Gipson faces up to 10 years in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing 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 was prosecuted as part of the Project Safe Neighborhoods Initiative. Project Safe Neighborhoods is aimed at reducing gun and gang violence, deterring illegal possession of guns, ammunition and body armor, and improving the safety of residents in the Eastern District of Texas. Participants in the initiative include community members and organizations as well as federal, state and local law enforcement agencies.
This case was investigated by the Federal Bureau of Investigation, Smith County Sheriff’s Office and Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Alan Jackson.
Convicted Felon Pleads Guilty to Illegally Possessing A FirearmRead the Press Release
MACON, Ga. – A convicted felon, caught in illegal possession of a firearm, pleaded guilty to his crime this morning in federal court, said Peter D. Leary, the Acting U.S. Attorney for the Middle District of Georgia.
Shakqylion Coxton, 26, of Macon, pleaded guilty to one count possession of a firearm by a convicted felon before U.S. District Judge Marc Treadwell. Coxton is facing a maximum sentence of ten years imprisonment, a $250,000 fine and three years of supervised release. Sentencing is scheduled for May 19. There is no parole in the federal system.
“Convicted felons, especially those with violent criminal histories, who illegally possess firearms will face federal prosecution and the possibility of a lengthy federal prison sentence without parole,” said Acting U.S. Attorney Leary. “I want to thank the Georgia State Patrol, the Bibb County Sheriff’s Office and ATF for their combined efforts investigating this case.”
Coxton was pulled over by a Georgia State Patrol trooper for a traffic violation in Macon at 12:58 a.m. on January 3, 2020. When the trooper approached the defendant’s vehicle to obtain his driver’s license and vehicle information, he observed a revolver in plain view on the passenger seat next to Coxton, which later was found to be a loaded .38 Special. The defendant was previously convicted of robbery by force, a felony, in the Superior Court of Bibb County on July 11, 2011. Coxton admits he knew it was illegal for him to possess a firearm because he is a convicted felon.
The investigation was conducted as part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see https://www.justice.gov/archives/projectguardian.
The case was investigated by the Georgia State Patrol, the Bibb County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Assistant U.S. Attorney Elizabeth Howard prosecuted the case for the Government. Questions can be directed to Pamela Lightsey, Public Information Officer, U.S. Attorney’s Office, at (478) 621-2603 or Melissa Hodges, Public Affairs Officer (Contractor), U.S. Attorney’s Office, at (478) 765-2362.
Cleveland City Council member arrested, charged with federal program theftRead the Press Release
Acting United States Attorney Bridget M. Brennan announced today that sitting Cleveland City Council member Kenneth JOHNSON, age 74, of Cleveland, was arrested this morning by law enforcement agents with the Cleveland Division of the FBI after a federal grand jury handed down a fifteen-count indictment charging JOHNSON with violations related to federal program theft. Two additional defendants were also charged in the indictment.
“The allegations set forth in today’s indictment detail the exploitation of public office for personal gain,” said Acting U.S. Attorney Bridget M. Brennan. “Such conduct may bring about a temporary financial benefit for those involved, but it harms the public’s confidence in its elected officials. Where an elected official is alleged to have disregarded their oath and obligations, the public should remain confident that we will not disregard ours. Allegations of public corruption will be thoroughly investigated and brought before the court for a final resolution.”
“These individuals are accused of developing and implementing schemes to defraud hardworking American federal taxpayers,” said FBI Special Agent in Charge Eric B. Smith. “Citizens should have confidence that their elected representatives are ethical and law abiding, not enriching themselves through graft and deceit. The FBI will continue to root out fraudsters that portray themselves as civil servants and hold them accountable.”
“This indictment represents our continuing resolve to root out fraud and corruption in all forms, particularly when the programs involved should have been used to help our neediest families and the communities in which they live,” said HUD OIG Special Agent in Charge Brad Geary. “It is our continuing core mission to work with our law enforcement partners and the United States Attorney’s Office to protect the integrity of our housing programs and to take strong action against those who seek to illegally benefit from them.”
“When public officials choose to betray the public’s trust for personal gain, our system of government is negatively impacted,” said Bryant Jackson, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “Therefore, in partnership with the U.S. Attorney’s Office and our law enforcement partners, IRS Criminal Investigation gives priority to investigations involving the alleged breach of the public trust by government officials at any level.”
The indictment charges JOHNSON with two counts of conspiracy to commit federal program theft; six counts of federal program theft; five counts of aiding and assisting in the preparation of false tax returns; one count of tampering with a witness and one count of falsification of records in a federal investigation. Defendant JOHNSON was elected to serve as a Ward 4 Councilperson for the city of Cleveland.
Defendant Garnell JAMISON, age 61, of Cleveland, is charged with one count of conspiracy to commit federal program theft; two counts of federal program theft; five counts of aiding and assisting in the preparation of false tax returns; one count of tampering with a witness and one count of falsification of records in a federal investigation. JAMISON worked for the city of Cleveland as JOHNSON’s Executive Assistant, a position he held for over 20 years.
Defendant John HOPKINS, age 57, of Cleveland Heights, is charged with one count of conspiracy to commit federal program theft and three counts of federal program theft. HOPKINS was Executive Director of The Buckeye Shaker Square Development Corporation.
Robert Fitzpatrick worked for the city of Cleveland in the Division of Recreation. Fitzpatrick was charged in a Bill of Information for his role in the scheme and pleaded guilty on February 8, 2021.
According to the indictment, from January of 2010 through October of 2018, defendants JOHNSON, JAMISON, Fitzpatrick, and others known and unknown to the Grand Jury, are accused of conspiring together to commit federal program theft in order to enrich themselves and others. JOHNSON and his conspirators are accused of inducing the city of Cleveland to issue reimbursement checks from the city’s general fund to JOHNSON for Ward 4 maintenance expenses that were never actually performed. From July 2009 to June 2019, the city received Community Development Funds via the Department of Housing and Urban Development (HUD) that were deposited into the city’s general fund.
The indictment states that around 2010, JOHNSON and JAMISON approached Fitzpatrick and asked him to perform maintenance services in Ward 4. These tasks included cutting grass, checking on properties, assisting with snow removal and looking for potential homes that could be renovated and sold for a profit. Fitzpatrick performed these services for approximately six weeks and was never paid by JOHNSON nor JAMISON. Fitzpatrick did not perform any ward services after the initial six weeks and continued to receive his salary from the city.
It is alleged that JAMISON regularly delivered timesheets to Fitzpatrick that purported to reflect the hours and maintenance services he performed in Ward 4 and instructed him to sign them. Fitzpatrick complied, even though he did not actually perform any ward services beyond the initial six weeks.
As part of the alleged conspiracy, JAMISON delivered these timesheets to JOHNSON for his approval and JOHNSON included them with his “Council Member Expense Reports,” which were submitted to the city in order for reimbursement as eligible council-related expenses. In addition, JOHNSON attached receipts to his expense reports that made it appear that he had paid Fitzpatrick, in cash, for Ward 4 services. These receipts purportedly bore Fitzpatrick’s signature.
From January of 2010 through October of 2018, the indictment alleges that JOHNSON requested the maximum reimbursement – $1,200 – each month on his expense report for ward services that Fitzpatrick seemingly had performed. Based on records, the city issued $1,200 in monthly expense reimbursement checks to JOHNSON, totaling approximately $127,200. According to the indictment, each reimbursement check from the city was deposited into a personal bank account owned by JOHNSON.
JOHNSON is also charged for a conspiracy to commit theft of federal program funds dispersed to The Buckeye Shaker Square Development Corporation (BSSDC) via community block grants. The indictment states that, from September of 2013 through June of 2019, JOHNSON, HOPKINS and three other unnamed persons (known to the Grand Jury but not charged) conspired together to commit federal program theft.
The defendants and their co-conspirators are accused of creating fraudulent documents, including timesheets, and causing BSSDC to issue checks to the three unnamed persons to which they were not entitled. JOHNSON was either directly related or the court-appointed guardian for the three unnamed persons.
Furthermore, the indictment states that from in or around December 2013 to in or around March 2018, HOPKINS signed no less than approximately $50,000 in BSSDC checks issued to third parties, including the three unnamed persons. These checks were later deposited or transferred into bank accounts held and controlled by JOHNSON.
Federal law and the city’s conflict of interest prohibitions related to the distribution and receipt of the Community Development Funds prohibit any person, or family of a person, who was an employee, agent, consultant, officer, or elected official or appointed official of the BSSDC or the city, from personally benefitting from the funds.
Counts 9 through 13 of the indictment charge JOHNSON and JAMISON with falsifying JOHNSON’s Individual Income Tax Return, Form 1040, for the calendar years of 2014 through 2018. JOHNSON and JAMISON allegedly failed to report additional income from their scheme and inflated the value of JOHNSON’s itemized deductions.
The final two counts of the indictment accuse JOHNSON and JAMISON of witness tampering and falsifying records in a federal investigation.
On or about October 2, 2020, JOHNSON, who was the court-appointed guardian of a fourth unnamed person, and JAMISON attempted to corruptly persuade this person by providing false and fraudulent information and records purporting to document charitable donations made by JOHNSON, and other material information, with the intent to influence this person’s testimony.
JOHNSON and JAMISON are also accused of creating a fraudulent donation receipt intended to obstruct the investigation into this matter and influence a grand jury proceeding.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation.
In all cases, the sentence will not exceed the statutory maximum, and in most cases, it will be less than the maximum.
This case was investigated by the Cleveland Division of the FBI, Department of Housing and Urban Development Office of Inspector General and IRS-Criminal Investigation. This case is being prosecuted by Assistant United States Attorneys Justin Seabury Gould and Megan R. Miller.
Cincinnati man pleads guilty to creating child pornography of minor in his care at sleepoverRead the Press Release
CINCINNATI – Scott Surgener, 43, of Cincinnati, pleaded guilty in U.S. District Court today to sexually exploiting a minor. As part of the plea, parties involved in his case are recommending a sentence of 20 years in prison.
According to court documents, from April 2018 through July 2019, Surgener engaged in sexually explicit conduct with a minor in his home for the purpose of taking pictures and videos of the sexual abuse. The pictures and videos were taken in Surgener’s residence while the victim, who was younger than 13, was in his care at child sleepovers.
In total, the defendant produced 28 videos and images of the exploitation.
Surgener was charged by a federal criminal complaint in October 2019 and has remained in custody since.
David M. DeVillers, United States Attorney for the Southern District of Ohio; Chris Hoffman, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division; Hamilton County Sheriff Charmaine McGuffey and Springdale Police Chief Thomas Wells announced the plea entered into today before U.S. District Judge Susan J. Dlott. Assistant United States Attorney Kyle J. Healey is representing the United States in this case.
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Cincinnati Man Sentenced to 36 Months for Possession of a Firearm by Convicted FelonRead the Press Release
COVINGTON, Ky. – A Cincinnati man, Alex Collins, 37, was sentenced on Tuesday to 36 months in federal prison, by U.S. District Judge David Bunning, for possession of a firearm by a convicted felon.
According to his plea agreement, on March 1, 2020, law enforcement attempted to conduct a traffic stop on Collins, who only stopped momentarily before driving off and hitting a car and utility pole. Collins admitted that during that stop, he was in possession of a loaded handgun. Collins further admitted that he was a convicted felon and was prohibited from possessing a firearm.
Collins has a previous felony conviction from Ohio in 2014 for felonious assault. Collins pleaded guilty to the current charge in September 2020.
Under federal law, Collins must serve 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for three years, after his release from prison.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky; James Robert Brown, Jr., Special Agent in Charge, FBI, Louisville Field Office, and Rob Nader, Chief of the Covington Police Department, jointly announced the sentence.
The investigation was conducted by the FBI and the Covington Police Department. The United States was represented by Assistant U.S. Attorney Amanda Harris.
This case was prosecuted as part of the Department of Justice’s “Project Safe Neighborhoods” Program (PSN), which is a nationwide, crime reduction strategy aimed at decreasing violent crime in communities. It involves a comprehensive approach to public safety — one that includes investigating and prosecuting crimes, along with prevention and reentry efforts. In the Eastern District of Kentucky, Acting U.S. Attorney Shier, coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. Click here for more information about Project Guardian.
Cincinnati Man Sentenced to 30 Months for Possession of a Firearm by Convicted FelonRead the Press Release
COVINGTON, Ky. – A Cincinnati man, Keith A. Shaffer, 34, was sentenced on Tuesday to 30 months in federal prison, by U.S. District Judge David Bunning, for possession of a firearm by a convicted felon.
According to his plea agreement, on March 11, 2020, law enforcement conducted a traffic stop on Shaffer’s vehicle, finding him in possession of a 9mm loaded gun. Shaffer admitted that he was a convicted felon and was prohibited from possessing a firearm.
Shaffer was previously convicted of second-degree burglary, in July 2006. Shaffer pled guilty to the current charge in September 2020.
Under federal law, Shaffer must serve 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for three years, after his release from prison.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky; Shawn Morrow, Special Agent in Charge, ATF, Louisville Field Division; and Bill Birkenhauer, Chief of the Highland Heights Police Department, jointly announced the sentence.
The investigation was conducted by the ATF and the Highland Heights Police Department. The United States was represented by Assistant U.S. Attorney Tony Bracke.
This case was prosecuted as part of the Department of Justice’s “Project Safe Neighborhoods” Program (PSN), which is a nationwide, crime reduction strategy aimed at decreasing violent crime in communities. It involves a comprehensive approach to public safety — one that includes investigating and prosecuting crimes, along with prevention and reentry efforts. In the Eastern District of Kentucky, Acting U.S. Attorney Shier, coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. Click here for more information about Project Guardian.
Cincinnati Man Sentenced to 188 Months for Distribution of Fentanyl and HeroinRead the Press Release
COVINGTON, Ky. – A Cincinnati man, Thomas Coleman, 48, was sentenced to 188 months in federal prison on Tuesday, by U.S. District Judge David Bunning, after previously admitting to distributing fentanyl and heroin.
In his guilty plea agreement, Coleman admitted to selling fentanyl and heroin, cocaine, and methamphetamine, on several occasions in December 2019, at locations in Covington. Coleman has nine prior convictions for drug trafficking. He was also released from his parole, for a prior prison term, less than eight months before committing the new crimes.
Coleman pled guilty in October 2020.
Under federal law, Coleman must serve 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for eight years, after his release from prison.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky; James Robert Brown, Jr., Special Agent in Charge, FBI, Louisville Field Office; and Rob Nader, Chief of the Covington Police Department, jointly announced the sentence.
The investigation was conducted by the Federal Bureau of Investigation and the Covington Police Department. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Tony Bracke.
Chester County Pharmacy Agrees to Resolve Civil Allegations of Improper Dispensing of Controlled Substances for $225,000Read the Press Release
PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that the United States filed a civil lawsuit against Source One Pharmacy Services, LLC, a West Chester, PA-based closed-door pharmacy, alleging that the pharmacy improperly dispensed and distributed controlled substances and failed properly to inventory and document its controlled substances. At the same time the civil suit was filed, the United States also filed a proposed consent judgment that, subject to the court’s approval, would resolve the lawsuit. The consent judgment would require Source One to pay $225,000 in civil penalties under the Controlled Substances Act and would impose several accountability and monitoring conditions on the pharmacy.
The civil lawsuit alleges that Source One Pharmacy, which operates as a closed-door pharmacy (meaning that it is not open for business to the general public), had received warnings from the Drug Enforcement Administration (DEA) in prior investigations, but nevertheless went on to dispense controlled substances illegally, including opioids. The complaint further alleges that Source One distributed some controlled substances to locations where the recipients were not authorized to receive them, and that a DEA audit revealed pills were missing from Source One’s records for seven different controlled substances.
Source One agreed to resolve its civil liability under terms outlined in the proposed consent judgment, if accepted by the court. Among other items, Source One would pay $225,000 in civil penalties under the Controlled Substances Act and would be subject to several heightened accountability and monitoring measures for three years, including the requirement that Source One report its dispensing to the DEA.
“Pharmacies that handle dangerous controlled substances like opioids must be held to the highest standards in order to ensure that the drugs are properly monitored and do not end up in the wrong hands,” said Acting U.S. Attorney Williams. “This civil suit and consent judgment send a strong message to the community that, if a pharmacy violates these important standards, laws, and regulations, it will face serious consequences.”
“Source One Pharmacy is alleged to have improperly dispensed opioids and failing to maintain an accurate inventory of their controlled substances,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “Civil penalties such as these are an effective means to insure the proper safeguarding of controlled substances and compliance with the Controlled Substances Act.”
The case was investigated by the Philadelphia Field Division of the Drug Enforcement Administration. The civil investigation, litigation, and resolution are being handled by Assistant United States Attorneys Scott W. Reid and Anthony D. Scicchitano.
The complaint contains allegations only and does not contain any admissions. The proposed consent judgment would resolve any alleged civil liability.
Cattaraugus Woman Pleads Guilty to Distribution of Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Melanie Thompson, 46, of Cattaraugus, NY, pleaded guilty to distribution of child pornography before U.S. District Judge John L. Sinatra, Jr. The charge carries a mandatory minimum penalty of five years in prison, a maximum of 20 years, and a $250,000 fine.
Special Assistant U.S. Attorney Jeffrey T. Fiut, who is handling the case, stated that between January 9, 2017, and March 6, 2020, the defendant took sexually explicit photographs of Victim 1, a minor, in furtherance of her plan to impersonate Victim 1. Thereafter, defendant, while impersonating Victim 1, engaged in conversations of a sexual nature with two minor male victims (Victims 2 and 3) and one adult. During those conversations, defendant: solicited a sexually explicit picture from Victim 2; sent, via social media, the sexually explicit photograph she had taken of Victim 1 to Victim 3, receiving two sexually explicit images in return from Victim 3; and while impersonating Victim 1 and engaging in sexual conversations with an adult male over social media, sent such male the sexually explicit photographs she had taken of Victim 1.
The plea is the result of an investigation by Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly, and the Cattaraugus County Sheriff’s Office, under the direction of Timothy S. Whitcomb.
Sentencing is scheduled for June 17, 2021, at 2:00 p.m. before Judge Sinatra.
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CEO of Medifirst Solutions, Inc. Arrested for Securities FraudRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn charging Bruce Schoengood, the chief executive officer of Medifirst Solutions, Inc. (MFST"), a publicly-traded company, with securities fraud in connection with a scheme that yielded hundreds of thousands of dollars in profits for Schoengood and others, while defrauding MFST investors. Schoengood was arrested earlier today and made his initial appearance this afternoon via videoconference before United States Magistrate Judge Robert M. Levy. The defendant was released on a $500,000 bond.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charge.
“CEOs of publicly-traded companies cannot enrich themselves at the expense of investors by illegally manipulating the stock of their companies,” stated Acting United States Attorney DuCharme. “This Office is committed to upholding the integrity of financial markets and to prosecuting, to the fullest extent of the law, company executives who abuse investors' trust.” Mr. DuCharme expressed his grateful appreciation to the U.S. Securities and Exchange Commission for its assistance with the case.
“As alleged, Schoengood stood to illegally profit from the exploitation of his victims, whom he defrauded through manipulative practices carried out in relation to the purchase and sale of stock for Medifirst Solutions, Inc. These illegal business practices, while all too common, tend to catch the eye of federal investigators. The FBI is committed to bringing to justice all those who attempt to defeat the integrity of the financial markets in this way,” stated FBI Assistant Director-in-Charge Sweeney.
According to the complaint, between May 2016 and January 2019, Schoengood, together with others, engaged in a scheme to defraud MFST investors by manipulating the volume of MFST stock and concealing the sale of that stock by others. Specifically, Schoengood entered into sham consulting agreements with a co-conspirator (Co-Conspirator 1) so that Co-Conspirator 1 would appear to be working for MFST. Schoengood then transferred MFST stock to Co-Conspirator 1 and made false statements in public filings and related filings to enable the shares to be deposited and sold by Co-Conspirator 1, so that Co-Conspirator 1 and an investment relations firm could participate in the undisclosed promotion of MFST stock. Schoengood also issued stock to co-conspirators so that they could sell their shares into the artificially created volume by Co-Conspirator 1 and the investment relations firm, then “kickback” portions of the proceeds to Schoengood.
The charge in the complaint is an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted of securities fraud, Schoengood faces up to 20 years in prison.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Hiral D. Mehta is in charge of the prosecution.
The Defendant:
BRUCE SCHOENGOOD
Age: 62
Manalapan, New JerseyE.D.N.Y. Docket No. 20-MJ-206
Butler County Man Sentenced to Federal Prison for Gun ConvictionRead the Press Release
A man who illegally possessed a firearm was sentenced on February 22, 2021, to 3 years in federal prison.
Michael Limkemann, 35, from Clarksville, Iowa, pled guilty on September 24, 2020, to illegal possession of a firearm as a felon and user of controlled substances. Limkemann was previously convicted of Conspiracy to Distribute Methamphetamine and Unauthorized Possession of an Offensive Weapon, in the Iowa District Court for Butler County, and Possession of a Controlled Substance – 2nd Offense, in the Iowa District Court for Black Hawk County, on or about January 12, 2016. These convictions prohibited Limkemann from possessing any firearms or ammunition.
At the plea and sentencing hearings, evidence showed that Limkemann had given a .22 rifle to another drug user. Limkemann further admitted to possessing the .22 rifle while he was a user of methamphetamine and marijuana.
Sentencing was held before United States District Court Chief Judge Leonard T. Strand. Limkemann was sentenced to 36 months’ imprisonment. He must also serve a term of 3 years of supervised release following imprisonment. There is no parole in the federal system. Limkemann remains in custody of the United States Marshal until he can be transferred to a federal prison.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see /media/1122011/dl?inline.
The case was prosecuted by Special Assistant United States Attorney Patrick T. Greenwood and was investigated by Clarksville Police Department, Butler County Sheriff’s Department and the Bureau of Alcohol, Tobacco and Firearms Enforcement.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-3010. Follow us on Twitter @USAO_NDIA.
Buffalo Man Arrested, Charged with Receiving Images of Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Jeffrey A. Joyes, 49, of Buffalo, NY, was arrested and charged by criminal complaint with receipt of child pornography. The charge carries a mandatory minimum penalty of five years in prison, a maximum of 20 years, and a $250,000 fine.
Assistant U.S. Attorney Charles M. Kruly, who is handling the case, stated that according to the complaint, the defendant used his Kik account to engage in a sexual conversation with a 17-year old minor girl (Victim). During that conversation, Joyes received nude images that constitute child sexual abuse material. The FBI's Child Exploitation Task Force began to investigate on January 22, 2021, after receiving information from an FBI special agent in Augusta, Georgia. The agent had recently interviewed the Victim’s mother, who stated that her daughter met an adult male online and exchanged sexually explicit pictures and videos with him.
A forensic review of the Victim’s phone determined that the defendant communicated with the Victim on the Kik application between January 13-16, 2021. Investigators also recovered multiple photos of the Victim, some of which constitute child pornography. There were also several phone calls made between the defendant and the Victim.
Joyes will make an initial appearance this afternoon at 4:30 p.m. before U.S. Magistrate Judge Michael J. Roemer.
The complaint is the result of an investigation by the Federal bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia. Additional assistance was provided by the Augusta, Georgia, Office of the FBI.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Billings woman admits trafficking meth, heroin and fentanylRead the Press Release
BILLINGS—A Billings woman today admitted a drug trafficking crime after law enforcement seized methamphetamine, heroin and fentanyl during an investigation, Acting U.S. Attorney Leif Johnson said.
Lisa Ann Emmett, 34, pleaded guilty to possession with intent to distribute controlled substances. Emmett faces a minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release.
U.S. Magistrate Judge Timothy J. Cavan presided. A sentencing date will be set before U.S. District Judge Dana L. Christensen. Emmett was released pending further proceedings.
In court documents filed in the case, the prosecution said that agents with the Drug Enforcement Administration developed information that Emmett and co-defendant, Anthony Walker, had been receiving distributable amounts of meth and heroin in the U.S. mail. DEA agents conducted several controlled buys from Emmett and Walter. Walter has pleaded guilty to charges and is pending sentencing.
On Aug. 30, 2019, a U.S. Postal Inspector intercepted a suspicious package destined to Walker’s business address. The package was searched pursuant to a warrant and investigators found about 465.1 grams of meth, which is approximately one pound, and 61.1 grams of heroin, which was similar to “China white” heroin.
The package was delivered to Walter’s business, and Walter took possession of the package. Agents executed a search warrant on the business. Both Walter and Emmett were present and directed agents to their drug stash. Agents located heroin, meth and marijuana in a black container. The meth was determined to be 99 percent pure. The China white heroin was determined to contain 51.6 grams of fentanyl.
Assistant U.S. Attorney Julie Patten is prosecuting the case, which was investigated by the DEA.
This case is part of Project Safe Neighborhoods, a U.S. Department of Justice initiative to reduce violent crime. According to the FBI’s Uniform Crime Reports, violent crime in Montana increased by 48% from 2013 to 2019. 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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Beltsville Pimp Pleads Guilty to Conspiracy to Commit Sex TraffickingRead the Press Release
Baltimore, Maryland – Kamal Dorchy, age 46, of Beltsville, Maryland, pleaded guilty today to the federal charge of conspiracy to commit sex trafficking.
The guilty plea was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Special Agent in Charge James R. Mancuso of Homeland Security Investigations (HSI) Baltimore; Chief Lisa D. Myers of the Howard County Police Department; Chief Melissa R. Hyatt of the Baltimore County Police Department; Commissioner Michael Harrison of the Baltimore Police Department; Interim Chief Hector Velez of the Prince George’s County Police Department; and Howard County State’s Attorney Rich Gibson.
According to Dorchy’s plea agreement, from September 2016 to July 2017, Dorchy conspired with others to commit sex trafficking. Dorchy posted prostitution advertisements on Internet websites. Dorchy also recruited sex workers for his prostitution business through advertisements on Internet websites for massage work or prostitution.
As detailed in his plea agreement, on July 27, 2017 a Howard County Police Department detective met with an adult sex worker (Victim 1) at a hotel in Laurel, Maryland. Victim 1 advised the detective about Dorchy’s conduct. The victim also told the detective she went by a name in prostitution ads that Dorchy had given her.
Further, Dorchy agrees that he met a 17-year-old minor at a strip club in July of 2017 and recruited the minor victim to work for him. Dorchy claims that he was not aware of her true age at the time, and believed she was 18 years of age due to her employment at the strip club. The minor victim informed law enforcement that she told Dorchy her true age before she was trafficked. Dorchy arranged prostitution dates for the minor victim by posting ads on Internet websites, including for dates in Maryland. When Dorchy could not be there for the minor victim’s prostitution dates, he employed his cousin to act as “security.” The minor victim was 17 years old during the entire time that she was trafficked.
A third sex trafficking victim, an adult female, advised law enforcement that she met Dorchy in 2016 during a job interview for a massage business at a hotel in Baltimore, Maryland, where she was told that she would be walking clients to appointments. The victim advised that later, she did prostitution dates at Dorchy’s direction at the massage business.
As part of his plea agreement, Dorchy will be required to register as a sex offender in the places where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
Dorchy and the government have agreed that, if the Court accepts the plea agreement, Dorchy will be sentenced to between six years and 10 years in federal prison. U.S. District Judge George L. Russell has scheduled sentencing for May 27, 2021, at 10:00 a.m.
This case was investigated by law enforcement agencies that are members of the Maryland Human Trafficking Task Force, formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders. Members include federal, state and local law enforcement, as well as victim service providers and local community members. For more information about the Maryland Human Trafficking Task Force, please visit http://www.mdhumantrafficking.org/.
Report suspected instances of human trafficking to HSI's tip line at 866-DHS-2ICE (1-866-347-2423) or by completing its online tip form. Both are staffed around the clock by investigators.
Acting United States Attorney Jonathan F. Lenzner praised HSI, the Howard County, Baltimore County, and Prince George’s County Police Departments, the Baltimore Police Department, and the Howard County State’s Attorney’s Office for their work in the investigation and prosecution. Mr. Lenzner thanked Assistant U.S. Attorneys Ayn B. Ducao, Adam K. Ake, and Jeffrey J. Izant, who are prosecuting the case.
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Barraza Pleads Guilty to Trafficking in Heroin and Carrying a Firearm in Furtherance of a Drug Trafficking CrimeRead the Press Release
ST. GEORGE, UTAH – Richard Dimitri Barraza, 24, of St. George, Utah, has agreed to serve 150 months in federal prison after pleading guilty to possessing heroin with the intent to distribute, and possessing a firearm in furtherance of a drug trafficking crime.
According to the plea agreement, Barraza admitted to possessing approximately 160 grams of a mixture or substance containing heroin, along with a 9mm pistol that he used to further his heroin trafficking enterprise. Because Barraza was on supervised release for a 2017 federal conviction for being a felon in possession of a firearm, this plea also resolves the outstanding supervised release violation pending against him.
“Southwest Utah needs federal law enforcement because of cases like this one,” said United States Attorney John W. Huber. “We are committed to focusing on dangerous offenders who drag down our quality of life through reckless decisions.”
Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office prosecuted the case. Agents from the Washington County Drug Task Force, Officers from the St. George Police Department, and Special Agents from the DEA conducted the investigation. The U.S. Attorney’s Office coordinated the prosecution with the Washington County Attorney’s Office.
Bank President’s Arson and Fraud Scheme Goes up in SmokeRead the Press Release
SHERMAN, Texas – A former bank president has been sentenced to federal prison for violations in the Eastern District of Texas, announced Acting United States Attorney Nicholas J. Ganjei today.
Anita Gail Moody, 57, of Cooper, Texas pleaded guilty on June 5, 2020, to conspiracy to commit bank fraud and arson and was sentenced to 96 months in federal prison today by U.S. District Judge Amos L. Mazzant, III. Moody has additionally agreed to pay restitution in the amount of $11,136,241.82.
According to information presented in court, on May 11, 2019, while Moody was President of Enloe State Bank in Cooper, Texas, the bank suffered a fire that investigators later determined to be arson. The fire was contained to the bank’s boardroom, however the entire bank suffered smoke damage. Investigation revealed that several files had been purposefully stacked on the boardroom table, all of which were burned in the fire. Notably, the bank was scheduled for a review by the Texas Department of Banking the very next day. Further investigation revealed Moody had created false nominee loans in the names of several people, including actual bank customers. Moody eventually admitted to setting the fire in the boardroom to conceal her criminal activity concerning the false loans. She also admitted to using the fraudulently obtained money to fund her boyfriend’s business, other businesses of friends, and her own lifestyle. The fraudulent activity, which began in 2012, resulted in a loss to the bank of approximately 11 million dollars.
“Criminal conduct that affects the financial health of a small, local lender can send a negative ripple effect throughout the entire community,” said Acting United States Attorney Nicholas J. Ganjei. “The Eastern District of Texas will vigorously prosecute cases, such as the one here, that undermine public confidence in our local banks. We are also deeply appreciative of the excellent investigative work of the FDIC Office of the Inspector General, and the Bureau of Alcohol, Tobacco, Firearms and Explosives in bringing this matter to a close.”
Jeannie Swaim, who served as vice president of Enloe State Bank, and who was also involved in fraudulent conduct, was previously sentenced to 24 months’ imprisonment, and agreed to pay restitution in the amount of $410,675.18.
This case was investigated by the FDIC-OIG and the Bureau of Alcohol, Tobacco, Firearms, and Explosives and prosecuted by Assistant United States Attorneys Maureen Smith and Wes Wynne.
Baltimore Fentanyl Dealer Sentenced to More Than Seven Years in Federal Prison for Distributing More Than 400 Grams of Fentanyl—Enough to Kill 20,000 PeopleRead the Press Release
Baltimore, Maryland – U.S. District Judge Stephanie A. Gallagher today sentenced Joseph Speed, age 28, of Baltimore, Maryland, to seven years in federal prison, followed by four years of supervised release, after Speed pleaded guilty to conspiracy to distribute and possess with intent to distribute 40 grams or more of fentanyl. Speed admitted that between 400 grams and 1.2 kilograms of fentanyl were reasonably foreseeable to him and in furtherance of the conspiracy to distribute fentanyl. As little as 2 milligrams of fentanyl can be a lethal dose.
This case is part of an initiative implemented by the U.S. Attorney’s Office for the District of Maryland to combat the growing fentanyl overdose crisis in Maryland. Under this initiative, every arrest involving distribution of fentanyl made by law enforcement in Baltimore is reviewed jointly by the State’s Attorney’s Office for Baltimore City, the Drug Enforcement Administration, and the U.S. Attorney’s Office to determine whether the case will be handled in the state or federal system. The use of federal resources and statutes, which carry significant terms of imprisonment, will allow the U.S. Attorney’s Office to prosecute those individuals who pose the greatest threat to public safety in distributing lethal doses of fentanyl.
The guilty plea and sentencing were announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Assistant Special Agent in Charge Orville O. Greene of the Drug Enforcement Administration, Baltimore District Office; Baltimore City Sheriff John W. Anderson; Chief Melissa R. Hyatt of the Baltimore County Police Department; and Baltimore County State’s Attorney Scott Shellenberger.
Acting United States Attorney Jonathan F. Lenzner stated, “Joseph Speed was an armed narcotics dealer operating in Baltimore. He sold fentanyl to people in our community and he carried firearms to further his drug business. Speed will now serve more than seven years in federal prison, where there is no parole—ever. Armed drug traffickers are on notice that dealing in fentanyl increases their odds of federal prosecution.”
According to his guilty plea, Speed was part of a drug organization that sold fentanyl in the Baltimore area. On May 20, 2019, law enforcement executed a search warrant at Speed’s apartment in Baltimore and recovered approximately 458 grams of fentanyl, a 9mm handgun, $666 in cash, and drug paraphernalia, including cutting agents and gel capsules. Speed admitted that he used these items to facilitate his drug trafficking, including preparing drugs for resale to customers of the drug organization.
On July 23, 2019, law enforcement performed a traffic stop on Speed’s vehicle in Baltimore County. A subsequent search of Speed and his vehicle recovered another 9mm handgun, numerous fentanyl gel caps, and $5,345 in cash.
Finally, on May 15, 2020, law enforcement executed a search warrant at Speed’s apartment in Pikesville, Maryland, and recovered a third firearm, a 9mm semi-automatic handgun, as well as a small amount of suspected fentanyl.
This case is part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Acting United States Attorney Jonathan F. Lenzner commended the DEA, the Baltimore City Sheriff’s Office, the Baltimore County Police Department, and the Baltimore County State’s Attorney’s Office for their work in the investigation and prosecution. Mr. Lenzner thanked Assistant U.S. Attorney Jason D. Medinger, who prosecuted the case.
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Attempted Armed Robbery Suspects Indicted on Federal Firearms ChargesRead the Press Release
In Austin today, a federal grand jury returned an indictment charging two Austin residents for their alleged roles in an attempted armed robbery of a convenience store last year, announced U.S. Attorney Ashley C. Hoff and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
The federal grand jury indictment charges 36-year-old Deon Ross and 18-year-old Lavante Carter with one count of interference with commerce by threat or violence. The indictment also charges Ross with one count of discharging a firearm during a crime of violence and Carter with one count of brandishing a firearm during a crime of violence. The indictment alleges that on October 7, 2020, the defendants attempted to rob a convenience store located on North Interstate 35 in Austin. The indictment further alleges that during the incident, Ross shot a convenience store employee while Carter brandished a firearm at a second convenience store employee.
Carter and Ross were arrested on October 12, 2020, and December 6, 2020, respectively. Both have since remained in custody. Upon conviction, Ross and Carter face up to 20 years in federal prison for interference with commerce by threat or violence. Ross faces between 10 years and life in federal prison upon conviction of discharging a firearm during a crime of violence. Carter faces between seven years and life in federal prison upon conviction of brandishing a firearm during a crime of violence.
This case is part of Operation Undaunted, representing federal, state and local law enforcement’s commitment to combat violence and restore peace to central and west Texas communities.
The FBI and the Austin Police Department investigated this case with assistance from the Killeen Police Department. Assistant U.S. Attorneys Gabriel Cohen and Keith Henneke are prosecuting this case on behalf of the government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
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Arkansas Couple Sentenced to A Combined Four Years in Federal Prison for Aggravated Identity Theft and Mail FraudRead the Press Release
El Dorado, Arkansas – David Clay Fowlkes, Acting United States Attorney for the Western District of Arkansas, announced today that Patrick Wayne Watson, age 24, now of Conway, Arkansas, and Kennan Dane O’Bier, age 24, now of Nash, Texas, were sentenced in Federal Court for their roles in a Mail Fraud and Identity Theft scheme in Magnolia, Arkansas. O’Bier was sentenced to 30 months in federal prison followed by three years of supervised release and Watson was sentenced to 18 months in federal prison followed by three years of supervised release, both on one count of Mail Fraud and Aggravated Identity Theft. They were each ordered to pay $200 in special assessments and to pay restitution in the amount of $42,113.12. The Honorable Susan O. Hickey, Chief United States District Judge, presided over the sentencing hearing in the United States District Court in El Dorado, Arkansas.
According to court records, between August of 2018 through January 31st of 2019, Watson, who was employed at a local bank, used his position at the bank to review personally identifiable information and banking information of customers. While doing so, Watson took photographs of the personally identifying information of over one hundred bank customers on his cellular phone. Watson and O’Bier together then used at least six (6) of those customer’s information to open PayPal, Amazon, and Wayfair accounts in the names of the unsuspecting bank customers.
Over the six months of the scheme, Watson and O’Bier then used those accounts to order thousands of dollars in products from Amazon and Wayfair and had them delivered to multiple addresses, to include their home in Magnolia, Arkansas. On April 23, 2019, a federal search warrant was obtained by the FBI and executed on their Magnolia home. Many of the shipped items were found as well as additional evidence of the Mail Fraud and Identity Theft scheme. Subsequent to this search warrant, a search of Watson’s cell phone resulted in law enforcement discovering the photographs of additional bank customers’ information which were not, to date, used in the scheme.
Watson and O’Bier were indicted on the scheme in August of 2019. Watson entered a plea to Mail Fraud and Aggravated Identity Theft charges on June 22, 2020. O’Bier entered his plea to Mail Fraud and Aggravated Identity Theft on July 20, 2020.
This case was investigated by the Federal Bureau of Investigation (FBI), the Hot Spring County Sheriff’s Office, the Hempstead County Sheriff’s Office and the Miller County Sheriff’s Office. Assistant United States Attorney Benjamin Wulff prosecuted the case for the United States.
Anchorage Man Indicted for Escape, Accomplice Charged by ComplaintRead the Press Release
Anchorage, Alaska – U.S. Attorney Bryan Schroder announced that, on February 18, 2021, Tristan Jamal Grant, aka “Goo” 35, of Anchorage, was indicted by a federal grand jury for Escape by Prisoner in Custody and Failure to Appear. Julissa Carter, aka “Red”, 32, of Anchorage was charged by criminal complaint February 19, 2021 for Assisting an Escape by Prisoner in Custody and Aiding and Abetting Grant’s Failure to Appear.
According to Court documents, Grant was apprehended by Anchorage Police Department following a shooting on December 12, 2018. Grant remained in custody and was indicted by a federal grand jury on January 15, 2019 for Felon in Possession of a Firearm and ordered held by federal detainer at the Anchorage Correctional Center (ACC). Later, a grand jury indicted Grant in a 10-count federal indictment for multiple federal offenses, including Conspiracy to Engage in Sex trafficking of Minors, Sex Trafficking of a Minor, Sexual Exploitation of a Child – Production of Child Pornography, and Felon in Possession of a Firearm. His trial on those charges was set to begin on February 22, 2021 and will be rescheduled.
On Feb 12, 2021, Grant was released by court order to meet with his attorney at his attorney’s office prior to trial. The Release Order allowed Grant to leave the Anchorage Correctional Center (ACC) on February 16 at 10:00 am and required him to return by 5:00 pm. A court-approved defense investigator picked Grant up at ACC and drove him to his attorney’s office. Upon the conclusion of the meeting, the defense investigator prepared to drive Grant back to ACC. As Grant approached the vehicle, he threw his paperwork into the vehicle and then fled from the area. The defense investigator notified law enforcement of Grant’s escape. Grant failed to return to custody at ACC by the specified time in the Release Order.
Upon learning of Grant’s escape, the Anchorage Police Department (APD) responded and the FBI Safe Streets Task Force reviewed jail calls made by Grant. The review of jail calls revealed that immediately after learning he was to be released, Grant called Carter to learn details of the location and layout of the attorney’s office. In later calls, Grant and Carter exchanged cryptic information and discussed a meeting on February 16.
The FBI’s Safe Streets Task Force, Human Trafficking Task Force, Child Exploitation Task Force, and Anchorage Police Department worked together to locate, isolate, and apprehend Grant and Carter. Their investigation revealed Carter had rented a room at a local hotel on the morning of February 17. Law enforcement obtained a search warrant for the room and entered it a short time later. Carter and Grant were both inside and were taken into custody without incident.
If convicted, Grant could face a sentence of up to 5 years for the Escape and 10 years for the Failure to Appear. Any sentence for the Failure to Appear to be consecutive to whatever sentence that may be imposed on the charges previously filed in the 10-count indictment. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
If convicted, Carter could face a sentence of up to 5 years for Assisting an Escape and 10 years for Aiding and Abetting Grant's Failure to Appear. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
The Federal Bureau of Investigation (FBI) and the Anchorage Police Department (APD) conducted the investigation leading to the indictment and complaint in this case. This case is being prosecuted by Assistant U.S. Kyle Reardon.
This original case against Grant case was brought as part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Grant’s case is also 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 U.S. Attorneys’ Offices, Project Safe Childhood combines 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 charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Monday 22 February 2021
Wilmington Man Sentenced to over Eight Years in Prison for Traveling to PA for Sexual Encounter with a MinorRead the Press Release
PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Thomas Traumann, 53, of Wilmington, DE, was sentenced to eight years and three months in prison, ten years of supervised release, and a $25,000 find by United States District Court Judge Gene E.K. Pratter for traveling across state lines to have sex with a person whom he believed to be a minor child.
In October 2020, the defendant pleaded guilty to one count of interstate travel with intent to engage in illicit sexual conduct. The charges stem from Traumann’s attempt in late-2018 to entice a minor into having a sexual relationship with him.
On November 3, 2018, Traumann began an online chat on a social media website with a person whom he thought was a 14-year-old girl. In reality, the defendant was exchanging online messages with a Special Agent from the Pennsylvania Office of Attorney General working in an undercover capacity. In his communications, Traumann repeatedly acknowledged that the “girl” was 14-years-old and made his intentions quite clear that he wanted to have a sexual encounter with her days later. He also knew what he was proposing was against the law, stating in part, “…I am a little concerned … I will go to jail because of your age…” When Traumann traveled by vehicle to meet up with this purported girl near ‘her’ house in Pennsylvania on November 5, 2018, he was taken into custody by law enforcement.
“This defendant traveled here from out-of-state and was prepared to sexually assault a young, vulnerable child,” said First Assistant U.S. Attorney Williams. “I shudder to think what would have happened had Traumann connected online with an actual child rather than an undercover agent. We are grateful to our federal, state and local partners who work relentlessly to identify and stop all those who would prey upon minor children.”
“Homeland Security Investigations special agents are committed to the fight to defend our children from online perpetrators,” said Brian A. Michael, Special Agent in Charge for Homeland Security Investigations Philadelphia. “Traumann’s attempts to exploit an innocent child is unconscionable. Today’s sentencing, is yet another example of how Homeland Security Investigations and our partners with the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Pennsylvania Office of Attorney General will relentlessly pursue child predators who commit these atrocious crimes.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
The case was investigated by Homeland Security Investigations and the Pennsylvania Office of Attorney General, and is being prosecuted by Assistant United States Attorney Josh A. Davison.
Wife of “El Chapo” Arrested on International Drug Trafficking ChargesRead the Press Release
The wife of Joaquin “El Chapo” Guzman Loera, leader of a Mexican drug trafficking organization known as the Sinaloa Cartel, was arrested today in Virginia on charges related to her alleged involvement in international drug trafficking.
Emma Coronel Aispuro, 31, a dual U.S.-Mexican citizen, of Culiacan, Sinaloa, Mexico, was arrested today at Dulles International Airport. She is scheduled to make her initial appearance in federal court tomorrow in the U.S. District Court for the District of Columbia via video conference.
According to court documents, Aispuro is charged with participating in a conspiracy to distribute cocaine, methamphetamine, heroin and marijuana for importation into the U.S. Additionally, Coronel Aispuro is alleged to have conspired with others to assist Guzman in his July 11, 2015 escape from Altiplano prison, located in Almoloya de Juarez, Mexico. After Guzman was re-arrested in Mexico in January 2016, Coronel Aispuro is alleged to have engaged in planning yet another prison escape with others prior to Guzman’s extradition to the U.S. in January 2017.
Guzman Loera was convicted by a jury in the Eastern District of New York in 2019 for his role as a leader of the Sinaloa Cartel.
Cornel Aispuro is charged in a one count criminal complaint with a conspiracy to distribute one kilogram or more of heroin, five kilograms or more of cocaine, 1,000 kilograms or more of marijuana, and 500 grams or more of methamphetamines for unlawful importation into the U.S.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division and Assistant Director in Charge Steven D’Antuono of the FBI’s Washington Field Office made the announcement.
The FBI’s Washington Field Office is investigating the case.
Acting Deputy Chief Anthony Nardozzi and Trial Attorney Kate Wagner of the Justice Department’s Narcotic and Dangerous Drug Section are prosecuting the case.
A criminal complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.