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Friday 4 December 2020
Harrison County man sentenced for firearms violationRead the Press Release
ELKINS, WEST VIRGINIA – Michael Lewis Woodyard, of Clarksburg, West Virginia, was sentenced to 21 months of incarceration for a firearms charge, U.S. Attorney Bill Powell announced.
Woodyard, age 28, pled guilty to one count of “Unlawful Possession of a Firearm” in July 2020. Woodyard, who was previously convicted of a felony, admitted to having a .22 caliber pistol in August 2019 in Lewis County.
Assistant U.S. Attorney Stephen D. Warner prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Lewis County Sheriff’s Office investigated.
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.
U.S. District Judge Thomas S. Kleeh presided.
Hansen Sentenced to 48 Months in Federal Prison After Pleading Guilty to Financial Fraud SchemeRead the Press Release
SALT LAKE CITY – Theodore Lamont Hansen, age 50, of Highland, Utah, who pleaded guilty to money laundering and bank fraud in May in connection with a financial fraud scheme, will serve 48 months in federal prison. U.S. District Judge Robert L. Shelby imposed the sentence Thursday afternoon in U.S. District Court.
Hansen was ordered to pay $1,435,913.44 in restitution as a part of the sentence.
“Another Utah fraudster has come to justice in federal court. In this case, a repeat offender ignored a merciful opportunity to separate from a life of crime given to him by a state court. It is unfortunate that more victims had to pay such a steep price for this swindler’s federal crimes after he ignored the state court’s orders in his previous conviction. There are far too many fraudsters in Utah who are truly wolves in sheep’s clothing, and Utah investors must be more mindful when parting with their hard-earned savings,” U.S. Attorney John W. Huber said today.
"Fraudsters are very good at what they do. They are extremely convincing and will work hard to gain your trust. Driven by greed, many reoffend," said Special Agent in Charge Paul Haertel of the Salt Lake City FBI. "The FBI will aggressively investigate these crimes, but we urge the public to do their part too. When considering investment opportunities, do your due diligence and ask some tough, detailed questions about a person’s financial history. The public is also encouraged to check court records and the state’s White Collar Crime Offender Registry online at utfraud.com."
“Mr. Hansen has made a lifestyle of fraud – whether it was fraud against investors or fraud against a financial institution. The IRS, working with our law enforcement partners, have finally put an end to his lifestyle of fraud,” IRS Special Agent in Charge Tara Sullivan said.
As a part of a plea agreement reached with federal prosecutors, Hansen admitted that he devised a scheme to defraud an individual of $1 million using fraudulent promises and omitting material facts. Hansen convinced the victim of the scheme, identified as E.L. in the plea agreement, to give him the money by representing he would use the funds to purchase full ownership of Seven Peaks Water Park in Provo. Hansen told E.L. he would return the money if the transaction could not be completed within 24 hours. In exchange for the investment, E.L. was promised $23.5 percent ownership in the waterpark.
Hansen admitted that he used the $1 million for things inconsistent with his representations and never returned the money to E.L. For example, he used $28,000 for a purchase from RC Automotive.
The bank fraud conviction stems from a large check-kiting scheme involving Bank of the West and Deseret First Credit Union. The check-kiting involved at least 10 different companies and got so complicated in the end that Hansen and a colleague would go to Bank of the West every morning to sort out each transaction. The bank, according, to the sentencing memo, discovered the kite and put an end to it. Bank of the West was left with a loss of more than $1.6 million. Hansen asked an elderly friend to cover the loss, but the friend would only agree to pay a portion of the amount, taking the loss amount down to $585,913.44.
In a sentencing memorandum, federal prosecutors told the court that “Hansen is a prodigious fraudster whose only real occupation is convincing others to give him money and property.” Hansen was convicted by the State of Utah for selling unregistered securities and placed on probation for 36 months. As a part of his conditions of release, Hansen was required to disclose to any prospective investor in writing that he had approximately $45 million in outstanding judgments against him – some thing he did not do in the case prosecuted by federal prosecutors.
Gary Man Sentenced to 144 Months ImprisonmentRead the Press Release
HAMMOND-Victor Wiggins, 38, of Gary, Indiana, was sentenced by Judge Philip P. Simon to 144 months imprisonment following his guilty plea to one count of Conspiracy to distribute 5 grams or more of methamphetamine, announced U.S. Attorney Kirsch.
According to documents filed in this case, from at least May 2018 continuing to September 7, 2018, in Gary, Indiana, Victor Wiggins conspired with others to distribute at least five grams of methamphetamine. Wiggins led the conspiracy and recruited others into it. Wiggins has three prior felony convictions and was on supervised release for one of those convictions when he committed this crime.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and was prosecuted by Assistant United States Attorneys Thomas M. McGrath and Jill Koster.
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Former West Virginia University professor sentenced for wire fraud and tax fraudRead the Press Release
CLARKSBURG – Dr. Qingyun Sun, of Morgantown, West Virginia, was sentenced today to three years of probation, with the first four months on home confinement, after defrauding West Virginia University and filing a false tax return, both offenses arising out of his official travel to China, U.S. Attorney Bill Powell announced.
Sun, age 58, pleaded guilty to a two-count information charging him with wire fraud and filing a false tax return in July 2020. Sun was a Chinese National employed by WVU as an associate professor and the associate director of the United States-China Energy Center at the University. As a part of his employment at WVU, through the West Virginia Development Office, he also acted as the Governor’s assistant for China affairs. He was also employed by Synfuels Americas Corporation, an energy conversion technology provider of coal-to-liquids and gas-to-liquids processes located in Sterling, Virginia, but headquartered in Beijing, China. From July 2011 to May 2015, Peabody Energy Generation Holding Company based in St. Louis, Missouri, paid consulting fees to Energy United LC, a consulting business Sun established in 2005. The scheme involved Sun’s operation of his consulting business through Energy United.
In 2015, Sun traveled to China on behalf of WVU and the WV Development Office to prepare for an upcoming visit to China by WVU representatives and to lead a West Virginia industrial delegation for a coal expo in Beijing. Sun booked both a coach flight and a business class flight for this trip, submitting a request for reimbursement to WVU for the coach flight, and submitting a request for reimbursement to Synfuels Americas for the business flight. Sun only used the business class ticket for his trip.
In 2014, Sun filed a joint income tax return with his wife, grossly overstating his business-related travel expenses, when a large sum of those travel expenses were paid for by a State Purchasing Card, or reimbursed to him by WVU and Peabody Energy. He also failed to state any financial interest in, or authority over, a financial account in a foreign country. Sun had an interest in numerous financial accounts in China.
As a part of the plea agreement, Sun has agreed to pay restitution in the amount of $6,233.12 in full to WVU. Sun is no longer employed by WVU.
Sun was also ordered to pay for the four months of home confinement monitoring as a part of his sentencing.
Assistant U.S. Attorney Jarod J. Douglas prosecuted the case on behalf of the government. The FBI and the Internal Revenue Service investigated. WVU cooperated in the investigation of this case.
Senior U.S. District Judge Irene M. Keeley presided.
Former Supervisor at Long Island Drug Manufacturer Pleads Guilty to Theft of Medical ProductsRead the Press Release
Earlier today, at the federal courthouse in Central Islip, New York, Gregory Settino pleaded guilty to theft of medical products from his employer, a drug manufacturer in Suffolk County. When sentenced, Settino faces up to 20 years in prison, restitution to his former employer and a fine of up to $250,000. Today’s proceeding took place before United States District Judge Joanna Seybert.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and Jeffrey Ebersole, Special Agent-in-Charge, Food and Drug Administration, Office of Criminal Investigations, New York Field Office (FDA-OCI), announced the guilty plea.
“With today’s guilty plea, Settino has been held accountable for stealing from his then-employer thousands of bottles of an injectable drug administered to horses, which he resold to trainers and vets potentially endangering the health of horses at New York racetracks because the stolen drugs were not handled properly,” stated Acting United States Attorney DuCharme. “This Office will vigorously prosecute those who jeopardized drug safety.”
“The FDA works to ensure that veterinary drugs are safe and effective so that animals remain healthy. When drugs are taken out of the legitimate supply chain, there is no longer any assurance that they are safe or effective,” stated FDA-OCI Special Agent-in-Charge Ebersole. “The FDA remains committed to investigating and bringing to justice those who endanger the health of animals.”
As set forth in court filings and facts admitted in court, Settino was the production supervisor of manufacturing at Luitpold Pharmaceuticals, Inc. in Shirley, New York. In January 2019, Luitpold was renamed American Regent. One of the products manufactured at Luitpold and American Regent was Adequan, an injectable equine drug administered to horses with degenerative joint disease and sold throughout the United States. Between 2012 and January 2020, Settino stole thousands of bottles of Adequan from Luitpold and American Regent valued at over $1 million and sold those drugs to horse trainers and veterinarians at New York racetracks, including Belmont Park, for more than $600,000. Settino’s conduct potentially endangered the health of horses because the drugs were not maintained, stored or transported in accordance with proper procedures for ensuring the safety, effectiveness and efficacy of the drugs. At times, Settino transported the drugs in shoeboxes stored in his car. At all times, the drugs were handled in violation of the FDA regulated supply chain.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Charles P. Kelly is in charge of the prosecution.
The Defendant:
GREGORY SETTINO
Age: 58
Bethpage, New YorkE.D.N.Y. Docket No. 20-CR-340 (JS)
Former Leaders of the DC Trust, a Non-Profit Dedicated to Helping Children, Charged with Using Organization's Funds for Personal GainRead the Press Release
WASHINGTON – Edward Davies, 49, and Earl Hamilton, 50, the former executive director and director of operations and finance of the DC Children and Youth Investment Trust Corporation (“DC Trust”), have been charged with using DC Trust funds to make hundreds of personal purchases, for expenses such as meals, automobile repairs, and personal travel for themselves, their family members, and their friends, announced Acting U.S. Attorney Michael R. Sherwin.
In an indictment unsealed today in the U.S. District Court for the District of Columbia, the grand jury charged that from late 2012 through early 2016, Davies and Hamilton, who are both currently residing in the Chicago area, engaged in a scheme to defraud the DC Trust by using the organization’s credit cards and debit card to make personal expenditures, by lying to the Trust’s accountants about the nature of these purchases, and by hiding from the board of directors the exorbitant monthly bills that resulted. Davies and Hamilton each stand charged with four counts of wire fraud and one count of credit card fraud. The indictment alleges that Davies used the organization’s credit card to pay for such extravagances as a $2,000 partial down payment for a new car; a Thanksgiving trip to New York, where he used Trust funds to pay for a hotel room in Times Square and a massage for two; and round-trip airfare, car rental, and lodging for himself, a girlfriend, and two of their children to visit Napa Valley, California. Hamilton is charged with using the Trust’s credit card to purchase multiple airline tickets for himself and his wife to fly to Florida, and a $700 Norditrac machine, among other personal expenditures.
The DC Trust was a non-profit organization, created in 1999, to serve as an intermediary to connect philanthropists, government leaders, youth advocates, and representatives from the business community in order to support programs to benefit the children of the District of Columbia. The organization was dissolved in late 2016, reportedly to cover debts from exorbitant spending on and by staff, including the misuse of organization credit cards.
An indictment is merely a finding of probable cause by the grand jury. All criminal defendants are presumed innocent until proven guilty.
The D.C. Office of the Inspector General, the FBI’s Washington Field Office, and the U.S. Department of Education Office of the Inspector General have been investigating this case. The case is being prosecuted by the Public Corruption and Civil Rights Section of U.S. Attorney’s Office for the District of Columbia. Assistant U.S Attorney Kathryn Rakoczy is litigating the case, with assistance from Paralegal Specialist Amanda Rohde.
Former Illinois Attorney Sentenced to 18 Months in Prison for Tax Evasion in Connection with Legal Fees from Tobacco LitigationRead the Press Release
CHICAGO — Former Illinois attorney EDWARD R. VRDOLYAK was sentenced today to 18 months in federal prison for assisting another lawyer in evading taxes on income received from a multi-billion dollar legal settlement with tobacco companies.
U.S. District Judge Robert M. Dow, Jr., imposed the sentence after a hearing in federal court in Chicago. Vrdolyak, 82, of Chicago, pleaded guilty last year to one count of tax evasion.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Tamera Cantu, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI. The government was represented by Assistant U.S. Attorney Amarjeet S. Bhachu and Special Assistant U.S. Attorney Michael T. Donovan.
Vrdolyak admitted in a plea agreement that he assisted another lawyer, co-defendant DANIEL P. SOSO, in evading federal income taxes owed by Soso. The income was derived from attorney fees received in connection with a $9.2 billion settlement between the State of Illinois and a number of tobacco companies in the 1990s. At the time of the settlement, Vrdolyak and Soso were licensed Illinois attorneys. The pair collected legal fees from the settlement pursuant to agreements with one of the attorneys that represented the State of Illinois. Pursuant to these agreements, Vrdolyak made payments to Soso between 2000 and 2005 of approximately $1,925,830, representing Soso’s agreed-upon share of the fees from the litigation.
In August 2005, the IRS served a notice of levy on Vrdolyak, which required the turnover of all salary, wages and other amounts owed to Soso. Over the next two years, Vrdolyak received approximately $262,854 due Soso, but he concealed receipt of these funds from the IRS, knowing such concealment would assist Soso in evading the payment of taxes and assessments. Vrdolyak admitted in the plea agreement that he later caused approximately $170,242 to be paid to Soso instead of remitting the funds to the IRS.
Soso, of Alsip, also pleaded guilty to tax evasion. Judge Dow in March sentenced Soso to two years in prison.
Florida man admits to exporting firearms, ammunition and explosive materials through McAllenRead the Press Release
McALLEN, Texas – A 44-year-old man has entered a guilty plea to aiding and abetting the export of defense articles from the United States, announced U.S. Attorney Ryan K. Patrick
Brett McGinnis, of Ormond Beach, Florida, admitted he mailed ammunition, firearms and firearms parts, or caused them to be mailed, to co-conspirators in McAllen who then would export them into Mexico.
From on or about May 12 through Sept. 13, 2018, law enforcement seized over 6,000 rounds of various caliber ammunition, 1,100 saw links (5.56mm), 35 firearm magazines, three firearms, multiple upper and lower receivers and other firearms accessories that were intended to be illegally exported to Mexico. McGinnis had attempted to provide some to co-conspirators. Each of these items were designated defense articles requiring a license to export into Mexico.
McGinnis also admitted to shipping 60 practice M781 grenade cartridges (40mm) and firearms prior to May 2018 that were intended to be exported into Mexico. M781 practice rounds are considered explosive materials requiring a federal explosives license to transport.
McGinnis did not possess such a license to transport explosives or to export defense articles.
U.S. District Judge Micaela Alvarez accepted the plea and has set sentencing for Feb. 12, 2021.At that time, McGinnis will face up to 10 years in prison and a possible $250,000 maximum fine.
McGinnis was permitted to remain on bond pending sentencing.
Immigration and Customs Enforcement’s Homeland Security Investigations and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant U.S. Attorney Roberto Lopez Jr. is prosecuting the case.
Felon Charged with Possessing Firearm in Shooting Incident on Bragg BoulevardRead the Press Release
RALEIGH, N.C. – A federal grand jury returned an indictment yesterday charging Earnest Demonte Smith with knowingly being a felon in possession of a firearm.
According to the indictment, Smith, aged 22, was traveling by car in the area of North Bragg Boulevard and Manchester Road in Spring Lake, North Carolina on May 18, 2020. Smith saw a man in another vehicle, whom he recognized because of a prior dispute, and began repeatedly shooting into that vehicle with a 9mm semiautomatic pistol. The vehicle into which Smith fired carried a total of 4 passengers, including a 2-year-old child. No one was injured in the shooting.
Smith is charged with being a felon in possession of a firearm, under 18 U.S.C. § 922(g). If convicted, he faces a maximum penalty of 10 years in prison. If Smith is deemed by the Court to be an Armed Career Criminal, he will face a minimum sentence of 15 years and a maximum potential sentence of life imprisonment, upon conviction for the offense charged in the Indictment.
Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement. The North Carolina Department of Public Safety (DPS) Special Operations and Intelligence Unit, Spring Lake Police Department and the Bureau of Alcohol Tobacco Firearms & Explosives (ATF) are investigating the case and Assistant U.S. Attorney Evan Rikhye is prosecuting the case.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Federal Transfer Center Inmate Sentenced to Serve Additional 78 Months in Federal Prison for Assaulting a Federal Bureau of Prisons OfficerRead the Press Release
OKLAHOMA CITY – WILLIAM STANLEY, 59, of Massachusetts, an inmate at the Federal Transfer Center, has been sentenced to serve 78 additional months in federal prison for the assault of a Federal Bureau of Prisons officer causing bodily injury, announced U.S. Attorney Timothy J. Downing.
While an inmate at the Federal Transfer Center in Oklahoma City, Stanley kicked a correctional officer in the leg while the officer was escorting Stanley to the Special Housing Unit. The assault resulted in injury to the officer’s right hip, ultimately requiring a total right hip replacement.
On August 20, 2019, a federal grand jury returned a one-count Indictment charging Stanley with assault on a federal officer causing bodily injury. On January 13, 2020, Stanley pled guilty to the charges of the Indictment.
On November 30, 2020, U.S. District Judge Patrick R. Wyrick sentenced Stanley to serve 78 months (6.5 years) to run consecutively to his ongoing prison term, followed by three years of supervised release. In imposing the sentence, Judge Wyrick noted Stanley’s history of violence within the federal prison system and his previous assault convictions in Massachusetts.
This case is the result of investigations by the FBI and the Federal Bureau of Prisons. Assistant U.S. Attorney Ashley Altshuler prosecuted the case.
Reference is made to public filings for more information. To download a photo of U.S. Attorney Downing, click here.
Federal Authorities Arrest El Paso Police Officer for Providing Assistance to Drug DealerRead the Press Release
In El Paso today, federal authorities arrested 23-year-old El Paso police officer Monica Garcia for allegedly helping a local drug distributor to further his criminal enterprise, announced U.S. Attorney Gregg N. Sofer; Drug Enforcement Administration (DEA) Special Agent in Charge Kyle Williamson, El Paso Division; and El Paso Police Chief Greg Allen.
A three-count federal grand jury indictment unsealed today charges Garcia and 44-year-old Fred Saenz with conspiracy to possess with intent to distribute cocaine; conspiracy to unlawfully use a communication facility; and conspiracy to maintain a drug involved premise. The indictment also charges Saenz with one count of possession with intent to distribute over 500 grams of cocaine.
According to court records, on November 10, 2020, DEA and the El Paso Police Department (EPPD) executed two search warrants at two different residences in El Paso utilized by Saenz to conduct drug trafficking activity. Agents and officers seized approximately $14,450.00 at one residence and approximately 1.2 kilograms of cocaine at the second residence. Saenz was arrested at that time based on a federal criminal complaint. Further investigation revealed that Garcia used her law enforcement access with EPPD to conduct counter-surveillance measures for Saenz, including running license plates on vehicles associated with undercover operations.
“Law enforcement officers must he held to the highest standards,” said U.S. Attorney Sofer. “The U.S. Attorney’s Office is committed to ensuring that any public official who violates the law is brought to justice, and we will always devote the necessary resources to ensure that this important part of our mission is carried out effectively.”
“The defendant is alleged to have committed serious crimes, which are compounded by the fact that she was sworn to uphold the law,” stated DEA Special Agent in Charge Williamson. “Although this is an isolated case, the charged conduct still unfairly tarnishes the proud reputation of the thousands of law enforcement officers in the El Paso area who put their lives on the line every day to protect our residents and their communities.”
“All El Paso Police Department employees are sworn to uphold the law and are held to the highest of standards. The men and women of the El Paso Police Department are dedicated to serving the community and are appalled at the actions of this individual. Every officer takes an oath and I want to ensure the community that any officer who violates that oath will be dealt with sternly and swiftly. We also thank DEA for their cooperation in investigating this case,” said El Paso Police Chief Allen.
Conspiracy to unlawfully use a communication facility calls for up to four years in federal prison upon conviction. Conspiracy to maintain a drug involved premise calls for up to 20 years in federal prison upon conviction. Saenz faces between five and 40 years in federal prison upon conviction of the drug related charges. Garcia faces up to 20 years in federal prison upon conviction of the drug related charges.
Garcia and Saenz remain in federal custody at this time.
The DEA and the EPPD’s Narcotics Unit and Special Investigations Unit are investigating this case. Assistant U.S. Attorneys Michael Williams and Steven Spitzer are prosecuting this case on behalf of the government.
It is important to note that a federal grand jury indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Federal Appeals Court Upholds Conviction of Former Ocean County Law Firm Partner on Tax and Loan FraudRead the Press Release
NEWARK, N.J. – A federal appeals court today upheld the conviction of George Gilmore, a former partner in an Ocean County, New Jersey, law firm, on charges of failing to pay over payroll taxes to the IRS and making false statements in a loan application, Attorney for the United States Rachael A. Honig announced.
Gilmore, 71, of Toms River, New Jersey, a former equity partner and shareholder at Gilmore & Monahan P.A., was convicted in April 2019 on two counts of failing to pay over payroll taxes withheld from employees to the IRS and one count of making false statements on a bank loan application submitted to Ocean First Bank N.A. He was sentenced Jan. 22, 2020, to one year and one day in prison.
In the non-precedential ruling written by Judge Thomas Hardiman for a three-judge panel of the U.S. Court of Appeals for the Third Circuit, the court rejected four separate claims raised by Gilmore. It agreed with the government that the trial judge properly excluded expert psychiatric testimony supporting Gilmore’s claim that a “hoarding” disorder made him spend lavishly on personal expenses rather than make timely payments to the IRS. Gilmore contended that testimony would have negated his intent to commit the charged tax crimes. The court also rejected Gilmore's challenges to the jury instructions and sufficiency of evidence.
The government was represented on appeal by Assistant U.S. Attorney Bruce P. Keller of the U.S. Attorney’s Office’s Special Prosecutions Division and Steven G. Sanders of the Appeals Division. The government was represented at trial by Deputy U.S. Attorney Matthew J. Skahill; Assistant U.S. Attorney Jihee G. Suh of the Special Prosecutions Division; and Trial Attorney Thomas F. Koelbl of the U.S. Department of Justice, Tax Division.
Durable Medical Equipment Manufacturer and Orthotics Provider Agree to Pay $1.59 Million to Resolve False Claims Act AllegationsRead the Press Release
BOSTON – National durable medical equipment manufacturer Joint Active Systems, Inc. (JAS) has agreed to pay $1.5 million, and orthotics and prosthetics clinic chain New England Orthotics & Prosthetics, LLP (NEOPS) has agreed to pay $90,000, to resolve allegations that they violated the False Claims Act by improperly charging the government for custom fabricated orthotics. NEOPS, which has locations throughout New England and New York, filed for bankruptcy in 2017, and is now under new ownership.
“Joint Active Systems and New England Orthotics & Prosthetics engaged in multiple calculated schemes to enrich themselves by submitting false claims to government healthcare programs and overcharging the government for their devices,” said United States Attorney Andrew E. Lelling. “Today’s result is another example of this office’s commitment to take action against health care providers that defraud the government and American taxpayers.”
“Submitting claims to government health insurance programs for unnecessary devices drains resources from legitimate patient care,” said Phillip Coyne, Special Agent in Charge, Office of Inspector General of the U.S. Department of Health and Human Services. “We will continue to hold those accountable that seek to enrich themselves at the expense of these taxpayer-funded programs.”
“It is vitally important that we protect our government funded health care programs against fraud of any kind. Today’s settlement is the result of years of hard work by the FBI and our partners to make sure these companies are held accountable for trying to bilk taxpayers for custom fabricated orthotics that were not medically necessary, and not custom made,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “The FBI will continue to aggressively pursue these cases to protect these important programs for those who really need them.”
The government contends that JAS recruited NEOPS to improperly bill state Medicaid programs in Connecticut, Massachusetts and Rhode Island for JAS devices when JAS did not have participation agreements with those programs. The federal government jointly finances those Medicaid programs. Under the arrangement, NEOPS billed those programs for JAS devices as custom-fabricated orthotics when the devices were neither orthotics nor custom-fabricated, and when custom-fabricated devices were not medically necessary. As part of the arrangement, NEOPS claimed to the Medicaid programs that it treated the patients receiving the JAS devices when, in fact, JAS-affiliated sales representatives measured, fitted and delivered the devices to the patients. The JAS-affiliated sales representatives lacked the training and certifications necessary to provide custom-fabricated orthotics under certain state regulations. After submitting false claims for the devices, NEOPS received reimbursement from the Massachusetts, Connecticut and Rhode Island Medicaid programs, and remitted a portion of that reimbursement back to JAS. Through this arrangement, NEOPS often made hundreds of dollars per patient, despite providing no treatment.
The government also contends that JAS billed the Medicare program for custom-fabricated orthotics when the devices which JAS billed to Medicare did not qualify as orthotics. JAS did this despite having received coding guidance from a Medicare contractor that the devices did not meet Medicare’s definition of “orthotic.”
Lastly, the government contends that JAS overcharged the Department of Veterans Affairs (VA) for its devices under the terms of a contract that it entered into with the VA. The contract required JAS to sell its devices to the VA at a substantially better price than JAS offered to any commercial customer. Despite the contract’s terms, JAS knowingly failed to provide the VA with discounts that JAS provided to other commercial customers. As a result, JAS charged VA medical centers nationwide more for its devices—300% more in many instances—than the contract required.
“Companies who overcharge VA despite their contractual obligation to the contrary undermine VA’s procurement processes,” said VA OIG Special Agent in Charge Christopher F. Algieri, Northeast Field Office. “This settlement underscores VA Office of Inspector General’s commitment to working with our law enforcement partners to safeguard the integrity of VA’s programs and operations.”
“Ensuring the integrity of TRICARE, the healthcare system for military members and their families, is a top priority for the Defense Criminal Investigative Service (DCIS),” stated Special Agent in Charge Patrick J. Hegarty, DCIS Northeast Field Office. “Today's settlement is the result of our commitment to work with the United States Attorney's Office and our law enforcement partners to investigate the submission of false claims.”
Two former NEOPS employees brought allegations against JAS and NEOPS as part of a whistleblower lawsuit. Under the qui tam provisions of the False Claims Act, private individuals, known as relators, can sue on the government’s behalf for false claims and share in any recovery. In connection with today’s announced settlement, the relators will receive 17 percent of the recovery.
U.S. Attorney Lelling, HHS OIG SAC Coyne, FBI Boston SAC Bonavolonta, VA OIG SAC Algieri and DCIS SAC Hegarty made the announcement today. This matter was handled by Assistant U.S. Attorneys Brian M. LaMacchia and Evan Panich of Lelling’s Affirmative Civil Enforcement Unit.
Drug User in Possession of a Firearm Sentenced to Federal Prison as Part of “Operation Crime Driver” in Tipton CountyRead the Press Release
Memphis, TN – Isca Johnson, 24 of Covington, Tennessee has been sentenced to 21 months in federal prison for being an unlawful drug user in possession of a firearm. This case was developed as part of the first "Operation Crime Driver" in Tipton County. D. Michael Dunavant, U.S. Attorney announced the sentence today.
Johnson’s arrest was part of "Operation Crime Driver", a joint federal, state and local law enforcement anti-violence initiative led by the District Attorney General’s Office for the 25th Judicial District, and conducted between February and May 2019, where law enforcement targeted offenders wanted on arrest warrants for violent criminal offenses in Tipton County, Tennessee. Johnson was among 6 defendants from the first phase of "Operation Crime Driver" to be indicted in federal court in October, 2019 for various drug and gun offenses. https://www.justice.gov/usao-wdtn/pr/operation-crime-driver-targets-violent-criminals-tipton-county
According to information presented in court, on May 3, 2019, Tipton County Sheriff’s deputies encountered Johnson as they smelled marijuana emanating from his apartment. He gave consent to search, and deputies found marijuana, alprazolam, a loaded handgun, and ammunition. He admitted to owning the items and to being a regular user of illicit drugs. Johnson was charged in federal court in Memphis with possession of a firearm while being an unlawful user of a controlled substance.
On December 9, 2019, Johnson pled guilty to being an unlawful drug user in possession of a firearm, a violation of 18 U.S.C. § 922(g)(3).
On November 30, 2020, U.S. District Court Senior Judge Jon McCalla sentenced Johnson to 21 months in federal prison followed by two years supervised release. There is no parole in the federal system.
U.S. Attorney D. Michael Dunavant said, "Studies amply demonstrate the connection between chronic drug abuse and violent crime, and illuminate the nexus between Congress’s attempt to keep firearms away from habitual drug abusers and its goal of reducing violent crime. We are pleased to join with our federal, state and local law enforcement partners to focus on the priority areas of firearms and narcotics cases that impact public safety in our rural communities, and we are glad to support this successful joint operation by adopting these cases for federal prosecution."
Other defendants sentenced in Operation Crime Driver include:
• Danny Muex, 32, of Tipton County was sentenced to 40 months in federal prison for being a felon in possession of a firearm. https://www.justice.gov/usao-wdtn/pr/tipton-county-probationer-arrested-during-operation-crime-driver-sentenced-federal
• Maurice Nash, A/K/A "Monster," 47, of Atoka, TN was sentenced to 210 months in federal prison for being a convicted felon in possession of a firearm. https://www.justice.gov/usao-wdtn/pr/tipton-county-armed-career-criminal-sentenced-over-17-years-federal-prison
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Tipton County Sheriff’s Office investigated this case.
Special Assistant U.S. Attorney Sean G. Hord prosecuted this case on behalf of the government. SAUSA Hord is currently assigned from the 25th Judicial District Attorney’s Office.
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Defense Contractor and Employees Plead Guilty to Fraud SchemeRead the Press Release
NEWPORT NEWS, Va. – A Hampton-based business owner and four employees have all pleaded guilty to engaging in an extensive procurement fraud scheme involving millions of dollars in government contracts targeting the Department of Defense and other federal government agencies.
According to court documents, from 2011 to 2018, Iris Kim, Inc., (aka I-Tek) owner Beyung S. Kim, 61, of Newport News, and employees Seung Kim, 30, of Newport News, Dongjin Park, 53, of Yorktown, Chang You, 61, of Yorktown, Pyongkon Pak, 53, of Toano, and Li-Ling Tu, 57, of China, engaged in a conspiracy and scheme related to certain government contracts for which I-Tek acted as a supplier of goods, including items for the U.S. Marine Corps, U.S. Army, U.S. Coast Guard, and the National Guards of various states, among other agencies.
These government contracts had certain set-aside preferences and source of good requirements. The conspirators acted to defraud the U.S. and commit other substantive offenses by fraudulently importing goods into the U.S. that were made in China, in violation of the terms of these contracts. They then falsely relabeled these goods as if they were made in the U.S. Kim and his employees also acted through a separate nominee company to conceal the importing of goods from China and installed a nominee officer of I-Tek in order to be able to fraudulently qualify for certain set-aside contracts. The conspirators also submitted false documents and further falsely classified the value of the goods imported into the U.S. so as to avoid higher duties and taxes.
The five conspirators are scheduled to be sentenced mid-March. Each defendant faces a maximum term of five to seven years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; Raymond Villanueva, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations; Chris Dillard, Acting Special Agent in Charge for the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office; and Gregory Scovel, Special Agent in Charge of the Naval Criminal Investigative Service (NCIS) Norfolk Field Office, made the announcement after U.S. District Judge David J. Novak accepted the pleas.
Assistant U.S. Attorneys Brian J. Samuels and D. Mack Coleman, and Trial Attorney Matthew P. Mattis of the Justice Department’s Criminal Division are prosecuting the case.
The Defense Contract Audit Agency, the U.S. Small Business Administration’s Office of Inspector General, the U.S. Coast Guard Investigative Services, the U.S. Customs and Border Patrol Regulatory Audit and Agency Advisory Services, Office of Trade, and the U.S. Department of State Office of Inspector General all provided significant assistance to this case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:20-cr-47.
Cleveland real estate developer indicted for embezzlement of project fundsRead the Press Release
U.S. Attorney Justin Herdman announced today that a federal grand jury sitting in Toledo has returned a nine-count indictment charging Arthur Fayne, age 58, of Aurora, with wire fraud. The defendant is accused of orchestrating and executing two schemes to defraud separate businesses and embezzling the funds for personal use, including gambling at a casino, which resulted in the loss of over $1 million.
According to the indictment, the defendant was the owner of Business Development Concepts (BDC), an organization that provided training and business consultation services to start-ups and existing companies. In addition, BDC managed construction projects and the purchase of equipment, supplies and inventory.
The defendant also served as Vice President and a board member on a for-profit subsidiary (Subsidiary 1) of a nonprofit corporation (Nonprofit 1) that operated as a federally qualified health center network of community health centers and provided primary care medical services for adults and children in the Cleveland, Ohio area. In this capacity, the defendant had the authority to enter into contracts on behalf of Nonprofit 1.
In June of 2016, a construction management and general contracting company headquartered in Cleveland (Company 1) entered into a contract with Nonprofit 1 to serve as the construction manager and general contractor on a project to redevelop a vacant building in the city of Cleveland into a grocery store and community center with health care offices.
The defendant executed this contract on behalf of Nonprofit 1 and, under the terms of the contract, BDC and Subsidiary l would serve as Nonprofit l 's authorized representatives. In addition, Subsidiary 1 and Nonprofit 1 were to issue payments to BDC, which the defendant was to disburse to Company 1.
The indictment states that from December of 2016 through March of 2018, the defendant caused Nonprofit 1 and Subsidiary 1 to pay $2,629,740.38 to BDC to be disbursed to Company 1 as compensation for work on the project.
It is alleged that the defendant distributed only $1,870,634.46 to Company 1. Instead of distributing the remaining $759,105.92 to Company 1, the defendant is accused of diverting these funds to BDC for his personal use, which included gambling at a casino. To further the scheme, the defendant allegedly caused to be created and submitted falsified invoices to Subsidiary l and Nonprofit 1 for money owed to Company 1.
The indictment states that from 2016 to 2018, Nonprofit 1 separately made payments to BDC for services and expenses in overseeing the project and others. The defendant is accused of accessing some funds from BDC at a casino and losing approximately $1 million on separate occasions.
Additionally, the indictment states that the defendant devised a second scheme to defraud a subcontractor on the redevelopment project. On or about June 28, 2018, the defendant caused a subcontractor on the project to make a $125,923.86 wire transfer to a bank account owned by the defendant's wife. These funds were allegedly used for personal use, which included gambling at a casino.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation.
In all cases, the sentence will not exceed the statutory maximum, and in most cases, it will be less than the maximum.
This case was investigated by the Cleveland Division of the FBI. The U.S. Attorney’s Office for the Northern District of Ohio would like to acknowledge and thank the Cuyahoga County Prosecutor’s Office for its cooperation with this matter. This case is being prosecuted by Assistant U.S. Attorney Brian McDonough.
Chicago Man Sentenced to More Than a Year in Prison for Illegally Structuring Nearly $350,000Read the Press Release
CHICAGO — A Chicago man was sentenced today to 14 months in federal prison for illegally structuring nearly $350,000 in cash deposits in an effort to evade federal reporting requirements.
In 2015 and 2016, ANTUANE KING made at least 37 deposits of less than $10,000 each at seven financial institutions, including the Chicago Firefighters Credit Union. The deposits were structured in an effort to evade federal reporting rules, which require financial institutions to notify the U.S. Department of the Treasury about transactions of more than $10,000. After making all of the structured cash deposits, King later combined all of the money to purchase three residences in the south suburbs of Chicago.
A federal jury earlier this year convicted King, 49, on two counts of structuring a currency transaction. U.S. District Judge Jorge L. Alonso imposed the sentence after a hearing in federal court in Chicago.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Tamera Cantu, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago.
“The structuring laws are in place for a good reason: they help law enforcement ferret out serious criminal activity that could otherwise go undetected,” Assistant U.S. Attorneys Christopher V. Parente and Esther S. Mignanelli argued in the government’s sentencing memorandum. “The defendant knew he was committing a crime each time he went to a bank and structured the cash deposits.”
Bronx Man Charged with Scheme to Steal Checks and Defraud BanksRead the Press Release
NEWARK, N.J.– A Bronx, New York, man was charged for his participation in a scheme to steal and alter checks from the mail and engage in bank fraud, U.S. Attorney Craig Carpenito announced today.
Claude Anthony Burnett, 23, is charged by complaint with one count of bank fraud conspiracy and one count of conspiracy to receive and possess stolen mail. He is scheduled to appear by videoconference this afternoon before U.S. Magistrate Judge Michael A. Hammer.
According to documents filed in this case and statements made in court:
From at least February 2020 to November 2020, Burnett and others conspired to steal checks from mailboxes in and around Morris, Essex, Somerset, and Passaic counties, alter the stolen checks, and deposit the altered checks into bank accounts controlled by Burnett and his conspirators. To date, the investigation has identified over 140 checks with a face value of over $600,000 that have been stolen, altered, and deposited in accounts controlled by Burnett and his conspirators.
The count of bank fraud conspiracy carries a maximum sentence of 30 years in prison and a fine of $1 million; the count of conspiracy to receive and possess stolen mail carries a maximum sentence of five years in prison and a fine of $250,000, or twice the pecuniary gain to the defendant or loss to the victim, whichever is greater.
U.S. Attorney Carpenito credited special agents of the U.S. Postal Inspection Service Newark Division, under the direction of Acting Inspector in Charge Raimundo Marrero, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Vijay Dewan of the U.S. Attorney’s Office Economic Crimes Unit.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Bow Man Sentenced to 30 Months for Fentanyl TraffickingRead the Press Release
CONCORD - Michael Briand, 29, of Bow, was sentenced to 30 months in federal prison for fentanyl trafficking, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, on August 27, 2019, a cooperating individual told Nashua Police Detectives that Briand and an accomplice were selling fentanyl in Nashua. At the direction of detectives, the cooperator arranged to buy a quantity of fentanyl from Briand and his accomplice, Megan Judd. They were transported to the transaction by Travis Dunn. The deal took place in the bathroom of a fast food restaurant in Nashua and Briand took custody of the money in the transaction. Following the sale, detectives arrested Briand, Judd, and Dunn.
Briand previously pleaded guilty on August 5, 2020. Judd and Dunn also have pleaded guilty. Judd has already been sentenced and Dunn is scheduled to be sentenced on March 1, 2021.
“Fentanyl traffickers sell a deadly substance that endangers the health and safety of their customers as well as the general public,” said U.S. Attorney Murray. “Through Operation SOS, we are working closely with the Nashua Police Department to target and prosecute the drug dealers who are engaged in this hazardous and illegal activity. Traffickers in Nashua who persist in selling fentanyl should understand that they are destined to spend time in federal prison.”
This matter was investigated by the Nashua Police Department’s Narcotics Intelligence Division and Problem-Oriented Policing Unit.
The case is being prosecuted by Assistant U.S. Attorney Joachim H. Barth.
This case is part of Operation Synthetic Opioid Surge (S.O.S.). In July of 2018, Attorney General Jeff Sessions announced the creation of S.O.S., which is being implemented in the District of New Hampshire and nine other federal districts. The goal of S.O.S. is to combat the large number of overdoses and deaths associated with fentanyl and other synthetic opioids. In New Hampshire, the U.S. Attorney’s Office is focusing its efforts on prosecuting synthetic opioid trafficking cases arising in Hillsborough County, which includes Manchester and Nashua.
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Baltimore Cocaine Dealer Pleads Guilty, Sentenced to 10 Years in Federal PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced Antoine Coles, age 33, of Baltimore, yesterday to 10 years in federal prison, followed by three years of supervised release, after Coles pleaded guilty to possession with intent to distribute cocaine.
The guilty plea and sentence were 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 Commissioner Michael Harrison of the Baltimore Police Department.
According to Coles’ plea agreement, on September 25, 2019, Baltimore Police officers on patrol in the 2100 block of West Lexington Street in Southwest Baltimore approached a group of men who were running a power line out of a vacant home. Coles was sitting on a stoop nearby holding a marijuana blunt. When an officer approached him to conduct a pat down, Coles stood up, clenched his right hand in a fist around his cell phone, and punched the officer in his jaw.
As detailed in his plea agreement, immediately after striking the officer, Coles ran away, dropping a spare magazine as he fled. Coles was quickly apprehended by other officers. While attempting to arrest Coles, detectives recovered a handgun from Coles’ waistband, loaded with 12 rounds of .45 caliber ammunition, including a round in the chamber. A search of Coles after his arrest recovered 11 blue-top vials, each containing cocaine. Coles admitted that he intended to distribute the cocaine.
United States Attorney Robert K. Hur praised the ATF and Baltimore Police Department for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorney Michael Goldsticker, who prosecuted the case.
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Bakersfield Man Indicted for Unauthorized Transfers of more than $450,000 from A Victim’s Bank Account to a Brokerage Account He ControlledRead the Press Release
FRESNO, Calif. — Ramon Armendariz, Jr., 33, of Bakersfield, was indicted on Oct. 15, 2020, and charged with multiple counts of wire fraud, bank fraud, and aggravated identity theft, U.S. Attorney McGregor W. Scott announced.
According to court documents, Armendariz unlawfully obtained personal identifying information and bank account information of the victim, S.L., which he used to open a brokerage account in the victim’s name. Armendariz used S.L.’s personal bank accounts to fund the brokerage account. Armendariz listed himself as an authorized check writer on the brokerage account in order to access the funds when the transfers to the brokerage account were completed. Armendariz’s scheme unraveled when S.L. discovered the unauthorized transfers and notified the financial institution, resulting in a freeze of the funds in the brokerage account.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Melanie L. Alsworth is prosecuting the case.
If convicted, Armendariz faces a maximum statutory penalty of 20 years in prison on each count of wire fraud, up to 30 years in prison on each count of bank fraud, and a mandatory consecutive sentence of two years in prison on the aggravated identity theft. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Armed Career Criminal Sentenced to over 19 Years in Prison for Firearm PossessionRead the Press Release
GAINESVILLE, FLORIDA – James Wilkerson, 43, of Citra, Florida, was sentenced on December 1, 2020, to a total of 19 and a half years in federal prison after a federal jury convicted him of possessing a firearm as a convicted felon on July 24, 2020. Lawrence Keefe, United States Attorney for the Northern District of Florida, announced the sentence.
“The threat posed to our communities by this violent career criminal has been eliminated,” said U.S. Attorney Keefe. “This sentence not only fits the defendant’s history of crime, but it is also key to protecting public safety. The collaborative efforts of our partners in the Gainesville Gun Violence Initiative continue to yield impactful results, and we will continue working tirelessly to make North Florida safer.”
On October 30, 2018, in response to a number of violent crimes occurring in a vacant lot in northeast Gainesville, Gainesville Police Department (GPD) detectives were conducting follow-up investigation in relation to an unsolved homicide when they observed Wilkerson and another person sitting under a tent in the vacant lot. The detectives approached the tent and made contact with Wilkerson, who was clenching one of his hands, as if he was concealing something. The detectives also noticed the odor of marijuana as they approached the tent. Wilkerson refused to comply with lawful commands from the detectives and began to resist their attempts to detain him for further investigation. After a brief struggle, Wilkerson was detained and a small baggie of drugs was recovered.
Detectives then searched the area where Wilkerson had been sitting and located a loaded .32 caliber pistol amongst some trash, which would have been immediately adjacent to Wilkerson’s feet. Wilkerson, a convicted felon, was arrested for possession of a firearm by a convicted felon.
DNA forensic analysis conducted by the Florida Department of Law Enforcement crime lab was instrumental in proving that the firearm belonged to Wilkerson.
Additional investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) revealed that Wilkerson had multiple prior felony convictions, including aggravated assault, robbery with a firearm, trafficking in cocaine, and possession of cocaine. Due to his criminal record, Wilkerson qualified as an Armed Career Criminal, which allowed for an enhanced sentence, including a fifteen year minimum mandatory term of imprisonment.
“As a felon, with several prior convictions for violent crimes, this sentence will remove this individual from our streets and put him in federal prison where he will serve a lengthy sentence,” said ATF Special Agent in Charge Craig W. Saier.
This sentencing resulted from the collaborative work of the Gainesville Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Assistant United States Attorney Chris Elsey.
The GPD Detectives Division notes, “This sentence is another example of how the Gainesville Gun Violence Initiative is benefiting our neighbors and making our City safer. As our Department continues to seek ways to curb gun violence in Gainesville, we are grateful for our local, state, and federal partners that work tirelessly to bring these violent criminals to justice.”
The Gainesville Gun Violence Initiative (GVI) was established in April, 2019, by the United States Attorney’s Office for the Northern District of Florida in an effort to stem the escalating gun violence in Gainesville and the surrounding area. As GVI partners, the State Attorney’s Office for the Eighth Judicial Circuit, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Federal Bureau of Investigation, the U.S. Marshals Service, the Florida Department of Law Enforcement, the Gainesville Police Department, the Alachua County Sheriff’s Office, the Alachua Police Department, the University of Florida Police Department, and the Florida Department of Corrections share this commitment to protecting public safety.
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Press Release - U.S. v. WilkersonArizona man sentenced to one year in prison for illegally possessing a firearmRead the Press Release
ALBUQUERQUE, N.M. – Carlton Craig Sandoval, 39, of Window Rock, Arizona, and a member of the Navajo Nation, was sentenced to 12 months and 1 day in prison on Dec. 2 after pleading guilty to being a felon in possession of a firearm and ammunition in Indian Country.
On Jan. 1, police encountered Sandoval after responding to a 911 call from Navajo, New Mexico, reporting a fight outside a group of homes. Officers found Sandoval at the scene sitting in the driver’s seat of a vehicle, where he refused to comply with officers’ inquiries and requests. An officer observed an open beer can and a rifle on the front passenger seat. The officers arrested Sandoval, who was prohibited from possessing firearms based on previous felony convictions.
Sandoval pleaded guilty on June 3. Upon his release from prison, Sandoval will be subject to three years of supervised release.
The FBI investigated this case with assistance from the Window Rock Police Department. Assistant U.S. Attorney Alexander Flores prosecuted the case.
17 Charged in Lancaster-Based Federal Drug Conspiracy and Firearms Case after Multi-Year InvestigationRead the Press Release
Columbia, South Carolina --- United States Attorney Peter M. McCoy, Jr. announced today that federal, state, and local law enforcement officers charged 16 individuals in federal court for their roles in a drug trafficking organization that operated out of the Midlands region of South Carolina. An additional defendant was charged in a related case with violations of federal firearms laws. Charges against the 17 follow federal charges against five additional defendants in related cases, four of whom have been convicted.
A joint team of more than 55 federal, state, and local law enforcement officers made eight arrests in the case today. Four defendants were already in custody, and five defendants remain at large. The arrested defendants were arraigned before the Honorable Shiva V. Hodges, United States Magistrate Judge, in Columbia.
The charges follow a more than two-year long investigation by federal, state, and local law enforcement into a fentanyl, heroin, and methamphetamine distribution ring in the Lancaster area. The investigation resulted in the seizure of various quantities of fentanyl, heroin, and methamphetamine, 16 firearms, and ammunition.
“Operations like these leave our communities safer and more stable than they were before; the people of South Carolina deserve nothing less,” said U.S. Attorney McCoy. “We will continue to work tirelessly with our federal, state, and local partners to dismantle large-scale, organized drug-dealing organizations, which cause untold levels of harm to end users, their families, and their communities.”
“This focused and collaborative effort was designed to make a long-lasting impact on the level of gun violence and criminal activity in Lancaster County,” said ATF Special Agent in Charge Vince Pallozzi. “Along with our law enforcement partners, we have taken a number of violent individuals out of the community throughout this investigation and made significant progress in on-going efforts to decrease gun violence.”
“Today was a good day in Lancaster County,” said Sheriff Barry S. Faile. “Our Drug Task Force agents, along with agents from several of our state and federal partners, have been working for many months on investigating this alleged wide-ranging conspiracy. I appreciate the help we got from all quarters in bringing this operation to a close.”
The indictment charges 47 counts alleging violations of federal narcotics, firearm, and counterfeit laws for conduct spanning from February 2017 to present. Specifically, the indictment returned by a federal Grand Jury alleges defendants distributed, and possessed with intent to distribute, fentanyl, heroin, and methamphetamine, and that some defendants violated federal firearms laws including by possessing or using firearms in furtherance of drug trafficking crimes.
The following defendants have been charged in the Indictment for conduct related to their alleged roles in the drug trafficking organization:
- Clarence Grover Kirk III, 38, of Rock Hill;
- William Earl Belk, 29, of Lancaster;
- Celeste Allen Pardue, 47, of Lancaster;
- Rachell Nichole House, 32, of Lancaster;
- Berry Allen McIlwain Jr., 30, of Lancaster;
- Richard Hopkins, 30, of Lancaster;
- Christopher Lynn Love, 44, of Lancaster;
- Scott Charles Catledge Jr., 27, of Lancaster;
- Dustin Robert Barton, 33, of Lancaster;
- Ezekiel T. Williams, 23, of Lancaster; and
- Larry Christopher Craig, 50, of Lancaster.
In a related case, Dennis Lee Williams, 29, of Lancaster, was charged with violating federal firearms laws.
The case was a joint investigation by the ATF and Lancaster County Sheriff’s Office, who were assisted by Homeland Security Investigations (HSI), South Carolina Law Enforcement Division (SLED), Lancaster Police Department, and the Sixth Circuit Solicitor’s Office.
This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Assistant U.S. Attorneys Justin B. Holloway, Elliott B. Daniels, Winston I. Marosek, and Michael O’Mara of the Columbia and Greenville offices are prosecuting the case.
The United States Attorney stated that all charges against these defendants are merely accusations and that all defendants are presumed innocent until and unless proven guilty.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
13 Arrested in Connection with an LSD, Fentanyl and Methamphetamine Trafficking and Money Laundering Scheme Occurring in the West Campus Area of the University of Texas at AustinRead the Press Release
Federal, state and local authorities have arrested 13 individuals, including current and former University of Texas (UT) students, charged in connection with trafficking LSD, fentanyl and methamphetamine pills to UT students in Austin.
That announcement was made today by U.S. Attorney Gregg N. Sofer; Drug Enforcement Administration (DEA) Special Agent in Charge Steven S. Whipple, Houston Division; FBI Special Agent in Charge Christopher Combs, San Antonio Field Office; Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge Richard D. Goss, Houston Field Office; Travis County Sheriff Sally Hernandez; Austin Police Chief Brian Manley; and Lakeway Police Chief Todd Radford.
Those arrested include: 23-year-old Varun Prasad of Austin; 26-year-old Charles Zenker of Houston; 68-year-old Benny Daneshjou of Austin; 26-year-old Ashley Larue of Austin; 21-year-old Drew Zarate of Austin; 32-year-old Christopher Edwards of Portland, Ore.; 21-year-old Jacob Schelling of Cypress; 22-year-old Madison Scott of Houston; 21-year-old Adrian Andreescu of Plano; 21-year-old Nikit Shingari of Austin; 21-year-old Nolan Fogleman of Austin; 23-year-old Samuel Parry of Austin; and 27-year-old Brandon Carpenter of Austin. All of the defendants are charged with conspiracy to possess with intent to distribute a controlled substance. Prasad, Daneshjou, Larue and Zarate are also charged with conspiracy to commit money laundering.
The defendants allegedly conspired to distribute LSD, fentanyl and methamphetamine in the Austin metropolitan area and other locations since April 2019 and also allegedly conspired to launder the financial proceeds of unlawful activities.
Search warrants executed yesterday in conjunction with arrest warrants resulted in the seizure of large quantities of fentanyl, Adderall pills, Alprazolam (Xanax), LSD, marijuana and psilocybin (hallucinogenic mushrooms). Investigators also seized several firearms and approximately $100,000 in U.S. currency. Prior to yesterday’s enforcement action, law enforcement officers arrested four other subjects and seized quantities of fentanyl methamphetamine, heroin, cocaine, LSD, MDMA, Benzodiazepine and other opioids during this investigation. Approximately $163,000 in assets and U.S. currency were also seized.
“Make no mistake about it. These are not pills being carefully manufactured and tested by trusted, regulated pharmaceutical companies. During the course of this investigation, two of the targets died from drug overdoses,” said U.S. Attorney Sofer. “When unsuspecting college kids and other drug seekers put these pills in their mouths, they are playing Russian roulette. They are gambling that profit-seeking drug dealers did not place lethal doses of unknown chemicals or fentanyl in these pills.”
“Drug overdose is a leading cause of preventable, injury-related deaths in our nation. This coordinated law enforcement operation dismantled an enterprise responsible for the distribution of counterfeit pharmaceuticals that contained fentanyl and methamphetamine, but were clandestinely manufactured to mimic the prescription pharmaceuticals Oxycodone and Adderall. We caution people to never consume pharmaceuticals unless under licensed medical care and sourced from a licensed pharmacy. A miniscule amount, as small as a couple grains of salt, of some of these illicit drugs can result in death,” said DEA Special Agent in Charge Whipple.
The Austin Tactical Diversion Squad, a law enforcement task force targeting criminal pharmaceutical diversion and counterfeit drug trafficking in Central Texas, conducted this investigation dubbed Operation Spider Web. Partner agencies include DEA, FBI, IRS-CI, Austin Police Department, Travis County Sheriff’s Office, Lakeway Police Department, Cedar Park Police Department and the Texas National Guard Joint Counterdrug Task Force.
“The laundering of illegal drug profits is as important and essential to drug traffickers as the very distribution of their illegal drugs,” said IRS-CI Special Agent in Charge Goss. “Without these ill-gotten gains, the traffickers cannot finance their organizations. By following the money trail, Special Agents with the IRS are able to assist our law enforcement partners with dismantling drug trafficking organizations and those that facilitate their activities.”
“We value the relationship we have with our federal partners, and through our collaborative efforts have removed a significant amount of illegal drugs off the streets of Austin. This has potentially saved many people from the dangers and risks associated with illegal drug use and furthers our mission of keeping Austin residents safe,” stated Austin Police Chief Manley.
“We are honored to serve alongside such professional agencies to combat illicit drug distribution in our various communities. This case is emblematic of the partnerships it takes in today’s times to successfully investigate and prosecute these types of complex crimes,” stated Lakeway Police Chief Radford.
Upon conviction of the drug conspiracy charge, the defendants face between 10 years and life in federal prison. Upon conviction of the money laundering conspiracy charge, the defendants face up to 20 years in federal prison.
Assistant U.S. Attorneys Mark Marshall and Robert Almonte are prosecuting this case on behalf of the government.
It is important to note that an indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Drug overdose deaths and opioid-involved deaths continue to increase in the U.S. Deaths from drug overdose are up among both men and women, all races and adults of nearly all ages with more than three out of five drug overdose deaths involving an opioid. More than 130 people die every day in the U.S. after overdosing on opioids while methamphetamine continues to be one of the most commonly misused stimulant drugs in the world and is the drug that most contributes to violent crime.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Thursday 3 December 2020
Workrite Companies to Pay $7.1 Million to Settle Alleged Furniture OverchargesRead the Press Release
Ergonomic office furniture maker Workrite Ergonomics LLC, a Delaware company, and its parent, Knape & Vogt Manufacturing Co. (collectively, Workrite), have agreed to pay $7.1 million to resolve allegations under the False Claims Act that they overcharged the federal government for office furniture under General Services Administration (GSA) contracts, the Department of Justice announced today.
“Companies that do business with the United States are expected to charge the government appropriately for their services,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Department of Justice’s Civil Division. “We will continue to protect the American taxpayers and hold accountable those who misuse federal funds.”
“Federal contractors must be honest and forthcoming,” said U.S. Attorney David L. Anderson of the Northern District of California. “Contractors that overcharge the American taxpayer will be held accountable.”
“American taxpayers deserve fair prices and accurate information from GSA contractors,” said GSA Inspector General Carol Fortine Ochoa. “I appreciate the hard work and dedication that led to this significant recovery.”
“The settlement is a positive outcome that holds Workrite accountable for its questionable business practices,” said Special Agent in Charge Bryan D. Denny, Defense Criminal Investigative Service (DCIS), Western Field Office. “This is but one example of the law enforcement and oversight communities’ on-going, joint efforts to be good stewards of American taxpayer dollars.”
This settlement relates to a contract under which Workrite provided office furniture to government entities from 2009 to 2017 through GSA’s Multiple Award Schedule (MAS) program. The MAS program provides the government with a streamlined process to procure commonly used commercial goods and services. The settlement resolves allegations that Workrite did not fulfill its contractual obligations to provide GSA with accurate information about its commercial sales practices during contract negotiations, and did not subsequently extend lower prices to government customers as required by the GSA contract’s price reduction clause.
The allegations were originally made in a lawsuit filed under the whistleblower provisions of the False Claims Act by Michael J. Franchek, of Park City, Utah, a former Workrite sales manager. The Act permits private parties to sue for false claims on behalf of the United States and to share in any recovery. Franchek will receive approximately $1.27 million from the settlement proceeds.
The settlement with Workrite was the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Northern District of California, the GSA’s Office of the Inspector General, the Department of State’s Office of Inspector General, the DCIS, the Defense Contract Audit Agency, and the U.S. Department of Veterans Affairs’ Office of Inspector General.
The lawsuit is captioned United States ex rel. Franchek v. Workrite Ergonomics, LLC, No. 16-cv-02789 (N.D. Cal.). The claims resolved by the settlement are allegations only and there has been no determination of liability.
Workrite Companies to Pay $7.1 Million to Settle Alleged Furniture OverchargesRead the Press Release
SAN FRANCISCO – Ergonomic office furniture maker Workrite Ergonomics LLC, a Delaware company, and its parent, Knape & Vogt Manufacturing Co. (collectively, Workrite), have agreed to pay $7.1 million to resolve allegations under the False Claims Act that they overcharged the federal government for office furniture under General Services Administration (GSA) contracts, the Department of Justice announced today.
“Companies that do business with the United States are expected to charge the government appropriately for their services,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Department of Justice’s Civil Division. “We will continue to protect the American taxpayers and hold accountable those who misuse federal funds.”
“Federal contractors must be honest and forthcoming,” said U.S. Attorney David L. Anderson of the Northern District of California. “Contractors that overcharge the American taxpayer will be held accountable.”
“American taxpayers deserve fair prices and accurate information from GSA contractors,” said GSA Inspector General Carol Fortine Ochoa. “I appreciate the hard work and dedication that led to this significant recovery.”
“The settlement is a positive outcome that holds Workrite accountable for its questionable business practices,” said Special Agent in Charge Bryan D. Denny, Defense Criminal Investigative Service (DCIS), Western Field Office. “This is but one example of the law enforcement and oversight communities’ on-going, joint efforts to be good stewards of American taxpayer dollars.”
This settlement relates to a contract under which Workrite provided office furniture to government entities from 2009 to 2017 through GSA’s Multiple Award Schedule (MAS) program. The MAS program provides the government with a streamlined process to procure commonly used commercial goods and services. The settlement resolves allegations that Workrite did not fulfill its contractual obligations to provide GSA with accurate information about its commercial sales practices during contract negotiations, and did not subsequently extend lower prices to government customers as required by the GSA contract’s price reduction clause.
The allegations were originally made in a lawsuit filed under the whistleblower provisions of the False Claims Act by Michael J. Franchek, of Park City, Utah, a former Workrite sales manager. The Act permits private parties to sue for false claims on behalf of the United States and to share in any recovery. Franchek will receive approximately $1.27 million from the settlement proceeds.
The settlement with Workrite was the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Northern District of California, the GSA’s Office of the Inspector General, the Department of State’s Office of Inspector General, the DCIS, the Defense Contract Audit Agency, and the U.S. Department of Veterans Affairs’ Office of Inspector General.
The lawsuit is captioned United States ex rel. Franchek v. Workrite Ergonomics, LLC, No. 16-cv-02789 (N.D. Cal.). The claims resolved by the settlement are allegations only and there has been no determination of liability.
Wirt County Woman Sentenced to Prison for Bank FraudRead the Press Release
CHARLESTON, W.Va. – United States Attorney Mike Stuart announced that Melissa Evans, 49, of Palestine, was sentenced to 21 months in prison for bank fraud. She will also pay a total of $145,000 in restitution.
“Evans stole from her employer for four years,” said United States Attorney Mike Stuart. “Now, in addition to repaying her employer, she’ll be spending almost two years in federal prison.”
Evans worked as the financial coordinator for a dental practice in Parkersburg. Over the course of four years, Evans stole checks mailed to the dental practice from insurance groups and fraudulently deposited the stolen checks into her bank account, instead of the dental practice’s bank account. Throughout her scheme, Evans fraudulently appropriated more than 300 checks and embezzled more than $120,000.
The United States Secret Service and the Parkersburg Police Department conducted the investigation. United States District Judge Irene C. Berger imposed the sentence. Assistant United States Attorney Kathleen Robeson 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. 2:20-cr-00026.
Follow us on Twitter: SDWVNews and USAttyStuart
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Western New York Man with Alleged Ties to White Supremacist Group Charged with Being A Felon in Possession of FirearmsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that a federal criminal complaint, charging Stephen Reed Pattison, 31, of Hilton, NY, with being a felon-in-possession of firearms, was unsealed today. The charge carries a maximum penalty of 10 years in prison.
Assistant U.S. Attorney Brett A. Harvey, who is handling the case, stated that according to the criminal complaint, Pattison was arrested in Western New York, on October 30, 2020, by the United States Marshals Task Force. The basis for defendant’s arrest was a parole absconder warrant from a 2016 conviction that he had in the State of Missouri for Domestic Assault in the Second Degree. In the months preceding his arrest, the defendant aggressively and sometimes violently expressed his disagreement with local protests relating to the deaths of George Floyd and Daniel Prude in a series of Facebook posts. Pattison also expressed his support of white supremacist groups and is believed to be associated with a local “Blood and Honour” group in the Rochester, a white supremacist group that is affiliated with a neo-Nazi organization known as “Combat 18.” Following his arrest as a parole absconder, investigators obtained search warrants for both the defendant’s cell phone as well as his residence on Church Road, in Hilton. During the execution of those warrants, evidence suggesting his involvement with white supremacist organizations was developed and various firearms were seized from the residence.
Pattison made his initial appearance today before U.S. Magistrate Judge Marian W. Payson and was detained.
The complaint is a result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia, the United States Marshals Service, under the direction of Marshal Charles Salina, the Brighton Police Department, under the direction of Chief David Catholdi; the New York State Police, under the direction of Major Barry Chase; the Monroe County Sheriff's Office, under the direction of Sheriff Todd Baxter; the Rochester Police Department, under the direction of Chief Cynthia Herriott-Sullivan; and the Aureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York FIeld Division.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Weakley County Man Sentenced to Federal Prison for Conspiring with Others to Distribute over 500 Grams of MethamphetamineRead the Press Release
Jackson, TN - Justin Tyler Bynum, 32, of South Fulton, Tennessee, has been sentenced to 100 months in federal prison for conspiring with others to possess with the intent to distribute over 500 grams of methamphetamine. D. Michael Dunavant, U.S. Attorney announced the sentence today.
According to information presented in court, on April 25, 2018, when deputies with the Weakley County Sheriff’s Department attempted a traffic stop on Bynum's vehicle, he turned into a driveway, stopped his vehicle, and fled on foot. Deputies eventually caught Bynum and recovered approximately an ounce of methamphetamine. Bynum later admitted to selling methamphetamine for the previous four months, in the amount of at least two ounces per week.
On June 25, 2019, Bynum pled guilty to conspiring with others to distribute and possess with the intent to distribute over 500 grams of methamphetamine.
Bynum has an extensive criminal history, including his current offense, which involved his distribution of approximately 900 grams of methamphetamine, prior burglary, theft and vandalism convictions that occurred a few years before his current offense.
On December 1, 2020, Chief U.S. District Judge S. Thomas Anderson sentenced Bynum to 100 months in federal prison followed by five years of supervised release. There is no parole in the federal system.
U.S. Attorney D. Michael Dunavant said, "Methamphetamine that is trafficked in and through West Tennessee is increasing in dangerous purity, and continues to destroy individuals, families, and communities. Drug dealers who profit from the pain, addiction, violence and death caused by these dangerous substances deserve proper punishment, and this sentence does just that."
This is the third sentencing in a case involving multiple defendants, including Justin Tyler Bynum, Keith Norris, Robert Thomas, Charles Settles, and Solomon Clay on charges of conspiracy to distribute actual methamphetamine. On August 6, 2019, Robert Thomas was sentenced to 108 months in federal prison followed by 5 years supervised release for his role in the conspiracy. https://www.justice.gov/usao-wdtn/pr/martin-tennessee-man-sentenced-108months-imprisonment-conspiracy-distribute
On July 13, 2020, Norris was sentenced to 280 months in federal prison followed by five years supervised release. https://www.justice.gov/usao-wdtn/pr/weakley-county-man-sentenced-23-years-federal-prison-conspiracy-distribute
This case was investigated by the Weakley County Sheriff’s Office and the Tennessee Bureau of Investigation.
Assistant U.S. Attorneys Jerry Kitchen and Josh Morrow prosecuted this case on behalf of the government.
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Vitol Inc. Agrees to Pay over $135 Million to Resolve Foreign Bribery CaseRead the Press Release
Vitol Inc. (Vitol), the U.S. affiliate of the Vitol group of companies, which together form one of the largest energy trading firms in the world, has agreed to pay a combined $135 million to resolve the Justice Department’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) and to resolve a parallel investigation in Brazil.
The resolution arises out of Vitol schemes to pay bribes to officials in Brazil, Ecuador, and Mexico. Vitol has also agreed to disgorge more than $12.7 million to the Commodity Futures Trading Commission (CFTC) in a related matter and to pay the CFTC a penalty of $16 million related to trading activity not covered by the deferred prosecution agreement with the department.
“Over a period of 15 years, Vitol paid millions of dollars in bribes to numerous public officials – in three separate countries – to obtain improper competitive advantages that resulted in significant illicit profits for the company,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “Today’s coordinated resolution with Brazil, along with our first coordinated FCPA resolution with the CFTC, underscores the department’s resolve to hold companies accountable for their crimes while, at the same time, avoiding unnecessarily duplicative penalties.”
“Vitol paid bribes to government officials in Brazil, Ecuador and Mexico to win lucrative business contracts and obtain competitive advantages to which they were not fairly entitled,” said Acting U.S. Attorney Seth D. DuCharme of the Eastern District of New York. “The United States Attorney’s Office for the Eastern District of New York will continue to hold accountable companies and individuals that attempt to defy U.S. law to the detriment of honest competitors.”
“This resolution demonstrates the FBI's commitment to investigate foreign corruption and hold accountable those who circumvent laws for financial gain at the expense of American consumers,” said Assistant Director in Charge Kristi K. Johnson of the FBI’s Los Angeles Field Office. “We'll continue to work with our partners to root out corruption, whether it occurs domestically or abroad, to ensure trust on the international playing field.”
Vitol entered into a deferred prosecution agreement with the department in connection with a criminal information filed today in the Eastern District of New York charging the company with two counts of conspiracy to violate the anti-bribery provisions of the FCPA. The case is assigned to Senior U.S. District Judge Eric N. Vitaliano.
Pursuant to its agreement with the department, Vitol’s total criminal penalty is $135 million. The department will credit $45 million – approximately one third of the total criminal penalty – against the amount that Vitol will pay to resolve an investigation by the Brazilian Ministério Público Federal for conduct related to the company’s bribery scheme in Brazil.
As part of the deferred prosecution agreement, Vitol Inc. and Vitol S.A., another company within the Vitol group of companies, have agreed to continue to cooperate with the department in any ongoing investigations and prosecutions relating to the conduct, including of individuals; to enhance their compliance programs; and to report to the department on the implementation of their compliance programs.
According to the company’s admissions and court documents, between 2005 and 2014, Vitol and its co-conspirators paid bribes of more than $8 million to at least four officials at Brazil’s state-owned and controlled oil company Petróleo Brasileiro S.A. – Petrobras (Petrobras). Vitol paid these bribes in exchange for receiving confidential Petrobras pricing and competitor information. Vitol concealed the scheme through the use of intermediaries and a fictitious company that facilitated the payments to offshore accounts and, ultimately, to the Petrobras officials.
Vitol also admitted that from 2011 to 2014, it bribed at least five other Petrobras officials in exchange for receiving confidential pricing information that Vitol used to win fuel oil contracts with Petrobras. During that scheme, a consultant acting on behalf of Vitol engaged in back-channel negotiations with a Houston-based Petrobras official. The parties would then hold staged negotiations, ultimately settling on the pre-arranged price that allowed for bribes to be paid from Vitol to the Petrobras officials. Several of the co-conspirators communicated using alias email accounts and code names, including “Batman,” “Tiger,” “Phil Collins,” “Dolphin,” “Popeye,” and “Beb.”
Vitol also admitted to a second conspiracy to bribe officials in Ecuador and Mexico in order to obtain and retain business in connection with the purchase and sale of oil products. Between 2015 and July 2020, Vitol agreed to offer and pay more than $2 million in bribes to officials in Ecuador and Mexico.
In furtherance of this bribery scheme, Vitol and its co-conspirators entered into sham consulting agreements, set up shell companies, created fake invoices for purported consulting services and used alias email accounts to transfer funds to offshore companies involved in the conspiracy – all while knowing that the funds, at least in part, would be used to pay bribes to Ecuadorian and Mexican officials.
In related matters, the department recently unsealed charges against a Houston-based former Petrobras official who received bribes in association with the scheme, and who pleaded guilty to one count of conspiracy to commit money laundering on Feb. 8, 2019, in the Eastern District of New York. In addition, the department recently unsealed charges against one of the intermediaries involved in the Brazil scheme, who pleaded guilty on Sept. 22, 2017, to one count of conspiracy to violate the FCPA in connection with a related bribery scheme. Both individuals are awaiting sentencing. Further, on Sept. 22, 2020, a federal grand jury in the Eastern District of New York returned an indictment against Javier Aguilar, a Vitol trader, for his alleged role in the Ecuador scheme.
The investigation is being conducted by the FBI’s International Corruption Unit. The government’s case is being handled by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. Fraud Section Trial Attorneys Derek J. Ettinger, Jonathan P. Robell, and Clayton P. Solomon, and Assistant U.S. Attorneys Mark E. Bini and Andrey Spektor are prosecuting the case. The U.S. Marshals Service and Justice Department’s Office of International Affairs provided assistance in the investigation.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Vitol Inc. Agrees to Pay over $135 Million to Resolve Charges for Bribery Schemes in Latin AmericaRead the Press Release
Vitol Inc. (Vitol), the U.S. affiliate of the Vitol group of companies, which together form one of the largest energy trading firms in the world, has agreed to a combined total criminal penalty of $135 million to resolve bribery charges with law enforcement authorities in the United States and Brazil. The resolution arises out of Vitol schemes to pay bribes to officials in Brazil, Ecuador, and Mexico. Vitol has also agreed to disgorge more than $12.7 million to the Commodity Futures Trading Commission (CFTC) in a related matter and to pay the CFTC a penalty of $16 million related to trading activity not covered by the deferred prosecution agreement with the department. The case is assigned to Senior U.S. District Judge Eric N. Vitaliano.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, Brian C. Rabbitt, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and Kristi K. Johnson, Assistant Director-in-Charge, Federal Bureau of Investigation, Los Angeles Field Office (FBI), made the announcement.
“Vitol paid bribes to government officials in Brazil, Ecuador and Mexico to win lucrative business contracts and obtain competitive advantages to which they were not fairly entitled,” stated Acting United States Attorney DuCharme. “The United States Attorney’s Office for the Eastern District of New York will continue to hold accountable companies and individuals that attempt to defy U.S. law to the detriment of honest competitors.”
“Over a period of 15 years, Vitol paid millions of dollars in bribes to numerous public officials – in three separate countries – to obtain improper competitive advantages that resulted in significant illicit profits for the company,” said Acting Assistant Attorney General Rabbitt. “Today’s coordinated resolution with Brazil, along with our first coordinated FCPA resolution with the CFTC, underscores the department’s resolve to hold companies accountable for their crimes while, at the same time, avoiding unnecessarily duplicative penalties.”
“This resolution demonstrates the FBI's commitment to investigate foreign corruption and hold accountable those who circumvent laws for financial gain at the expense of American consumers,” said FBI Assistant Director-in-Charge Johnson. “We'll continue to work with our partners to root out corruption, whether it occurs domestically or abroad, to ensure trust on the international playing field.”
Vitol entered into a deferred prosecution agreement with the government in connection with a criminal information filed today in the Eastern District of New York charging the company with two counts of conspiracy to violate the anti-bribery provisions of the FCPA. Pursuant to its agreement, Vitol will pay a total criminal penalty to the United States of $135 million. The Department of Justice will credit $45 million—approximately one third of the total criminal penalty—against the amount that Vitol will pay to resolve an investigation by the Brazilian Ministério Público Federal for conduct related to the company’s bribery scheme in Brazil.
As part of the deferred prosecution agreement, Vitol Inc. and Vitol S.A., another company within the Vitol group of companies, have agreed to: (i) continue to cooperate with the department in any ongoing investigations and prosecutions relating to the charged conduct, including conduct of individuals, (ii) enhance their compliance programs, and (iii) report to the department on the implementation of their compliance programs.
According to the Vitol’s admissions and court documents, between 2005 and 2014, Vitol and its co-conspirators paid bribes of more than $8 million to at least four officials at Brazil’s state-owned and controlled oil company Petróleo Brasileiro S.A. – Petrobras (Petrobras). Vitol paid these bribes in exchange for receiving confidential Petrobras pricing and competitor information. Vitol concealed the scheme through the use of intermediaries and a fictitious company that facilitated the payments to offshore accounts and, ultimately, to the Petrobras officials.
Vitol also admitted that from 2011 to 2014, it bribed at least five additional Petrobras officials in exchange for receiving confidential pricing information that Vitol used to win fuel oil contracts with Petrobras. During that scheme, a consultant acting on behalf of Vitol engaged in back-channel negotiations with a Houston-based Petrobras official. The parties would then hold staged negotiations, ultimately settling on the pre-arranged price that allowed for bribes to be paid from Vitol to the Petrobras officials. Several of the co-conspirators communicated using alias email accounts and code names, including “Batman,” “Tiger,” “Phil Collins,” “Dolphin,” “Popeye” and “Beb.”
Finally, Vitol admitted to participating in a second conspiracy to bribe officials in Ecuador and Mexico in order to obtain and retain business in connection with the purchase and sale of oil products. Between 2015 and July 2020, Vitol agreed to offer and pay more than $2 million in bribes to those officials. In furtherance of this scheme, Vitol and its co-conspirators entered into sham consulting agreements, set up shell companies, created fake invoices for purported consulting services and used alias email accounts to transfer funds to offshore companies involved in the conspiracy—all while knowing that the funds, at least in part, would be used to pay bribes to Ecuadorian and Mexican officials.
In related matters, the government recently unsealed charges against Houston-based former Petrobras official Rodrigo Berkowitz, who pleaded guilty in the Eastern District of New York on February 8, 2019 to one count of conspiracy to commit money laundering. In addition, the government recently unsealed charges against one of the intermediaries involved in the Brazil scheme, Luiz Eduardo Andrade, who pleaded guilty on September 22, 2017 to one count of conspiracy to violate the FCPA in connection with a related bribery scheme. Both individuals are awaiting sentencing. Further, on September 22, 2020, a federal grand jury in the Eastern District of New York returned an indictment against Javier Aguilar, a Vitol trader, for his alleged role in the Ecuador scheme.
The government’s investigation is being conducted by the FBI’s International Corruption Unit. The government’s case is being handled by the Office’s Business and Securities Fraud Section and the Criminal Division’s Fraud Section. Assistant U.S. Attorneys Mark E. Bini and Andrey Spektor of the Eastern District of New York, and Fraud Section Trial Attorneys Derek J. Ettinger, Jonathan P. Robell and Clayton P. Solomon, are prosecuting the case. The Criminal Division’s Office of International Affairs provided assistance in the investigation.
The Defendants:
VITOL INC.
RODRIGO BERKOWITZ
Age: 41
Country of Origin: BrazilJAVIER AGUILAR
Age: 46
Country of Origin: MexicoLUIZ EDUARDO ANDRADE
Age: 61
Country of Origin: BrazilVallejo Man Sentenced to over 4 Years in Prison for Illegally Possessing a FirearmRead the Press Release
SACRAMENTO, Calif. — Joshua Wayne Thompson, 26, of Vallejo, was sentenced today to four years and three months in prison for being a felon in possession of a firearm, U.S. Attorney McGregor W. Scott announced.
According to court documents, on Nov. 18, 2019, law enforcement officers arrested Thompson on multiple felony warrants. Before the arrest, officers witnessed Thompson exit a home in Vallejo and approached him. Thompson ran toward and entered the driver’s side door of a Ford Fusion. While attempting to flee, Thompson rammed the Ford into a Deputy U.S. Marshal’s vehicle. Officers placed Thompson under arrest. At the time of the arrest, Thompson possessed a loaded pistol with a 25-round extended magazine. Thompson cannot possess a firearm or ammunition because he previously was convicted of a felony offense.
This case was a product of an investigation by the U.S. Marshals Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the California Highway Patrol. Assistant U.S. Attorney Matthew Thuesen prosecuted the case.
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 the Department’s 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 the local community to develop effective, locally based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.
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 www.justice.gov/projectguardian.
US Law Enforcement Takes Action Against Approximately 2,300 Money Mules in Global Crackdown on Money LaunderingRead the Press Release
WASHINGTON – The U.S. Department of Justice, the FBI, the U.S. Postal Inspection Service, and six other federal law enforcement agencies announced the completion of the third annual Money Mule Initiative, a coordinated operation to disrupt the networks through which transnational fraudsters move the proceeds of their crimes. Money mules are individuals who assist fraudsters by receiving money from victims of fraud and forwarding it to the fraud organizers, many of whom are located abroad. Some money mules know they are assisting fraudsters, but others are unaware that their actions enable fraudsters’ efforts to swindle money from consumers, businesses, and government unemployment funds. Europol announced a simultaneous effort, the European Money Mule Action (EMMA) today.
Over the last two months, U.S. law enforcement agencies took action against over 2,300 money mules, far surpassing last year’s effort, which acted against over 600 money mules. This year, actions occurred in every state in the country. The initiative announced today targeted money mules involved in a wide range of schemes including lottery fraud, romance scams, government imposter fraud, technical support fraud, business email compromise or CEO fraud, and unemployment insurance fraud. Many of these schemes target elderly or vulnerable members of society. “Money mules fuel fraud against some of America’s most vulnerable populations. Without the help of these money mules, many foreign fraud enterprises find it difficult to profit off of U.S. victims,” said Attorney General William P. Barr. “As this initiative demonstrates, the Department of Justice is committed to disrupting money mule networks, taking actions against more money mules this year than ever before, in an effort to cut off the flow of funds from American consumers and businesses to transnational criminal organizations.” Eight federal law enforcement agencies participated in this year’s effort.
Led by the Department of Justice’s Consumer Protection Branch, the FBI, and the U.S. Postal Inspection Service, the participating agencies include the Department of Labor Office of Inspector General, Federal Deposit Insurance Corporation Office of Inspector General, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Social Security Administration Office of Inspector General, U.S. Secret Service, and U.S. Treasury Inspector General for Tax Administration.
Some highlights from this year’s efforts are:
- Actions were taken to halt the conduct of approximately 2,300 money mules, spanning 92 federal districts.
- Law enforcement served approximately 2,000 money mules with letters warning the money mules that they were facilitating fraud and could face civil or criminal consequences for continuing their actions. Agents conducted over 450 interviews.
- On approximately 30 instances, agents seized assets or facilitated the return of victim funds. Among the asset seizures was a 2019 Lamborghini, which was seized as part of an investigation into a business email compromise scheme.
- The U.S. Postal Inspection Service filed 14 administrative actions requiring money mules to cease facilitating fraud.
- U.S. Attorney’s Offices and the Consumer Protection Branch filed 17 civil injunctive actions seeking court orders requiring money mules to stop facilitating fraudulent activity. Districts filing those actions include the Western District of Washington, District of South Carolina, Middle District of Florida, Southern District of Florida, Central District of California, Northern District of New York, and District of Colorado.
Additionally, more than 35 individuals were criminally charged or arrested for their roles in
receiving victim payments and forwarding the fraud proceeds to accomplices or laundering fraud
proceeds. Cases include:- -The U.S. Attorney’s Office for the Central District of California indicted three individuals for collecting parcels containing victim proceeds in a government imposter scheme.
- -The U.S. Attorney’s Office for the District of Maryland indicted three individuals for opening bank accounts using falsified documents for the purposes of facilitating a business email compromise scam.
- The U.S. Attorney’s Office for the Western District of Texas indicted an individual for facilitating a lottery fraud scheme. The indictment also seeks to forfeit over $1.2 million.
- The U.S. Attorney’s Office for the Northern District of Ohio indicted two money mules who facilitated a grandparents scam.
- -The U.S. Attorney’s Office for the Eastern District of Virginia charged a money mule who laundered gift cards purchased by fraud victims.
Additional criminal charges were brought by U.S. Attorney’s Offices in Southern District of Florida, Western District of Pennsylvania, Western District of North Carolina, Southern District of Texas, the Southern District of Mississippi, and the District of New Jersey.
The above charges are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
“The success of the Money Mule Initiative is the culmination of the hard work by and coordination between the FBI and our federal, state, local, and international partners,” said FBI Director Christopher Wray. “This campaign has resulted in hundreds of criminal arrests worldwide and justice for countless victims. Today’s announcement should send a clear message to those engaged in this type of criminal activity: they are not outside the reach of law enforcement, and the FBI and its partners will relentlessly pursue them in order to protect the American people.”
“The Postal Inspection Service has zero tolerance for fraudsters who use the U.S. Mail to transport funds from scammed victims,” said Chief Postal Inspector Gary Barksdale. “Postal Inspectors use cutting-edge technology to build strong cases and campaigns like those announced today, which make significant progress towards disrupting money mule networks. Postal Inspectors and our law enforcement partners will be relentless in the pursuit of criminal organizations that perpetrate these schemes.”
The agencies participating in the Money Mule Initiative and community partners are undertaking an outreach campaign to increase awareness of how fraudsters use and recruit money mules. U.S. Attorney’s Offices across the country, through their Elder Justice Coordinators, will be reaching out to their communities to educate the public about money mules. AmeriCorp Seniors (formerly Senior Corps) will be working to increase awareness of how money mules facilitate fraud and how consumers can avoid unwittingly assisting fraud schemes.Additionally, the American Bankers Association will be engaging with its members on money mules and the role of financial institutions in addressing the problem. The Department of Justice will also be distributing resources for state and local law enforcement on identifying, disrupting, investigating, and prosecuting money mules.
To find public education materials, as well as information about how fraudsters use and recruit money mules, please visit www.justice.gov.Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. In January 2020, the department designated “Preventing and Disrupting Transnational Elder Fraud” as an Agency Priority Goal, one of its top four priorities. In March 2020, the department announced the largest elder fraud enforcement action in American history, charging more than 400 defendants in a nationwide elder fraud sweep. The department has also conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
The department’s extensive efforts to combat elder fraud seek to halt the billions of dollars seniors lose each year to fraud schemes, including those perpetrated by transnational criminal organizations. The best method for prevention, however, is sharing information about the various types of elder fraud schemes with relatives, friends, neighbors, and other seniors who can use that information to protect themselves. If you or someone you know is age 60 or older and has been a victim of financial fraud,
help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed seven days a week from 6:00 a.m. to 11:00
p.m. eastern time. English, Spanish and other languages are available. The year 2020 marks the 150th anniversary of the Department of Justice.U.S. law enforcement takes action against money mules in global crackdown on money launderingRead the Press Release
The U.S. Department of Justice, the FBI, the U.S. Postal Inspection Service, and six other federal law enforcement agencies announced the completion of the third annual Money Mule Initiative, a coordinated operation to disrupt the networks through which transnational fraudsters move the proceeds of their crimes.
Money mules are individuals who assist fraudsters by receiving money from victims of fraud and forwarding it to the organizers, many of whom are located abroad. Some money mules know they are assisting fraudsters, but others are unaware that their actions enable fraudsters’ efforts to swindle money from consumers, businesses, and government unemployment funds.
Over the last two months, U.S. law enforcement agencies took action against over 2,300 money mules, far surpassing last year’s total of over 600. This year, actions occurred in every state in the country and targeted money mules involved in a wide range of schemes, including lottery fraud, romance scams, government imposter fraud, technical support fraud, business email compromise or CEO fraud, and unemployment insurance fraud. Many of these schemes target elderly or vulnerable members of society.
“Money mules fuel fraud against some of America’s most vulnerable populations. Without the help of these money mules, many foreign fraud enterprises find it difficult to profit off of U.S. victims,” said Attorney General William P. Barr. “As this initiative demonstrates, the Department of Justice is committed to disrupting money mule networks, taking actions against more money mules this year than ever before, in an effort to cut off the flow of funds from American consumers and businesses to transnational criminal organizations.”
“This year in the Northern District, we have seen more than $1 million in losses and prosecuted 11 defendants for elder fraud offenses,” said U.S. Attorney Justin Herdman. “Many of us are all too aware of instances involving a loved one or elderly relative who was financially exploited by a fraudster or scammer. We will continue to seek out and prosecute these criminals as long as they continue to prey on our most vulnerable.”
Additionally, more than 35 individuals were criminally charged or arrested for their roles in receiving victim payments and either laundering the proceeds or forwarding them to accomplices. This includes two men in the Northern District of Ohio who were indicted for facilitating a grandparent scheme in the area.
Eight federal law enforcement agencies participated in this year’s effort. Led by the Department of Justice’s Consumer Protection Branch, the FBI, and the U.S. Postal Inspection Service, the participating agencies include the Department of Labor Office of Inspector General, Federal Deposit Insurance Corporation Office of Inspector General, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Social Security Administration Office of Inspector General, U.S. Secret Service, and U.S. Treasury Inspector General for Tax Administration.
Some highlights from this year’s efforts are:
- Actions were taken to halt the conduct of approximately 2,300 money mules, spanning 92 federal districts.
- Law enforcement served approximately 2,000 money mules with letters warning the money mules that they were facilitating fraud and could face civil or criminal consequences for continuing their actions. Agents conducted over 450 interviews. .
- On approximately 30 instances, agents seized assets or facilitated the return of victim funds. Among the asset seizures was a 2019 Lamborghini, which was seized as part of an investigation into a business email compromise scheme.
To find public education materials, as well as information about how fraudsters use and recruit money mules, please visit www.justice.gov/civil/consumer-protection-branch/money-mule-initiative.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. In January 2020, the department designated “Preventing and Disrupting Transnational Elder Fraud” as an Agency Priority Goal, one of its top four priorities. In March 2020, the department announced the largest elder fraud enforcement action in American history, charging more than 400 defendants in a nationwide elder fraud sweep. The department has also conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
The department’s extensive efforts to combat elder fraud seek to halt the billions of dollars seniors lose each year to fraud schemes, including those perpetrated by transnational criminal organizations. The best method for prevention, however, is sharing information about the various types of elder fraud schemes with relatives, friends, neighbors, and other seniors who can use that information to protect themselves.
If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses.
The hotline is staffed seven days a week from 6:00 a.m. to 11:00 p.m. eastern time. English, Spanish and other languages are available.
- Actions were taken to halt the conduct of approximately 2,300 money mules, spanning 92 federal districts.
U.S. Trustee Program Reaches Settlement with McKinsey and Company to Withdraw and Waive its Fees in the Westmoreland Coal Bankruptcy CaseRead the Press Release
The Department of Justice’s U.S. Trustee Program (USTP) has entered into a settlement agreement with global consulting firm McKinsey & Company (McKinsey) requiring McKinsey to forego payment of fees in the Westmoreland Coal bankruptcy case pending in the U.S. Bankruptcy Court for the Southern District of Texas (Westmoreland Case). The agreement, which is subject to review and approval by the bankruptcy court, resolves the USTP’s objection to the adequacy of McKinsey’s disclosures of connections and possible conflicts of interest in the Westmoreland Case.
The USTP previously reached a $15 million settlement with McKinsey in February 2019 to address past disclosure practices by McKinsey in three bankruptcy cases, including the Westmoreland Case. The USTP had objected to McKinsey’s initial application seeking to be retained in the Westmoreland Case, and after the prior settlement McKinsey withdrew that application. McKinsey later made new disclosures in a renewed attempt to be retained in the Westmoreland Case. The USTP again objected, alleging that the disclosures remained deficient because McKinsey failed to disclose the connections of all of its affiliates, failed to make adequate disclosures regarding its investments in entities that could create a conflict of interest, and failed to address inconsistencies concerning its disclosure of confidential client connections.
“In bankruptcy, professionals who are paid at the expense of the debtor company’s creditors, employees, and shareholders must be free of any actual or potential conflicts of interest,” said USTP Director Cliff White. “Under bankruptcy law, this also entails detailed disclosures to ensure that the professionals can provide single-minded loyalty to the debtor’s stakeholders. Should any professionals fail to meet this standard, regardless of size, complexity, or motivation, they will be held accountable. This settlement ensures that McKinsey is held accountable for its conduct in this case.”
Settlement Terms
Under the terms of the settlement, McKinsey’s application seeking employment in the Westmoreland Case will be withdrawn. As a result, McKinsey will not seek to recover any fees in connection with services rendered in the case that would otherwise be subject to review and approval of the court. While the total amount of fees it is waiving is unknown, McKinsey rendered services throughout the case and likely would have sought approval for, and reimbursement of, millions of dollars in fees and expenses.
In addition, McKinsey has for the first time agreed that it will fully disclose all affiliate connections and all confidential client connections in any bankruptcy case in which it seeks to be retained in the future, unless the bankruptcy court orders otherwise.
The USTP has agreed to withdraw its pending objection in the Westmoreland Case and to work cooperatively, as it does with all professionals seeking to be employed in bankruptcy cases, to ensure the adequacy of McKinsey’s disclosures relating to its proposed retention in future bankruptcy cases. The USTP continues to review McKinsey’s practices with respect to its investment affiliates.
While the settlement resolves any actions that could be brought by the USTP for McKinsey’s inadequate disclosures in the Westmoreland Case, it does not impact the rights of other third parties, including any parties or government agencies not participating in the settlement. This settlement, as with the prior settlement, is limited to resolving McKinsey’s disclosure deficiencies and does not address or resolve, among other things, claims relating to actual or potential conflicts of interest.
The USTP has an ongoing initiative to ensure the rigorous review of applications to employ professionals, including those who have investment arms and complex multi-affiliate organizational structures. The USTP’s public emphasis on enforcing conflict and disclosure set forth in bankruptcy law has resulted in more complete disclosures made by these professionals in cases across the country.
The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The Program has 21 regions and 90 field office locations. Learn more information on the Program at: https://www.justice.gov/ust.
U.S. Law Enforcement takes action against approximately 2,300 money mules in global crackdown on money launderingRead the Press Release
Indianapolis – The U.S. Department of Justice, the FBI, the U.S. Postal Inspection Service, and six other federal law enforcement agencies announced the completion of the third annual Money Mule Initiative, a coordinated operation to disrupt the networks through which transnational fraudsters move the proceeds of their crimes. Money mules are individuals who assist fraudsters by receiving money from victims of fraud and forwarding it to the fraud organizers, many of whom are located abroad. Some money mules know they are assisting fraudsters, but others are unaware that their actions enable fraudsters’ efforts to swindle money from consumers, businesses, and government unemployment funds.
Over the last two months, U.S. law enforcement agencies took action against over 2,300 money mules, far surpassing last year’s effort, which acted against over 600 money mules. This year, actions occurred in every state in the country. The initiative announced today targeted money mules involved in a wide range of schemes including lottery fraud, romance scams, government imposter fraud, technical support fraud, business email compromise or CEO fraud, and unemployment insurance fraud. Many of these schemes target elderly or vulnerable members of society.
“Money mules fuel fraud against some of America’s most vulnerable populations. Without the help of these money mules, many foreign fraud enterprises find it difficult to profit off of U.S. victims,” said Attorney General William P. Barr. “As this initiative demonstrates, the Department of Justice is committed to disrupting money mule networks, taking actions against more money mules this year than ever before, in an effort to cut off the flow of funds from American consumers and businesses to transnational criminal organizations.”
Eight federal law enforcement agencies participated in this year’s effort. Led by the Department of Justice’s Consumer Protection Branch, the FBI, and the U.S. Postal Inspection Service, the participating agencies include the Department of Labor Office of Inspector General, Federal Deposit Insurance Corporation Office of Inspector General, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Social Security Administration Office of Inspector General, U.S. Secret Service, and U.S. Treasury Inspector General for Tax Administration.
If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372- 8311). This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed seven days a week from 6:00 a.m. to 11:00 p.m. eastern time. English, Spanish and other languages are available.
To find public education materials, as well as information about how fraudsters use and recruit money mules, please visit www.justice.gov/civil/consumer-protection-branch/money-mule-initiative.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
U.S. Law Enforcement Takes Action Against Approximately 2,300 Money Mules in Global Crackdown on Money LaunderingRead the Press Release
LEXINGTON, KY—The U.S. Department of Justice, the FBI, the U.S. Postal Inspection Service, and six other federal law enforcement agencies announced the completion of the third annual Money Mule Initiative, a coordinated operation to disrupt the networks through which transnational fraudsters move the proceeds of their crimes. Money mules are individuals who assist fraudsters by receiving money from victims of fraud and forwarding it to the fraud organizers, many of whom are located abroad. Some money mules know they are assisting fraudsters, but others are unaware that their actions enable fraudsters’ efforts to swindle money from consumers, businesses, and government unemployment funds. Europol announced a simultaneous effort, the European Money Mule Action (EMMA) yesterday.
Over the last two months, U.S. law enforcement agencies took action against over 2,300 money mules, far surpassing last year’s effort, which acted against over 600 money mules. This year, actions occurred in every state in the country. The initiative announced today targeted money mules involved in a wide range of schemes including lottery fraud, romance scams, government imposter fraud, technical support fraud, business email compromise or CEO fraud, and unemployment insurance fraud. Many of these schemes target elderly or vulnerable members of society.
“Money mules fuel fraud against some of America’s most vulnerable populations. Without the help of these money mules, many foreign fraud enterprises find it difficult to profit off of U.S. victims,” said Attorney General William P. Barr. “As this initiative demonstrates, the Department of Justice is committed to disrupting money mule networks, taking actions against more money mules this year than ever before, in an effort to cut off the flow of funds from American consumers and businesses to transnational criminal organizations.”
“Detecting and disrupting the work of money mules is critically important, as money mules are integral components of many organized criminal groups, including international fraud rings and transnational drug trafficking organizations,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “We remain committed to working with our local, state, and federal law enforcement partners to disrupt the flow of illegal money and cutting off the lifeblood of these criminal organizations.”
“While some money mules know they are supporting criminal enterprises, others are unaware that they are helping criminals profit,” said James Robert Brown, Jr., Special Agent in Charge for FBI, Louisville Field Office. “Regardless, money mules add layers between the true criminal and the victim oftentimes making it more difficult for law enforcement to trace the money trail. To protect yourself, always be suspicious of someone asking for your bank account information or requesting that you move money for them.”
Eight federal law enforcement agencies participated in this year’s effort. Led by the Department of Justice’s Consumer Protection Branch, the FBI, and the U.S. Postal Inspection Service, the participating agencies include the Department of Labor Office of Inspector General, Federal Deposit Insurance Corporation Office of Inspector General, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), Social Security Administration Office of Inspector General, U.S. Secret Service, and U.S. Treasury Inspector General for Tax Administration.
Some highlights from this year’s efforts are:
- Actions were taken to halt the conduct of approximately 2,300 money mules, spanning 92 federal districts.
- Law enforcement served approximately 2,000 money mules with letters warning the money mules that they were facilitating fraud and could face civil or criminal consequences for continuing their actions. Agents conducted over 450 interviews.
- On approximately 30 instances, agents seized assets or facilitated the return of victim funds. Among the asset seizures was a 2019 Lamborghini, which was seized as part of an investigation into a business email compromise scheme.
- The U.S. Postal Inspection Service filed 14 administrative actions requiring money mules to cease facilitating fraud.
- U.S. Attorney’s Offices and the Consumer Protection Branch filed 17 civil injunctive actions seeking court orders requiring money mules to stop facilitating fraudulent activity.
Over the past year, the Eastern District of Kentucky has worked in conjunction with federal, state, and local partners to dismantle two money mule schemes operating in the District.
- U.S. vs. Fafunmi et al.- Ismaila Fafunmi admitted that, beginning in June 2018, he worked in conjunction with others, who communicated through online chats, about a scheme to defraud U.S. citizens through a romance scheme. In furtherance of this scheme, Fafunmi and his co-conspirators would set up fake profiles on dating websites profiling American men, often military members. Fafunmi’s co-conspirators would engage in conversations with victims, typically women older than 50, through the dating website, making the victims believe they were in a romantic relationship with the individual in the fictitious profile. Fafunmi and his co-conspirators would then convince these unsuspecting women to send money for various reasons. One victim of the scheme lived in Kentucky, and sent more than $200,000 to a person she believed to be her boyfriend. In another scheme, Fafunmi received funds from another female over 50, who believed she was being awarded a large grant and had to pay fees up front in order to receive her award. Fafunmi is pending sentencing on May 13, 2021.
- U.S. vs. Inkoom et al.- Baaki Abdul Majeed conspired with Kahad Wuupini and Thomas Inkoom, in a money laundering conspiracy. Evidence revealed that the conspirators agreed to aid in and launder $757,000 in funds, which were defrauded from a victim of an online romance fraud scheme. After receiving cashier’s checks, personal checks, and cash from the victim, Majeed and his co-conspirators laundered the money from Washington and New Jersey, back to Ghana, by purchasing cars that were shipped to Ghana, obtaining cashier’s checks, and wiring funds to each other or other individuals in the United States and Ghana. The purpose of these transactions was to conceal and disguise the proceeds of their online romance fraud. Majeed is pending sentencing on January 29, 2021.
To find public education materials, as well as information about how fraudsters use and recruit money mules, please visit www.justice.gov/civil/consumer-protection-branch/money-mule-initiative.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. In January 2020, the department designated “Preventing and Disrupting Transnational Elder Fraud” as an Agency Priority Goal, one of its top four priorities. In March 2020, the department announced the largest elder fraud enforcement action in American history, charging more than 400 defendants in a nationwide elder fraud sweep. The department has also conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
The department’s extensive efforts to combat elder fraud seek to halt the billions of dollars seniors lose each year to fraud schemes, including those perpetrated by transnational criminal organizations. The best method for prevention, however, is sharing information about the various types of elder fraud schemes with relatives, friends, neighbors, and other seniors who can use that information to protect themselves.
If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed seven days a week from 6:00 a.m. to 11:00 p.m. eastern time. English, Spanish and other languages are available.
— END —
U.s. Law Enforcement Takes Action Against Approximately 2,300 Money Mules in Global Crackdown on Money LaunderingRead the Press Release
BEAUMONT, Texas – The U.S. Department of Justice, the FBI, the U.S. Postal Inspection Service, and six other federal law enforcement agencies announced the completion of the third annual Money Mule Initiative, a coordinated operation to disrupt the networks through which transnational fraudsters move the proceeds of their crimes. Money mules are individuals who assist fraudsters by receiving money from victims of fraud and forwarding it to the fraud organizers, many of whom are located abroad. Some money mules know they are assisting fraudsters, but others are unaware that their actions enable fraudsters’ efforts to swindle money from consumers, businesses, and government unemployment funds. Europol announced a simultaneous effort, the European Money Mule Action (EMMA) today.
Over the last two months, U.S. law enforcement agencies took action against over 2,300 money mules, far surpassing last year’s effort, which acted against over 600 money mules. This year, actions occurred in every state in the country. The initiative announced today targeted money mules involved in a wide range of schemes including lottery fraud, romance scams, government imposter fraud, technical support fraud, business email compromise or CEO fraud, and unemployment insurance fraud. Many of these schemes target elderly or vulnerable members of society.
“Money mules fuel fraud against some of America’s most vulnerable populations.
Without the help of these money mules, many foreign fraud enterprises find it difficult to profit off of U.S. victims,” said Attorney General William P. Barr. “As this initiative demonstrates, the Department of Justice is committed to disrupting money mule networks, taking actions against more money mules this year than ever before, in an effort to cut off the flow of funds from
American consumers and businesses to transnational criminal organizations.”
“These money mules are an essential link in these foreign-based criminal schemes,” said Stephen J. Cox, U.S. Attorney for the Eastern District of Texas. “The assistance of these money mules – both witting and unwitting alike – makes it easy for overseas criminal organizations to move money from victims’ wallets into their own.”
Eight federal law enforcement agencies participated in this year’s effort. Led by the Department of Justice’s Consumer Protection Branch, the FBI, and the U.S. Postal Inspection Service, the participating agencies include the Department of Labor Office of Inspector General, Federal Deposit Insurance Corporation Office of Inspector General, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Social Security Administration Office of Inspector General, U.S. Secret Service, and U.S. Treasury Inspector General for Tax Administration.
Some highlights from this year’s efforts are:
- Actions were taken to halt the conduct of approximately 2,300 money mules, spanning 92 federal districts.
- Law enforcement served approximately 2,000 money mules with letters warning the money mules that they were facilitating fraud and could face civil or criminal consequences for continuing their actions. Agents conducted over 450 interviews.
- On approximately 30 instances, agents seized assets or facilitated the return of victim funds. Among the asset seizures was a 2019 Lamborghini, which was seized as part of an investigation into a business email compromise scheme.
- The U.S. Postal Inspection Service filed 14 administrative actions requiring money mules to cease facilitating fraud.
- The U.S. Attorney’s Office for the Eastern District of Texas (EDTX), along with the U.S. Secret Service, dismantled a phony Amazon Alexa tech support fraud ring, seizing six websites in the process. In other cases, EDTX obtained four asset seizures leading to the recovery of nearly $150,000 in ill-gotten proceeds. Additionally, with the assistance of the FBI and IRS, EDTX identified and disrupted at least 13 money mules through interviews, warning letters, and criminal charges.
The above charges are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
“The success of the Money Mule Initiative is the culmination of the hard work by and coordination between the FBI and our federal, state, local, and international partners,” said FBI Director Christopher Wray. “This campaign has resulted in hundreds of criminal arrests worldwide and justice for countless victims. Today’s announcement should send a clear message to those engaged in this type of criminal activity: they are not outside the reach of law enforcement, and the FBI and its partners will relentlessly pursue them in order to protect the American people.”
“The Postal Inspection Service has zero tolerance for fraudsters who use the U.S. Mail to transport funds from scammed victims,” said Chief Postal Inspector Gary Barksdale. “Postal Inspectors use cutting-edge technology to build strong cases and campaigns like those announced today, which make significant progress towards disrupting money mule networks. Postal Inspectors and our law enforcement partners will be relentless in the pursuit of criminal organizations that perpetrate these schemes.”
The agencies participating in the Money Mule Initiative and community partners are undertaking an outreach campaign to increase awareness of how fraudsters use and recruit money mules. U.S. Attorney’s Offices across the country, through their Elder Justice Coordinators, will be reaching out to their communities to educate the public about money mules. AmeriCorp Seniors (formerly Senior Corps) will be working to increase awareness of how money mules facilitate fraud and how consumers can avoid unwittingly assisting fraud schemes.
Additionally, the American Bankers Association will be engaging with its members on money mules and the role of financial institutions in addressing the problem. The Department of Justice will also be distributing resources for state and local law enforcement on identifying, disrupting, investigating, and prosecuting money mules.
To find public education materials, as well as information about how fraudsters use and recruit money mules, please visit www.justice.gov/civil/consumer-protection-branch/money- mule-initiative.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. In January 2020, the department designated “Preventing and Disrupting Transnational Elder Fraud” as an Agency Priority Goal, one of its top four priorities. In March 2020, the department announced the largest elder fraud enforcement action in American history, charging more than 400 defendants in a nationwide elder fraud sweep. The department has also conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
The Department’s extensive efforts to combat elder fraud seek to halt the billions of dollars seniors lose each year to fraud schemes, including those perpetrated by transnational criminal organizations. The best method for prevention, however, is sharing information about the various types of elder fraud schemes with relatives, friends, neighbors, and other seniors who can use that information to protect themselves.
If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed seven days a week from 6:00 a.m. to 11:00 p.m. eastern time. English, Spanish and other languages are available.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Telemarketing Fraudster Pleads GuiltyRead the Press Release
PROVIDENCE – An Indian national today admitted to a federal judge in Providence that he participated in a wide-ranging conspiracy based in India to defraud United States citizens, primarily seniors, by telling victims that malware had been detected on their computers and, based on that falsehood, induced the victims to direct money to him and his coconspirators as payment for purported computer protection services that were not needed or ever provided.
The conspirators, in fact, did not detect malware on victims’ computers and accepted payment without providing any protection services.
Himanshu Asri, 33, of Delhi, India, admitted that he had 325 callers routed to call centers in India where call center operators falsely reasserted to victims that malware had been detected on their computers, and offered the victims purported computer protection services in exchange for payment. The purpose of the false assertions was to induce people into routing money to the fraudsters.
According to information presented to the court, from as far back as January 2015, through January 2020, Asri and others working together collected, in total, approximately $940,995 from victims through their fraud, and attempted to collect between $1,500,000 and $3,000,000. The actual loss was less than the intended loss because some of those who were targeted by Asri and his coconspirators did not send any funds to the fraudsters.
According to information presented to the court, the government and the defendant agree that many of Asri’s victims were vulnerable to fraud schemes due to age or infirmity, and the parties agree that the scheme pursued by Asri and his coconspirators were structured to exploit such persons, specifically persons over the age of 65.
Appearing today before U.S. District Court Chief Judge John J. McConnell, Jr., Asri pleaded guilty to wire fraud conspiracy, announced United States Attorney Aaron L. Weisman and Special Agent in Charge of the FBI Boston Division Joseph R. Bonavolonta.
Asri, the 4th India-based telemarketing fraudster to be convicted in federal court in Rhode Island in the past three months, is scheduled to be sentenced on February 18, 2021. Wire fraud conspiracy is punishable by statutory penalties of up to 20 years in prison, three years of supervised release, and a fine of $250,000.
The case is being prosecuted by Assistant U.S. Attorney Milind M. Shah.
The matter was investigated by the FBI.
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Tax Preparer Pleads Guilty to Filing False Tax ReturnsRead the Press Release
LAS VEGAS, Nev. – A Las Vegas tax preparer pleaded guilty today in U.S. District Court to preparing and filing fraudulent tax returns on behalf of her clients (which caused a total tax loss of at least $1,500,000), announced U.S. Attorney Nicholas A. Trutanich of the District of Nevada and Special Agent in Charge Tara Sullivan of the IRS-Criminal Investigation.
Baby Vasquez Beltran, 53, pleaded guilty to one count of aiding and assisting in the preparation and filing of a false tax return. U.S. District Judge Richard F. Boulware II scheduled a sentencing hearing for March 4, 2021.
According to court documents and admissions Beltran made in court, since at least 2008, she operated Speed Refund Tax Services, a tax return preparation business in Las Vegas. When preparing her clients’ tax returns, Beltran fraudulently claimed deductions to which her clients were not entitled. In total, for tax years 2012 through 2016, Beltran caused at least $1,500,000 in tax loss to the IRS.
The maximum statutory penalty faced by Beltran is three years in prison and a $250,000 fine.
The case was investigated by the IRS-CI. Assistant U.S. Attorney Tony Lopez is prosecuting the case.
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South Charleston Man Sentenced to Prison for Federal Drug CrimeRead the Press Release
CHARLESTON, W.Va. – United States Attorney Mike Stuart announced that Clay Dempsey, 37, of South Charleston, was sentenced to 36 months in prison for aiding and abetting the possession with intent to distribute a quantity of heroin.
“Great work by MDENT and the South Charleston Police Department in nabbing Dempsey and Banks,” said United States Attorney Mike Stuart. “The work of law enforcement ended the drug dealing careers of the defendants and kept nearly 150 grams of heroin off our streets and away from our families. We are committed to ridding our communities of poison peddlers like these two.”
Dempsey previously pled guilty and admitted that in February 2019, he allowed Troskey Banks to stay in his residence and store his heroin for distribution in exchange for heroin. MDENT detectives searched Dempsey’s residence on February 20, 2019, and located Dempsey, Banks, $7,530 cash, and approximately 147.955 grams of heroin intended for distribution. Dempsey also admitted that on January 27, 2020, at co-defendant Troskey Banks’ direction, he drove to Cleveland, Ohio and met with an individual. That individual then directed him to a location where a maroon minivan was parked. Dempsey switched the van he drove to Cleveland and drove the maroon minivan back to South Charleston. Banks directed him to park the minivan at a specific address in South Charleston. Dempsey parked the van at the location directed by Banks with the intent to come back later and meet with Banks to allow him to get inside the van and retrieve the controlled substances stored inside. Dempsey admitted that he knew that the purpose of his trip was to bring back controlled substances for Banks to distribute. Officers with the South Charleston Police Department later searched the van and recovered a bag of methamphetamine weighing 108.42 grams.
Banks was sentenced to five years in prison.
The Metropolitan Drug Enforcement Network Team (MDENT) and the South Charleston Police Department conducted the investigation. United States District Judge Irene C. Berger imposed the sentence. Assistant United States Attorney 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. 2:20-cr-00127.
Solano County Man Pleads Guilty to Narcotics and Firearms OffensesRead the Press Release
SACRAMENTO, Calif. — Jesus Heriberto Barajas, 29, of Suisun City, pleaded guilty today to possession of cocaine and methamphetamine for distribution and possessing a firearm as a felon, U.S. Attorney McGregor W. Scott announced.
According to court documents, on April 11, 2019, police officers executed a search warrant at Barajas’ home in Suisun City. During the search, they found approximately 860 grams (1.9 pounds) of powder cocaine, 370 grams (0.8 pounds) of methamphetamine, a digital scale, and a stolen .40-caliber pistol that had been modified to function as a fully automatic machine gun. Barajas is not allowed to possess firearms or ammunition because he has previously been convicted of a felony offense.
This case is the product of an investigation by the Fairfield Police Department, with special assistance from the FBI’s Solano County Violent Crimes Task Force, the Solano County District Attorney’s Office, and the Fresno County District Attorney’s Office. Assistant U.S. Attorney Adrian T. Kinsella is prosecuting the case.
Barajas is scheduled to be sentenced by U.S. District Judge Troy Nunley on May 20, 2021. For each of the narcotics charges, Barajas faces a mandatory minimum sentence of five years in prison, a maximum statutory penalty of 40 years in prison and a fine of up to $5 million. For the firearm charge, Barajas faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
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 the Department’s 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 the local community to develop effective, locally based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.
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 www.justice.gov/projectguardian.
Six Men Charged for Roles in Scheme to Defraud Businesses of Luxury Goods and ServicesRead the Press Release
Six men were charged in an indictment unsealed on Wednesday for their alleged participation in a nation-wide scheme to defraud dozens of businesses across the United States of luxury goods and services announced Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department's Criminal Division and U.S. Attorney Andrew Lelling of the District of Massachusetts.
Antonio Strong, 28, Herbert Wright, 24, Joseph Williams, 28, Steven Hayes Jr., 27, Demario Sorrells, 34, and Terrence Bender, 28, all from the greater Chicago, Illinois area, were charged with one count of conspiracy to commit wire fraud. In addition, Strong was charged with nine counts of aggravated identity theft and four counts of wire fraud; Williams was charged with three counts of aggravated identity theft; Wright, Bender, and Hayes were each charged with two counts of aggravated identity theft; and Sorrells was charged with one count of aggravated identity theft.
On Sept. 14, 2020, Strong was arrested and detained by a federal judge in the Northern District of Illinois; on Nov. 24, 2020, Williams self-surrendered in the Northern District of Illinois and was released on bond; on Nov. 19, 2020, Sorrells and Hayes were arrested in the Northern District of Illinois and released on bond; on Dec. 2, 2020, Bender self-surrendered in the Northern District of Georgia and was released on bond; and Wright self-surrendered today in the Central District of California. The defendants will make an initial appearance before U.S. Magistrate Judge Katherine A. Robertson in the District of Massachusetts on Dec. 7, 2020.
The indictment alleges that the defendants, often presenting themselves as musicians and promoters, engaged in a nation-wide scheme to defraud businesses and individuals across the United States of goods and services by using fraudulently obtained credit card account information. These goods and services included trips on private jets, private yacht charters, private chef and security guard services, designer puppies, limousine and chauffer services, and commercial airlines flights, among other things. The defendants allegedly used pseudonyms, including the names of other real persons, and purported to be from real and fictitious businesses to perpetuate the scheme and for the conspiracy to avoid detection from law enforcement.
The indictment further alleges that, because the defendants provided authentic credit card information, the defrauded businesses and individuals processed the transactions and provided the goods and services. When the actual payment cardholders challenged the transactions as fraudulent, the individuals and businesses who provided the goods and services consequently suffered losses.
An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the U.S. Secret Service Boston Field Office. Trial Attorneys Michelle Pascucci and Andrew Tyler of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Steve Breslow of the District of Massachusetts are prosecuting the case. The Justice Department also acknowledges and thanks the FBI’s Chicago Field Office and the Chicago Police Department for their assistance with this matter.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Six Drug Traffickers Indicted for Smuggling Thousands of Pounds of Marijuana Through the U.S. MailRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that on November 4, 2020, Christopher Texidor, age 33, William Kuduk, age 34, Justin Laboy, age 33, Jose Laboy, age 36, and Jonathan Cobaugh, age 23, all from Harrisburg, Pennsylvania, and Jamie Valenzuela, age 29, of Santa Ana, California, were indicted by a federal grand jury on drug trafficking, violence, and firearms charges. The case was unsealed following the arrests of Texido, Kuduk, Justin and Jose Laboy, and Cobaugh on November 5, 2020 and Valenzuela on November 25, 2020.
According to United States Attorney David J. Freed, the indictment alleges that between October 2018 until May 2020, the defendants operated a marijuana smuggling operation out of Fastlane Auto Sales located on Paxton Street in Harrisburg. It is alleged that defendants mailed hundreds of parcels full of marijuana from California to Harrisburg and mailed cash back to California. The indictment also alleges that defendants used a sophisticated system of GPS tracking devices, which they placed in their parcels, to keep track of their drugs and money. Through this the scheme, it’s alleged that defendants brought thousands of pounds of marijuana to the Harrisburg area worth millions of dollars.
The indictment further alleges that defendants used guns, robbery, and kidnapping as tools to keep their criminal operation running. The defendants raided a home in Harrisburg of a person suspected of interfering with their drug trafficking activities; shot into an occupied home in Susquehanna Township; attempted to restrain and then robbed a victim of a motor vehicle in Highspire; and placed a tracking device on a vehicle to surveil a person believed to be interfering with their drug trafficking activities.
The case was investigated by the U.S. Postal Inspection Service, the Pennsylvania State Police, and the Dauphin County District Attorney’s Office. Assistant U.S. Attorney Michael A. Consiglio is prosecuting the case.
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 the Department’s 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 the local community to develop effective, locally-based strategies to reduce violent crime.
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.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for these offenses are life imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Sex Offender Sentenced to Additional Prison Time for Violating Federal Supervised ReleaseRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that HERIBERTO BATIZ, 55, formerly of New Britain and New Haven, was sentenced today by U.S. District Judge Victor A. Bolden to 10 months of imprisonment for violating the conditions of his federal supervised release.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the sentencing occurred via videoconference.
According to court documents and statements made in court, in March 2004, Batiz was sentenced in Hartford federal court to 120 months of imprisonment, followed by five years of supervised release, for trafficking crack cocaine. He was released from federal prison in July 2011. While Batiz was on supervised release, he repeatedly sexually abused an 11-year-old girl.
Batiz was convicted in state court of two counts of illegal sexual contact with a minor and, in October 2016, was sentenced to consecutive sentences of seven years of incarceration, followed by five years of special parole. He is currently in state custody.
Judge Bolden ordered the 10-month federal sentence to run consecutively with Batiz’s state sentence.
This case was prosecuted by Assistant U.S. Attorney Deborah R. Slater.
Secretary-Treasurer of Maryland Labor Union Pleads Guilty to Embezzling More Than $294,000Read the Press Release
Greenbelt, Maryland – Sarah Geddes Holmes, age 65, of Clinton, Maryland, pleaded guilty today to the federal charges of embezzlement from a labor organization and bank fraud. Holmes, who was the Secretary-Treasurer of the International Association of Machinists and Aerospace Workers, Local Lodge 24, admitted that she embezzled $294,585.18 from the union.
The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur and District Director Mark Wheeler of the U.S. Department of Labor, Office of Labor - Management Standards.
Between May 2015 and June 2018, Local 24 represented approximately 423 members, who worked for 10 different employers at Andrews Air Force Base. Local 24 members paid monthly dues that were intended to fund legitimate union purposes, including bargaining with employers, litigating grievances, and providing any administrative support that Local 24 required to conduct its business.
According to her guilty plea, from May 2015 through June 2018, while Holmes was the Secretary-Treasurer of the International Association of Machinists and Aerospace Workers, Local Lodge 24 (“Local 24”), she embezzled union funds by writing checks to herself, altering checks and entries in Local 24’s accounting software, and forging signatures. One hundred thirty-eight checks were signed only by Holmes, in violation of Local 24’s bylaws, which require that funds disbursed from the union’s account via check be countersigned by the President of Local 24. Holmes forged the second signature on 22 checks; and altered information in Local 24’s accounting software to fraudulently obtain 33 checks. Additional, in order to fraudulently deposit the Local 24 checks, Holmes altered the check numbers on 14 checks, as well as altered the dates on four of those 14 checks and altered the amount on one of those 14 checks. Finally, Holmes deposited one check twice—the second deposit being fraudulent. In total, Holmes deposited 160 fraudulent checks, totaling $294,585.18. Holmes deposited the checks into her personal checking account—primarily using a mobile application on her cellular phone.
Holmes used the fraudulently obtained union funds at casinos and to make personal purchases, including food, household goods, beauty supplies, online gaming, and other gambling-related charges. On 17 occasions, Holmes deposited fraudulent Local 24 checks, totaling $39,894.79 on the same day that her player card was used at Maryland Live! Casino.
As detailed in her plea agreement, in order to conceal her embezzlement, Holmes altered Local 24’s accounting software. In some instances, Holmes to made it appear as though the checks Holmes wrote to herself were authorized for a legitimate union purpose. In other instances, Holmes changed the amounts listed for some checks and/or changed the name of the payee or the memo attached to that check. The false records in Local 24’s accounting software resulted in false reports that were filed by the union with the Department of Labor and signed by Holmes as Secretary-Treasurer. On two occasions, on December 4, 2017, and April 23, 2018, Holmes returned a total of $30,000 to Local 24’s bank account. However, Holmes continued embezzling union funds by writing checks to herself during and after she made these deposits.
As part of her plea agreement, Holmes will be required to forfeit and pay restitution in the full amount of the victim’s losses, which is at least $264,585.18.
Holmes faces a maximum sentence of five years in federal prison for embezzlement from a labor organization and a maximum of 30 years in federal prison for bank fraud. U.S. District Judge Theodore D. Chuang has scheduled sentencing for March 4, 2021 at 2:00 p.m.
United States Attorney Robert K. Hur commended the U.S. Department of Labor, Office of Labor - Management Standards for its work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Rajeev R. Raghavan and Erin B. Pulice, who are prosecuting the federal case.
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San Diego Man Admits to Robbing Bank Teller at KnifepointRead the Press Release
Assistant U. S. Attorney Megan Rossi (619) 546-9661
NEWS RELEASE SUMMARY – December 3, 2020
SAN DIEGO – Rafeek Omar Karamat of San Diego pleaded guilty in federal court today to bank robbery before U.S. Magistrate Judge Karen S. Crawford.
Karamat admitted that on September 30, 2020, at approximately 9:59 a.m., he entered the Navy Federal Credit Union in San Diego wearing a facecovering and approached a teller. Karamat walked around the corner of the teller’s desk, brandished a knife and demanded, “give me money,” and “give me what I came for.” The teller complied and provided Karamat with $2,500 in cash. Karamat then ran to a white Ford Ranger and sped away.
Karamat was arrested by La Mesa Police Officers shortly after fleeing the Navy Federal Credit Union. Karamat had the stolen money and a knife at the time of his arrest.
“Bank robberies are a terrifying experience for both customers and the tellers,” said U.S. Attorney Robert Brewer. “Thanks to the swift action of federal and local law enforcement agencies in this matter, this defenedant was quickly apprehended and justice has been achieved.” Brewer praised prosecutor Megan Rossi and the FBI for excellent work on this case.
“Robbing banks may sound old-fashioned in today's high-tech world, but it's a crime problem that continues to take a toll on financial institutions and communities across the nation,” said FBI Special Agent in Charge Suzanne Turner. “In San Diego, the FBI Violent Crimes Task Force is dedicated to working with our local partners to keep our communities safe from bank robbers and other violent criminals.” Brewer praised prosecutor Megan Rossi, the FBI and La Mesa Police Department for their excellent work on this case.
“Our community is a safer place thanks to the outstanding work of the responding officers and our partners at the FBI Violent Crimes Task Force and U.S. Attorney’s Office,” said Acting La Mesa Police Chief Ray Sweeney. “The collaboration between the La Mesa Police Department and our federal partners is a critical component to keep all of our citizens safe from violent crimes.”
This case is the result of the ongoing efforts of the Violent Crime and Human Trafficking (VCHT) Section. Formed in 2019 by U.S. Attorney Robert Brewer, the VCHT is tasked with leading collaborations between federal and local law enforcement in the investigation and prosecution of cases involving violent crimes, firearms and gang cases; sex trafficking and child exploitation; civil rights, and labor trafficking. The VCHT Section oversees the Southern District of California Coordinators for Project Safe Neighborhoods, Human Trafficking, and Project Safe Childhood.
Karamat is scheduled to be sentenced on February 22, 2021 at 9 a.m. before U.S. District Judge Anthony J. Battaglia.
DEFENDANT Case Number 20cr3392-AJB
Rafeek Omar Karamat Age: 35 San Diego, California
SUMMARY OF CHARGES
Bank Robbery – Title 18, U.S.C., Section 2113(a)
Maximum penalty: Twenty years in prison and $250,000 fine
AGENCY
Federal Bureau of Investigations
La Mesa Police Department
Salem County Man Admits Illegal Possession of WeaponRead the Press Release
CAMDEN, N.J. – A Salem County, New Jersey, man today admitted to illegally possessing a handgun, U.S. Attorney Craig Carpenito announced.
Rahim Seals, 27, of Salem City, New Jersey, pleaded guilty by videoconference before U.S. District Judge Noel L. Hillman to an indictment charging him with one count of possession of a firearm by a previously convicted felon.
According to documents filed in this case and statements made in court:
On Dec. 27, 2019, while Seals was walking in Salem City, detectives from the Salem County Prosecutor’s Office attempted to arrest Seals on an outstanding warrant. Seals fled and dropped a Sig Sauer P238 .380 caliber handgun loaded with seven hollow point rounds of ammunition. Seals has at least three prior felony convictions, including a controlled substance offense and two resisting arrest offenses.
The charge of possession of a weapon by a convicted felon is punishable by a maximum penalty of 10 years in prison and a fine of up to $250,000. Sentencing is scheduled for April 8, 2021.
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 ensured 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 .
U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson, Newark Field Division, Camden Field Office, with the investigation leading to today’s guilty plea. He also thanked the Salem City Police Department, under the direction of Chief John A. Pelura, III, and the Salem County Prosecutor’s Office, under the direction of Prosecutor John T. Lenahan, for their assistance.
The government is represented by Assistant U.S. Attorney Daniel A. Friedman of the U.S. Attorney’s Office’s Criminal Division in Camden.
SCANA Agrees to Settle Fraud Charges Stemming from Failed Nuclear Power Plant ExpansionRead the Press Release
Charleston, South Carolina --- United States Attorney Peter M. McCoy, Jr. announced today that SCANA Corp. and its subsidiary SCE&G have agreed to settle the Securities and Exchange Commission’s lawsuit charging them with defrauding investors by making false and misleading statements about the nuclear plant expansion that was ultimately abandoned. The proposed settlement, which remains subject to court approval, would require SCANA to pay a $25 million penalty and require SCANA and SCE&G to pay $112.5 million in disgorgement plus prejudgment interest.
“Shareholders were deceived by SCANA and robbed of millions upon millions of dollars,” said U.S. Attorney McCoy. “I am hopeful that, along with the criminal charges brought forward by our office, this multimillion dollar civil fine and penalty shows that no person or organization is above the law.”
The SEC’s complaint filed in February 2020 alleged that SCANA, SCE&G, and two former senior executives misled investors by claiming that a project to build two nuclear units would qualify the company for more than $1 billion in tax credits when they knew the project was far behind schedule and therefore unlikely to qualify for the tax credits. The complaint alleged that the false statements and omissions boosted SCANA’s stock price and enabled it to raise rates on customers and sell more than $1 billion in bonds. In mid-2017, SCANA announced it was scrapping the project and, according to the complaint, investors lost hundreds of millions of dollars when the truth was revealed.
“The securities laws require public companies and their senior executives to speak truthfully in their statements to investors,” said Justin Jeffries, Associate Director of the SEC’s Atlanta Regional Office. “This settlement holds SCANA and SCE&G accountable for their alleged fraud and reinforces that companies must not deceive investors.”
The SEC’s complaint, filed in federal court in South Carolina, charged SCANA, SCE&G, SCANA’s former CEO Kevin Marsh and former executive vice president Stephen Byrne with violations of the antifraud provisions of the federal securities laws. The complaint charged SCANA, SCE&G and Marsh with reporting violations. Without admitting or denying the allegations, SCANA and SCE&G agreed to a permanent injunction and to pay $112.5 million in disgorgement plus prejudgment interest, which will be deemed satisfied by SCANA and SCE&G’s settlement payments and related rate payer and shareholder litigation. SCANA also agreed to pay a $25 million penalty. The litigation against Marsh and Byrne is still ongoing.
The case was handled in the District of South Carolina by Assistant United States Attorneys Beth Warren and James Leventis, while Justin Jeffries, Graham Loomis, Natalie Brunson, H.B. Robson, and John O’Halloran of the Atlanta Regional Office handled the litigation for the SEC.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.