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4 February 2021
Sanbornville Man Pleads Guilty to Federal Drug Trafficking and Firearm ChargesRead the Press Release
CONCORD - James Coughlin, 38, of Sanbornville, pleaded guilty in federal court to drug trafficking charges and unlawful possession of firearms and ammunition, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, Coughlin conspired with individuals in California to have quantities of “ice” methamphetamine shipped to him at his Sanbornville residence. He distributed a portion of the drugs to individuals in New Hampshire. On September 17, 2019, he sold approximately 27 grams of “ice” methamphetamine to an individual who was cooperating with the New Hampshire Attorney General’s Drug Task Force.
On January 14, 2020, federal and state law enforcement officers executed a federal search warrant at Coughlin’s residence and seized approximately 61 grams of “ice” methamphetamine, cash, firearms and ammunition. Because he previously had been convicted of a felony, it was unlawful for Coughlin to possess the firearms and ammunition.
Coughlin is scheduled to be sentenced on May 18, 2021.
“Methamphetamine is a dangerous drug that is appearing with alarming frequency in New Hampshire,” said U.S. Attorney Murray. “We are working with our law enforcement partners to identify and prosecute the drug dealers who bring this deadly substance into the Granite State. I am grateful to the investigators whose work led to the arrest and prosecution of this armed methamphetamine trafficker.”
“Today’s guilty plea is another important step toward holding Mr. Coughlin accountable for his interstate narcotics trafficking activities.” said William S. Walker, acting Special Agent in Charge, Homeland Security Investigations (HSI), Boston. “HSI will continue to prioritize the investigation of drug traffickers who pump illicit narcotics, like methamphetamines, into our communities. These investigations are especially effective when we collaborate with our federal, state and local law enforcement partners in New Hampshire and beyond.”
This matter was investigated by the Drug Enforcement Administration, Homeland Security Investigations, the U.S. Postal Inspection Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshals Service, the New Hampshire State Police Narcotics Investigation Unit and Mobile Enforcement Team, the New Hampshire Attorney General’s Drug Task Force the Dover Police Department, the Portsmouth Police Department, the University of New Hampshire Police Department, the Somersworth Police Department, the Hampton Police Department, and the York, Maine Police Department. The case is being prosecuted by Assistant U.S. Attorney Jennifer Cole Davis.
This investigation is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
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Roommates Sentenced to Combined 31 Years in Federal Prison for Drug CrimesRead the Press Release
Two roommates have been sentenced to a combined 31 years in federal prison for drug crimes, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
Ramon Mendoza-Villegas, 45, and Daniel Sanchez-Mendoza, 28, were indicted in February 2019. Mr. Mendoza-Villegas pleaded guilty in January 2020 to possession with intent to distribute methamphetamine and was sentenced in December 2020 to 240 months in federal prison. Mr. Sanchez-Mendoza pleaded guilty in January 2020 to possession with intent to distribute methamphetamine and was sentenced today to 135 months in federal prison.
According to plea papers, during a traffic stop in January 2019, Dallas Police Department officers discovered methamphetamine and heroin in a truck occupied by Mr. Mendoza-Villegas and Mr. Sanchez-Mendoza.
During a subsequent search of the pair’s apartment on Brockbank Drive, law enforcement found and seized heroin, methamphetamine and cocaine, and three semi-automatic handguns, including one that was loaded.
Inside a storage unit used by the pair, law enforcement found and seized methamphetamine, heroin, a shotgun, and an assault rifle. (According to a complaint, the drugs were located in the back seat of a stolen vehicle parked inside the storage unit.)
In total, law enforcement seized almost 6,000 grams of meth and more than 2,500 grams of heroin.
The Drug Enforcement Administration's Dallas Field Division and the Dallas Police Department conducted the investigation with the assistance of the U.S. Marshals Service and Homeland Security Investigations. Assistant U.S. Attorney Linda Requénez prosecuted the case. The men were sentenced by Chief U.S. District Judge Barbara M.G. Lynn.
Rockford Man Sentenced to 9 Years in Federal Prison for Distributing Cocaine and Illegally Possessing FirearmRead the Press Release
ROCKFORD — A Rockford man was sentenced Wednesday by U.S. District Judge John Z. Lee to nine years in federal prison for drug trafficking and illegally possessing a firearm as a convicted felon.
BRIAN KOTLIENTHONG, 33, pleaded guilty to the charges on Aug. 13, 2020. According to a written plea agreement, Kotlienthong distributed a total of approximately 83.6 grams of cocaine to an individual in Rockford in December 2017. Kotlienthong, who had previously been convicted of a felony and was prohibited from possessing a firearm, admitted that on Feb. 8, 2018, he illegally possessed a 9mm rifle and sold it to an individual. Kotlienthong also admitted in the plea agreement that on Dec. 21, 2017, he possessed and sold a 9mm pistol and approximately 27.6 grams of cocaine, and on March 26, 2018, he possessed and sold another 9mm pistol while showing approximately one pound of marijuana that he offered to sell.
The sentencing 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 Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives. The investigation was conducted by ATF and the Stateline Area Narcotics Team, which includes law enforcement officers and agents from the Illinois State Police and Ogle County Sheriff’s Office. The government was represented by Assistant U.S. Attorney Talia Bucci.
Rockford Man Sentenced to 11 Years in Federal Prison for Distributing Crack CocaineRead the Press Release
ROCKFORD — A Rockford man has been sentenced to eleven years in federal prison on a drug trafficking charge.
ROMEO TRAMMELL, 32, pleaded guilty to the charge on Sept. 4, 2020. According to a written plea agreement, Trammell distributed approximately 24.8 grams of cocaine base - in the form of crack cocaine - to an individual in Rockford on Apr. 5, 2018.
U.S. District Judge John Z. Lee imposed the sentence Wednesday in federal court in Rockford.
The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kristen deTineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives; and Daniel O’Shea, Chief of the Rockford Police Department. The government was represented by Assistant U.S. Attorney Talia Bucci.
Ridgeview Man Sentenced on Meth Trafficking and Firearm ChargesRead the Press Release
United States Attorney Ron Parsons announced that a Ridgeview, South Dakota, man convicted of Conspiracy to Distribute a Controlled Substance, Maintaining a Drug-Involved Premises, Distribution to a Person Under Age Twenty-One, Possession with Intent to Distribute a Controlled Substance, and Prohibited Person in Possession of a Firearm, was sentenced on February 1, 2021, by Chief Judge Roberto A. Lange, U.S. District Court.
Jess Brian Ducheneaux, age 58, was sentenced to 72 months in federal prison, followed by 12 years of supervised release, a $1,000 fine, a special assessment to the Federal Crime Victims Fund in the amount of $500, and forfeiture of two firearms.
Ducheneaux was indicted by a federal grand jury on December 11, 2018. He was found guilty by a federal trial jury on November 12, 2020.
The jury found that between January 1, 2014, and December 17, 2018, Ducheneaux knowingly and intentionally conspired with others to distribute and possess with the intent to distribute methamphetamine on the Cheyenne River Sioux Indian Reservation. Ducheneaux received his methamphetamine from local dealers and from an individual who traveled to Colorado to acquire the drug. Further, the jury found that Ducheneaux knowingly used his residence for the purposes of distributing and using methamphetamine. Ducheneaux repeatedly distributed methamphetamine to a person under twenty-one years of age and to several individuals who worked at his ranch.
The jury also found Ducheneaux guilty of possessing approximately six grams of methamphetamine with the intent to distribute it, and two firearms while being a felon and a drug user. On December 17, 2018, law enforcement officers went to Ducheneaux’s residence to arrest him on a federal warrant. After making contact with Ducheneaux, the officers observed drug paraphernalia and a firearm in plain view in the living room. The officers obtained a search warrant and seized the six grams of methamphetamine, a scale, pipes, and numerous plastic baggies. They also recovered a rifle and a loaded shotgun from the residence. Ducheneaux was convicted of a felony offense in 2005 and was prohibited from possessing firearms.
Drug trafficking is an inherently violent activity. Firearms are tools of the trade for drug dealers. It is common to find drug traffickers armed with guns in order to protect their illegal drug product and cash, and enforce their illegal operations.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and local communities to develop effective, locally-based strategies to reduce violent 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/projectguardian.
This case was investigated by the Northern Plains Safe Trails Drug Enforcement Task Force, the Cheyenne River Sioux Tribe Law Enforcement Services, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Cameron J. Cook prosecuted the case.
Ducheneaux was immediately remanded to the custody of the U.S. Marshals Service.
Previously Convicted Frederick Sex Offender Pleads Guilty to Federal Charge for Possession of Child PornographyRead the Press Release
Baltimore, Maryland - Roy Edward Gibbs, age 65, of Frederick, Maryland, pleaded guilty today to the federal charge of possession of child pornography. In July 2006, Gibbs was convicted in Montgomery County Circuit Court on four counts involving the sexual abuse of two prepubescent girls.
The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge James Mancuso of Homeland Security Investigations (HSI) Baltimore; Frederick County Sheriff Charles A. “Chuck” Jenkins; and Frederick County State’s Attorney J. Charles Smith.
According to his plea agreement, after serving his sentence for the sexual abuse convictions, Gibbs begin downloading and distributing images and videos of child pornography using peer-to-peer file-sharing software. Between August 2019 and November 2019, Gibbs repeatedly distributed child pornography to undercover law enforcement officers over the file-sharing network. For example, in August 2019, a detective from the Frederick County Sheriff's Office determined that a device using an IP address associated with Gibbs's residence made 19 different files containing child pornography available for download. The detective was also able to establish a direct connection to Gibbs's tablet IP address and download seven packages of files containing child pornography, including prepubescent minor girls. Between November 4 and November 14, 2019, an FBI Special Agent in Dallas also downloaded a number of images depicting child pornography made available by Gibbs on the same file-sharing network.
As detailed in the plea agreement, on November 15, 2019, law enforcement agents executed a series of federal search warrants on Gibbs's residence and vehicles. Forensic examination of several electronic devices, including Gibbs’s tablet and its 32 MicroSD card, revealed at least 568 images of child pornography. Additionally, at least 45 images examined during the forensic review were identical to images downloaded by investigators over the file-sharing network after making direct connections to Gibbs's tablet. The forensic review of Gibbs’s tablet also revealed data shredding/deletion applications used by Gibbs to attempt to hide evidence of his distribution and possession of child pornography.
As part of his plea agreement, Gibbs will be required to continue to register as a sex offender in the places where he resides, is an employee, and is a student, pursuant to the Sex Offender Registration and Notification Act (SORNA), and the laws of the state of residence.
Gibbs faces a maximum of 20 years in federal prison for possession of child pornography. U.S. District Judge Ellen L. Hollander has not yet scheduled sentencing.
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 Attorney’s 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. For more information about Internet safety education, please visit www.justice.gov/psc and click on the "Resources" tab on the left of the page.
United States Attorney Robert K. Hur commended HSI Baltimore, the Frederick County Sheriff’s Office, and the Frederick County State’s Attorney’s Office for their work in the investigation and prosecution. Mr. Hur also thanked Assistant U.S. Attorneys Paul A. Riley and Daniel A. Loveland, Jr. and Special Assistant U.S. Attorney Joyce R. King, Chief Counsel of the Frederick County State’s Attorney’s Office cross-designated to handle this case, who are prosecuting the federal case.
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Pinellas County Doctor Pleads Guilty to Illegal Drug Distribution and Tax EvasionRead the Press Release
Tampa, FL – United States Attorney Maria Chapa Lopez announces that Alina Pollan (56, Pinellas County) has pleaded guilty to one count of distributing oxycodone for no legitimate medical purpose and not in the usual course of professional practice, and to one count of tax evasion. Pollan faces a maximum penalty of 20 years in federal prison for the illegal drug distribution and 5 years’ imprisonment for the tax evasion count.
According to the plea agreement, Pollan, a Florida-licensed physician and DEA registrant, worked at Pain and Wellness Clinic (“PWC”) for approximately three years. Pollan prescribed large quantities of controlled substances to nearly all of the PWC patients. On February 7, 2018, Pollan interacted with an undercover DEA agent who had been posing as a patient during multiple visits to Pollan at PWC. Despite many red flags raised by the undercover agent during her medical appointments with Pollan—a reported history of drug abuse, failed drug urinalysis screenings, vague medical history, and the acknowledged ability to perform athletic activities—Pollan prescribed oxycodone to the agent for no legitimate medical purpose and outside the usual course of professional practice.
In addition, Pollan filed, or caused to filed, false and fraudulent tax returns with the IRS that understated the true and complete amount of her reportable income from PWC for the tax years 2017 and 2018.
Tom Wynne, the former owner and operator of PWC, previously pleaded guilty to related criminal charges.
This case was investigated by the Drug Enforcement Administration—Tampa District Office, the Internal Revenue Service – Criminal Investigation, and the Opioid Fraud and Abuse Detection Unit. The Opioid Fraud and Abuse Detection Unit was created by the Department of Justice to help combat the devastating opioid crisis. The Opioid Fraud and Abuse Detection Unit focuses specifically on opioid-related health care fraud, using data to identify and prosecute individuals contributing to the prescription opioid epidemic. The case is being prosecuted by Assistant United States Attorneys Greg Pizzo and Kelley Howard-Allen.
Pine Ridge Man Indicted on Assault and Firearm ChargesRead the Press Release
United States Attorney Ron Parsons announced that a Pine Ridge, South Dakota, man has been indicted by a federal grand jury for Assault With a Dangerous Weapon and Possession of a Firearm by a Prohibited Person.
Timothy George Buckman, age 36, was indicted on January 12, 2021. He appeared before U.S. Magistrate Judge Daneta L. Wollmann on January 22, 2021, and pleaded not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in federal prison and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on December 8, 2020, Buckman did unlawfully assault two individuals with a firearm with the intent to do bodily harm. Buckman is also a previously convicted felon who is prohibited from possessing firearms. The charges are merely accusations and Buckman is presumed innocent until and unless proven guilty.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and local communities to develop effective, locally-based strategies to reduce violent 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/projectguardian.
The investigation is being conducted by the Oglala Sioux Tribe Department of Public Safety and the Federal Bureau of Investigation. Assistant U.S. Attorney Sarah B. Collins is prosecuting the case.
Buckman was detained pending trial. A trial date has not been set.
Pierre Woman Indicted for Involuntary ManslaughterRead the Press Release
United States Attorney Ron Parsons announced that a Pierre, South Dakota, woman has been indicted by a federal grand jury for Involuntary Manslaughter.
Emerald Plenty Chief, age 25, was indicted on January 12, 2021. She appeared before U.S. Magistrate Judge Mark A. Moreno on February 2, 2021, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to eight years in federal prison and/or a $250,000 fine, three years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on April 26, 2020, in Hughes County, South Dakota, Plenty Chief killed another human being by operating a motor vehicle in a grossly negligent manner.
The charge is merely an accusation and Plenty Chief is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation, South Dakota Highway Patrol, Hughes County Sheriff’s Office, and the Bureau of Indian Affairs. Assistant U.S. Attorney Kirk Albertson is prosecuting the case.
Plenty Chief was released on bond pending trial. A trial date has not been set.
Philadelphia Man Admits Role in Fentanyl Distribution ConspiracyRead the Press Release
CAMDEN, N.J. – A Philadelphia man today admitted his role in a fentanyl distribution conspiracy, Acting U.S. Attorney Rachael A. Honig announced.
Ronal Alberto Hernandez Pinales, 26, pleaded guilty by videoconference before U.S. District Judge Noel L. Hillman to an information charging him with conspiring to distribute and possess with intent to distribute 400 grams or more of fentanyl.
According to documents filed in this case and statements made in court:
In early 2020, Hernandez Pinales and his conspirator, Jonathan Rivera Pagan, met and communicated about fentanyl trafficking and firearms. On March 2, 2020, Rivera Pagan and Hernandez Pinales arranged to deliver fentanyl to another individual. Hernandez Pinales and Rivera Pagan drove separately to a parking lot of a building in Gloucester County to conduct the planned fentanyl transaction. Shortly thereafter, both Hernandez Pinales and Rivera Pagan fled from the parking lot, after seeing what they believed to be law enforcement presence in the area. Rivera Pagan was later arrested in the parking lot of a nearby bar, and Hernandez Pinales was later arrested near a highway. Law enforcement officers recovered approximately 900 grams of fentanyl from Hernandez Pinales’ car, as well as cellphones from Rivera Pagan and Hernandez Pinales that contained drug-related communications.
The charge to which Hernandez Pinales pleaded guilty carries a mandatory minimum penalty of 10 years in prison, a maximum penalty of life in prison and a fine of up to $10 million. Sentencing is scheduled for June 9, 2021.
Rivera Pagan previously pleaded guilty to his role in the fentanyl conspiracy and his sentencing is scheduled for April 1, 2021.
Acting U.S. Attorney Honig credited special agents and task force officers with the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson in Newark, with the investigation leading to today’s guilty plea. He also thanked the New Jersey State Police, the Gloucester County Prosecutor’s Office and the East Greenwich Police Department for their assistance.
The government is represented by Assistant U.S. Attorney Sara A. Aliabadi of the U.S. Attorney’s Office Criminal Division in Camden.
Passaic County Man Sentenced to 63 Months in Prison for Role in Fentanyl ConspiracyRead the Press Release
NEWARK, N.J. – A Passaic County, New Jersey, man was sentenced today to 63 months in prison for conspiring to distribute fentanyl and distributing fentanyl, Acting U.S. Attorney Rachael A. Honig announced.
Cequan Wharton, a/k/a “Cee Cee,” 27, of Paterson, New Jersey, previously pleaded guilty before U.S. District Judge Brian R. Martinotti in Newark federal court to an information charging him with conspiracy to distribute and possess with intent to distribute heroin and knowingly and intentionally distributing heroin. Judge Martinotti imposed the sentence by videoconference today.
According to documents filed in this case and statements made in court:
Wharton and his conspirators are members and associates of the 230 Boys street gang, which operates primarily around Rosa Parks Boulevard and Godwin Avenue in Paterson. Through numerous controlled purchases of narcotics, consensually recorded telephone calls and text messages, physical surveillance, and the analysis of telephone call detail records, law enforcement officers determined that from at least September 2018 through Oct. 1, 2019, Wharton and his conspirators conspired to distribute narcotics, including heroin and fentanyl.
In addition to the prison term, Judge Martinotti sentenced Wharton to three years of supervised release.
This case is being conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). 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.
Acting U.S. Attorney Honig credited special agents and task force officers with the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Division, under the direction of Special Agent in Charge Charlie J. Patterson; special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson in Newark; officers of the N.J. State Police, under the direction of Col. Patrick J. Callahan; officers of the Paterson Police Department, under the direction of Director Jerry Speziale and Police Chief Ibrahim Baycora; detectives of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia Valdes; and the Passaic County Sheriff’s Office, under the direction of Sheriff Richard H. Berdnik, with the investigation leading to the charges. He also thanked the U.S. Marshals Service, the Bergen County Sheriff's Office and the Belleville and Livingston police departments for their assistance with the case.
The government is represented by Assistant U.S. Attorney Francesca Liquori, of the Organized Crime and Gangs Unit.
Owner of Georgia Consulting Company and Texas Man Charged in $2.7 Million Genetic Testing Kickback SchemeRead the Press Release
NEWARK, N.J. – The owner of a Georgia consulting company and a Texas man were charged today in connection with their roles in a conspiracy to pay kickbacks and bribes in exchange for referrals of patient DNA samples and genetic tests to a laboratory, Acting U.S. Attorney Rachael A. Honig announced.
John Berberian, 46, of Atlanta, Georgia, and Christopher Lytle, 51, of Desoto, Texas, are each charged by complaint with conspiracy to violate the Anti-Kickback Statute. Both defendants are scheduled to have their initial appearances by videoconference on Feb. 11, 2021, before a U.S. Magistrate Judge.
According to documents filed in this case and statements made in court:
Berberian owned and operated a consulting company based in Atlanta. The consulting company entered into agreements with marketing and sales groups, which acquired patients’ DNA samples and physicians’ orders for the purpose of submitting those samples and orders to clinical laboratories for genetic tests and related services. Lytle partnered with Berberian and others to recruit and oversee these patient acquisition groups.
From as early as June 2018 through November 2018, Berberian, Lytle, and others conspired to offer and pay kickbacks and bribes to Ark Laboratory Network LLC, a patient acquisition group. These kickbacks and bribes were paid in exchange for Ark’s referral of patient DNA samples, including from beneficiaries in New Jersey, to Personalized Genetics LLC, d/b/a Personalized Genomics (PGL), a clinical laboratory in Pittsburgh, Pennsylvania, for genetic testing. PGL, in turn, via a billing company associated with Berberian, billed and obtained payment from Medicare for these genetic tests. Berberian’s consulting company paid Ark $957,783 in kickbacks and bribes in exchange for DNA samples and physicians’ orders it delivered to PGL. As a result of the claims PGL submitted to Medicare for the related genetic tests, Medicare paid PGL more than $2.7 million.
Berberian, Lytle, and others arranged for PGL to enter into a sham contract with Ark in order to make it look like Ark had agreed to provide various marketing, call center, and other services for PGL for $500 per hour. In reality, the consulting company – not PGL – paid Ark in exchange for DNA samples and physicians’ orders. The amount it paid Ark bore no relation to the amount of hours Ark billed for the phony services identified in the sham contract. Instead, the payments were based on the number of samples that Ark delivered to PGL – $1,500 per individual sample for genetic tests related to a patient’s hereditary predisposition for cancer and approximately 50 percent of the net revenue that PGL received from Medicare for pharmacogenomic tests (referred to in the complaint as the “Bribe Formula.”)
To conceal the payment of kickbacks and bribes to Ark, Berberian, Lytle, and others directed Ark to draft and submit, via the consulting company, sham invoices to PGL that purported to bill for hourly services at a rate of $500 per hour. Berberian and Lytle, however, had already determined with Ark the amount of kickbacks and bribes that the consulting company would pay Ark pursuant to the Bribe Formula. Ark’s sham invoices, which typically repeated the same identical description of services, including “conference calls” and “prospective Ark client visits,” simply adjusted the total amount of hours billed so that the amount due under the invoice equaled the same amount due to Ark under the Bribe Formula.
The conspiracy charge against Berberian and Lytle carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross grain or loss from the offense, whichever is greatest.
Acting U.S. Attorney Honig credited special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott Lampert; and special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Supervisory Special Agent Thomas Mahoney, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorneys Bernard J. Cooney and Osmar J. Benvenuto of the Health Care Fraud Unit of the U.S. Attorney’s Office in Newark.
The charge and allegations in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Orlando Man Sentenced to 20 Years for Attempting to Sexually Entice 8-Year-Old ChildRead the Press Release
Orlando, Florida – U.S. District Judge Wendy W. Berger has sentenced Jeffrey Aronofsky (55, Orlando) to 20 years in federal prison, followed by a lifetime of supervised release, for attempted enticement of a child to engage in sexual activity.
Aronofsky had pleaded guilty on August 4, 2020.
According to court documents, in October 2019, Aronofsky engaged in an extensive online chat with an FBI agent who was acting in an undercover capacity and posing as the father of an eight-year-old boy. During the online conversation, Aronofsky expressed interest in meeting with the father in order to sexually assault his minor son. Aronofsky also discussed gang-raping the child. Furthermore, Aronofsky told the father that he had previously sexually assaulted several other children (including a five-year-old) in the Dominican Republic. Aronofsky was arrested when he traveled to meet the father at a prearranged meeting place so that he could have sex with the eight-year-old boy.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Emily C. L. Chang.
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 United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to 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.
Omaha Man Sentenced to Prison for Failure to Register as a Sex OffenderRead the Press Release
COUNCIL BLUFFS, Iowa – Acting United States Attorney Richard D. Westphal announced that Brian Keith Messer, age 39, of Omaha, Neb., was sentenced by United States District Court Judge Stephanie M. Rose on February 3, 2021, to 24 months in prison to be followed by 10 years of supervised release for failure to register as a sex offender. Messer pleaded guilty to the charge on October 16, 2020.
Messer was convicted in Nebraska in 2016 of attempted sexual assault on a child in the third degree. As a result of this conviction, Messer is a sex offender and is required to register as a sex offender under the Sex Offender Registration and Notification Act (“SORNA”). In October 2018, Messer moved from Nebraska to Iowa and did not register in the State of Iowa as required.
This investigation was conducted by the United States Marshals Service and the case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Oklahoma Medical Professionals Sentenced for Unlawful Distribution of Controlled Substances and Medicare Health Care FraudRead the Press Release
OKLAHOMA CITY – Over the past week, DR. JAMES FERRIS, 47, of Midwest City, KATHERINE DOSSEY, 61, of Luther, and SHERRY ISBELL, 50, of Chandler, were sentenced for their respective roles in the unlawful distribution of controlled substances and corresponding health care fraud, announced U.S. Attorney Timothy J. Downing.
On June 20, 2018, a federal grand jury returned a 103-count Indictment charging Ferris, Dossey and Isbell with crimes related to the distribution of controlled prescription drugs using invalid medical prescriptions and the subsequent fraudulent billings of Medicare for those prescriptions. According to the Indictment, Isbell was the owner of Physicians at Home and the Mid-Oklahoma Medical Access Clinic, both located in Wellston, Oklahoma. Ferris was a physician employed by Physicians at Home. Dossey was a licensed pharmacist who owned a retail pharmacy located in the same building as the clinic.
From September 2015 through December 2015, Isbell, Dossey and Ferris allegedly conspired to dispense prescription controlled substances, including opioids such as hydrocodone, morphine, and fentanyl. In furtherance of the conspiracy, Ferris provided Dossey with stacks of pre-signed, blank prescription pads. Isbell provided Dossey with access to patient records, allowing Dossey to prepare invalid prescription refills utilizing the pre-signed prescription pads.
The Indictment further alleged that Isbell, Dossey and Ferris conspired to commit health care fraud in connection with these pre-signed prescriptions. Due to the unlawful nature of the prescriptions, any claim for reimbursement to Medicare was a false claim for payment.
On January 26, 2021, Ferris pleaded guilty to one count of distribution of fentanyl without a valid prescription and one count of health care fraud. In the same court proceeding, Chief U.S. District Judge Timothy DeGiusti sentenced Ferris to 42 months’ probation. Pursuant to the terms of his plea agreement, Ferris agreed to surrender his license to practice medicine in Oklahoma and would not apply for a medical license in Oklahoma for a period of three years from the date of surrender.
On November 27, 2019, Dossey pleaded guilty to one count of health care fraud. On January 27, 2021, Judge DeGiusti sentenced Dossey to 54 months’ probation. Pursuant to the terms of her plea agreement, Dossey agreed to surrender her Oklahoma pharmacy license and further agreed that she would never reapply for that license.
On July 30, 2019, Isbell pleaded guilty to one count of health care fraud. On February 3, 2021, Judge DeGiusti sentenced Isbell to 24 months’ probation.
Judge DeGiusti additionally ordered Ferris, Dossey and Isbell to pay restitution to the Center for Medicare and Medicaid Services (CMS) in the amount of $53,468.74, as well as to the Oklahoma Medicaid Fraud Control Unit in the amount of $20,301.51. This restitution was ordered to be paid jointly and severally among the defendants, representing the monetary amount Medicare unknowingly reimbursed for the unlawful prescriptions.
"The tragic consequences of opioid abuse are an ongoing problem in our Oklahoma communities," said U.S. Attorney Downing. "These criminal convictions send a clear message that those given the power to prescribe controlled substances will be held to high standards of ethical and professional behavior in accordance with the law."
This prosecution was the product of a multi-year investigation by the Drug Enforcement Administration, the Federal Bureau of Investigation’s Oklahoma City Field Division, and the Department of Health and Human Services - Office of the Inspector General.
Assistant U.S. Attorney Thomas Snyder prosecuted the case.
Reference is made to public filings for more information. To download a photo of U.S. Attorney Downing, click here.
New Orleans Man Sentenced for Felon in Possession of a FirearmRead the Press Release
NEW ORLEANS – U.S. Attorney Peter G. Strasser announced that GERARD LAWLESS, age 41, of New Orleans, was sentenced on February 3, 2021 by United States District Judge Lance M. Africk after previously pleading guilty to being a felon in possession of a firearm, in violation of 18 U.S.C. §§ 922(g)(1) and 924(a)(2).
According to court documents, on August 4, 2018, LAWLESS possessed a Ruger .38 caliber firearm in New Orleans. LAWLESS had previously been convicted of a felony offense punishable by more than 1 year of imprisonment in the Orleans Parish Criminal District Court.
Judge Africk sentenced LAWLESS to 81 months of imprisonment, 3 years of supervised release, and a $100 special assessment.
U.S. Attorney Strasser praised the work of the Federal Bureau of Investigation, Drug Enforcement Administration, and New Orleans Police Department in investigating this case. Assistant United States Attorneys Elizabeth Privitera and Jonathan L. Shih are in charge of the prosecution.
This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (“OCDETF”). OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
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Mission Man Indicted for Child AbuseRead the Press Release
United States Attorney Ron Parsons announced that a Mission, South Dakota, man has been indicted by a federal grand jury for Child Abuse.
Xavier Quiver, a/k/a Xavier Medicine Blanket, age 26, was indicted on October 14, 2020. He appeared before U.S. Magistrate Judge Mark A. Moreno on February 2, 2021, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 15 years in federal prison and/or a $250,000 fine, three years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on February 9, 2020, in Todd County, Quiver did abuse, expose, torture, torment, and cruelly punish two children who had not attained the age of seven.
The charges are merely accusations and Quiver is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Kirk Albertson is prosecuting the case.
Quiver was released pending trial. A trial date has been set for April 6, 2021.
Milford Man Sentenced to Federal Prison on Immigration and Meth ChargesRead the Press Release
A man who was illegally in the United States and possessed with intent to distribute methamphetamine was sentenced on January 28, 2021, to 10 years in federal prison.
Emmanuel Nieto-Trenado, age 33, from Mexico and living in Milford, Iowa, received the prison term after a September 17, 2020, guilty plea to one count of illegal re-entry and one count of possession with intent to distribute methamphetamine.
In a plea agreement, Nieto-Trenado admitted that he is a citizen of Mexico and had been previously removed from the United States to Mexico in 2013. On October 18, 2019, while law enforcement was executing the arrest warrant for defendant, officers located and ultimately seized over 11 ounces of methamphetamine along with drug paraphernalia, ammunition, and two firearms.
Nieto-Trenado was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Nieto-Trenado was sentenced to 120 months’ imprisonment. He must also serve a 5-year term of supervised release after the prison term. There is no parole in the federal system.
Nieto-Trenado 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 Mikala Steenholdt and investigated by the Milford Police Department; the Iowa Division of Narcotics Enforcement; Immigration and Customs Enforcement (ICE) and the Enforcement and Removal Office of the Immigration and Customs Enforcement Bureau.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-CR-4018.
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Massachusetts Man Pleads Guilty to Bank RobberyRead the Press Release
CONCORD - Philip Leo Campanirio, 54, of Westport, Massachusetts, pleaded guilty in federal court to bank robbery, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, on April 17, 2018, Campanirio entered a branch of Provident Bank in Hampton, New Hampshire, approached a teller and asked for $8,000. He told the teller to “stay calm and no one gets hurt” and not to “make any sudden movements.” He then put his hands in his pockets, making the teller believe he had a gun. The teller gave Campanirio some money and he fled.
The robbery was captured by the bank’s video security system. Shortly after the robbery, Hampton police officers located the grey baseball cap and blue hoodie Campanirio wore during the robbery. A forensics lab confirmed Campanirio’s DNA was found on the sweatshirt.
Campanirio is scheduled to be sentenced on May 10, 2021.
“I am grateful to the Hampton Police Department and the FBI for their work in bringing this defendant to justice,” said U.S. Attorney Murray. “Bank robberies can cause great distress to victims and subject everyone involved to potential physical harm. These crimes directly undermine public safety. Would-be bank robbers should expect to be arrested and brought before the U.S District Court to face judgment.”
“Any time an individual threatens a gun inside a financial institution with the intent to rob it, victims are traumatized and there is a potential for tragic consequences. As a result of today's guilty plea, Paul Campanirio faces significant prison time, thanks to the combined efforts of our local and federal law enforcement partners," said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division.
This matter was investigated by the Federal Bureau of Investigation with assistance from the Hampton Police Department. The case is being prosecuted by Assistant U.S. Attorney Matthew T. Hunter and former Assistant U.S. Attorney Helen Fitzgibbons.
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Marion County man sentenced for firearms chargeRead the Press Release
CLARKSBURG, WEST VIRGINIA – Jonathan David Cochran, of Barrackville, West Virginia, was sentenced today to 34 months of incarceration for a firearms charge, U.S. Attorney Bill Powell announced.
Cochran, age 26, pled guilty to one count of “Unlawful Possession of Firearm” in September 2020. Cochran, prohibited from having a firearm because of a prior felony conviction, is accused of having a .380 caliber pistol in December 2019 in Marion County.
Assistant U.S. Attorney Sarah E. Wagner prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the West Virginia Probation and Parole Office investigated.
U.S. District Judge Thomas S. Kleeh presided.
Man Sentenced for Engaging in Illicit Sexual Conduct with Minors in the Republic of KenyaRead the Press Release
A Pennsylvania man was sentenced today to over 15 years in prison plus a lifetime of supervised release, and ordered to pay $16,000 in restitution for engaging in illicit sexual conduct in a foreign place.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division, Acting U.S. Attorney Jennifer Arbittier Williams of the Eastern District of Pennsylvania, and Special Agent in Charge Michael Driscoll of the FBI’s Philadelphia Field Office made the announcement.
According to information provided to the court, the investigation of this case revealed that Gregory Dow, 61, of Lancaster County, traveled to the Republic of Kenya in 2008 to start an orphanage which came to be known as the Dow Family Children’s Home. While running the orphanage with his wife, Dow sexually abused, on multiple occasions, four minor girls between October 2013 and September 2017. During this time period, he maintained ties to the United States.
The FBI’s Philadelphia Field Office conducted the investigation with assistance from Kenyan authorities and local law enforcement in Lancaster County.
Trial Attorneys Lauren S. Kupersmith and Lauren E. Britsch of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Timothy M. Stengel of the Eastern District of Pennsylvania prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Louisiana Tax Preparer Sentenced to Prison for Filing Fraudulent ReturnsRead the Press Release
A Louisiana tax return preparer was sentenced to 24 months in prison today for conspiring to defraud the United States, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and the U.S. Attorney’s Office for the Eastern District of Louisiana.
According to court documents, Michegel Butler of St. John the Baptist Parish, Louisiana, owned Crown Tax Service LLC, a tax preparation business located in Kenner, Louisiana. From approximately January 2013 through April 2013, Butler and others conspired to defraud the United States by preparing returns that fraudulently inflated clients’ tax refunds. Some of the returns included false Schedule C business income and expenses, dependents, and dependent care expenses. To substantiate the false income and expenses, Butler and others directed clients to create bogus receipts. In total, Butler caused over $100,000 in tax losses.
In addition to the term of imprisonment, U.S. District Judge Carl J. Barbier ordered Butler to serve three years of supervised release and to pay approximately $90,856 in restitution to the United States.
Deputy Assistant Attorney General Goldberg and the U.S. Attorney’s Office for the Eastern District of Louisiana commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Jessica Kraft of the Tax Division and Assistant U.S. Attorney Dall Kammer, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Louisiana Tax Preparer Sentenced to Prison for Filing Fraudulent ReturnsRead the Press Release
Washington – A Louisiana return preparer was sentenced to 24 months in prison today for conspiring to defraud the United States, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and the U.S. Attorney’s Office for the Eastern District of Louisiana.
According to court documents, Michegel Butler of St. John the Baptist Parish, Louisiana, owned Crown Tax Service LLC, a tax preparation business located in Kenner, Louisiana. From approximately January 2013 through April 2013, Butler and others conspired to defraud the United States by preparing returns that fraudulently inflated clients’ tax refunds. Some of the returns included false Schedule C business income and expenses, dependents, and dependent care expenses. To substantiate the false income and expenses, Butler and others directed clients to create bogus receipts. In total, Butler caused over $100,000 in tax losses.
In addition to the term of imprisonment, U.S. District Judge Carl J. Barbier ordered Butler to serve three years of supervised release and to pay approximately $90,856 in restitution to the United States.
Deputy Assistant Attorney General Goldberg and the U.S. Attorney’s Office for the Eastern District of Louisiana commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Jessica Kraft of the Tax Division and Assistant U.S. Attorney Dall Kammer, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Local Businesswoman Pleads Guilty to Criminal Healthcare and Tax Fraud Charges and Agrees to $20.3 Million Civil SettlementRead the Press Release
Tampa, FL – United States Attorney Maria Chapa Lopez announces that Kelly Wolfe (49, Indian Rocks Beach) has pleaded guilty to conspiracy to commit health care fraud and filing a false tax return. She faces a maximum penalty of 13 years in federal prison. A sentencing date has not yet been set.
In addition to her criminal charges, Wolfe and her company, Regency, Inc. (“Regency”) have agreed to pay up to $20,332,516, to resolve allegations that Wolfe and Regency violated the False Claims Act in a number of ways, including falsifying documentation in order to fraudulently establish durable medical equipment (“DME”) corporations to bill for medically unnecessary DME equipment, and engaging in improper marketing practices that violate the Anti-Kickback Statute. The civil settlement amount is based on Wolfe and Regency’s ability to pay.
According to court documents, Wolfe and her conspirators used Regency to establish dozens of DME supply companies—or, rather, DME fronts—using trickery and deception. The scheme involved placing the DME fronts in the names of straw owners. By concealing the true ownership of the fronts, Wolfe’s conspirators secretly gained control of multiple companies. With such control, they collectively submitted well over $400 million in illegal DME claims to Medicare and CHAMPVA (i.e., the Civilian Health and Medical Program of the Department of Veterans). The conspirators relied on the guise of “telemedicine” to explain the unusually high volume of claims, when, in fact, they had simply bribed doctors to approve them. Almost always, the doctors had no interaction, including telehealth interaction, with the beneficiaries. Wolfe further admitted that, for tax year 2017, she had purchased numerous personal items and services using Regency’s funds. Rather than properly report this as income to the Internal Revenue Service, Wolfe falsely classified her personal spending as purported business expenditures.
This prosecution, arising out of the nationwide “Operation Brace Yourself” takedown, involves one of the largest health care fraud schemes in United States history. The Middle District of Florida is playing a significant role in these historic and nationwide enforcement actions. Collaborative efforts among federal, state, and local partners have resulted in criminal charges against 12 defendants in the MDFL.
“The Department is committed to ensuring that federal health care program providers do not place their own financial gain over patients’ clinical needs,” said Acting Assistant Attorney General Brian Boynton of the Department of Justice’s Civil Division. “When medical professionals and companies knowingly commit fraud to maximize their profits, we will hold them accountable for their unlawful conduct.”
“Fraud and deceit in our nation’s healthcare system is not only unacceptable, it is illegal,” said U.S. Attorney Maria Chapa Lopez for the Middle District of Florida. “The U.S. Attorney’s Office will continue to aggressively work with our investigative partners in rooting out these illicit practices to ensure that patients receive the optimum care they deserve.”
“This pernicious telefraud scheme’s ambitions were cut short by the exceptional partnership of our law enforcement partners” said Special Agent in Charge Omar Pérez Aybar of the U.S. Department of Health and Human Services Office of Inspector General. “This guilty plea and the forfeiture of tens of millions of dollars back to the U.S. Treasury show our determination to stop such damaging fraud schemes and to bring fraudsters to justice.”
"The FBI is laser-focused on exposing those who cheat our government healthcare programs," said Special Agent in Charge of the FBI Tampa Division Michael McPherson. "American taxpayers can be assured the FBI and its law enforcement partners are working vigorously to protect federally funded healthcare programs from deception and greed."
“Honest and law-abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets," stated Special Agent in Charge Brian Payne of IRS Criminal Investigation. "Fleecing the health care industry effectively robs us all, and tax fraud undermines the integrity of our nation’s tax system. Those who engage in these swindles should know they will not go undetected and will be held accountable."
“The VA OIG’s continued oversight of CHAMPVA, which provides community care to family members of disabled veterans, is one of the agency’s highest priorities because it safeguards the integrity of VA’s health care programs,” stated David Spilker, Special Agent in Charge at the Department of Veterans Affairs Office of Inspector General (VA OIG). “As detailed in the charging documents, the defendant’s criminal actions resulted in a massive fraud being committed against both CHAMPVA and Medicare, ultimately impacting the beneficiaries of those programs. The VA OIG commends the extensive cooperation between our law enforcement partners in this important investigation.”
This case is being prosecuted criminally by Assistant United States Attorneys Kristen Fiore and James Muench, and pursued civilly by Assistant United States Attorney Carolyn B. Tapie and Department of Justice, Civil Division, Commercial Litigation Branch Trial Attorney Daniel A. Schiffer, with assistance from the Department of Health and Human Services – Office of Inspector General, the FBI, the Department of Veterans Affairs – Office of Inspector General, and the Internal Revenue Service – Criminal Investigation. The United States previously obtained an emergency temporary restraining order and preliminary injunction enjoining the conduct and assets of Wolfe, Regency, and several of their co-conspirators, in a civil injunctive action prosecuted by Assistant United States Attorneys Carolyn B. Tapie and Sean P. Keefe. The injunctive action is captioned United States v. Regency, Inc., et al., No. 8:19-cv-803-T-33AEP.
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act against Wolfe and Regency by Condra Albright, a former Regency employee. As a result of the settlement, Albright will receive 23% of the civil recovery as her statutory reward. Under the qui tam provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government takes over the case and reaches a monetary agreement with the defendant. The claims resolved by the settlement are allegations only, and there has been no determination of liability.
The qui tam case is captioned United States and the State of Florida ex rel. Albright v. Regency, Inc., et al., No. 8:19-cv-686-T-30AEP.
Law enforcement seizes more than 100 pounds of narcotics, firearms, hundreds of thousands in cash in federal case against three local menRead the Press Release
COLUMBUS, Ohio – Law enforcement officials seized more than 73 pounds of cocaine, 32 pounds of heroin, eight pounds of methamphetamine, nine firearms and hundreds of thousands of dollars in cash this week in relation to federal charges pending against three Columbus men.
Lucio Manuel Munoz, 28, Maximus Alberto Dominguez, 19, and Rene Bernal Gaytan, 22, were charged by federal criminal complaint and arrested on Feb. 3.
The three are charged with conspiring to distribute and possessing with intent to distribute more than five kilograms of cocaine. Each defendant faces a mandatory minimum of 10 years and up to life in prison.
According to court documents, the defendants were conducting illicit narcotics operations from the Red Roof Inn on South State Street in Westerville and from a residence on Chesford Road in Columbus.
Law enforcement officials were conducting surveillance on both locations on Feb. 2 and subsequently stopped Dominguez for a traffic stop on Interstate 270 South. A narcotics K9 alerted to the presence of drugs and officers discovered a kilogram-sized bundle of cocaine in the BMW Dominguez was driving.
It is alleged that Munoz attempted to flee the residence on Chesford Road later that evening with bulk amounts of narcotics in his vehicle. A traffic stop was initiated on Munoz, but he allegedly failed to yield. A vehicle pursuit was initiated and ended in a foot pursuit. Munoz was apprehended and officers secured the Jeep he was driving.
Authorities discovered 30 kilograms of cocaine and four kilograms of methamphetamine in the Jeep. They seized nine firearms and bulk amounts of cash from a subsequent search of the residence.
An affidavit details that agents also found multiple additional kilograms of narcotics with Gaytan in a room at the Red Roof Inn. They also discovered a storage locker in Columbus where a duffel bag of vacuum-sealed bulk currency was located.
Each of the three defendants remains in custody.
David M. DeVillers, United States Attorney for the Southern District of Ohio; Vance Callender, Special Agent in Charge, Homeland Security Investigations (HSI); Keith Martin, Special Agent in Charge, Drug Enforcement Administration (DEA); Ohio State Highway Patrol Superintendent Col. Richard S. Fambro; Westerville Police Chief Charles Chandler and Columbus Police Interim Chief Michael Woods announced the charges. Assistant United States Attorney Kelly A. Norris is representing the United States in this case.
A criminal complaint is merely an allegation, and defendants are presumed innocent unless proven guilty in a court of law.
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Lancaster Man Sentenced to 15+ Years in Prison for Sexually Abusing Orphans in KenyaRead the Press Release
PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Gregory Dow, 61, of Lancaster County, PA, was sentenced to 15 years, eight months in prison, a lifetime of supervised release, and ordered to pay $16,000 in restitution by United States District Judge Edward G. Smith for sexually abusing four minor children in an orphanage which the defendant and his wife operated in the Republic of Kenya.
In 2008, the defendant and his family traveled from Lancaster County, PA to the Republic of Kenya to start an orphanage. The orphanage, which came to be known as the Dow Family Children’s Home, was established near Boito, Kenya, and remained in operation for nearly a decade with financial support from donors in the United States, including churches and other faith-based organizations.
In September 2017, Kenyan authorities learned that Dow had sexually abused children in his care. Dow fled Kenya when the allegations came to light, returning to Lancaster County. Acting on information provided by Kenyan women living in the United States, the FBI investigated the allegations and determined that Dow had sexually abused at least four teenage girls between October 2013 and September 2017. Two of the girls were as young as 11 years old when the abuse began. The defendant’s wife even transported the victims to a medical clinic to have birth control devices implanted into their arms, which allowed Dow to perpetrate his crimes without fear of impregnating his victims. The defendant purported to be a Christian missionary who cared for these children and asked them to call him “Dad.” But instead of being a father figure, he preyed on their youth and vulnerability. In July 2019, Dow was charged in a four count Indictment; he pleaded guilty to all four counts in June 2020.
“Under the guise of faith-based charity work benefiting orphaned children, Gregory Dow traveled halfway around the world to prey on incredibly vulnerable victims,” said Acting U.S. Attorney Williams. “His crimes are nearly incomprehensible in their depravity. We thank the witnesses in this case for coming forward to report him, and our law enforcement partners in the United States and in Kenya for working diligently to bring him to justice. It is no exaggeration to say that the world’s children are safer with Dow behind bars.”
“Gregory Dow was the proverbial wolf in sheep’s clothing,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “He presented himself as this big-hearted man who was living according to his faith, when all the while, he was sexually abusing girls placed in his care. These horrific crimes were a betrayal of an entire community’s trust. If Dow thought he could get away with it because he was in a different country, if he thought no one would care because these were underprivileged Black children he victimized, this investigation and today’s sentence have most emphatically proved him wrong. The FBI and our partners will never stop working to protect children from sexual predators, whomever and wherever they are.”
The Dow case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
The investigation was conducted by the FBI, with assistance from the U.S. Embassy in Nairobi, the Kenyan Office of Director of Public Prosecutions and Directorate of Criminal Investigations Anti-Human Trafficking & Child Protection Unit, and the Investigative Division of the Office of the District Attorney of Lancaster County. The case is being prosecuted by Assistant United States Attorney Timothy Stengel and Department of Justice Trial Attorneys Lauren Britsch and Lauren Kupersmith of the Child Exploitation and Obscenity Section (CEOS).
La Crosse Man Sentenced to 84 Months for Distributing MethamphetamineRead the Press Release
MADISON, WIS. - Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that Lucas Carpenter, 36, La Crosse, Wisconsin was sentenced today by Chief U.S. District Judge James D. Peterson to 84 months in federal prison for distributing methamphetamine. Carpenter pleaded guilty to this charge on October 23, 2020.
Carpenter supplied methamphetamine to an associate, and on November 15, 2019, the associate agreed to sell a law enforcement confidential informant 57 grams of methamphetamine in exchange for $1,700. The associate directed the confidential informant to a parking lot in La Crosse where the transaction was scheduled to take place and warned the confidential informant that Carpenter would be in the area watching the transaction.
At the conclusion of the drug deal, law enforcement officers stopped Carpenter as he backed out of a parking stall. When officers approached him, they observed a plastic bag containing a white crystalline substance next to the defendant in plain view. Officers detained the defendant and searched around the car using a trained law-enforcement dog. The dog alerted to the presence of drugs, allowing officers to lawfully search the car, where they seized an additional 13 grams of methamphetamine, and arrested Carpenter.
During an interview, the associate admitted that Carpenter supplied the methamphetamine for the drug sale and also said that Carpenter watched the transaction because he wanted to meet up with the associate afterwards in order to get paid. Charges against Carpenter’s associate were dismissed after the associate was found dead.
The charge against Carpenter was the result of an investigation conducted by the Prairie du Chien Police Department and La Crosse West Central Metropolitan Enforcement Group. The prosecution of the case has been handled by Assistant U.S. Attorney Chadwick M. Elgersma.
Kalamazoo Man Arrested on Federal Firearm and Drug OffensesRead the Press Release
Jhontae Jamison will be detained pending trial.
GRAND RAPIDS, MICHIGAN — United States Attorney Andrew Birge announced today that Jhontae Kaprice Jamison, of Kalamazoo, has been detained on federal charges of being a felon in possession of a firearm, possession with intent to distribute cocaine base, and possessing a firearm in furtherance of a drug trafficking crime. The maximum penalty for being a felon in possession of a firearm is ten years’ imprisonment, the penalty for possession with intent to distribute cocaine base is up to 20 years’ imprisonment, and possessing a firearm in furtherance of drug trafficking requires a mandatory sentence of at least five years’ imprisonment consecutive to any other sentence imposed.
The federal complaint in the case alleges that on January 28, 2021, Kalamazoo Valley Enforcement Team (KVET) investigators attempted to search Jamison pursuant to a search warrant, but he fled in a car, striking an apartment building to avoid the investigators. Investigators found his car in a parking lot; Jamison fled on foot. Jamison was apprehended a short while later and officers found cocaine base (“crack” cocaine) on his person. Along the path where Jamison ran, officers also found a loaded Walther PPQ 9mm pistol.
At a preliminary examination and detention hearing held today, U.S. Magistrate Judge Ray Kent found probable cause and ordered that Jamison be detained pending trial.
This case was investigated by KVET, in conjunction with the Drug Enforcement Administration and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. This case was prosecuted as part of the Department of Justice’s Project Safe Neighborhoods, a nationwide initiative to reduce violent crime. The U.S. Attorney’s Office, county prosecutor’s offices, and federal, state, local, and tribal law enforcement work closely together to identify and prosecute individuals responsible for driving violent crime in our communities in order to make neighborhoods safer for everyone. Individuals with information or concerns about violent crime or firearms offenses should contact local law enforcement. For more information about Project Safe Neighborhoods, visit: https://www.justice.gov/psn.
The charges in a complaint are merely accusations, a defendant is presumed innocent until and unless proven guilty in a court of law.
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Justice Department Settles Retaliation Claim Against Florida Electrician CompanyRead the Press Release
The Justice Department today announced that it reached a settlement agreement with Service Minds Inc., dba Mister Sparky (Service Minds), a company that provides contract electrical services to residential customers in Florida and Alabama. The settlement resolves a claim that the company retaliated against a work-authorized job applicant, in violation of the anti-discrimination provision of the Immigration and Nationality Act (INA), when he and his wife challenged a U.S. citizens-only hiring rule that a recruiter had wrongly claimed was the company’s policy.
“Employers should not retaliate against workers for speaking up when they are told they cannot get a job because they are not a U.S. citizen,” said Gregory B. Friel, Deputy Assistant Attorney General of the Civil Rights Division. “We are grateful that the applicant and his wife objected to what would have been an unlawful practice when they learned about it.”
The department initiated its investigation after a woman filed a charge on behalf of her husband, an electrician in Ocala, Florida, who applied for a job with Service Minds. The investigation determined that although the applicant was qualified for the position, a company recruiter incorrectly told him that the company could only hire U.S. citizens. The applicant and his wife sent the recruiter information about the INA’s prohibition against citizenship status discrimination and objected to the company’s policy. The Civil Rights Division’s Immigrant and Employee Rights Section (IER) found evidence that, based on the electrician’s qualifications and the company’s past hiring practices, the company would have hired him if he and his wife had not raised an objection. The INA’s anti-discrimination provision generally prohibits employers from retaliating against individuals because they object to conduct that is illegal under the provision, or for exercising other rights protected under that provision.
Under the terms of the settlement agreement, Service Minds will, among other things, give the former employee front pay and back pay (including benefits) plus interest, totaling over $24,500; pay a civil penalty; train its workers; and be subject to departmental monitoring.
IER is responsible for enforcing the anti-discrimination provision of the INA. The statute prohibits citizenship status and national origin discrimination in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; and retaliation and intimidation. Learn more about citizenship status discrimination under the INA here.
Learn more about IER’s work and how to get assistance through this brief video. Applicants or employees who believe they were discriminated against based on their citizenship, immigration status, or national origin in hiring, firing, recruitment, or during the employment eligibility verification process (Form I-9 and E-Verify); or subjected to retaliation, may file a charge. The public also may contact IER’s worker hotline at 1-800-255-7688; call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); email [email protected]; sign up for a free webinar; or visit IER’s English and Spanish websites. Subscribe to GovDelivery to receive updates from IER.
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Jacksonville Man Pleads Guilty to Aggravated Identity Theft and Fraud ChargesRead the Press Release
Jacksonville, Florida – Charles Cornelius Smith (36, Jacksonville) has pleaded guilty to charges of aggravated identity theft and conspiracy to commit bank fraud. Smith faces up to 30 years in federal prison on the conspiracy charge, and a 2-year mandatory minimum term of imprisonment on the aggravated identity theft charge. Smith made his initial appearance in federal court on August 27, 2020 and was detained. Smith’s co-defendant, Zipporan Carmel Peters, is scheduled for trial on March 1, 2021.
According to court documents, Smith obtained the personal identification information to include the name, date of birth, and Social Security number of the victim. Using this information, he provided Peters with a counterfeit South Carolina driver license in the name and identity of the victim, but with Peters’s picture on it. Smith then drove Peters to different branches of the Navy Federal Credit Union in Clay and Duval Counties. Using the victim’s identity, Peters subsequently made various fraudulent transactions involving the withdrawal of large amounts of cash and the purchase of multiple $500 gift cards, utilizing the victim’s account. Smith and Peters also went to multiple cell phone stores in Clay and Duval Counties. Using the victim’s identity, they obtained several thousand dollars of cell phones and accompanying merchandise.
Smith, without the involvement of Peters, also was involved with a check fraud scheme. As part of the scheme, Smith would deposit fraudulent checks into various VyStar Credit Union accounts and subsequently make ATM withdrawals before it was determined the deposited check was fraudulent.
This case was investigated by United States Secret Service - Jacksonville Field Office, the Clay County Sheriff’s Office, and the Orange Park Police Department. It is being prosecuted by Assistant United States Attorney Kevin C. Frein.
Inmates Indicted for Assaulting an Officer at the Metropolitan Detention CenterRead the Press Release
SAN JUAN, Puerto Rico – On February 3, 2021, a federal grand jury returned a one-count indictment charging Héctor Maldonado Maldonado and Miguel Santana Avilés with assaulting a federal officer, announced W. Stephen Muldrow, United States Attorney for the District of Puerto Rico. The Federal Bureau of Investigation (FBI) with the collaboration of the Bureau of Prisons (BOP) are in charge of the investigation of the case.
On August 20, 2020, a BOP officer at the Metropolitan Detention Center (MDC) in Guaynabo was conducting the daily lock-down procedure and inmate count. The officer found that inmate Maldonado was not in his assigned cell. Instead, the officer saw inmate Santana alone in the cell. The officer ordered Santana to exit. At this point, Maldonado rushed to the cell and began yelling at the officer, striking him in the face with his fist. Santana then grabbed the officer from behind in a bear hug and pinned his arms to his side. Maldonado put the officer in a headlock and continued to forcefully strike him in the face and head. The officer was able to activate his body alarm, and other officers intervened. The officer suffered bodily injuries, including multiple contusions to his face, ear, head and neck.
Assistant U.S. Attorney Luis A. Valentin of the Violent Crimes and National Security Section is in charge of the prosecution of the case. If convicted, the defendant faces up to 20 years in prison.
An indictment contains only charges and is not evidence of guilt. The defendant is presumed to be innocent unless and until proven guilty.
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Illegal Alien Convicted of Possession of a FirearmRead the Press Release
Hattiesburg, Miss. – Ivan Cano-Elvira, 34, an illegal alien from Mexico, pled guilty yesterday before U.S. District Judge Taylor B. McNeel to possession of a firearm by an illegal alien, announced Acting U.S. Attorney Darren J. LaMarca, Diane Witte, Field Office Director of Immigration and Customs Enforcement (ICE), Enforcement & Removal Operations (ERO) in New Orleans, and Special Agent-in-Charge Kurt Thielhorn, of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
Cano-Elvira is scheduled to be sentenced by Judge McNeel on May 21, 2021, at 11:00 a.m. Cano-Elvira faces a potential maximum of 10 years imprisonment, plus 3 years of supervised release and a maximum $250,000 fine. He also faces being removed from the U.S. to his home nation of Mexico, following the completion of any prison sentence.
On October 2, 2020, ICE/ERO arrested Cano-Elvira, who was being held by Jones County officials on a state charge after his arrest for felony domestic violence. On September 7, 2020, Jones County deputies had been dispatched to a domestic disturbance at Cano-Elvira’s residence. When deputies arrived, they were told Cano-Elvira had a rifle in the residence. Although Cano-Elvira had fled on foot, deputies found a Remington, Model 597, .22 caliber rifle, readily accessible in the unlocked closet of his bedroom. Deputies confiscated the firearm, and Cano-Elvira was arrested the following day when he surrendered to deputies at his residence. The Remington rifle later was turned over to the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF).
After further ICE investigation, Cano-Elvira was identified as a deported or removed alien. He had been removed from the U.S. to Mexico in April 2014. Thereafter, he illegally reentered the United States and was encountered by Homeland Security officials on May 3, 2014. His original order of removal was reinstated, and he was again physically removed from the United States to Mexico on May 31, 2014. At the time of his last removal in 2014, Cano-Elvira was prohibited from entering, attempting to enter, or being in the U.S. for 20 years.
Acting U.S. Attorney LaMarca praised the cooperation of the Department of Homeland Security; the ATF; and the Jones County Sheriff’s Department. Assistant U.S. Attorney Stan Harris is the prosecutor for the case.
Hudson County Felon Sentenced to 37 Months in Prison for Possession of Firearm and AmmunitionRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man previously convicted of multiple felonies was sentenced today to 37 months in prison for illegally possessing a firearm and ammunition, Acting U.S. Attorney Rachael A. Honig announced.
Benorce Duncan, 32, of Jersey City, previously pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an indictment charging him with one count of possession of a firearm and ammunition by a convicted felon. Judge Hayden imposed the sentence by videoconference today.
According to documents filed in this case and statements made in court:
On May 21, 2019, Duncan knowingly possessed a Röhm .22-caliber RG10 revolver loaded with six rounds of ammunition. At that time, Duncan had previously been convicted in Hudson County Superior Court of aggravated assault and robbery, both of which are felonies.
In addition to the prison term, Judge Hayden sentenced Duncan to three years of supervised release.
This case is 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/projectguardian.
Acting U.S. Attorney Honig credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the leadership of Special Agent in Charge Charlie J. Patterson in Newark, and the Jersey City Police Department, under the direction of Public Safety Director James Shea, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Sarah A. Sulkowski of the U.S. Attorney’s Office Cybercrime Unit in Newark.
Hot Springs Man Indicted for Sexual Exploitation of a MinorRead the Press Release
United States Attorney Ron Parsons announced that a Hot Springs, South Dakota, man was charged in federal district court with Attempted Enticement of a Minor, Attempted Enticement of a Minor Using the Internet, and Attempted Receipt of Child Pornography.
Brian Lynn Spitzer, age 56, was charged on January 12, 2021. He appeared before U.S. Magistrate Judge Daneta Wollmann on January 25, 2021, and pleaded not guilty to the charges. The penalty upon conviction is a mandatory minimum of 15 years up to life in federal prison and/or a $250,000 fine, a mandatory minimum of 5 years up to lifetime supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to Spitzer attempting to sexually exploit an undercover law enforcement agent posing as a 14-year-old female. The charges are merely an accusation and Spitzer is presumed innocent until and unless proven guilty.
The investigation is being conducted by the South Dakota Division of Criminal Investigation, the Department of Homeland Security, the Rapid City Police Department, and the Pennington County Sheriff’s Office. Assistant U.S. Attorney Sarah B. Collins is prosecuting the case.
Spitzer was released on conditions pending trial. A trial date has been set for March 30, 2021.
Head of Daytona Beach Drug Organization Pleads Guilty; Conspirators Face up to Life in PrisonRead the Press Release
Orlando, Florida – Maxwell Garvice Johnson (29, Ormand Beach) today pleaded guilty to one count of conspiracy to distribute controlled substances. Johnson faces a mandatory minimum penalty of 10 years, and up to life, in federal prison. His sentencing hearing is currently scheduled for March 16, 2021.
According to court documents, Johnson worked with multiple conspirators to distribute methamphetamine, heroin, fentanyl-laced heroin, and cocaine, in the Daytona Beach area, from April 3, 2020 through July 30, 2020. During the investigation, law enforcement seized over 2 kilograms of fentanyl-laced heroin, over 500 grams of cocaine, and over 140 grams of methamphetamine being distributed by members of Johnson’s organization, along with tens of thousands of dollars in drug proceeds.
Eight of nine of Johnson’s named co-conspirators have pleaded guilty to co-conspiracy to distribute and possess with intent to distribute controlled substances, such as methamphetamines, heroin, and cocaine and face the following penalties for their roles in this conspiracy:
Defendant
Pleaded Guilty
Statutory Penalties
Sentencing Date
Robert Lee Hamilton, Jr.
12/01/20
15 years to life
03/09/21
Jeniver Sebastian Scott, Jr.
01/13/21
10 years to life
03/16/21
Jeremy Rashan Tarrand
12/01/20
10 years to life
03/09/21
Shakia Monique Flagler
01/13/21
10 years to life
03/16/21
Sharodd Solomon Favors
12/28/20
5 years to 40 years
03/16/21
Dawnte Dequine Benjamin Davis
12/28/20
5 years to 40 years
03/16/21
Felicia Mae Riley
12/01/20
0-20 years
03/09/21
A final defendant, Gena Marie Walker, of Ormand Beach, is scheduled for trial during the March 2021 trial term.
This case was investigated by the Federal Bureau of Investigation, with assistance from the Drug Enforcement Administration, the Daytona Beach Police Department, and the Volusia County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Dana E. Hill.
Hartford Man Sentenced to 85 Months in Prison for Possessing Loaded Handgun While on Supervised ReleaseRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that RAHEEN THOMPSON, 41, of Hartford, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 85 months of imprisonment, followed by three years of supervised release, for illegally possessing a firearm while on federal supervised release.
According to court documents and statements made in court, in the early morning of August 7, 2016, Hartford Police officers arrested Thompson after they encountered him in a parked car outside of a nightclub in possession of a loaded .380 caliber pistol and distribution quantities of marijuana and pentylone.
Thompson’s criminal history includes multiple state felony convictions, and a federal conviction in 2007 for conspiracy to distribute and to possess with intent to distribute cocaine base (“crack”). Thompson was on federal supervised release at the time of his arrest.
Thompson has been detained since his arrest. On November 4, 2020, he pleaded guilty to possession of a firearm by a convicted felon.
Judge Thompson sentenced Thompson to 60 months of imprisonment for the firearm offense, and a consecutive 25 months of imprisonment for violating the conditions of his supervised release.
This investigation was conducted by the Federal Bureau of Investigation’s Violent Crime Task Force and the Hartford Police Department. The case was prosecuted by Assistant U.S. Attorney Patricia Stolfi Collins.
This prosecution has been brought through Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make neighborhoods safer for everyone.
Harford County Man Facing Federal Charge for Illegal Possession of an Unregistered SilencerRead the Press Release
Baltimore, Maryland – A federal criminal complaint has been unsealed charging Blaine Kenneth Kluge, age 25, of Forest Hill, Maryland, for illegal possession of an unregistered firearm, specifically, a silencer. The complaint was filed January 28, 2021 and unsealed on February 3, 2021 upon the arrest of the defendant.
The federal charge was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Timothy Jones of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; and Chief Charles Moore of the Bel Air Police Department.
According to the affidavit filed in support of the complaint, on October 30, 2019, a search warrant was executed at Kluge’s residence for evidence related to the burglary and desecration of a church in Bel Air, Maryland. During the search of the home, law enforcement recovered from Kluge’s bedroom a suspected homemade silencer; a replica Nazi knife with a swastika on it; a replica German military helmet bearing Nazi symbols; a ballistic vest with rifle plates, and two loaded magazines of .223-caliber ammunition stored inside the vest; and over 2,500 rounds of varying caliber ammunition.
As detailed in the affidavit, the silencer was found on top of a locked stand-up gun safe in Kluge’s bedroom. The ballistic vest and two loaded magazines were found inside the safe, but no guns were found in the safe. Additional investigation found that the silencer was not registered in the National Firearms Registration and Transfer Record database, as required. The silencer was determined to have been constructed by an individual rather than purchased through legal channels.
If convicted, Kluge faces a maximum of 10 years in federal prison for illegal possession of an unregistered firearm, specifically a silencer. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors. At yesterday’s initial appearance in U.S. District Court in Baltimore, U.S. Magistrate Judge Beth P. Gesner ordered that Kluge be released pending trial.
A criminal complaint is not a finding of guilt. An individual charged by criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
United States Attorney Robert K. Hur commended the ATF and the Bel Air Police Department for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Charles D. Austin and Zachary B. Stendig, who are prosecuting this case.
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Gilbert Man Charged with Threatening Former Assistant U.S. Attorney, Her Family and AssociatesRead the Press Release
Columbia, South Carolina --- United States Attorney Peter M. McCoy, Jr., announced today that James Patrick Giannakos, Jr. of Gilbert has been charged with threatening a former Assistant United States Attorney, her family, and associates. According to documents filed with the court, the threats came after multiple media platforms reported that the Government used information from Enrique Tarrio, the leader of the Proud Boys, to prosecute approximately 13 individuals.
According to information provided to the court, Giannakos allegedly left a message on the former Assistant United States Attorney’s voicemail stating in part, “if anything happens to Mr. Enrique Tarrio, the same thing will happen to you and your family . . . If anything happens to him, I promise you and your associates will pay for it.”
The day after the voicemail was reported to the Miami office for the Federal Bureau of Investigation (FBI), six additional threatening voicemails were left by the same telephone number on the answering machines of several offices of the firm that the former Assistant U.S. Attorney now works. Documents filed with the court allege that parts of those voicemails included, “If anything happens to Mr. Tarrio or his family, the same thing will happen to you and your associates. Be safe.” Another message allegedly included, “if anything happens to Enrique Tarrio . . . [the former Assistant United States Attorney’s] family is in danger and so are you.”
“Those who seek violent retribution on prosecutors, former prosecutors, other law enforcement officials and individuals who assist law enforcement will be held accountable,” said U.S. Attorney McCoy.
Giannakos is charged with transmitting in interstate commerce any communication containing a threat to injure the person of another. The case is being investigated by the FBI and prosecuted by Assistant United States Attorneys Jim May and Elliott Daniels.
The United States Attorney stated all charges in this case are merely accusations at this stage, and the defendant is presumed innocent unless and until proven guilty.
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affidavit_in_support_of_criminal_complaint.pdfGeorgia Man Sentenced to over 22 Years in Prison for Role in Conspiracy to Commit Armed RobberyRead the Press Release
CHARLESTON, W.Va. – United States Attorney Mike Stuart announced that Darrell Gillespie, of Smyrna, Georgia, was sentenced to 265 months in federal prison for his role in a conspiracy to commit armed home invasions of drug dealers. Gillespie was convicted after a nearly three week jury trial in January 2015. The federal jury found Gillespie and his co-defendant, Jamaa Johnson, 36, of Wytheville, Virginia, guilty of conspiracy to commit armed robbery and using firearms in crimes of violence, as well as obstruction of justice charges. Johnson previously was sentenced to over 19 years in prison for his role in the conspiracy.
“Gillespie and his co-conspirators committed a string of armed home invasions, wreaking havoc in multiple states for months,” said United States Attorney Mike Stuart. “I commend the work of the investigative agencies and my team that got this violent crew off our streets.”
The conspiracy involved armed robberies dating back to the fall of 2011 in Pittsburgh. Gillespie, joined by others involved in the conspiracy, traveled to Pittsburgh to rob a drug dealer. After the robbery, the men came back to Charleston to split up marijuana stolen in the robbery. Over the next four months, Gillespie, Johnson, or their co-conspirators, participated in six more robberies in West Virginia and Virginia. All involved firearms, and during a January 18, 2012, robbery in Charleston, the victim was shot in the leg and stabbed.
The case was investigated by the Federal Bureau of Investigation (FBI), the South Charleston Police Department, and the Charleston Police Department. Assistant United States Attorneys Monica D. Coleman handled the prosecution. United States District Judge Frank W. Volk imposed the sentence.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:13-cr-00091.
Follow us on Twitter: SDWVNews and USAttyStuart
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GPB Capital Founder and CEO Among Three Individuals Indicted in Private Equity Investment FraudRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging three individuals affiliated with GPB Capital Holdings, LLC (“GPB”) with securities fraud, wire fraud and conspiracy. Defendants David Gentile, the founder, owner and Chief Executive Officer (“CEO”) of GPB; Jeffry Schneider, the owner and CEO of Ascendant Capital LLC (“Ascendant”); and Jeffrey Lash, a former managing partner of GPB, are charged with engaging in a scheme to defraud investors by misrepresenting the source of funds used to make monthly distribution payments to them and the amount of revenue generated by two of GPB’s investment funds, GPB Holdings, LP and GPB Automotive Portfolio, LP. The defendants were arrested today, and Gentile will appear this afternoon in federal court in Boston, Massachusetts, Schneider will appear in federal court in Austin, Texas, and Lash in federal court in Fort Myers, Florida.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.
“As alleged, by paying investors from an undisclosed and improper source such as investor capital, the defendants repeatedly misled investors about the health and performance of their investments,” stated Acting United States Attorney DuCharme. “This Office is committed to ensuring honesty and integrity in the management of investment funds.”
Mr. DuCharme expressed his grateful appreciation to the Securities and Exchange Commission, New York Regional Office, for their significant cooperation and assistance during the investigation, and thanked the Business Integrity Commission and the New York City Police Department and for their support during the investigation.
“As alleged, the defendants misrepresented the holdings of GPB Capital through deceptive marketing practices, luring investors with promises of monthly distributions that would be covered by funds from the investments and not drawn from underlying invested capital. As we allege today, however, this was all a lie. In truth, a significant portion of GPB’s distributions were paid directly from investor funds. Investment fraud schemes are not only problematic for the victims they claim, but for the overall investing public who loses faith in a free-market system every time they hear of crimes like this. Along with our partners, we’re committed to exposing these frauds whenever and wherever we find them—and holding the fraudsters accountable,” stated FBI Assistant Director-in-Charge Sweeney.
As detailed in the indictment and other court documents, GPB, founded by Gentile in or around 2013, was a New York-based investment advisor registered with the SEC. GPB served as the general partner of several investment funds, including GPB Holdings, LP (“Holdings I”), GPB Holdings II, LP (“Holdings II”), GPB Automotive Portfolio, LP (“Automotive Portfolio”), GPB Waste Management, LP (“Waste Management”) and GPB Cold Storage, LP (“Cold Storage”) (collectively, the “GPB Funds”). The business of GPB Capital was to manage the GPB Funds, which raised and invested capital in a portfolio of private equity investments. Gentile and Schneider worked closely together on the founding, development, operation and marketing of the GPB Funds. From 2013 through early 2018, Lash was responsible for overseeing the GPB Funds’ investments in car dealerships, which made up a sizable percentage of GPB’s portfolio companies.
Between August 2015 and December 2018, the defendants, together with others, allegedly engaged in a scheme to defraud investors and prospective investors in the GPB Funds through material misrepresentations and omissions.
Specifically, Gentile and Schneider, both individually and through employees at Ascendant, represented to investors in Holdings I, Holdings II and Automotive Portfolio that the GPB funds would make a monthly distribution payment to investors that would be fully covered by funds from operations, meaning that the companies purchased by the funds would be sufficiently profitable for the monthly payments to be made from the companies’ cash flow, without drawing from capital raised by investors.
In reality, despite the defendants’ representations, investor capital was used to pay for a significant portion of the distributions made to investors in each of these funds. Gentile and Schneider were aware that the GPB Funds were underperforming, and authorized repeated distribution payments that used investor funds to cover income shortfalls, to the obvious detriment of investors.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants each face up to 20 years’ imprisonment.
The government’s case is being handled by the Office’s Business & Securities Fraud Section. Assistant United States Attorneys Lauren Howard Elbert, Artie McConnell and Garen Marshall are in charge of the prosecution.
The Defendants:
DAVID GENTILE
Age: 54
Manhasset, New YorkJEFFREY LASH
Age: 51
Naples, FloridaJEFFRY SCHNEIDER
Age: 52
Austin, TexasE.D.N.Y. Docket No. 21-CR-54 (DG)
Four Individuals Arrested and Charged with Physical Therapy Clinic FraudRead the Press Release
BOSTON – Four individuals were arrested today and charged in connection with a scheme to defraud an insurance provider for physical therapy services that were not provided to patients.
Gyulnara Bayryshova, 55, of Brighton; Anna Barenboym, 45, of Wayland; Slava Pride, 41, of West Roxbury; and Raya Bagardi, 36, of Brighton, were each indicted on one count of conspiracy to commit mail and health care fraud, eight counts of mail fraud and one count of health care fraud. In addition, Barenboym, Pride, and Bagardi were each charged with three counts of making false statements in connection with a health care benefit program. The defendants will make an initial appearance in federal court in Boston later today.
As alleged in the indictment, Bayryshova was the owner of Brighton Physical Therapy (BPT), a physical therapy clinic on Washington Street in Brighton. Barenboym was a licensed physical therapist and Pride and Bagardi were licensed physical therapist assistants, all employed by BPT. It is alleged that, from October 2018 through June 2020, the defendants conspired to cause an insurance company to reimburse them for physical therapy services that were not actually provided and/or were not medically necessary and, in some cases, were provided by individuals not licensed to provide the services. Specifically, the defendants falsely billed for services purportedly rendered to patients injured in automobile accidents when the services were not actually provided. In addition, some of the services for which the defendants sought reimbursement were not provided by licensed physical therapists. It is further alleged that BPT paid patients for referrals, referred patients to attorneys to assist with patients’ insurance settlements, and accepted kickbacks from those attorneys in return.
The charge of conspiracy to commit mail and health care fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. The charge of mail fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. 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. The charges of making false statements in connection with a health care benefit program provides for a sentence of up to five years in prison, two years of supervised release and a $250,000 fine. 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; Boston Police Acting Commissioner Gregory Long; and Quincy Police Chief Paul Keenan made the announcement today. Assistant U.S. Attorney Laura J. Kaplan of Lelling’s Organized Crime and Gang Unit is prosecuting the case.
The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Founder of $90 Million Cryptocurrency Hedge Fund Charged with Securities Fraud and Pleads Guilty in Federal CourtRead the Press Release
Audrey Strauss, United States Attorney for the Southern District of New York, and Peter C. Fitzhugh, Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced that STEFAN HE QIN, the founder of the Virgil Sigma Fund LP (“Virgil Sigma”) and the VQR Multistrategy Fund LP (“VQR”), a pair of cryptocurrency hedge funds in New York, New York, with over $100 million in investments, was charged with one count of securities fraud and pled guilty today in Manhattan federal court. For years, QIN stole investor money from Virgil Sigma and, in December 2020, QIN tried to steal investor money from VQR to pay back his investors in Virgil Sigma. QIN pled guilty today before United States District Judge Valerie Caproni.
U.S. Attorney Audrey Strauss said: “Stefan He Qin drained almost all of the assets from the $90 million cryptocurrency fund he owned, stealing investors’ money, spending it on indulgences and speculative personal investments, and lying to investors about the performance of the fund and what he had done with their money. Then, as he further admitted today, Qin attempted to steal money from another fund he controlled to meet redemption demands of the defrauded investors in the former fund. The whole house of cards has been revealed, and Qin now awaits sentencing for his brazen thievery.”
HSI Special Agent in Charge Peter C. Fitzhugh said: “Virgil Sigma and VQR, two multimillion-dollar cryptocurrency investment funds, were revealed to be slush funds for Qin to live his extravagant lifestyle. Qin orchestrated this reprehensible criminal scheme for many years, making misrepresentations and false promises that coaxed investors into pouring millions of dollars into fraudulent cryptocurrency firms, all the while stealing the hard-earned money of his investors. Furthermore, Qin mastered the art of trickery by representing these firms as profitable investment strategies so more victims fell to his tactics and were defrauded of nearly $100 million. The HSI New York El Dorado Task Force, with our incredible law enforcement partnerships, are committed to aggressively pursue fraud in all forms, regardless of how elaborate and profitable these schemes appear. In today’s technological world, there are increasingly more opportunities for fraudsters to take advantage of people, and with Qin pleading guilty to his deceitful acts, HSI and our partners remind those who attempt to defraud victims in any manner, your fraud will be uncovered and you will be brought to justice.”
According to the Information and statements made in open court:
Background
STEFAN HE QIN is a 24-year-old Australian national. Between 2017 through 2020, QIN owned and controlled two cryptocurrency investment funds, Virgil Sigma and VQR, both of which were located in New York, New York. Since its creation, Virgil Sigma purported to employ a strategy to earn profits from arbitrage opportunities in the cryptocurrency market, specifically, by using a trading algorithm to take advantage of price differences for a number of cryptocurrencies, including Bitcoin and others, in approximately 40 different exchanges around the world, including three exchanges located in the United States. This strategy was touted by QIN to the investing public as “market-neutral,” meaning the fund was not exposed to any risk from the price of cryptocurrency moving up or down and therefore provided a relatively safe and liquid investment. QIN exercised day-to-day control over Virgil Sigma and was responsible for tracking the fund’s balances at different trading exchanges, designing the algorithms to implement arbitrage trading, and preparing monthly investor statements. QIN also regularly participated in calls with Virgil Sigma investors and other forms of public communication where he touted the growth and success of Virgil Sigma. Until recently, Virgil Sigma purported to have over $90 million under management from dozens of investors, including many in the United States. According to its public marketing materials, Virgil Sigma has been profitable in every month from August 2016 to the present, with the sole exception of March 2017.
In or about February 2020, QIN founded VQR. VQR employed a variety of trading strategies and was poised to make or lose money based on the fluctuations in the value of cryptocurrency and was not market neutral. QIN was the sole owner of VQR’s general partner, but was not involved in VQR’s day-to-day operations. Instead, VQR had its own trading staff, including a head trader (the “Head Trader”) and other investment professionals. Until recently, VQR had at least approximately $24 million under management from investors.
Qin’s Scheme to Steal Assets from Virgil Sigma
Since 2017, QIN engaged in a scheme to steal assets from Virgil Sigma and defraud its investors. Rather than investing the fund’s assets in a cryptocurrency arbitrage trading strategy as advertised, QIN embezzled investor capital from Virgil Sigma and used the funds for purposes other than the purported arbitrage trading strategy, including: (a) using a substantial portion of investor capital stolen from Virgil Sigma to pay for personal expenses such as food, services, and rent for a penthouse apartment in New York, New York; (b) using a substantial portion of investor capital from Virgil Sigma to make personal, often illiquid, investments in other entities that had nothing to do with cryptocurrencies (for example, in or about October 2018, QIN invested hundreds of thousands of dollars stolen from Virgil Sigma in a real estate investment); and (c) using a substantial portion of investor capital from Virgil Sigma to invest in crypto-assets that had nothing to do with the fund’s stated arbitrage strategy (or example, in or about 2018, QIN invested funds from Virgil Sigma in certain initial coin offerings, a speculative form of investing in new issues of cryptocurrency). As a result of these and other fraudulent activities, QIN dissipated nearly all of the investor capital in Virgil Sigma.
In the course of stealing assets from Virgil Sigma, QIN regularly lied to the fund’s investors about the value, location, and status of their investment capital. These lies included an array of investor and public communications, including:
(a) QIN prepared and disseminated monthly statements to investors purporting to record the value of their holdings in Virgil Sigma. The amounts recorded in these statements did not accurately reflect the results of cryptocurrency trading. Instead, the amounts were made up by QIN and did not disclose the dissipation of assets by QIN.
(b) QIN also periodically prepared marketing materials for the investing public, including summary reports known as “tear sheets” that fraudulently reported that Virgil Sigma was earning remarkable profits, often with double-digit returns in a single month, month after month. For example, in or about February and in or about April 2017, QIN falsely reported that Virgil Sigma had earned 48.7% and 35.5% returns, respectively.
(c) On an annual basis, QIN prepared spreadsheets that purported to show Virgil Sigma’s balances at the approximately 40 exchanges where Virgil Sigma purportedly traded in order to prepare tax forms for the fund’s investors, also known as schedule K-1s. As QIN well knew, however, these spreadsheets and the resulting schedule K-1s were false and substantially overstated Virgil Sigma’s balances and trading activity on the exchanges.
As a result of QIN’s lies about the activity and success of Virgil Sigma in these and other communications, QIN was able to steadily attract new capital to Virgil Sigma thereby (a) ensuring that he was able to pay off investors’ redemption requests, and (b) projecting to the public the appearance of continued growth. For example, after QIN and the purported success of his fund were profiled in the Wall Street Journal in or about February 2018, Virgil Sigma experienced substantial growth as new investors flocked to the fund.
Qin Attempts to Steal Assets from VQR to Pay Virgil Sigma Investors
In the summer of 2020, QIN was having difficulty meeting redemption requests from investors in Virgil Sigma. In order to access funds to make those redemptions, and in order to conceal his fraudulent activities described above, QIN attempted to steal investor capital from VQR to pay redemptions to Virgil Sigma investors. After a few Virgil Sigma investors requested redemptions that Virgil Sigma could not pay, QIN convinced those investors that rather than redeem the funds outright, the investors would agree to have the funds withdrawn from Virgil Sigma and transferred into an investment in VQR. After months passed and no funds were transferred to VQR, QIN falsely told these investors that he had requested the transfer of funds from Virgil Sigma, but that the transfer was delayed because of an intermediary bank. QIN showed some of these investors wire transfer requests in order to bolster the impression that QIN was in fact trying to transfer the funds from Virgil Sigma to VQR. Virgil Sigma’s bank could not, however, effectuate these wire transfers because QIN had dissipated all of Virgil Sigma’s assets.
In or about December 2020, faced with additional redemption requests that he could not meet, QIN demanded that the Head Trader at VQR wind down all trading positions at VQR and transfer a portion of the funds to QIN so that QIN could use that money to pay off these redemptions to Virgil Sigma investors. QIN issued the demand even though the Head Trader advised QIN that closing out VQR’s then-current trading positions, rather than holding those positions in accordance with VQR’s directional trading strategy, would result in losses to VQR’s investors. In the course of those conversations, QIN threatened that if the Head Trader did not sufficiently expedite that process, QIN, as the sole owner of VQR’s general partner, would need to take over control of all of VQR’s accounts in order to access the funds. At QIN’s direction, the Head Trader accordingly closed out VQR’s positions and turned over access to VQR’s trading accounts to QIN. QIN subsequently attempted to take control of VQR’s assets in order to enable QIN to meet certain Virgil Sigma investor redemption requests.
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QIN, 24, pled guilty to one count of securities fraud. This charge carries a maximum term of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. Sentencing has been scheduled for May 20, 2021.
Ms. Strauss praised the work of Homeland Security Investigations. She further thanked the Securities and Exchange Commission for its cooperation and assistance in this investigation.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Daniel Tracer is in charge of the prosecution.
Former executive director of Montana Native Women’s Coalition admits stealing federal fundsRead the Press Release
BILLINGS — The former executive director of the Montana Native Women’s Coalition today admitted stealing federal funds for an unapproved trip to Las Vegas, Nevada, Acting U.S. Attorney Leif Johnson said.
Sheryl Lynn Lawrence, 44, of Colstrip, pleaded guilty to theft of federal funds. Lawrence was the executive director of the Montana Native Women’s Coalition. Lawrence faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release.
U.S. District Judge Susan P. Watters presided. Judge Watters continued Lawrence’s release pending further proceedings. Sentencing was set for June 3.
The prosecution said in court documents that the purpose of the Lame Deer-based Coalition is to help Native American victims of domestic and sexual violence. The Coalition receives funding from the U.S. Department of Justice’s Office on Violence Against Women (OVW), which provides grants for victim services.
While serving as the Coalition’s executive director, Lawrence received a travel advance in November 2017. Lawrence claimed $1,826 in travel money for a trip to Las Vegas. Lawrence claimed she drove, which provided more money due to payment for mileage, when in fact, Lawrence flew, which cost significantly less money than if driving. Lawrence spent money on a trip to Las Vegas, which was never approved by the OVW, nor would it ever have been approved.
Lawrence's actions intentionally deprived OVW from using the federal funds for their intended purpose to help Native American victims of domestic and sexual violence.
Lawrence’s co-defendant, Barbara Mary Daychief of Browning, pleaded guilty to theft of federal funds on Jan. 22, 2021 and is pending sentencing. A third co-defendant, Meredith McConnell of Colstrip, has pleaded not guilty to charges.
Assistant U.S. Attorneys Ryan Weldon and Bryan Dake are prosecuting the case, which was investigated by the Department of Justice’s Office of the Inspector General.
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Former Tallahassee Federal Correctional Officer Indicted for Sexual Abuse of Multiple InmatesRead the Press Release
TALLAHASSEE, FLORIDA – A federal grand jury in Tallahassee has returned a three-count indictment charging a federal correctional officer with sexually abusing three inmates at the Federal Correctional Institution in Tallahassee. Jimmy Lee Highsmith was charged with Sexual Abuse of a Ward. Lawrence Keefe, United States Attorney for the Northern District of Florida, announced the indictment, which was issued on February 2.
“The public places its trust in sworn law enforcement and correctional officers that they will represent the finest in our society, not the worst. Sadly, the charges contained in this indictment reflect the worst – an individual allegedly taking advantage of his position of trust to inflict harm on those under his care,” U.S. Attorney Keefe said.
Highsmith, 41, of Yazoo, Mississippi, was arrested last night by federal agents. His initial appearance will take place at 4:30 p.m. CST this afternoon at the Thad Cochran United States Courthouse in Jackson, Mississippi. Highsmith’s arraignment hearing is scheduled for February 17 at 1:30 p.m. EST before United States Magistrate Judge Fitzpatrick at the United States Courthouse in Tallahassee.
The indictment alleges that while employed as a U.S. Bureau of Prisons Correctional Officer at Federal Correctional Institution Tallahassee, Highsmith engaged in sexual acts with three inmates who were under his custodial, supervisory and disciplinary authority. The criminal conduct allegedly took place between March 2014 and September 2018. If convicted, Highsmith faces a maximum sentence of 15 years in federal prison and a maximum $250,000 fine, per count.
Assistant United States Attorneys David L. Goldberg and Lazaro P. Fields are prosecuting the case, which resulted from a long-term investigation by the Department of Justice Office of Inspector General.
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 a fair trial, during which it will be 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 U.S. Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Press Release - U.S. v. HighsmithFormer Nike Marketing Manager Charged in Scheme to Defraud CompanyRead the Press Release
PORTLAND, Ore.—U.S. Attorney Billy J. Williams announced today that Errol Amorin Andam, 49, of Beaverton, Oregon, a former marketing manager at Nike, Inc., has been charged by criminal information with wire fraud, money laundering, and making false statements on a loan application as part of a scheme to defraud his former employer.
According to the information, from 2001 until his termination in 2018, Andam was employed by Nike at its headquarters in Beaverton. Most recently, Andam worked as a manager in the company’s North American Retail Brand Marketing division wherein he managed the design, build-out, and operation of “pop-up” retail venues, temporary Nike shops situated near and tailored to sports competitions and other special events around the U.S.
In the summer of 2016, Andam recruited a childhood friend to establish a company to design and build the pop-up venues as an independent contractor for Nike. Andam used his authority as a manager at Nike to ensure that his friend’s company was consistently awarded the contracts for these jobs. Though he had no formal role in his friend’s company, Andam assumed control of much of the company’s financial operations, managing financial accounts and issuing invoices to Nike.
To conceal his role in the scheme, Andam used an alter ego, “Frank Little,” to invoice Nike and manage the contract company’s account with Square, Inc., a California-based provider of mobile credit-card-processing services. In 2016, Andam also renewed the lapsed registration of an Oregon-based limited liability corporation (LLC) he owned so that he could use the defunct entity as a shell company to funnel the proceeds diverted from Nike and his friend’s company to accounts under his personal control.
Beginning in September 2016, Andam caused credit-card sales at various pop-up venues around the U.S. to be run through card readers associated with a Square account owned by his friend’s company. These proceeds were transferred to Square in California and then to Andam’s LLC bank account in Oregon. Andam represented to both Nike and his friend that the proceeds of these sales were credited against the total amount Nike owed to his friend’s company. In truth, Andam simply pocketed the proceeds and, as “Frank Little,” invoiced Nike for the full cost of the contracted services.
From September 2016 through December 2018, Andam diverted and embezzled nearly $1.5 million in Nike proceeds for his own use. In July 2018, Andam submitted a fake financial statement from his LLC in support of a residential mortgage loan application. The financial statement falsely reflected as revenue checks for $194,000 drawn on a bank account owned by his friend’s business. Andam forged his friend’s signature on the check and withdrew much of that money without his friend’s knowledge.
Andam faces a maximum sentence of 30 years in prison, fines of up to $4.5 million, and 5 years’ supervised release. He will be arraigned on March 5, 2021, before a U.S. Magistrate Judge.
This case is being investigated by the FBI and IRS Criminal Investigation. It is being prosecuted by Ryan W. Bounds, Assistant U.S. Attorney for the District of Oregon.
A criminal information is only an accusation of a crime, and a defendant is presumed innocent unless and until proven guilty.
Former NJDCP&P Employee Admits Production of Child PornographyRead the Press Release
CAMDEN, N.J. – An Atlantic County, New Jersey, man who was previously employed by the New Jersey Department of Child Protection and Permanency (NJDCP&P) today admitted producing images of child sexual abuse, Acting U.S. Attorney Rachael A. Honig announced.
Kayan Frazier, 28, pleaded guilty by videoconference before U.S. District Judge Joseph H. Rodriguez to one count of producing images of child pornography. Frazier has been detained since his arrest on July 12, 2019, and his detention was continued.
According to documents filed in this case and statements made in court:
After receiving a report of images of child sexual abuse distributed via Tumblr, law enforcement officers identified Frazier, who was then employed as a case worker at NJDCP&P as the sender. On April 12, 2019, the Atlantic County Prosecutor’s Office obtained a search warrant for Frazier’s residence and, while executing the warrant, observed Frazier in the company of an underage boy. Law enforcement officers recovered thousands of additional images of child sexual abuse on Frazier’s cellular telephone and other electronic media, which included images of the boy taken in Frazier’s apartment. Frazier admitted that he took the images with a cellular telephone.
The count to which Frazier pleaded guilty carries a mandatory minimum penalty of 15 years in prison, a maximum possible penalty of 30 years in prison and a $250,000 fine. Sentencing is scheduled for June 8, 2021.
Acting U.S. Attorney Honig credited special agents of FBI Atlantic City Resident Agency, Human Trafficking Crimes Against Children Task Force, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor Damon Tyner; the Atlantic County Sheriff’s Office, under the direction of Sheriff Eric Scheffler; the New Jersey State Police, under the direction of Col. Patrick J. Callahan, and the New Jersey Human Services Police, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Diana Vondra Carrig of the U.S. Attorney’s Office’s Criminal Division in Camden.
Former Member of Massachusetts State Leadership Team of Latin Kings Pleads Guilty to Racketeering ConspiracyRead the Press Release
BOSTON – The former Secretary of the Massachusetts Almighty Latin King and Queen Nation (“Latin Kings”) pleaded guilty today to racketeering charges.
Francisco Lopez, a/k/a “King Cisco,” 43, 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 May 27, 2021.
During the course of the investigation, Lopez attended numerous meetings of the Latin Kings State Leadership, and hosted meetings at his residence in Chelsea. During these meeting, crimes of violence and the business of the gnag were discussed and decided. Additionally, Lopez sold over 200 grams of cocaine base to a cooperating witness. During the search of the Lopez’s Chelsea residence in December 2019, 50 grams of fentanyl, 50 grams of heroin and a loaded Glock firearm were recovered.
The Latin Kings are a violent gang 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 criminal organization. As alleged in court documents, the gang uses drug distribution to generate revenue, and is motivated by a desire to further its influence and to protect its turf from rival gangs.
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. Lopez is the 32nd defendant to plead guilty in the case.
Pursuant to the terms of the plea agreement, Lopez faces a sentence of between 108 and 150 months in prison and three years of supervised release. 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 Detroit Man Sentenced to over 15 Years in Prison for Drug Dealing OffensesRead the Press Release
CHARLESTON, W.Va. – United States Attorney Mike Stuart announced that Ralph Weathington, Jr., 28, of Charleston, formerly of Detroit, Michigan, was sentenced to 188 months in prison for distribution of methamphetamine, distribution of fentanyl, and possession with the intent to distribute cocaine, fentanyl, and more than 50 grams of methamphetamine. Weathington was previously found guilty of each crime by a jury of his peers. Following his release from prison, he will serve 10 years of supervised release.
“Weathington was dealing meth, fentanyl and cocaine in Charleston,” said United States Attorney Mike Stuart. “As a result of the excellent work of DEA, the Kanawha County Sheriff’s Office, the U.S. Marshals Service, the Charleston Police Department, MDENT and my prosecutors, he won’t be peddling poisons in our community any longer.”
Evidence presented during the jury trial established that on January 22, 2018, the defendant met with a confidential informant working with the Kanawha County Sheriff’s Office and the Drug Enforcement Administration (DEA) in Charleston and sold the informant approximately two ounces of methamphetamine. Later, on January 30, 2018, the defendant again met with a confidential informant on the West Side of Charleston and sold the informant approximately 3.5 grams of fentanyl. Finally, on May 22, 2019, the defendant was present at an apartment in Charleston when officers with the United States Marshals Service and the Kanawha County Sheriff’s Office discovered him holding a gray article of clothing that appeared to be wrapped around another object. The defendant was standing next to an open window as he held this object, and he threw it out the window when ordered by an officer to show his hands. An officer with the Charleston Police Department observed several objects falling from the window to the ground, and moved to secure the evidence which was found to be approximately 111 grams of methamphetamine, 18 grams of fentanyl, 27 grams of cocaine, United States currency, a silver weight used to calibrate a digital scale, a small shoebox and a gray sweatshirt. An officer with the Metropolitan Drug Enforcement Network Team (MDENT) arrived on scene and collected the drug-related evidence. Then, with the assistance of other officers, the apartment was searched and 18 additional grams of fentanyl were located along with a semi-automatic pistol, two digital scales and additional United States currency.
The Drug Enforcement Agency (DEA), the Kanawha County Sheriff’s Office, the Charleston Police Department, the United States Marshals Service, and the Metropolitan Drug Enforcement Network Team (MDENT) conducted the investigation. Senior United States District Judge John T. Copenhaver, Jr., imposed the sentence. Assistant United States Attorneys Jeremy B. Wolfe and Monica D. Coleman 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. 2:19-cr-00174.
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Former Controller of Lancaster County Oil & Gas Company Sentenced to Three Years for Participating in $65 Million Bank FraudRead the Press Release
PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Judith Avilez, 60, of Elizabethtown, PA, was sentenced to three years in prison, five years of supervised release, and ordered to pay $15 million in restitution by Judge Jeffrey L. Schmehl for participating in a massive bank fraud scheme over many years.
In September 2020, Avilez, the former Controller of Worley & Obetz, pleaded guilty to her role in a scheme that defrauded Fulton Bank of over $65 million. Avilez admitted that from 2016 through May 2018, she helped Worley & Obetz’s CEO, Jeffrey Lyons, defraud Fulton Bank by creating fraudulent financial statements that grossly inflated accounts receivable for Worley & Obetz’s largest customer, Giant Food. Worley & Obetz was an oil and gas company in Manheim, PA, that provided home heating oil, gasoline, diesel, and propane to its customers.
Lyons initiated the fraud shortly after he became CEO in 1999. In order to make Worley & Obetz appear more profitable and himself appear successful as the CEO, Lyons asked the previous Worley & Obetz Controller, Karen Connelly, to falsify the company’s financial statements to make it appear to have millions more in revenue and accounts receivable than it did. Lyons and Connelly continued the fraud scheme from 2003 until 2016, when Connelly retired and Avilez became the Controller and joined the fraud. Avilez and Lyons continued the scheme in the same manner that Lyons and Connelly had. Each month, Avilez created false Worley & Obetz financial statements that Lyons presented to Fulton Bank in support of his request for additional loans or extensions on existing lines of credit. In total, Lyons, Connelly, and Avilez defrauded Fulton Bank out of $65,000,000 in loans.
After the scheme was discovered, Worley & Obetz and its related companies did not have the assets to repay the massive amount of Fulton loans Lyons had accumulated. In June 2018, Worley & Obetz declared bankruptcy and notified its approximately 275 employees that they no longer had jobs. After 72 years, the Obetz’s family-owned company closed its doors forever. The fraud Lyons committed with the help of Avilez and Connelly caused many families in the Manheim community to suffer financially and emotionally. Fulton Bank received some repayments from the bankruptcy proceedings but is still owed over $50,000,000.
Last year, for their roles in the scheme, Lyons was sentenced to 14 years in prison and Connelly was sentenced to four years in prison.
“Judith Avilez walked in on the tail end of this scheme, and she had the opportunity to report it and stop the fraud,” said Acting U.S. Attorney Williams. “But instead of doing the right thing, she chose the greedy path. Instead of performing her job honestly, she chose to help her new boss steal tens of millions of dollars from bank lenders. And as a result, a company was destroyed and its employees were devastated. Our Office will continue to work with our law enforcement partners to protect innocent individuals and businesses from being victimized by financial fraud.”
The case was investigated by the Federal Bureau of Investigation, IRS Criminal Investigations, and Northern Lancaster County Regional Police Department and is being prosecuted by Assistant United States Attorney Tiwana Wright.
Florida Businesswoman Pleads Guilty to Criminal Health Care and Tax Fraud Charges and Agrees to $20.3 Million Civil False Claims Act SettlementRead the Press Release
A Florida businesswoman has agreed to resolve criminal charges and civil claims arising out of false claims to the United States for braces and other durable medical equipment (DME), the Justice Department announced today.
Kelly Wolfe, of Indian Rocks Beach, Florida, has pleaded guilty to conspiracy to commit health care fraud and filing a false tax return. She faces a maximum penalty of 13 years in federal prison. A sentencing date has not yet been set. Wolfe’s company, Regency Inc. (Regency), has also agreed to a civil resolution.
“The department is committed to ensuring that federal health care program providers do not place their own financial gain over patients’ clinical needs,” said Acting Assistant Attorney General Brian Boynton of the Department of Justice’s Civil Division. “When medical professionals and companies knowingly commit fraud to maximize their profits, we will hold them accountable for their unlawful conduct.”
“Fraud and deceit in our nation’s health care system is not only unacceptable, it is illegal.” said U.S. Attorney Maria Chapa Lopez for the Middle District of Florida. “The U.S. Attorney’s Office will continue to aggressively work with our investigative partners in rooting out these illicit practices to ensure that patients receive the optimum care they deserve.”
“This pernicious telefraud scheme’s ambitions were cut short by the exceptional partnership of our law enforcement partners,” said Special Agent in Charge Omar Pérez Aybar of the U.S. Department of Health and Human Services Office of Inspector General (HHS OIG). “This guilty plea and the forfeiture of tens of millions of dollars back to the U.S. Treasury show our determination to stop such damaging fraud schemes and to bring fraudsters to justice.”
“The FBI is laser-focused on exposing those who cheat our government health care programs," said Special Agent in Charge of the FBI Tampa Division Michael McPherson. "American taxpayers can be assured the FBI and its law enforcement partners are working vigorously to protect federally funded health care programs from deception and greed.”
“Honest and law-abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets," stated Special Agent in Charge Brian Payne of IRS Criminal Investigation. "Fleecing the health care industry effectively robs us all, and tax fraud undermines the integrity of our nation’s tax system. Those who engage in these swindles should know they will not go undetected and will be held accountable."
“The VA OIG’s continued oversight of CHAMPVA, which provides community care to family members of disabled veterans, is one of the agency’s highest priorities because it safeguards the integrity of VA’s health care programs,” stated David Spilker, Special Agent in Charge at the Department of Veterans Affairs Office of Inspector General (VA OIG). “As detailed in the charging documents, the defendant’s criminal actions resulted in a massive fraud being committed against both CHAMPVA and Medicare, ultimately impacting the beneficiaries of those programs. The VA OIG commends the extensive cooperation between our law enforcement partners in this important investigation.”
According to court documents, Wolfe and her conspirators used Regency to establish dozens of DME supply companies — or, rather, DME fronts — using trickery and deception. The scheme involved placing the DME fronts in the names of straw owners. By concealing the true ownership, Wolfe’s conspirators secretly gained control of multiple companies. With such control, they collectively submitted well over $400 million in illegal DME claims to Medicare and the Civilian Health and Medical Program of the VA. The conspirators claimed that the unusually high volume of claims reflected the use of telemedicine procedures, when, in fact, they had simply bribed doctors to approve them. Almost always, the doctors had no telehealth interaction with the beneficiaries.
Wolfe further admitted that, for tax year 2017, she had purchased numerous personal items and services using Regency’s funds. Rather than properly report this as income to the IRS, Wolfe falsely classified her personal spending as purported business expenditures.
In addition to Wolfe’s criminal plea, Wolfe and Regency have agreed to a civil settlement of up to $20,332,516, to resolve allegations that they violated the False Claims Act in a number of ways, including falsifying documentation in order to fraudulently establish DME corporations to bill for medically unnecessary DME equipment, and engaging in improper marketing practices that violated the Anti-Kickback Statute. The civil settlement is based on Wolfe and Regency’s ability to pay. The United States previously obtained an emergency temporary restraining order and preliminary injunction enjoining the conduct and assets of Wolfe, Regency, and several of their alleged co-conspirators, in a civil injunctive action pursued by the U.S. Attorney’s Office for the Middle District of Florida. The injunctive action is captioned U.S. v. Regency, Inc., et al., No. 8:19-cv-803 (M.D. Fla.).
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act against Wolfe and Regency by Condra Albright, a former Regency employee. Under the qui tam provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government takes over the case and reaches a monetary agreement with the defendant. The qui tam case is captioned U.S. ex rel. Albright v. Regency, Inc., et al., No. 8:19-cv-686 (M.D. Fla.).
The criminal case is being prosecuted by the U.S. Attorney’s Office for the Middle District of Florida with assistance from the HHS OIG, the FBI’s Criminal Investigation Division, the VA OIG, and the IRS Office of Criminal Investigations. The civil case is being handled by the Commercial Litigation Branch (Fraud Section) and the U.S. Attorney’s Office for the Middle District of Florida with assistance from the HHS OIG.
Except for the conduct admitted in connection with Wolfe’s criminal plea, the claims resolved by the civil settlement are allegations only, and there has been no determination of liability.