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23 February 2021
Three San Fernando Valley Men Charged with Running Counterfeit Document Ring that Created and Sold Dozens of False Passports, IDsRead the Press Release
LOS ANGELES – Two San Fernando Valley men were arraigned today on a federal grand jury indictment alleging they were part of a prolific document trafficking ring that created and sold counterfeit United States passport cards, Social Security cards, driver’s licenses, and other documents.
Carlos Ayala Hernandez, a.k.a. “Juan Juarez,” 44, of Granada Hills, the 19-count indictment’s lead defendant; and Nestor Perez, a.k.a. “Daniel Perez,” 32, of Van Nuys, each pleaded not guilty to one conspiracy count, nine counts of production of false identification documents, seven counts of transferring false identification documents, and one count of possession of five or more false identification documents. Hernandez also pleaded not guilty to one count of being an illegal alien in possession of a firearm.
On February 19, a third defendant named in the indictment – Miguel Juarez Guerrero, 23, of Van Nuys – pleaded not guilty to 18 charges related to the fake document mill.
According to the indictment filed on February 9, from January 2016 to January 2021, Hernandez, Guerrero and Perez conspired to produce false identification documents that appeared to have been issued by the United States government, and driver’s licenses purporting to be from multiple states, including California, Wyoming and Pennsylvania.
Hernandez and Guerrero allegedly received orders, some by text message, from customers seeking specific false identification documents. Hernandez and Guerrero then notified Perez, who manufactured and stored the fake IDs at a Van Nuys apartment used solely to produce the counterfeit documents, the indictment alleges. After the fake IDs were ready, Hernandez and Guerrero allegedly notified customers and arranged for pickup times and places, usually in the parking lots of restaurants or pharmacies, in exchange for cash.
On January 7, 2021 at the Van Nuys residence, the defendants possessed 21 U.S. passport cards; 68 Social Security cards; five Lawful Permanent Resident cards (commonly known as “green cards”); two Employment Authorization Document cards;135 driver’s licenses; 11 foreign identification documents for Mexico, Chile, Argentina and Peru; approximately 1,000 fraudulent authentication seals, according to the indictment. On the same date, Hernandez allegedly possessed $40,000 in cash at his residence.
An April 6 jury trial date has been scheduled before United States District Judge John F. Walter.
The three defendants in this case were arrested pursuant to a criminal complaint on January 27.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The charges related to the counterfeit documents each carry a statutory maximum sentence of 15 years in federal prison. So, if convicted of all charges in the document, the defendants would face potential sentences of decades in prison.
Homeland Security Investigations and the Ventura County Sheriff’s Office investigated this matter.
Special Assistant United States Attorney Matthew C. Chan and Assistant United States Attorney Gregory D. Bernstein, both of the General Crimes Section, are prosecuting this case.
Somers Man Charged with Receipt and Possession of Child PornographyRead the Press Release
Audrey Strauss, the United States Attorney for the Southern District of New York, announced that RICHARD LEAF, a resident of Somers, was arrested this morning and charged with receiving and possessing videos and images containing child pornography. LEAF was presented today before U.S. Magistrate Judge Andrew E. Krause in White Plains federal court.
U.S. Attorney Audrey Strauss said: “Richard Leaf is alleged to have engaged in deeply disturbing sexual communications with minors, and in being in possession of child pornography. Child pornography inflicts immeasurable damage upon innocent victims, and this Office and our FBI partners will continue to exhaustively detect, identify, and charge any individuals engaged in this sinister conduct. Below, the various usernames alleged to have been used by Leaf to engage with under-aged victims are listed, please call 1-800-CALL-FBI if you believe you have information helpful to this investigation.”
FBI Assistant Director William F. Sweeney Jr. said: “As our society continues to become more reliant on technology, more of our children are exposed to the most despicable predators - those searching out young children to sexually exploit them. As we allege in this case, Mr. Leaf used Skype to chat with his victims. I'd like to stress to parents that although these contacts may occur in a virtual world, they harm your children in the real world. These criminals inflict lasting damage to their victims, and both parents and guardians need to be aware of the dangers their children face. The list below provides known fake handles Mr. Leaf allegedly used to contact children. Please take a look and have a conversation with your child. If you believe they've been in contact with Mr. Leaf, please call us at 1-800-CALL-FBI or reach us online at tips.fbi.gov."
According to the allegations contained in the Complaint[1]:
Between March 2019 and April 2020, LEAF posed as a teenager named “Alex Bronson” to communicate via Skype with a minor (“Minor-1”), who LEAF believed was 15 years old. During the course of these communications, Minor-1 sent LEAF a video of himself masturbating in the shower and a fully nude photo of himself in a bedroom. In addition, law enforcement officers uncovered almost a dozen images and videos containing child pornography on LEAF’s home computer.
The Complaint further alleges that LEAF created fictitious accounts on Chat Avenue, an online chatroom website, and Skype to communicate with minors. The usernames of some of LEAF’s fictitious accounts include:
alex bronson
sportsboi.15
alex15
15brandon
zach.914
runnerboi.14
austinf19
sportsgirl.914
brandon.williams.23
dan.dan77771
beachsand.7
Austin A
If you have information to report or if you interacted or sent under-aged photos or videos of a sexual nature to any of the above accounts, please contact the Federal Bureau of Investigation at 1-800-CALL-FBI.
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LEAF, 72, of Somers, New York, is charged with one count of receiving child pornography, which carries a mandatory minimum sentence of 5 years in prison and a maximum sentence of 20 years in prison, and one count of possessing child pornography, which carries a maximum sentence of 10 years in prison. The statutory maximum penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.
Ms. Strauss praised the efforts of the FBI and its Westchester County Safe Streets Task Force. She added that the investigation is ongoing.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorney Jennifer Ong is in charge of the prosecution.
The charge contained in the complaint is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the descriptions of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
Six Foreign Nationals and a Bank Employee Facing Federal Indictment in Maryland for a Scheme to Defraud Financial InstitutionsRead the Press Release
Greenbelt, Maryland – A federal grand jury in Maryland has returned a superseding indictment charging six foreign nationals and a bank employee for a bank fraud scheme in which the defendants and their co-conspirators obtained or attempted to obtain more than $700,000. The defendants, Diape Seck, age 27, of Rockville, Maryland; Nicolae Gindac, age 52, of Dania Beach, Florida; Mateus Vaduva a/k/a “Romi”, age 28; Marius Vaduva, age 26; Marian Unguru, age 36; Daniel Velcu, age 43; and Vali Unguru, age 18, all of Baltimore, Maryland are charged with a federal bank fraud and wire fraud conspiracy. The superseding indictment was returned on February 17, 2021 and was unsealed in part at Diape Seck’s initial appearance on February 22, 2021.
The superseding indictment was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Postal Inspector in Charge Peter R. Rendina of the U.S. Postal Inspection Service - Washington Division; Special Agent in Charge James R. Mancuso of Homeland Security Investigations (HSI) Baltimore; Special Agent in Charge Shimon R. Richmond of the Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG); Chief Marcus Jones of the Montgomery County Police Department; Chief Toni Dezomits of the Cary, North Carolina, Police Department; and Sheriff Dusty Rhoades of the Williamson County, Tennessee, Sheriff’s Office.
According to the superseding indictment and other court documents, from June 2018 to January 2021, conspirators fraudulently opened bank accounts at victim financial institutions. The conspirators stole checks from the incoming and outgoing mail of churches and other religious institutions, then deposited the stolen checks into the fraudulently opened bank accounts. The conspirators then allegedly withdrew the funds and spent the fraudulently obtained proceeds.
Specifically, the superseding indictment alleges that Diape Seck, an employee of one of the victim financial institutions, facilitated the opening of multiple bank accounts at that institution for the co-conspirators. Mateus Vaduva, Marius Vaduva, Nicolae Gindac, Marian Unguru, Daniel Velcu, Vali Unguru and their co-conspirators allegedly used foreign identity documents, often but not universally Romanian, in both their true identities as well as suspected fictitious identities, to fraudulently open bank accounts at victim financial institutions. The co-conspirators then fraudulently negotiated the stolen checks by depositing the stolen checks into the victim bank accounts, often by way of automated teller machine (ATM) transactions. After depositing the stolen checks into the bank accounts, the conspirators allegedly made cash withdrawals from ATMs and purchases using debit cards associated with the bank accounts.
According to court documents, an investigation by the victim bank where Diape Seck worked revealed that Seck allegedly violated numerous bank policies in opening approximately 412 checking accounts in a one-year period from approximately January 2, 2019 through January 3, 2020, relying predominantly on Romanian passports and driver's license information. Checks payable to and written from churches and other religious institutions from around the country were allegedly deposited into many of the 412 checking accounts which were not opened in the names of the churches. Law enforcement determined that the church checks were stolen.
For example, the indictment alleges that: on October 24, 2019, Diape Seck opened, and aided and abetted the opening of, five fraudulent bank accounts in the names of “E.V.,” “L.U.,” “R.P.,” “G.B.,” and “F.P.”; on October 25, 2019, Mateus Vaduva opened a fraudulent bank account in the name of “W.H.”; on November 12, 2019, Marius Vaduva opened three fraudulent bank accounts in the names of “P.P.,” “M.C.,” and “N.V.”; on January 21, 2020, Daniel Velcu negotiated a stolen check into a victim bank account using an ATM in Glen Burnie, Maryland; on April 12, 2020, Nicolae Gindac negotiated two checks that had been stolen from churches in Ellicott City and La Plata, Maryland into a fraudulently opened bank account in the name of “D.B.”, using an ATM in Davie, Florida; on April 15, 2020, Marian Unguru negotiated three stolen checks and withdrew $500 in cash from a fraudulently opened bank account in Glen Burnie, Maryland; and on July 13, 2020, Vali Unguru negotiated a stolen check into a fraudulently opened bank account using an ATM in Baltimore, Maryland.
If convicted, the defendants each face a maximum sentence of 30 years in federal prison for conspiracy to commit bank fraud and wire fraud. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors. Diape Seck had his initial appearance on February 22, 2021, and was ordered to be released pending trial. Marian Unguru, Daniel Velcu, and Vali Unguru previously had initial appearances in U.S. District Court in Greenbelt. Marian Unguru and Daniel Velcu were ordered to be detained pending trial and Vali Unguru was released pending trial. The remaining defendants are each expected to have an initial appearance in U.S. District Court in Greenbelt, but no dates have been scheduled.
A superseding indictment is not a finding of guilt. An individual charged by superseding indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
Acting United States Attorney Jonathan F. Lenzner commended the U.S. Postal Inspection Service, HSI, the FDIC Office of Inspector General, the Montgomery County Police Department, the Cary (North Carolina) Police Department, and the Williamson County (Tennessee) Sheriff’s Office for their work in the investigation. Mr. Lenzner thanked Assistant U.S. Attorney Elizabeth Wright, who is prosecuting the case.
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Sioux City Man to Federal Prison for MethRead the Press Release
A man who conspired to distribute methamphetamine was sentenced February 23, 2021, to 11 years in federal prison.
Nicholas Thompson, 30, from Sioux City, Iowa, received the prison term after a September 24, 2020, guilty plea to conspiracy to distribute methamphetamine and possession with intent to distribute methamphetamine. Thompson was previously convicted of conspiracy to manufacture methamphetamine in the United States District Court for the Northern District of Iowa on November 9, 2010.
Evidence at the plea and sentencing hearings showed that between January 2019 and January 2020, Thompson and others conspired to distribute at least 5000 grams of methamphetamine mixture. On two occasions in July and December of 2019, Thompson was stopped by law enforcement and found in possession of about ½ ounce of methamphetamine. Later in December 2019, Thompson was apprehended pursuant to an arrest warrant and found in possession of more than two ounces of methamphetamine. Then in January 2020, law enforcement conducted a traffic stop of a vehicle occupied by Thompson. The driver attempted to flee in the vehicle and ran over stop-sticks deployed by law enforcement. Thompson exited the vehicle, fell down and was caught with a bag of nearly ten ounces of methamphetamine near him. Law enforcement also seized a loaded .38 caliber handgun, with the serial number filed off, approximately 60 feet from where the vehicle ultimately stopped. The bag appeared to have been thrown from the vehicle. Thompson admitted he had been involved in the distribution of sizable quantities of methamphetamine since he had been released from federal prison and intended to distribute some or all of the methamphetamine to other persons.
Thompson was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Thompson was sentenced to 132 months’ imprisonment. He must also serve a 6-year term of supervised release after the prison term. There is no parole in the federal system. Thompson is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and investigated by Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-4036. Follow us on Twitter @USAO_NDIA.
Serbian Founder of Digital-Asset Companies Indicted in International Cryptocurrency SchemeRead the Press Release
A Serbian man was charged in an indictment today for his alleged participation in a coordinated cryptocurrency scheme in which he solicited U.S. investors using two fraudulent online investment platforms.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division, Acting U.S. Attorney Seth D. DuCharme of the Eastern District of New York, Assistant Director in Charge Kristi K. Johnson of the FBI’s Los Angeles Field Office, and Special Agent in Charge Ryan L. Korner of the IRS Criminal Investigation (IRS-CI) Los Angeles Field Office made the announcement.
Kristijan Krstic, 45, was charged in an indictment filed today in the Eastern District of New York with one count of conspiracy to commit securities fraud, one count of securities fraud, one count of conspiracy to commit wire fraud, and one count of conspiracy to commit money laundering.
According to 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. As alleged, 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. In order to perpetuate the fraud, Krstic allegedly used the alias “Felix Logan” and created the Twitter handle “@felixlogan_cfo” to communicate with investors in Start Options and B2G.
The indictment alleges that 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 allegedly 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.” The indictment further alleges that 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.”
As alleged, 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.”
According to the indictment, however, both Start Options and B2G were fraudulent. In truth, the money sent by investors in Start Options and B2G allegedly was never invested and instead was laundered internationally to a Phillippines-based financial account and digital-currency wallet, and diverted to a U.S.-based promoter of the fraud. Subsequently, as alleged, the promoter transferred to Krstic approximately $7 million in investor funds from B2G and Start Options, and Krstic thereafter stopped responding to all communications and absconded with those investors’ funds. A press release issued by Start Options claimed that the company had been sold to Russian venture capitalists.
The former Director of North American Operations for Start Options and B2G, John DeMarr, 55, of Santa Ana, California, was previously charged for his role in the scheme.
The charges in an indictment are based on allegations, and the defendants are presumed innocent unless and until proven guilty.
This case was investigated by the FBI and IRS-CI. Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Kaitlin Farrell, Hiral Mehta, and David Pitluck of the Eastern District of New York are prosecuting the case, with assistance on forfeiture matters from Assistant U.S. Attorney Laura Mantell.
The Criminal Division’s Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.
Schuylerville Man Sentenced for Social Security FraudRead the Press Release
SYRACUSE, NEW YORK – Thomas Baxter, a.k.a. Mark Anthony, age 80, of Schuylerville, New York was sentenced today to three years’ probation for defrauding the Social Security Administration (SSA) by using a false identity to collect Social Security benefits under that identity for over a decade.
The announcement was made by Acting United States Attorney Antoinette T. Bacon and John F. Grasso, Special Agent in Charge of the Social Security Administration, Office of the Inspector General, New York Field Office.
As part of his earlier guilty plea, Baxter admitted that in 1971 he fraudulently applied for and was issued a second Social Security number in a fictitious name, and that from September of 2008 until June of 2019, he used that false name and fraudulently acquired Social Security number to obtain and spend $31,362.00 in Social Security benefits, while also receiving Social Security benefits under his true name and Social Security number.
Senior United States District Judge Thomas J. McAvoy also imposed an order requiring Baxter to pay full restitution to SSA.
This case was investigated by the SSA Office of the Inspector General and prosecuted by Special Assistant U.S. Attorney Adrian S. LaRochelle.
Rochester Man Sentenced for Tax ViolationsRead 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 Robert Fitzgerald, 50, of Rochester, NY, who was convicted of failing to collect and pay over payroll taxes to the Internal Revenue Service, was sentenced to serve one year probation and ordered to pay $122,207.16 in restitution to the IRS by Chief U.S. District Judge Frank P. Geraci, Jr.
Assistant U.S. Attorney Richard A. Resnick, who handled the case, stated that the defendant was the principal corporate officer of Fitzgerald Coaching Inc., a Western New York real estate listings referral company. Fitzgerald was required to collect and pay over Social Security and Medicare taxes to the Internal Revenue Service on behalf of the company. During the years 2010 through 2017, Fitzgerald Coaching Inc. failed to report wages that were subject to Social Security and Medicare taxes totaling $55,487.65. The employer portion of the Social Security and Medicare taxes not paid to the IRS was $66,720.11. The total due to the IRS for both employee and employer Social Security and Medicare taxes is $122,207.16.
The sentencing is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of Jonathan D. Larsen, Special Agent-in-Charge, New York Field Office.
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Removed Alien Charged with Illegally Re-Entering the U.S.Read the Press Release
PITTSBURGH – A citizen of Mexico residing in Aliquippa, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh, Pennsylvania, on an illegal re-entry charge, United States Attorney Scott W. Brady announced today.
The one-count Indictment named Alberto Jimenez-Sanchez, 43, as the sole defendant.
According to the Indictment, on or about February 4, 2021, Jimenez-Sanchez knowingly re-entered the United States unlawfully and without the consent or permission of the Attorney General of the United States or the Secretary of Homeland Security.
The law provides for a maximum total sentence of 24 months in prison, a fine of $250,000. or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Benjamin J. Risacher is prosecuting this case on behalf of the government.
The U.S. Immigration and Customs Enforcement conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Previously Convicted Sex Offender Pleads GuiltyRead 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 Vernon Schermerhorn III, 51, of Coeymans Hollow, NY, pleaded guilty before U.S. District Judge David G. Larimer to attempted receipt of child pornography. The charge carries a mandatory minimum penalty of five years in prison, and a maximum of 20 years.
Assistant U.S. Attorney Kyle P. Rossi, who is handling the case, stated that in September 2019, the defendant engaged in conversation on a teen chat website with a person he believed to be a 13-year-old girl, who, in fact, was an undercover FBI agent. The chat turned sexual in nature, and during it, defendant proposed that the two have sex and requested naked photographs.
Subsequent investigation determined that the defendant is a registered sex offender, who was convicted in 2003 in New York State Court of disseminating indecent material to a minor via computer for sexual contact. Schermerhorn was sentenced to 10 years’ probation.
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia, and the New York State Police, under the direction of Acting Major Barry Chase.
Sentencing is scheduled for May 19, 2021, at 2:00 pm before Judge Larimer.
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Pittsburgh Man Caught in West End Wiretap Investigation Sentenced to 10 Years in PrisonRead the Press Release
PITTSBURGH - A resident of Pittsburgh, PA, has been sentenced in federal court to 120 months’ imprisonment on his conviction of conspiracy to distribute cocaine, United States Attorney Scott W. Brady announced today.
Senior United States District Judge Arthur J. Schwab imposed the sentence on Allen Green, age 41.
According to information presented to the court, in 2017, the Federal Bureau of Investigation and the Drug Enforcement Administration initiated a wiretap investigation, primarily targeting the GBK street gang and drug trafficking in and around an area known as the Greenway Projects, located in the West End of the City of Pittsburgh. The wiretap investigation revealed that from in and around November 2017 through in and around June 2018, Allen Green conspired to distribute over 500 grams of cocaine.
Prior to imposing sentence, Senior Judge Schwab stated that the sentence was sufficient but not greater than necessary to achieve the goals of sentencing.
Assistant United States Attorneys Tonya Sulia Goodman and Yvonne M. Saadi prosecuted this case on behalf of the government.
United States Attorney Brady commended the Federal Bureau of Investigation and the Drug Enforcement Administration jointly with the Pittsburgh Bureau of Police, Allegheny County Sheriff’s Office, Pennsylvania State Police, Robinson Township Police Department, Stowe Township Police Department, Pennsylvania Attorney General’s Office, Wilkinsburg Borough Police Department, and the McKees Rocks Police Department, for the investigation leading to the successful prosecution of Green.
This prosecution is a result of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles high-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten communities throughout the United States. OCDETF uses a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Pittsburgh Felon Charged with Drug and Gun CrimesRead the Press Release
PITTSBURGH – Randale Chapman was indicted by a federal grand jury in Pittsburgh for fentanyl, methamphetamine, and methylenedioxyamphetamine trafficking and firearm crimes, United States Attorney Scott W. Brady announced today.
The Indictment charges Chapman, age 33 of Pittsburgh, with possessing with intent to distribute fentanyl, methamphetamine, and methylenedioxyamphetamine on April 30, 2020, and with possessing a firearm after a prior felony conviction and in furtherance of a drug trafficking crime on that date.
The law provides for a maximum total sentence of at least 25 years and up to life in prison and a fine of up to $2,500,000. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history of the defendant.
Assistant United States Attorney Craig W. Haller is prosecuting this case on behalf of the United States.
The Pittsburgh Bureau of Police and the Bureau of Alcohol, Tobacco, Firearms, and Explosives conducted the investigation leading to the return of the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Perkinston Man Sentenced to 50 Years in Prison for Producing Child PornographyRead the Press Release
Gulfport, Miss. – Edward Lee Thomas, 48, of Perkinston, Mississippi, was sentenced today by U.S. District Judge Sul Ozerden to serve the statutory maximum of 600 months in federal prison, followed by a lifetime of supervised release, for producing images of minors engaging in sexually explicit conduct, announced Acting U.S. Attorney Darren J. LaMarca and Jack Stanton, Acting Special Agent in Charge of Homeland Security Investigations (HSI) in New Orleans. Assessments were also imposed on Thomas in the amount of $5,000 under the Justice for Victims of Tracking Act of 2015, and $20,000 under the Amy, Vicky, and Andy Child Pornography Victim Assistance Act of 2018.
In March, 2020, HSI Gulfport received 95 images and 2 videos of child sexual abuse from The National Center for Missing and Exploited Children (NCMEC). The investigation led agents to a residence in Forrest County, Mississippi, where sexual abuse images of two minors had been taken. Agents executed a federal search warrant at the residence of Edward Lee Thomas in Perkinston. The seizure and forensic examination of electronic devices taken from Thomas’ residence revealed over 4,000 images and 700 videos of minors engaging in sexually explicit conduct.
A superseding indictment charging the production and possession of images of minors engaging in sexually explicit conduct was returned by a federal grand jury on June 10, 2020. Thomas pled guilty to the production count on October 22, 2020. He faced a penalty of not less than 15 years and not more than 30 years in prison. However, Thomas’s 2004 Mississippi state conviction for sexual battery of a child was determined to be a qualifying prior conviction for an enhanced statutory penalty, and as such he faced a maximum penalty of not less than 25 years nor more than 50 years, and a $250,000 fine.
The case was investigated by Homeland Security Investigations and prosecuted by Assistant U.S. Attorney Andrea Jones.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.
Pewaukee Man Pleads Guilty to Directing COVID-Relief Fraud SchemeRead the Press Release
Acting U.S. Attorney Richard G. Frohling of the Eastern District of Wisconsin joined Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division and other federal officials in announcing that on February 23, 2021, Thomas Smith (age: 46) of Pewaukee, Wisconsin, pleaded guilty to one count of bank fraud 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.
The announcement of the plea was made jointly with Special Agent in Charge Sharon Johnson of the Small Business Administration’s Office of Inspector General (SBA-OIG); Special Agent in Charge Robert Hughes of the FBI’s Milwaukee Field Office; Special Agent in Charge John Crawford of the Federal Deposit Insurance Corporation – Office of Inspector General (FDIC-OIG); and Acting Special Agent in Charge Tamera D. Cantu of the IRS Criminal Investigation (CI) Milwaukee Field Office.
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. According to plea documents, 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.
United States District Judge Brett Ludwig scheduled Smith’s sentencing for June 2, 2021.
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 one percent. 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.
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For further information contact: Public Information Officer Kenneth Gales
[email protected], (414) 297-1700
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One of the Nation’s Largest Chicken Producers Pleads Guilty to Price Fixing and is Sentenced to a $107 Million Criminal FineRead the Press Release
Pilgrim’s Pride Corporation (Pilgrim’s), a major broiler chicken producer based in Greeley, Colorado, has pleaded guilty and has been sentenced to pay approximately $107 million in criminal fines for its participation in a conspiracy to fix prices and rig bids for broiler chicken products, the Department of Justice announced today.
According to the plea agreement entered in the U.S. District Court in Denver, from as early as 2012 and continuing at least into 2017, Pilgrim’s participated in a conspiracy to suppress and eliminate competition for sales of broiler chicken products in the United States that affected at least $361 million in Pilgrim’s sales of broiler chicken products.
The District Court accepted Pilgrim’s guilty plea and sentenced the company to pay a criminal fine of $107,923,572.
“Today’s guilty plea demonstrates our unwavering commitment to prosecuting companies that violate the nation’s antitrust laws, especially when it involves something as central to everyday life as the food we eat,” said Richard Powers, Acting Assistant Attorney General of the Department of Justice’s Antitrust Division. “This guilty plea is a direct result of the tireless efforts of our dedicated career prosecutors and staff, and partners at the FBI, Commerce Office of Inspector General (OIG) and USDA OIG.”
“Today’s plea is another example of the FBI’s ongoing work to eliminate bid rigging and price fixing and hold those conducting these activities accountable for their actions,” said Steven M. D’Antuono, Assistant Director in Charge of the FBI Washington Field Office. “These criminal acts cheat American workers and consumers while harming competitive markets. This ongoing investigation has yielded charges against 10 individuals for their efforts to illegally manipulate broiler chicken prices, and the FBI is committed to continuing this important work alongside the Department of Justice and our partners.”
“This investigation demonstrates the government’s resolve to protect the integrity of free and open market competition,” said Peggy E. Gustafson, Inspector General of the Department of Commerce. “When competitor companies conspire to set prices that benefit themselves, American consumers are cheated. We will continue to work with our law enforcement partners to pursue such illegal activity and ensure perpetrators are held accountable. We greatly appreciate the efforts of the Department of Justice, FBI and USDA OIG on this investigation.”
“We appreciate the ongoing commitment and concerted efforts of our law enforcement partners at the Department of Justice’s Antitrust Division, the FBI, and the Department of Commerce OIG to investigate a long running scheme affecting competition through the rigging of bids and price fixing of broiler chicken products,” said Special Agent-in-Charge Bethanne M. Dinkins of the U.S. Department of Agriculture (USDA) OIG. “During these uncertain times, USDA OIG will continue to dedicate resources and prioritize work that benefits hard working Americans through competitive prices for agricultural producers and fairness in pricing and quality of agricultural products for consumers.”
Pilgrim’s is the first company to plead guilty for its role in a conspiracy to fix prices and rig bids for broiler chicken products. Broiler chickens are chickens raised for human consumption and sold to grocers and restaurants. Ten executives and employees at major broiler chicken producers have also previously been charged. The investigation remains ongoing.
A violation of the Sherman Act carries a maximum penalty of a $100 million fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
This case is the result of an ongoing federal antitrust investigation into price fixing, bid rigging, and other anticompetitive conduct in the broiler chicken industry, which is being conducted by the Antitrust Division with the assistance of the U.S. Department of Commerce OIG, FBI Washington Field Office, and USDA OIG. Special thanks to U.S. Attorney Jason R. Dunn and Assistant U.S. Attorney Hetal Doshi from the District of Colorado for their assistance. Anyone with information on price fixing, bid rigging, or other anticompetitive conduct related to the broiler chicken industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.
Ohio man admits to role in drug trafficking operationRead the Press Release
WHEELING, WEST VIRGINIA – Joseph Garth, of Bellaire, Ohio, has admitted to his role in a drug trafficking conspiracy, U.S. Attorney Bill Powell announced.
Garth, also known as “Nephew,” 24, pled guilty today to one count of “Aiding and Abetting the Distribution of Cocaine Base.” Garth admitted to selling cocaine base, also known as “crack,” in May 2020 in Ohio County.
Garth faces up to 20 years of incarceration and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorneys Shawn M. Adkins and Clayton J. Reid are prosecuting the case on behalf of the government. The Ohio Valley Drug and Violent Crimes Task Force, a HIDTA-funded initiative, which includes the Drug Enforcement Administration, West Virginia State Police, Ohio County Sheriff’s Office, and the Wheeling Police Department, investigated. The U.S. Marshal Service, Columbus Police Department Gang Crimes Unit, the Martins Ferry Police Department, and the Bellaire Police Department also assisted.
U.S. Magistrate Judge James P. Mazzone presided.
Original case indictment here: https://www.justice.gov/usao-ndwv/pr/26-charged-drug-conspiracy-involving-heroin-fentanyl-crack-cocaine-and-meth-wheeling
Ohio Man Sentenced for Role in Akron to Huntington Meth ConspiracyRead the Press Release
HUNTINGTON, W.Va. – United States Attorney Mike Stuart announced that Robert Von Wilson, 24, of Ohio, was sentenced to 87 months in federal prison for possession with intent to distribute 500 grams or more of methamphetamine. Wilson participated in a conspiracy that saw large quantities of methamphetamine shipped from Akron, Ohio, and sold in Huntington.
“Wilson had 1.7 kilos of 100% pure meth,” said United States Attorney Mike Stuart. “I commend the FBI and their law enforcement partners for shutting down this meth pipeline coming into Huntington from Akron.”
Wilson previously pled guilty and admitted that he and others involved in the conspiracy utilized a residence at 1235 25th Street in Huntington to store methamphetamine after it was shipped from Akron. Wilson also admitted that he was present at 1235 25th Street on June 6, 2019, when investigators executed a search warrant at the residence. During the search, investigators seized over 1.7 kilograms of methamphetamine. Wilson admitted that he possessed the methamphetamine and intended to distribute it in the Huntington area. The methamphetamine was later examined by a chemist and determined to be 100% pure.
This joint investigation was spearheaded by the Federal Bureau of Investigation (FBI). Other agencies which participated and assisted in the investigation include the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Violent Crime and Drug Task Force West, the Metropolitan Drug Enforcement Network Team (MDENT), the West Virginia State Police, the Drug Enforcement Administration (DEA) Task Force, the Beckley/Raleigh County Drug and Violent Crime Unit, the United States Marshals Service, the Cabell County Sheriff’s Department, the Charleston Police Department, the Putnam County Sheriff’s Department, the Ohio State Highway Patrol, the Akron, Ohio Police Department, and the Brecksville, Ohio Police Department. United States District Judge Robert C. Chambers imposed the sentence. Assistant United States Attorney Joseph F. Adams handled the prosecution.
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. 3:19-cr-00245.
Follow us on Twitter: SDWVNews and USAttyStuart
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New Jersey Nurse Admits Role in Multimillion-Dollar Compounding Fraud SchemeRead the Press Release
NEWARK, N.J. – A New Jersey nurse today admitted her role in a multimillion-dollar compounding fraud scheme, Acting U.S. Attorney Rachael A. Honig announced.
Jennifer Nash, 51, of River Vale, New Jersey, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to an information charging her with conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
Beginning in 2015, Nash was recruited by two individuals who owned a pharmaceutical marketing company to write prescriptions for customized drugs known as “compounded medications” in exchange for payment. Not only did Nash write these prescriptions regardless of whether a health insurance plan beneficiary needed such a medication, she also wrote them even though her Advance Practice Nurse license was inactive or suspended. On other occasions, Nash wrote prescriptions for compounded medications, in exchange for cash payments, without meeting with or examining patients.
In addition to authorizing these medically unnecessary prescriptions, Nash served as a sales representative. She collected large commission payments in exchange for marketing these compounded medications without regard to whether a beneficiary needed such a medication or whether an FDA-approved medication would have been appropriate and sufficient.
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 medical professional determines that an FDA-approved medication does not meet the health needs of a particular patient. For example, compounded drugs may be appropriate for a patient who is allergic to a dye or other ingredient or a patient who cannot consume a medication by traditional means, such as an elderly patient or child who needs the medication in a liquid form instead of an FDA-approved pill.
The conspiracy count to which Nash pleaded guilty carries a maximum penalty of 10 years in prison and a fine of $250,000 fine, or twice the gain or loss from the offense, whichever is greater. Sentencing is scheduled for July 6, 2021.
Acting U.S. Attorney Honig credited special agents and of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and Defense Criminal Investigative Service, under the direction of Special Agent in Charge Patrick J. Hegarty, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto and José R. Almonte of the Health Care Fraud Unit in Newark.
New Castle Felon Charged with Drug Trafficking and Firearms OffensesRead the Press Release
PITTSBURGH – Jgenus Steele was indicted by a federal grand jury in Pittsburgh for fentanyl, heroin, and cocaine base trafficking and firearm crimes, United States Attorney Scott W. Brady announced today.
The Indictment charges Steele, age 21 of New Castle, Pennsylvania, with possessing with intent to distribute and/or distributing cocaine base, fentanyl and heroin on December 19, 2019, and February 21, 2020, and with possessing a firearm after a prior felony conviction and in furtherance of a drug trafficking crime on February 21, 2020.
The law provides for a maximum total sentence of at least five years and up to life in prison and a fine of up to $2,500,000. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history of the defendant.
Assistant United States Attorney Craig W. Haller is prosecuting this case on behalf of the United States.
The Lawrence County District Attorney’s Office Drug Task Force and the Federal Bureau of Investigation conducted the investigation leading to the return of the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
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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