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Thursday 30 July 2020
Council Bluffs Man Sentenced to 40 Years in Prison for Child Pornography OffensesRead the Press Release
COUNCIL BLUFFS, Iowa - United States Attorney Marc Krickbaum announced on Wednesday, July 29, 2020, United States District Court Judge Rebecca Goodgame Ebinger sentenced Michael Brandstrom, age 29, of Council Bluffs, to 480 months in prison. He was sentenced to 360 months imprisonment for Production of Child Pornography and 120 months to Possession of Child Pornography, to run consecutively. The federal sentence will be served concurrently with his prison sentence in Pottawattamie County State Court for Kidnapping in the Third Degree and Lascivious Acts with a Child. Brandstrom was ordered to serve fifteen years of supervised release to follow his prison term. He was also ordered to pay a $200 special assessment to the Crime Victims’ Fund and $10,500 in restitution to numerous victims.
The charges stem from an investigation initiated by local law enforcement after a mother reported her four-year-old child missing from their apartment in Council Bluffs on September 2, 2019. As Council Bluffs Police Officers searched the apartment complex, Brandstrom brought the missing child out to them. Brandstrom was nervous when questioned by the police, his story was not consistent as to why he did not contact police when he located the child, and the child’s shirt was inside out. Brandstrom had taken the child into his apartment without the consent of her mother and the child disclosed that Brandstrom took pictures of her in his bathroom.
A search warrant was executed on Brandstrom’s apartment and a laptop and two cellular phones were seized for forensic analysis. The analysis of the devices revealed a large number of child pornography images and videos, including those of the child he kidnapped. The analysis of the laptop computer also located communications Mr. Brandstrom had with children from another country where he attempted to sexually exploit them.
This investigation was conducted by the Council Bluffs Police Department and United States Secret Service. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa and the Pottawattamie County Attorney’s Office.
Columbia Man Sentenced to 15 Years for Illegal Firearms, Meth TraffickingRead the Press Release
JEFFERSON CITY, Mo. – A Columbia, Missouri, man was sentenced in federal court today for illegally possessing firearms and methamphetamine.
Matthew Alan Eads, 38, was sentenced by U.S. District Judge Stephen R. Bough to 15 years in federal prison without parole. Eads was sentenced as an armed career criminal due to his prior felony convictions.
On Jan. 7, 2020, Eads pleaded guilty to being a felon in possession of a firearm, to possessing a firearm in furtherance of a drug-trafficking crime, and to possessing methamphetamine with the intent to distribute.
According to court documents, Eads was driving a 1997 Lincoln on March 39, 2018, when he ran a red light at the intersection of Paris Road and Brown Station Road in Columbia, causing a collision with a pick-up truck. Officers were called to the scene of the crash. An officer smelled marijuana while retrieving Eads’s proof of insurance from his vehicle, and Eads admitted he had a small amount of marijuana.
Officers searched Eads’s vehicle and found a gray backpack on the rear passenger seat that contained a Bersa .380-caliber semi-automatic handgun and a prescription bottle that contained methamphetamine. In the Lincoln’s trunk officers found a drawstring athletic bag that contained a Phoenix Arms .22-caliber semi-automatic handgun and two plastic baggies that contained approximately 12 grams of methamphetamine. Also inside this bag was a marijuana pipe, suspected THC wax, and two loaded magazines for the Bersa handgun.
Under federal law, it is illegal for anyone who has a prior felony conviction to be in possession of any firearm or ammunition. Eads has prior felony convictions for assault (injuring his victim with a utility knife), possessing cocaine with the intent to deliver, stealing, drug trafficking, and distributing psilocin (mushrooms – a controlled substance).
This case was prosecuted by Special Assistant U.S. Attorney Aaron M. Jolly. It was investigated by the Columbia, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Project Safe Neighborhoods
The U.S. Attorney’s Office is partnering with federal, state, and local law enforcement to specifically identify criminals responsible for significant violent crime in the Western District of Missouri. A centerpiece of this effort is Project Safe Neighborhoods, a program that brings together all levels of law enforcement to reduce violent crime and make neighborhoods safer for everyone. Project Safe Neighborhoods is an evidence-based program that identifies the most pressing violent crime problems in the community and develops comprehensive solutions to address them. As part of this strategy, Project Safe Neighborhoods focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.Clinton Township Man Charged with Robbery of a Pharmacy and Other OffensesRead the Press Release
A Clinton Township man was arraigned today on an indictment with robbing a pharmacy and other related offenses, announced United States Attorney Matthew Schneider.
Schneider was joined in the announcement by Steven M. D’Antuono, Special Agent in Charge of the FBI in Michigan and Chief Anne Moise, Hamtramck Police Department.
Charged was Marcus McBride, 27.
According to the charging documents, the Hoover Pharmacy, located at 2930 Holbrook Avenue, Hamtramck, Michigan, was robbed at gunpoint on June 10, 2020. Surveillance video from inside the pharmacy shows a man wearing a distinctive blue coat enter the pharmacy, produce a handgun, and demand pills. The suspect waved the firearm at the individuals located inside of the pharmacy and yelled, “Get down”. The suspect then approached the counter and pointed the firearm at the pharmacist and stated, “Give me 30’s and 40’s”. The pharmacist grabbed a box of medication which contained Oxycodone and Oxymorphone prescriptions and handed it to the suspect. The suspect took the box filled with medications and fled the pharmacy. Approximately 3,937 pills, with a street value of over $100,000, of oxycodone and other substances were taken during the robbery. Federal search warrants executed as part of this investigation produced a handgun, pills, cash, and a jacket which is similar to the one worn during the robbery. On the date of the robbery, MCBRIDE was wearing a MDOC GPS monitoring device. The GPS coordinates place him at the pharmacy at the approximate time of the robbery.
Chief Anne Moise stated, “I would like to thank the hardworking men and women of the Hamtramck Police Department, the Federal Bureau of Investigation and the United States Attorney's office for their hard work on this case. Our agency appreciates the great partnerships we have with our state and federal agencies."
In addition to the robbery and related drug and gun charges, McBride, along with co-defendant Patrick Johnson, were charged in connection with a previous narcotics trafficking incident that occurred near the Greyhound bus station in Detroit. McBride was in a vehicle driven by the co-defendant, and had unsuccessfully attempted to board a bus headed to Alabama with a large number of oxycodone pills.
The investigation of the case is being conducted by special agents and task force officers of the Federal Bureau of Investigation and officers with the Hamtramck Police Department. Assistant United States Attorneys Andrew Picek and Robert Moran are prosecuting this case for the United States.
An indictment is only a charge and is not evidence of guilt. The burden is on the government to show proof beyond a reasonable doubt.
Cass County, Texas, Attorney Indicted for Smuggling Methamphetamine into the Cass County JailRead the Press Release
TEXARKANA, Texas – A 49-year-old Cass County, Texas, man has been indicted for federal violations in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.
Bryan Lee Simmons was indicted by a federal grand jury on March 18, 2020, and charged with conspiring to distribute methamphetamine and using a firearm during and in relation to drug trafficking. After his initial appearance before U.S. Magistrate Judge Roy S. Payne, he was ordered detained pending trial.
According to the indictment, from at least July 2019 and continuing to about August 2019, Simmons agreed with others to distribute methamphetamine. Specifically, on August 29, 2019, he possessed methamphetamine that he intended to distribute. During and in relation to those crimes, he possessed a pistol.
If convicted, Simmons faces a minimum of 5 years and as much as life in federal prison.
This case is being investigated by the Texas Department of Public Safety, Texas Rangers Division with assistance from the Cass County, Texas, District Attorney’s Office and the Cass County, Texas, Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Jonathan R. Hornok.
A grand jury indictment is not evidence of guilt. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Cartel Recruiter Pleads Guilty to Heroin and Meth Trafficking ConspiracyRead the Press Release
NORFOLK, Va. – A North Carolina woman was sentenced today to 10 years in prison for her role in a large heroin and meth trafficking conspiracy that originated in Sinaloa, Mexico.
According to court documents, Delia Marie Salinez, 31, of Greensboro, was a recruiter and drug courier operating out of the conspiracy’s North Carolina distribution point. In March 2019, Salinez and two of her recruits packaged and drove roughly a kilogram of heroin and a kilogram of pure methamphetamine to Virginia Beach, where they thought they were going to sell the drugs. Instead, they were arrested during a SWAT takedown operation and the drugs were seized.
The other two couriers, Maricella Williamson and Kenya Godinez-Camacho, were sentenced to 65 and 60 months in prison, respectively.
The case was investigated as part of the Organized Crime Drug Enforcement Task Forces (OCDETF). The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; Jesse R. Fong, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division; and Anthony F. Zucaro, Jr., Interim Chief of Virginia Beach Police, made the announcement after sentencing by Senior U.S. District Judge Robert G. Doumar. Assistant U.S. Attorney William B. Jackson prosecuted the 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. 2:19-cr-131.
Camdenton Man Sentenced to 10 Years for Romance Fraud SchemeRead the Press Release
JEFFERSON CITY, Mo. – A Camdenton, Missouri, man with a history of predatory financial crimes against women was sentenced in federal court today for a $78,000 fraud scheme in which he used his victim’s credit cards without authorization.
Ivan Joseph Stark, Jr., 48, was sentenced by U.S. District Judge Stephen R. Bough to 10 years in federal prison without parole. The court also ordered Stark to pay restitution to his victim.
On Jan. 7, 2020, Stark pleaded guilty to one count of bank fraud and one count of aggravated identity theft.
Stark became romantically involved with his victim, identified in court documents as “C.H.,” after they met on a dating website. Stark, who used an alias and omitted details regarding his past prison sentence, obtained C.H.’s credit cards on March 1, 2018. Stark obtained the credit cards by falsely telling C.H. he intended to repair an electronic sign and sell the sign for a profit. Stark falsely claimed he already had a buyer for the sign. Stark promised to repay C.H. for purchases he made with C.H.’s credit cards using the proceeds from the sale of the sign. Stark also promised to split a portion of the proceeds of the sale with C.H. In reality, there was no electric sign or project to repair any sign.
Stark obtained more than $78,000 through this scheme. One of the credit cards, for example, was used to make a $10,180 down payment on a 30-foot trailer from Flying A. Motorsports. Another credit card was used to make a $1,500 down payment on a Dodge Ram truck, which was made over the phone with another woman who purported to be the victim.
Stark opened a Square account under the name AVR Industries. Stark falsely represented to Square that AVR was a taxicab and limousine business, when in fact, no such business was in operation. Stark conducted approximately $43,000 in transactions through Square, using C.H.’s credit cards, to make payments to AVR. As a result of these transactions, $41,817 was deposited into Stark’s personal bank account.
Stark, without C.H.’s knowledge or consent, requested a credit limit increase on two of C.H.’s
credit cards.Stark ultimately charged one of C.H.’s credit cards to a balance above $43,000. Stark made an electronic payment from his personal account in the amount of $21,947, payable to C.H.’s credit card, knowing that his account contained insufficient funds to cover the payment. Before his unfunded payment was reversed, however, Stark made approximately $21,154 in charges to C.H.’s credit card. This resulted in a statement balance of $43,607, which was $21,607 over the card’s credit limit.
The government’s sentencing memorandum cites a history of predatory financial crimes against several more victims. Stark’s past relationships show a pattern of systematic victimization, the memorandum states, in which Stark deliberately chooses his victims, uses them, and leaves them financially ruined and emotionally traumatized.
According to court documents, Stark’s criminal history is staggering. From the age of 19, he has either been under supervision, an active warrant or incarcerated. His crimes have been almost exclusively financial and fraudulent in nature and have only escalated over time, despite periods of incarceration.
This case was prosecuted by Assistant U.S. Attorneys Ashley S. Turner and Lauren E. Kummerer. It was investigated by the FBI and the Camden County, Mo., Sheriff’s Department.
Cambridge Man Charged with Receipt and Possession of Child PornographyRead the Press Release
BOSTON – A Cambridge man was arrested today and charged with child pornography offenses.
Robert Wharton, 31, was charged in a criminal complaint with receiving and possessing child pornography. Following an initial appearance in federal court in Boston via videoconference, Wharton was detained pending a probable cause and detention hearing.
According to the charging documents, federal investigators developed evidence that a user of the Kik messaging application had electronically transmitted funds to another individual in exchange for access to internet links containing child pornography. The investigation revealed that those funds originated from Wharton and that Wharton resided at an apartment in Cambridge. Earlier today, during a search of Wharton’s apartment, Kik messages that Wharton had exchanged with the person to whom he had sent funds were discovered. In addition, various images and videos depicting naked children were found on Wharton’s phone, including a pornographic video that Wharton had received via the Telegram messaging application; this video depicts a young child performing oral sex on an adult.
Members of the public who have questions, concerns or information regarding this case should call 617-748-3274.
The charge of receipt of child pornography provides for a mandatory minimum sentence of five years and up to 20 years in prison, a mandatory minimum of five years and up to life of supervised release and a fine of $250,000. The charge of possession of child pornography provides for a sentence of up to 20 years in prison, a mandatory minimum of five years and up to life of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based on the United States Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigations, Boston Field Division made the announcement today. The Cambridge Police Department provided valuable assistance along with the Arlington, Newton and Revere Police Departments and the Massachusetts Department of Correction. Assistant United States Attorney Bill Abely, Deputy Chief of Lelling’s Major Crimes Unit, is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Bowie Man Sentenced to 18 Months in Federal Prison for False Use of a PassportRead the Press Release
Greenbelt, Maryland – U.S. District Judge George J. Hazel, III, today sentenced Arinze Michael Ozor, age 37, of Bowie, Maryland, a dual citizen of the United States and Nigeria, to 18 months in federal prison, followed by three years of supervised release, for forgery or false use of a passport, in connection with his use of false passports to open “drop accounts” for a money laundering conspiracy. Judge Hazel also ordered Ozor to pay restitution of $43,000.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Edwin Guard of the Washington Field Office of the U.S. Department of State’s Diplomatic Security Service (DSS).
According to his plea agreement, Ozor used at least two fraudulent passports as part of a money laundering conspiracy to open eight “drop accounts” to receive the proceeds from fraud schemes, including business e-mail compromise schemes and romance fraud schemes. The funds deposited to the accounts were largely disseminated to other entities as part of the conspiracy by Ozor and others.
Specifically, Ozor admitted that he used a Ghanaian passport in the name of Kelvin Green to open accounts at five banks between December 2017 and January 2018. Although the passport contained purported identifiers for Green, it contained Ozor’s photograph. When one of the banks froze the account due to suspicion of fraudulent activity, Ozor met with a banker to discuss regaining access to the account and presented the same Ghanaian passport in support of his request.
Ozor further admitted that from March 23, 2018 through May 1, 2018, he used a purported Beninese passport in the name of Jacob Hessou to open accounts at three additional banks. As with the Ghanaian passport, the Beninese passport contained purported identifiers for Hessou, but contained Ozor’s photograph.
The investigation found that Ozor does not have a validly issued passport from Ghana or Benin. In addition, the Kelvin Green Ghanaian passport number and the Jacob Hessou Beninese passport number were actually issued to other individuals by the respective governments and not to Green or Hessou.
More than $976,000 was involved in the money laundering conspiracy from the eight accounts opened by Ozor using the fraudulent passports.
United States Attorney Robert K. Hur commended the FBI and the DSS for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorney Elizabeth Wright, who prosecuted the case.
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Boston Man Charged with Assaulting Officers with a Firearm During June 1 Civil Disorder in BostonRead the Press Release
BOSTON – A Boston man was charged today with assaulting officers with a firearm during the civil disorder in Boston early in the morning of June 1, 2020.
John Boampong, 37, was charged by criminal complaint with one count each of assaulting a federal officer, interfering with a law enforcement officer during the commission of a civil disorder, and being a prohibited person under felony indictment in possession of a firearm and ammunition. Boampong is currently detained in state court and will make an initial appearance in federal court in Boston at a later date.
“The charges in this case – which involve someone legally barred from having a gun indiscriminately firing 11 rounds at a crowd of officers and civilians – are a good reminder of a simple rule: Protests, even disruptive ones, are legal. Destroying property and endangering lives is not. We will enforce that rule. This is also today’s reminder that what police officers really do every day is put themselves at risk to protect our communities,” said United State Attorney Andrew E. Lelling. “My thanks to the Boston Police for their professionalism, restraint and sacrifices during the recent period of unrest.”
“Shooting toward police officers who are there for no other reason than to protect the public is appalling, and it’s against the law. So is illegally carrying a loaded handgun. But we believe that’s exactly what John Boampong is alleged to have done. He incited panic, putting everyone—including civilians—in danger,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Today’s charges should send a clear message: there will be serious consequences for violent instigators who are exploiting legitimate, peaceful protests and engaging in violations of federal law.”
“On May 31, 2020, while people were expressing their First Amendment rights, others unfortunately turned to violence directed toward our city, its residents, and my officers,” said Boston Police Commissioner William Gross. “I’m pleased to work in partnership with the Federal Bureau of Investigations and the United States Attorney's Office bringing federal charges against John Boampong. This sends a clear message that people committing violent crime in our city, against our residents, and my officers, will not be tolerated.”
“On June 3, 2020, my office charged Mr. Boampong with 21 counts of armed assault with intent to murder. Since that day, he has been removed from the community pursuant to a dangerousness hearing initiated by the Suffolk County DA's Office,” said DA Rachael Rollins. “Mr. Boampong’s behavior was egregious, violent and unacceptable and he will be held accountable. Any opportunity to work in collaboration with our federal partners to keep Suffolk County residents and the members of law enforcement that are sworn to protect and serve us, is welcomed by my office.”
According to court documents, on the evening of May 31, 2020 and continuing through the morning of June 1, 2020, what began as a peaceful demonstration in Boston’s Back Bay neighborhood devolved into widespread acts of violence, vandalism, looting and destruction of police property, including the burning of at least one police vehicle on Tremont Street. Some protestors threw rocks, bricks and commercially-available explosives, such as M-80s, at police officers. Numerous police officers were injured.
It is alleged that, on June 1, 2020 at approximately 3:00 am, Boampong was driving his car near the Arlington Street and Boylston Street intersection in front of a store that had been victimized by looting that evening. Police officers instructed Boampong and his passengers to leave the area. The occupants of Boampong’s car initially became verbally combative towards the officers and failed to leave the area as instructed. When Boampong reversed the car, officers told him to stop, as officers and another vehicle were in the way. Boampong kept driving in reverse until one officer knocked with his baton on Boampong’s car to get his attention.
Boampong then drove away, but soon returned to the area, parked on Providence Street, and allegedly shot at least 11 times toward officers, including a deputized federal officer. The officers took cover by bracing or ducking behind cars and others objects. Bullets broke through the windows of two apartments above ground level in a building behind some of the officers.
When officers eventually stopped Boampong’s car, they saw a Sig Sauer P230 9mm firearm lying on the floor of the front passenger-side floor mat, and a black holster underneath the driver’s seat, where Boampong had been sitting. The firearm was recovered, examined and revealed to have Boampong’s fingerprint on it.
At the time, Boampong was prohibited from possessing a firearm or ammunition because he faced pending state charges carrying potential sentences exceeding one year.
The charge of assaulting federal officers provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. The charges of interfering with law enforcement officers during a civil disorder and being a prohibited person in receipt of a firearm or ammunition provide for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Lelling, FBI Boston SAC Bonavolonta, Boston Police Commissioner Gross and Suffolk County District Attorney Rollins made the announcement today. Assistant U.S. Attorney John Dawley of Lelling’s Organized Crime and Gang Unit, and Assistant U.S. Attorney Scott L. Garland, Deputy Chief of Lelling’s National Security Unit, are prosecuting the case.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Armed Career Criminal Sentenced to 19 Years in Federal Prison for Illegally Possessing a Firearm and DrugsRead the Press Release
Memphis, TN – Levester Grayer, 42, has been sentenced to 235 months in federal prison for being an armed career criminal in possession of a firearm and possession of a controlled substance. D. Michael Dunavant, U.S. Attorney announced the sentence today.
According to the information presented in court, on October 3, 2016, Memphis Police Department dispatch received a call that Grayer, an individual wanted for outstanding warrants, was at the Corner Grocery in Memphis. Officers found him at that location and arrested him as he got into his car. As law enforcement searched the car they found 4 plastic bags containing crack cocaine, a small amount of marijuana and a loaded Tanfoglio 10mm caliber pistol. Grayer waived his Miranda rights and admitted to possessing the drugs and the firearm.
The United States charged Grayer with being a felon in possession of a firearm and possession of a controlled substance. On February 21, 2017, Grayer pleaded not guilty. On May 21, 2019, the case proceeded to trial, where he was convicted by a federal jury. His behavior at trial was so disruptive in the courtroom that the judge admonished the defendant numerous times, and he was ultimately ordered removed from the courtroom in handcuffs.
Grayer had 14 prior felony convictions, 11 of which were violent felonies, including kidnapping, aggravated assault and robbery. He also had two prior felony convictions for selling drugs and had been convicted of a misdemeanor crime of domestic violence at the time of his possession of the drugs and the possession of the firearm.
On July 23, 2020, U.S. District Court Judge Thomas L. Parker sentenced Grayer to 235 months in federal prison followed by 3 years of supervised release. At sentencing, Grayer was deemed to be an armed career criminal, which carries a 15 year mandatory minimum prison sentence. There is no parole in the federal system.
U.S. Attorney D. Michael Dunavant said, "Convicted felons who possess firearms are an inherent danger to community, and in this case, the defendant was an armed career criminal who continued to possess a firearm despite his prior violent felony conviction history. Grayer has devoted his adult life to a career of criminal conduct, and that prior history has finally caught up with him. This sentence rightly removing him from our streets for 19 years will improve public safety for the citizens of Memphis."
This case was investigated by the Project Safe Neighborhoods Task Force. The Project Safe Neighborhoods (PSN) initiative is 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. In 2017, PSN was reinvigorated as part of the Justice 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.
Assistant U.S. Attorney J.William Crow prosecuted this case on behalf of the government.
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Agency Village Man Charged with Six Counts of Aggravated Sexual Abuse of a Child and Six Counts of Abusive Sexual ContactRead the Press Release
United States Attorney Ron Parsons announced that an Agency Village, South Dakota, man has been indicted by a federal grand jury for Aggravated Sexual Abuse of a Child and Abusive Sexual Contact.
Kevin Lee Farmer, age 57, was indicted on July 20, 2020. He appeared before U.S. Magistrate Judge William D. Gerdes on July 30, 2020, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to life in federal prison and/or a $250,000 fine, life of supervised release, and up to $1,200 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between April 1, 2016, and December 31, 2016, and between March 10, 2009, and March 10, 2012, Farmer knowingly engaged in, and attempted to engage in sexual acts with two children who had not attained the age of 12.
The Indictment also alleges that between June 29, 2015, and June 28, 2016, as well as between March 10, 2009, and March 9, 2012, and between July 1, 2017, and July 31, 2017, Farmer knowingly engaged in and attempted to engage in sexual contacts with four juvenile victims, by using force against them, as well as threatening and placing them in fear of their lives.
The charges are merely accusation and Farmer is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation and the Sisseton Wahpeton Oyate Tribal Police. Assistant U.S. Attorney Jeremy R. Jehangiri is prosecuting the case.
Farmer was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Aberdeen Man Charged with Being Felon in Possession of FirearmRead the Press Release
United States Attorney Ron Parsons announced that an Aberdeen, South Dakota, man has been indicted by a federal grand jury for Felon in Possession of a Firearm.
Darrell Two Hearts, age 40, was indicted on July 20, 2020. He appeared before U.S. Magistrate Judge Mark A. Moreno on July 29, 2020, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in federal prison and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on April 25, 2020, Two Hearts, who had been convicted of a crime punishable by imprisonment for a term exceeding one year, and being an unlawful use of a controlled substance, knowingly possessed a firearm. Said firearm had been shipped and transported in interstate commerce.
The charge is merely an accusation and Two Hearts is presumed innocent until and unless proven guilty.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
This case is also part of Project Guardian, the Department of Justice's signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department's past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian.
The investigation is being conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Aberdeen Police Department. Assistant U.S. Attorney Jeffrey C. Clapper is prosecuting the case.
Two Hearts was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Wednesday 29 July 2020
York County Man Sentenced to 30 Months’ Imprisonment for Conspiring to Steal Thousands of Dollars’ Worth of Postage StampsRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Steven Williams, age 48, of York, Pennsylvania, was sentenced on July 28, 2020, to 30 months’ imprisonment followed by three years of supervised release, by Chief District Court Judge John E. Jones, III, for stealing government property and conspiring to commit that offense.
According to United States Attorney David J. Freed, Williams previously pleaded guilty to conspiring with other individuals to purchase thousands of dollars’ worth of postage stamps from post offices in the Middle District of Pennsylvania and elsewhere. Williams admitted that to purchase the stamps, he used personal checks, knowing that the funds in his bank account were insufficient to cover the cost of the stamps. As part of his plea agreement, Williams agreed to pay restitution to the U.S. Postal Service in the amount of $105,875.
The case was investigated by the United States Postal Inspection Service and the Northeastern Regional Police Department. Assistant U.S. Attorney Carlo D. Marchioli prosecuted the case.
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Wyoming Man Convicted of Making a Threat Against the PresidentRead the Press Release
United States Attorney Joe Kelly announced that Timothy Cessor, age 27, of Cheyenne, Wyoming, was convicted on July 29, 2020 of making a threat against the President of the United States following a three-day jury trial in federal court, in Omaha, Nebraska. United States District Judge Robert F. Rossiter, Jr. scheduled the sentencing for October 23, 2020. Cessor faces up to five years’ imprisonment.
Evidence at trial established that on February 4, 2019, Cessor broke into his father’s gun safe in his home in Cheyenne, took a .40 caliber pistol and ammunition, and began driving east toward Washington, D.C., to kill the President of the United States. Cessor made a short cell phone video in which he declared that he “will not tolerate an incompetent white house.” Cessor set out to go to the White House to shoot the President. A few hours into the trip east, while Cessor was in Nebraska, he called his father and stated that he was going to “take care of Trump.” After speaking with his father, Cessor turned around and returned to Cheyenne and received treatment at a medical facility in Cheyenne. While at the medical facility, Cessor stated that he had begun driving to Washington to kill the President.
This case is part of the Department of Justice’s Project Guardian and Early Disruption initiatives. These initiatives seek to address threats to the public safety presented by individuals who would seek to acquire or use firearms to achieve violence and injure others. For more information about Project Guardian, please see https://www.justice.gov/projectguardian.
The case was investigated by the United States Secret Service and the Cheyenne Police Department in Wyoming.
West Seneca Man Charged with Selling MethRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Timothy J. Chowaniec, 62, of West Seneca, NY, was arrested and charged by complaint with possessing with the intent distribute, and distributing, five grams of more of methamphetamine. The charge carries a mandatory minimum penalty of five years in prison, and a maximum of 40 years.
Assistant U.S. Attorney Charles E. Watkins, who is handling the case, stated that according to the complaint, on three separate occasions in January and February of 2020, an undercover investigator with the New York State Police purchased quantities of methamphetamine from the defendant near Chowaniec’s residence in West Seneca. On April 14, 2020, the DEA and United States Postal Inspection Service executed a search warrant on a parcel from California addressed to the defendant at his West Seneca residence. Located inside the parcel was a plastic sandwich bag containing approximately 3.7 ounces of suspected methamphetamine.
The complaint is the result of an investigation by the New York State Police, under the direction of Major James Hall; the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division; and the U.S. Postal Inspection Service, under the direction of Boston Division Inspector-in-Charge Joseph W. Cronin.
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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West Memphis Man Sentenced to More Than 20 Years in Prison for Methamphetamine ConspiracyRead the Press Release
LITTLE ROCK—A West Memphis man was sentenced today to 250 months in federal prison for his involvement in a methamphetamine conspiracy. Cody Hiland, United States Attorney for the Eastern District of Arkansas, announced that Karlen Ingram, 38, was sentenced as part of Operation Money Don’t Sleep, which targets drug trafficking in West Memphis and the surrounding areas.
In September 2015, the Drug Enforcement Administration (DEA) and West Memphis Police Department began investigating a drug trafficking organization in West Memphis. During this investigation, federal agents learned Ingram was a supplier of cocaine and crack cocaine for numerous individuals. In late 2015 and early 2016, agents made six controlled purchases of crack cocaine from Ingram, all of which occurred at his home.
After several court-authorized wiretaps of Ingram’s cell phones, agents intercepted multiple communications of Ingram conducting narcotics transactions and learned that he later shifted from primarily distributing cocaine to also dealing in methamphetamine. The investigation revealed that Ingram and his co-conspirators used the U.S. Postal Service to ship illegal narcotics, which continued through January 2017.
On July 11, 2017, a grand jury returned an indictment charging Ingram and others with one count of conspiracy to possess with intent to distribute and to distribute methamphetamine. Ingram pleaded guilty on October 2, 2019. Today, United States District Court Judge James M. Moody Jr. sentenced Ingram to more than 20 years in prison, followed by five years of supervised release. There is no parole in the federal system.
“This defendant and his co-conspirators conducted a high-level drug trafficking scheme that endangered our communities in Eastern Arkansas,” stated U.S. Attorney Hiland. “This lengthy sentence is a testament to the dedication of our law enforcement partners, with whom we share a tireless commitment to maintaining law and order in our state.”
Operation Money Don’t Sleep is an Organized Crime Drug Enforcement Task Force investigation that is being conducted by the DEA, the West Memphis Police Department and the U.S. Postal Inspection Service.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available online at
https://www.justice.gov/edar
Twitter:
@EDARNEWS
Utica Men Sentenced for Drug Trafficking ConspiracyRead the Press Release
UTICA, NEW YORK – Abner Peralta, age 31, and Luis Colon, age 35, both of Utica, were sentenced today after previously being found guilty after trial of drug trafficking charges. Peralta was sentenced to serve 60 months in federal prison, followed by a 4-year term of supervised release and forfeiture of $650.00. Colon was sentenced to time served. The sentences were announced by United States Attorney Grant C. Jaquith and Ray Donovan, Special Agent in Charge of the U.S. Drug Enforcement Administration (DEA), New York Field Division.
Earlier this year, Peralta and Colon were found guilty after a five-day jury trial in federal court in Utica of conspiracy to distribute and to possess with intent to distribute cocaine in the Utica area from October 2016 to October 2017. The jury also found Peralta guilty of possession with intent to distribute of 28 grams or more of cocaine base (crack cocaine). The evidence at trial showed that Peralta and Colon conspired with each other and others to distribute cocaine in the Utica area and that Peralta, the head of the conspiracy, had access to kilogram-quantities of cocaine. The evidence also showed that Peralta maintained a drug “stash house” in Utica where he kept drugs and drug packaging materials. During the trial, a fingerprint analyst testified that he identified Peralta’s fingerprints on some of the drug packaging material seized from the stash location. The cocaine base Peralta possessed with the intent to distribute was found during a search warrant executed at this location in October 2017. The evidence at trial also included testimony that law enforcement officers searched Peralta’s house and found multiple items in the garage that tested positive for cocaine residue, including a digital scale.
This case was investigated by the United States Drug Enforcement Administration (DEA) with assistance from the New York State Police, Oneida County Sheriff’s Office, Rome Police Department, Utica Police Department, Cortland Police Department, Investigators from the Onondaga County District Attorney’s Office; U.S. Border Patrol; and Internal Revenue Service – Criminal Investigation (IRS-CI), and it was prosecuted by Assistant U.S. Attorneys Michael F. Perry & Thomas Sutcliffe.
University of Arkansas Professor Indicted for Wire Fraud and Passport FraudRead the Press Release
The Department of Justice announced today that Simon Saw-Teong Ang, 63, of Fayetteville, Arkansas, was indicted by a federal grand jury in the Western District of Arkansas on 42 counts of wire fraud and two counts of passport fraud.
“Transparency and integrity have long sustained the pursuit of knowledge on America’s campuses,” said Assistant Attorney General for National Security John C. Demers. “Mr. Ang is alleged to have demonstrated neither when he failed to disclose his financial and other ties to companies and institutions in China to the University of Arkansas and to U.S. government agencies, despite an obligation to do so. This is a hallmark of the China’s targeting of research and academic collaborations within the United States in order to obtain U.S. technology illegally. The Department of Justice will continue to work with colleges and universities to protect U.S. research and development from exploitation by foreign powers and will prosecute those who defraud the U.S. Government.”
“This case is the result of the tireless efforts of our Federal law enforcement partners at the FBI and the State Department,” stated Acting U.S. Attorney Fowlkes for the Western District of Arkansas. “The wire fraud in this case affected not only the University of Arkansas, but also several other important United States Government Agencies such as the National Aeronautics and Space Administration (NASA) and the United States Air Force. It is our sincere hope that this investigation sends a strong message to those who would attempt to defraud the Federal Government.”
“The significant federal charges leveled against Simon Ang demonstrate how real the PRC’s pervasive threat is to Arkansan innovation and businesses,” said FBI Little Rock Special Agent in Charge Diane Upchurch. “Our counterintelligence agents work tirelessly to protect our state’s economy from foreign adversaries. Throughout this investigation, we were proud to partner with the U.S. Air Force Office of Special Investigations, NASA’s Office of Inspector General, the Diplomatic Security Service and prosecutors from the U.S. Attorney’s Office of the Western District of Arkansas.”
Ang was a professor and researcher at the University of Arkansas in Fayetteville, Arkansas since 1988. At the University of Arkansas, Ang served as the Director of the High Density Electronics Center (HiDEC) until on or about May 8, 2020. During his employment with the University of Arkansas and as director of the HiDEC, Ang was the investigator and co-investigator for many grant contracts that were funded by United States Government Agencies. Annually, the University of Arkansas required Ang to disclose any conflicts of interest, including outside employment. Agents working with the FBI discovered that Ang received money and benefits from China and was closely associated with various companies based in China during the same time that he was receiving grants from various United States Government Agencies. The agents discovered that Ang did not disclose these conflicts of interest, even when specifically required to do so by the University of Arkansas and NASA, one of the agencies that awarded Ang and his research associates a Federal grant.
The indictment charges that beginning as early as June 9, 2013, and continuing to on or about May 8, 2020, in the Western District of Arkansas, and elsewhere, Ang, knowingly and willfully devised and intended to devise a scheme and artifice to defraud and to obtain money and property from unknowing United States Government Agencies, the University of Arkansas, and others by means of material false and fraudulent pretenses, representations and promises and the concealment of material facts for the purpose of obtaining money and intellectual property that he would not have received had the University of Arkansas and other government authorities known the facts involved in his scheme and artifice to defraud.
The indictment also charges Ang with two counts of making false statements on a passport renewal application. Specifically, the indictment states that on or about Aug. 5, 2019, in the Western District of Arkansas, Ang, willfully and knowingly made a false statements in an application for a passport with intent to induce and secure for his own use the issuance of a passport under the authority of the United States, contrary to the laws regulating the issuance of such passports and the rules prescribed pursuant to such laws, in that in such application the defendant stated that he was not known by any names other than “Simon Saw-Teong Ang,” which statement he knew to be false. The indictment also charges that Ang also listed immediate travel plans for a trip to Singapore with a departure date of Aug. 30, 2019 and a return date of Sept. 7, 2019, which statement he knew also to be false.
If convicted, Ang faces a statutory maximum punishment of 20 years in prison for each wire fraud count and 10 years in federal prison for each passport fraud count. If convicted, Ang’s sentence will be determined by the court after review of factors unique to this case, including Ang’s prior criminal record (if any), Ang’s role in the offense and the characteristics of the violations.
The FBI and the State Department’s Diplomatic Security Service (DSS) is investigating the case. Acting U.S. Attorney David Clay Fowlkes from the U.S. Attorney’s Office for the Western District of Arkansas and Trial Attorneys Michael Eaton and Ali Ahmad from the National Security Division are prosecuting the case.
An indictment is merely an accusation. An arrest warrant represents a finding of probable cause. A person is presumed innocent unless or until he or she is proven guilty beyond a reasonable doubt in a court of law.
University of Arkansas Professor Indicted for Wire Fraud and Passport FraudRead the Press Release
Fayetteville, Arkansas – Acting United States Attorney for the Western District of Arkansas David Clay Fowlkes, Assistant Attorney General for National Security John C. Demers, and FBI Special Agent in Charge Diane Upchurch of the FBI Little Rock Field Office, announced today that Simon Saw-Teong Ang, 63, of Fayetteville, Arkansas, was indicted by a federal grand jury in the Western District of Arkansas on forty-two counts of wire fraud and two counts of passport fraud.
“This case is the result of the tireless efforts of our Federal law enforcement partners at the FBI and the Diplomatic Security Service, stated Acting US Attorney Fowlkes.” “The wire fraud in this case affected not only the University of Arkansas, but also several other important United States Government Agencies such as the National Aeronautics and Space Administration (NASA) and the United States Air Force. It is our sincere hope that this investigation sends a strong message to those who would attempt to defraud the Federal Government.”
“Transparency and integrity have long sustained the pursuit of knowledge on America’s campuses,” said Assistant Attorney General for National Security John C. Demers. “Mr. Ang is alleged to have demonstrated neither when he failed to disclose his financial and other ties to companies and institutions in China to the University of Arkansas and to U.S. government agencies, despite an obligation to do so. This is a hallmark of the China’s targeting of research and academic collaborations within the United States in order to obtain U.S. technology illegally. The Department of Justice will continue to work with colleges and universities to protect U.S. research and development from exploitation by foreign powers and will prosecute those who defraud the U.S. Government.”
“The significant federal charges leveled against Simon Ang demonstrate how real the PRC’s pervasive threat is to Arkansan innovation and businesses,” said FBI Little Rock Special Agent in Charge Diane Upchurch. “Our counterintelligence agents work tirelessly to protect our state’s economy from foreign adversaries. Throughout this investigation, we were proud to partner with the U.S. Air Force Office of Special Investigations, NASA’s Office of Inspector General, the Diplomatic Security Service and prosecutors from the U.S. Attorney’s Office of the Western District of Arkansas.”
Ang was a professor and researcher at the University of Arkansas in Fayetteville, Arkansas since 1988. At the University of Arkansas, Ang served as the Director of the High Density Electronics Center (HiDEC) until on or about May 8, 2020. During his employment with the University of Arkansas and as director of the HiDEC, Ang was the investigator and co-investigator for many grant contracts that were funded by United States Government Agencies. Annually, the University of Arkansas required Ang to disclose any conflicts of interest, including outside employment. Agents working with the FBI discovered that Ang received money and benefits from China and was closely associated with various companies based in China during the same time that he was receiving grants from various United States Government Agencies. The agents discovered that Ang did not disclose these conflicts of interest, even when specifically required to do so by the University of Arkansas and NASA, one of the agencies that awarded Ang and his research associates a Federal grant.
The Indictment charges that beginning as early as June 9, 2013, and continuing to on or about May 8, 2020, in the Western District of Arkansas, and elsewhere, Ang, knowingly and willfully devised and intended to devise a scheme and artifice to defraud and to obtain money and property from unknowing United States Government Agencies, the University of Arkansas, and others by means of material false and fraudulent pretenses, representations and promises and the concealment of material facts for the purpose of obtaining money and intellectual property that he would not have received had the University of Arkansas and other government authorities known the facts involved in his scheme and artifice to defraud.
The Indictment also charges Ang with two counts of making false statements on a passport renewal application. Specifically, the Indictment states that on or about August 5, 2019, in the Western District of Arkansas, Ang, willfully and knowingly made a false statement in an application for a passport with intent to induce and secure for his own use the issuance of a passport contrary to the laws regulating the issuance of passports, in that Ang stated that he was not known by any names other than “Simon Saw-Teong Ang,” which he knew to be false. The Indictment also charges that Ang also listed immediate travel plans for a trip to Singapore with a departure date of August 30, 2019 and a return date of September 7, 2019, which he knew also to be false.
If convicted, Ang faces a statutory maximum punishment of 20 years in prison for each wire fraud count and 10 years in federal prison for each passport fraud count. If convicted, Ang’s sentence will be determined by the court after review of factors unique to this case, including Ang’s prior criminal record (if any), Ang’s role in the offense and the characteristics of the violations.
The FBI, the U.S. Department of State’s Diplomatic Security Service (DSS), NASA Office of Inspector General and Air Force Office of Special Investigations are investigating the case. Acting United States Attorney David Clay Fowlkes from the United States Attorney’s Office for the Western District of Arkansas and Trial Attorneys Michael Eaton and Ali Ahmad from the National Security Division are prosecuting the case.
An Indictment is merely an accusation. An arrest warrant represents a finding of probable cause. A person is presumed innocent unless or until he or she is proven guilty beyond a reasonable doubt in a court of law.
United States Files Complaint to Forfeit More Than $6.5 Million in Cryptocurrency Stolen in Banana Fund Ponzi SchemeRead the Press Release
WASHINGTON - The United States has filed a complaint to forfeit approximately 482 bitcoins and 1,721,868 tether (collectively worth approximately $6.5 million), announced the Acting U.S. Attorney for the District of Columbia Michael R. Sherwin and Special Agent in Charge of the United States Secret Service San Francisco Field Office Thomas Edwards.
The complaint alleges that the administrator of the “Banana Fund” marketed the company to potential investors as a platform for startups to post business proposals and receive crowdfunding in virtual currency. Based on the administrator’s representations, his victims sent him investment contributions; however, the Banana Fund never became operational. Instead, the administrator invested the victims’ capital for his own gain. After admitting that the Banana Fund was unsuccessful, he told his victims that he would return their contributions. When he failed to do so, the U.S. authorities seized the remaining victim funds, which amounted to more than $6.5 million in bitcoins and tether.
“The complaint in this case demonstrates our commitment to protecting people here and abroad from ever-evolving Ponzi schemes,” said Acting U.S. Attorney Sherwin. “Today’s complaint ensures that funds will be returned to victims of the scheme. This office has prioritized investigating and prosecuting the illicit use of virtual currency to launder criminal enterprises such as the Banana Fund.”
“Today’s cybercriminals rely on sophisticated techniques in order to prey on victims, often masquerading as legitimate businesses, “ said Thomas Edwards, Special Agent in Charge of the United States Secret Service’s San Francisco Field Office. “The complaint demonstrates that the Secret Service will continue to hold foreign and domestic criminals accountable, to include crooked cryptocurrency schemes that attempt to defraud American citizens. The swift actions taken by the Secret Service, the U.S. Attorney’s Office and the Department of Justice’s Computer Crime and Intellectual Property Section prevented the subject from liquidating the remaining illegally obtained funds for personal gains - and will permit us to return the reserves to the victims. This investigation is a testament to the strong partnership between the Secret Service, U.S. Attorney’s Office and the Department of Justice’s Computer Crime and Intellectual Property Section.”
The civil forfeiture complaint was filed on July 29, 2020, in the U.S. District Court for the District of Columbia. According to the complaint, between December 2016 and March 2018, the administrator for the Banana Fund solicited investments by representing his company as a platform for entrepreneurs to bring their business concepts and crowdsource ideas. Each entrepreneur’s project would be funded by the crowd during an initial token offering, with a percentage of the capital raised going to the Banana Fund. The administrator amassed over 500 bitcoins. Although the administrator claimed to be working toward opening the Banana Fund for business, he laundered the funds and made tens of thousands of virtual currency trades as part of a self-enrichment scheme.
According to the complaint, in January 2018, the administrator informed his investors that the Banana Fund had failed and promised to refund their contributions. He also claimed that he was in the process of transferring all funds to stablecoins, such as tether. Shortly thereafter, he withdrew approximately 100 bitcoins from his victims’ investments so that he could purchase a house for his personal use. He never returned any of the funds to his investors. After victim investors complained that the Banana Fund had turned out to be a fraud, USSS began an investigation.
While soliciting investments, the administrator announced publicly that investor funds had reached 557 bitcoins and approximately 1.73 million tether. After tracing the victims’ investment funds to a particular virtual currency account, USSS investigators were able to locate 482 bitcoins and 1,721,868 tether. As a result, USSS executed a seizure warrant on those funds and commenced this action to begin returning these funds to the administrator’s victims.
USSS has set up a dedicated email account for Banana Fund victims to contact law enforcement at [email protected]. Further information about filing a claim may be found at www.forfeiture.gov.
The claims made in the complaint are only allegations and do not constitute a determination of liability.
The Secret Service San Francisco Field Office is investigating the case. Assistant U.S Attorneys Zia M. Faruqui and Jessi Brooks, and Trial Attorneys Jessica Peck and C. Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section are litigating the case, with assistance from Paralegal Specialist Elizabeth Swienc. The U.S. Attorney’s Office for the Northern District of California in San Francisco provided significant assistance.
United States Attorney McSwain Announces 2019 Affirmative Civil Enforcement Achievements and Ongoing 2020 Efforts Resulting in Recoveries of over $260 MillionRead the Press Release
PHILADELPHIA, PA – United States Attorney William M. McSwain announced affirmative civil enforcement (ACE) achievements in 2019 by the Civil Division of the United States Attorney’s Office for the Eastern District of Pennsylvania, and its ongoing efforts in the first half of 2020 to stop fraud, waste, and abuse against the government. The number of affirmative civil enforcement settlements rose to an all-time high in 2019, solidifying the Office’s Civil Division as one of the busiest and most productive in the nation.
The Office’s Civil Division recovered over $260 million in settlements and judgments from civil cases involving fraud against the government in 2019 and the first half of 2020. These matters originated from qui tam, or whistleblower, filings under the False Claims Act (FCA), referrals from agency partnerships, and proactive efforts including data analytics. In 2019, the Civil Division also opened a record-setting number of ACE investigations into alleged fraud against the government, Controlled Substances Act violations, and civil rights violations. Much of the Office’s affirmative success came from a renewed focus on generating and supporting investigations using data analytics, which helps to identify fraud trends.
“This past year’s results reflect creative and groundbreaking resolutions across a variety of programs that appropriately address violations by health care providers, government contractors, and federal grant recipients, while encouraging those same entities and their employees to come forward and self-disclose when they are aware of non-compliance with federal laws,” said U.S. Attorney McSwain. “In our District, we have one of the most sophisticated whistleblower bars in the country. We thank those whistleblowers and their counsel who have brought allegations of fraud to our attention. The willingness of whistleblowers, or relators, to come forward and shed light on claims of fraud resulted in the return of millions of dollars to the federal government programs that were defrauded.”
U.S. Attorney McSwain continued, “We also thank our federal enforcement partners for their dedication in the matters summarized below, including: the United States Department of Health and Human Services, Office of the Inspector General; the Defense Investigative Service, Office of the Inspector General; the Department of Veterans Affairs; the Drug Enforcement Administration; the United States Office of Personnel Management, Office of the Inspector General; and the United States Postal Inspection Service. My Office would not have achieved the level of success it did without the benefit of their dedication and expertise.”
“Our Civil Division’s affirmative achievements show that we will fight fraud and hold companies and individuals accountable, no matter the methods, schemes, or amounts at play,” U.S. Attorney McSwain said. “I look forward to ongoing ACE success and continued enforcement in the areas of health care fraud, grant fraud, Controlled Substances Act enforcement, and civil rights enforcement.”
Below are some of the case highlights from 2019 and thus far in 2020.
2019 ACE Achievements Spanned Multiple Enforcement Areas
FCA Healthcare Fraud Settlements
Pentec Health. Pentec Health, a provider of compounded infusion drugs and nutritional supplements for use by patients with end-stage renal disease, paid $17 million to resolve allegations that, from 2007 to 2018, it billed Medicare and other federal healthcare programs for excessive amounts of product wasted during the compounding of its nutritional supplement Proplete for dialysis patients, and routinely waived patient copayments and deductible obligations in order to induce prescriptions and use of Proplete. Along with this settlement, Pentec executed a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General. https://www.justice.gov/usao-edpa/pr/pentec-health-inc-pay-17-million-settle-false-claims-act-allegations
Mallinckrodt/Questcor Pharmaceuticals. Mallinckrodt ARD LLC (formerly known as Mallinckrodt ARD, Inc. and previously Questcor Pharmaceuticals, Inc.) paid $15.4 million to resolve claims that Questcor paid illegal kickbacks to doctors from 2009 through 2013 in the form of lavish dinners and entertainment, to induce prescriptions of the company’s drug, H.P. Acthar Gel, for the treatment of complications from multiple sclerosis. The company allegedly paid kickbacks to induce referrals from health care providers in violation of the Anti-Kickback Statute and to induce the submission of false claims to Medicare. https://www.justice.gov/usao-edpa/pr/drug-maker-mallinckrodt-agrees-pay-154-million-resolve-false-claims-act-allegations
Heritage Pharmaceuticals. Generic drug manufacturer Heritage Pharmaceuticals paid $7.1 million to resolve allegations that from 2012 to 2015, it engaged in a scheme to artificially inflate generic drug prices and other anti-competitive behavior, causing a loss to Medicare, Medicaid, and the Department of Defense’s Tricare program beneficiaries, as well as the Department of Veterans Affairs. Separately, Heritage entered into a three-year deferred prosecution agreement with the Antitrust Division with regard to a criminal charge that the company conspired to suppress and eliminate competition by allocating customers, rigging bids, and fixing and maintaining prices in violation of the Sherman Act. https://www.justice.gov/usao-edpa/pr/heritage-pharmaceuticals-pays-over-7-million-resolve-civil-false-claims-act-allegations
Controlled Substances Act Enforcement
Spiro Kassis, M.D. Dr. Kassis paid $1.4 million, committed to never obtaining a controlled substance registration, and consented to a 15-year exclusion from Medicare and Medicaid to resolve allegations that he improperly prescribed Schedule II controlled substances to patients between 2014 and 2017.
In a parallel criminal proceeding, Kassis pled guilty to 14 counts of illegal distribution of controlled substances. According to the criminal charges, Kassis, who claimed to be a specialist in psychiatry and addiction medicine, operated medical offices in East Norriton Township, PA and Scranton, PA and used his offices to operate a prescription “pill mill” where he sold medically unnecessary prescriptions for opioids such as oxycodone for approximately $200 cash each.
This opioid settlement, the first of its kind in this Office, simultaneously resolved all three aspects of liability – under the Controlled Substances Act, FCA, and forfeiture statutes – in a single civil settlement agreement. https://www.justice.gov/usao-edpa/pr/montgomery-county-doctor-agrees-pay-14-million-resolve-allegations-improper-opioid
FCA Procurement and Grant Fraud Settlements
Drexel University. Drexel agreed to pay the United States $189,062 to resolve potential FCA liability for a former professor’s use of grant funds to fund trips to “gentlemen’s clubs,” sports bars, and other improper purchases. The government’s investigation began in 2017 after Drexel voluntarily disclosed the improper charges to eight federal grants for energy and naval technology related research that it received from the Department of the Navy, the Department of Energy, and the National Science Foundation. https://www.justice.gov/usao-edpa/pr/drexel-university-pay-189062-resolve-potential-false-claims-liability
Ambu. Ambu, a provider of medical supplies, paid $3.3 million to resolve allegations that it submitted false claims for manufactured products in China and Malaysia for sale to United States government agencies in violation of the Trade Agreements Act (“TAA”). The TAA requires that products sold to government agencies must come only from countries with which the United States has a trade agreement. https://www.justice.gov/usao-edpa/pr/defense-contractor-pay-33m-resolve-false-claims-act-allegations
Our Lady of Lourdes. Our Lady of Lourdes Health Foundation and two related Our Lady of Lourdes companies paid $1,143,881 to resolve claims arising from Lourdes’ administration of community service grants funded through the Corporation for National and Community Service (CNCS)’s Senior Corps program. Specifically, the fraud affected the Foster Grandparent Program, which places seniors in school and community settings to serve alongside youth with exceptional needs, and the Senior Companion Program, which places seniors in community and residential settings to assist other seniors who have difficulty with tasks of daily living. These programs provide small hourly stipends to the volunteers performing these services, who must clear criminal history checks to ensure their suitability for service. Lourdes allegedly either failed to perform these criminal history checks or failed to keep records of doing so for 46 individuals. When a monitoring visit was scheduled in 2017, Lourdes employees cut-and-pasted other background checks in an attempt to conceal this failure from CNCS officials. https://www.justice.gov/usao-edpa/pr/our-lady-lourdes-agrees-pay-over-11m-resolve-claims-it-failed-perform-background-checks
Civil Rights Settlements
Thomas Jefferson University Hospital. Thomas Jefferson University Hospitals, Inc., and Outpatient Imaging Affiliates, LLC, the owners and operators of Jefferson Outpatient Imaging and Radiology (“Jefferson Outpatient”), resolved allegations that Jefferson Outpatient violated the Americans with Disabilities Act (ADA) by denying full and equal access to services based on an individual’s disability and use of a wheelchair. Under the ADA, facilities like Jefferson Outpatient, as a place of public accommodation, must provide outpatient and radiology services to members of the general public. In response to allegations that it failed to provide access to DEXA bone density scans to individuals with disabilities at its facilities in the greater Philadelphia area, Jefferson Outpatient agreed to comply with its obligations under the ADA, provide employee training, pay compensatory damages to the complainant, adopt and incorporate a non-discrimination policy into its existing policies, and post the policy in conspicuous locations in all of its offices and on its website. https://www.justice.gov/usao-edpa/pr/eastern-district-pennsylvania-reaches-settlement-agreement-thomas-jefferson-university
ACE Achievements Continue in 2020, Despite Coronavirus Pandemic
The coronavirus pandemic has not impeded the Office’s continued work in the civil enforcement area, as resolutions of significant FCA matters have continued into 2020:
In February 2020, Guardian Elder Care Holdings, Inc., and its related companies, paid over $15 million to settle claims that the skilled nursing home chain provided medically unnecessary rehabilitation therapy to residents in order to meet revenue goals. Guardian Elder Care operates more than fifty facilities throughout Pennsylvania – including locations in the Lehigh Valley, the Poconos, and Bucks County – as well as in Ohio and West Virginia. https://www.justice.gov/usao-edpa/pr/pennsylvania-nursing-home-chain-pay-155-million-settle-false-claims-act-allegations
In April 2020, Logan Laboratories, Inc. and two former executives, Michael T. Doyle and Christopher Utz Toepke, agreed to pay $41 million to resolve alleged FCA violations for billing federal health care programs for medically unnecessary urine drug testing. https://www.justice.gov/usao-edpa/pr/florida-based-laboratory-pain-clinic-and-two-former-executives-agree-pay-41-million
In July 2020, Universal Health Services, Inc. and UHS of Delaware, Inc. (UHS), headquartered in King of Prussia, PA, agreed to pay $117 million to resolve alleged FCA violations for billing for medically unnecessary inpatient behavioral health services and for failing to provide adequate and appropriate services for adults and children admitted to UHS psychiatric and behavioral treatment facilities nationwide. https://www.justice.gov/usao-edpa/pr/universal-health-services-inc-pay-117-million-settle-false-claims-act-allegations
As the year continues to unfold, the Office’s Civil Division is prepared to fight any coronavirus-related fraud through the enforcement of the FCA. The Coronavirus Aid, Relief, and Economic Security (CARES) Act provided $2 trillion in federal funds to fight the ongoing health and economic crisis caused by the coronavirus and was the largest economic stimulus package in U.S. history. It provided $349 billion in loans for small businesses, $130 billion in relief for hospitals and medical suppliers, and $500 billion in assistance to other businesses, states, and municipalities. Unfortunately, there are unscrupulous actors who are attempting to take advantage of these financial outlays by committing fraud, especially when there is so much money at stake.
Attorney General Barr has directed the Department of Justice to prioritize fraud schemes arising out of the coronavirus pandemic. If there are federal funds involved in any coronavirus-related fraud in the Eastern District of Pennsylvania, whether through Medicare, Medicaid, defense contracting, or other government contracts, this Office will dedicate resources to holding companies and individuals appropriately accountable. The FCA remains an extremely powerful tool to combat fraud on the government.
“During this difficult time, protecting our communities from fraudsters who prey on federal programs and federal taxpayers is paramount,” said U.S. Attorney McSwain. “Previous experience has shown that there are people who will seek to illegally profit from disasters. But my Office is committed to using all of the criminal and civil tools at our disposal to protect federal programs.”
United States Attorney Matthew Krueger’s Remarks Regarding Operation Legend’s Expansion to MilwaukeeRead the Press Release
Following are remarks from United States Attorney Matthew Krueger as prepared for a press conference to announce the expansion of Operation Legend to Milwaukee to reduce violent crime.
“Good morning. We’re here to announce a good thing for Milwaukee—specifically, the expansion of Operation Legend to address violent crime. Here with me are some of our key partners, including Robert Hughes, the Special Agent-in-Charge for FBI Milwaukee; Brian Kolar, Assistant Special Agent-in-Charge for the ATF; Paul Maxwell, Assistant Special Agent-in-Charge for the DEA; Thomas Conlon, Acting United States Marshal; Milwaukee County Sheriff Earnell Lucas; and Acting Assistant Chief Paul Formolo of the Milwaukee Police Department.
In the last week, there has been substantial discussion about Operation Legend so I hope to explain clearly what Operation Legend is, and what it is not.
First, what it is. Operation Legend is an initiative to address violent crime. Through Operation Legend, federal law enforcement resources, both funding and investigators, are brought to work in coordination with state and local law enforcement officials to address firearms offenses, violent individuals, and violent drug trafficking organizations.
These resources will help address a spike in violent crime. In December 2019, the Attorney General identified Milwaukee and six other cities as having violent crime rates that were significantly higher than the national average. He announced the initiative then named Operation Relentless Pursuit. Its first phase ran from January to April this year and focused on the apprehension of violent fugitives. The United States Marshal’s Service led that effort in coordination the Milwaukee Police Department as well as these federal agencies.
The operation resulted in the arrest of 96 individuals wanted for violent offenses, including homicide, robbery, aggravated assault, and forcible sexual assault. It also provided support for operations that dismantled violent drug trafficking organizations, such as Operation Island Hopper and the charges against the Buffam Meinecke Boys that we announced earlier this year. The second phase of Operation Relentless Pursuit was intended to begin in the spring of 2020, but it was delayed because of the COVID-19 pandemic.
Since then, Milwaukee has only suffered a greater increase in violent crime. As of yesterday, there already have been 97 homicides in 2020, compared to 52 homicides at this time last year. That’s an 85% increase—45 additional lives lost this year. Those lives are precious. They are sons and daughters, whose families are grieving. Non-fatal shootings in the city also are up 64%.
Milwaukee is not alone in this trend. Other major cities have also seen a spike in violent crime this year, including Kansas City. Early in the morning of June 29, a four-year-old named LeGend Taliferro was shot and killed while he slept in his bed. And so the Department of Justice is continuing what it started in Operation Relentless Pursuit, now under the banner of Operation Legend. It began in Kansas City, which was one of the seven original Relentless Pursuit cities, but with additional federal resources. It was expanded to Albuquerque and Chicago, which was not originally in Relentless Pursuit. And now today, we’re announcing it for Milwaukee, Detroit, and Cleveland.
For Milwaukee, Operation Legend entails bringing to Milwaukee 25 to 30 federal investigators from these four Justice Department agencies: the FBI, DEA, ATF, and United States Marshals Service. In Milwaukee, no personnel from the Department of Homeland Security will participate in Operation Legend.
These investigators from the FBI, DEA, ATF, and U.S. Marshals Service will join the work already underway by existing joint federal, state and local task forces focused on combatting violent crime. Ten of those federal investigators are already assigned to work in Milwaukee temporarily to provide immediate assistance. The others will be assigned over the coming year to Milwaukee permanently to provide long-term assistance. This is a long-term commitment, a sustained effort, to make Milwaukee a safer place to live.
The task forces supplemented by Operation Legend address firearms offenses. This means working directly with the Milwaukee Police Department to analyze the firearms and ballistics used in homicides and other shootings. This also means investigating those who traffick in illegal firearms—those who sell guns to the shooters. And it means prosecuting those who possess firearms illegally. For example, a significant number of homicides involve domestic violence. Under federal law—but not state law, it is a felony to possess a firearm if you are under a domestic violence restraining order or have a misdemeanor domestic violence conviction.
The task forces will also address violent drug trafficking organizations because we know that drug traffickers are often involved in firearms violence, as they protect their illegal activity and rob or war with their competitors.
The case of Earnest Moffett is an example of the type of important work that task forces are continuing to undertake as part of Operation Legend. One week ago, task force agents from the FBI and MPD arrested Earnest Moffett on a criminal complaint that charged him with four counts related to his distribution of cocaine, heroin, methamphetamine, and marijuana. When executing a search warrant at Moffett’s residence in connection with the arrest, task force agents recovered a loaded pistol, an assault-style rifle with a loaded magazine, a second loaded magazine, a distribution quantity of marijuana, and over $31,000 in cash. According to public records, Moffett has multiple prior felony convictions, including convictions for cocaine distribution, escape, and possession of a firearm by a convicted felon. This is the type of case that will be investigated and prosecuted as part of Operation Legend.
All of those cases will be conducted by federal investigators working side-by-side with state and local law enforcement agencies, as they always do. In this way, Operation Legend is simply an enhancement of the existing law enforcement partnerships, to increase solid, proven crime reduction methods.
Operation Legend also is bringing more than $12 million in funding to support state and local law enforcement partners in this effort to help Milwaukee. Specifically, through the Bureau of Justice Assistance, the Department of Justice will make available $1.9 million in funding to support Operation Legend’s violent crime reduction efforts in Milwaukee. The Justice Department’s COPS Office also has made $10.2 million available to the Police Departments of Milwaukee, Wauwatosa, and Cudahy to fund the hiring of 29 officers to facilitate their assigning of experienced officers to task forces.
The Department has also provided assistance through the Joint Law Enforcement Operations fund to assist reimbursement of local law enforcement serving as federal task force officers with the FBI, ATF, DEA, and U.S. Marshals Service. ATF also has provided $100,000 to help agencies in the Milwaukee area defray costs associated with installing or maintaining shot detection technology.
I have spent the last week speaking with state and local leaders about Operation Legend, and similar questions arise. So, let me clarify what Operation Legend is not.
First, Operation Legend is not aimed at protest activity or civil disturbances. Operation Legend differs from the federal operation in Portland. In Portland, Customs and Border Patrol agents, working with the Federal Protective Service, were deployed to protect the Federal Courthouse, which had been repeatedly damaged. That is an entirely different mission from investigating violent crime.
That is why Portland is not on the list of Operation Legend cities. You will not see federal agents massing on Milwaukee’s streets. Just like all the other Deputy U.S. Marshals and FBI, DEA, and ATF agents who have worked in Milwaukee for decades, the additional agents will investigate crime.
Second, Operation Legend is not aimed at flooding certain neighborhoods. This not a patrol operation, nor is it aimed at maximizing the number of arrests. Rather, the work of these task forces will be specifically targeted at offenders whose criminal activities pose a danger to the community. A relatively small number of individuals cause most of Milwaukee’s violence. They are the focus of Operation Legend.
Third, Operation Legend is not the full solution to Milwaukee’s violence. Law enforcement is one piece of the puzzle. To ensure that Milwaukee is a safe, vibrant city for all of its residents, we also need efforts to prevent violence, and to help make quality housing, schools, and job opportunities available to Milwaukee residents, including those returning from incarceration. But make no mistake, well-funded, well-trained, and collaborative law enforcement is an absolutely essential corner piece of the puzzle.
From talking to colleagues around the country, I can say that Milwaukee, and the entire State, is exceptional for its cooperative, professional law enforcement agencies. No one agency can handle all that is asked of it alone. That is why we have a long-standing tradition of federal, state, county, and local partnerships, including to confront the unacceptable levels of violent crime in Milwaukee. Operation Legend should be welcomed by all because it enhances these partnerships, for the good of Milwaukee.
Finally, and perhaps most importantly, we want to address the murder of Qunyonce Louis-Moore. Qunyonce Louis-More was just 16-years-old when she was shot and killed by unknown individuals in Milwaukee a few weeks ago, on June 30, 2020. SAC Hughes will provide more details on a reward that FBI is offering for information related to her death. I spoke with Ms. Louis-Moore’s mother and grandmother recently. They are grieving, and they want whoever killed Qunyonce brought to justice. Of course, nothing will heal the sense of loss that Ms. Louis-Moore’s family feels. Every life lost in Milwaukee to violent crime is a tragedy. There have been nearly 100 tragedies so far this year in Milwaukee, and hundreds more individuals injured by firearms. Leaders at all levels in Wisconsin—federal, state, county, and local—should be working together, reaching across divides, to stop firearm violence in Milwaukee. Operation Legend will bring much-needed support to those efforts.
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U.S. Attorney’s Office Commemorates 30th Anniversary of the Americans with Disabilities ActRead the Press Release
SHREVEPORT/LAFAYETTE/ALEXANDRIA/LAKE CHARLES/MONROE, La. – This week marks the 30thAnniversary of the Americans with Disabilities Act (the ADA). The ADA was signed into law on July 26, 1990, and is the nation’s preeminent civil rights law for providing access and equal opportunity for people with disabilities. The U.S. Attorney’s Office for the Western District of Louisiana is proud to play a critical role in enforcing the ADA to help eliminate discrimination against people with disabilities, U.S. Attorney David C. Joseph said today.
“Since its passage 30 years ago, the ADA has been instrumental in ensuring equal access and opportunity to individuals with disabilities,” said U.S. Attorney Joseph. “The United States Attorney’s Office for the Western District of Louisiana will continue to diligently enforce the ADA to remedy discrimination and ensure compliance. Our friends, family, and neighbors with disabilities must be afforded full access to the rights, privileges, and opportunities we all enjoy as Americans.”
In recent years the U.S. Attorney’s Office has investigated and resolved a number of ADA cases, including:
Ensuring Barrier-Free Access to Health Care Facilities: The U.S. Attorney’s Office has successfully resolved multiple matters to ensure that medical providers are using effective means of communication with patients, including qualified sign language interpreters provided at no cost to the patient, including Tri-State Physical Therapy Bossier and Acadiana Family Physicians.
Ensuring Equal Access for Children with Disabilities in Summer Camp Settings: The U.S. Attorney’s Office has conducted outreach to public and private camps within the Western District to ensure that the camps provide reasonable modifications of their policies and practices when necessary to enable campers with disabilities to participate fully in camp programs. https://www.justice.gov/usao-wdla/pr/summer-camps-must-reasonably-accommodate-children-disabilities
Ensuring Equal Access to Local Government Services: The U.S. Attorney’s Office has successfully resolved complaints with the Parish of DeSoto to ensure that people with disabilities can access local governmental services and facilities. https://www.justice.gov/usao-wdla/pr/us-attorneys-office-reaches-agreement-desoto-parish-increase-accessibility-pursuant
Ensuring Physical Access to Places of Public Accommodation: The U.S. Attorney’s Office has also resolved multiple matters to ensure physical access to public places to accommodate those with mobility disabilities.
The promise of the ADA is its wide-ranging efforts to eliminate disability discrimination across the range of services, programs, and activities that most Americans take for granted, but were largely inaccessible to individuals with disabilities prior to the law’s enactment. Whether in employment, areas of civic life, or in the day-to-day activities and access to goods and services that we all enjoy – the ADA ensures that individuals with disabilities enjoy the same opportunities as all Americans to participate in everything this nation has to offer.
Over the past 30 years, the United States has undertaken the challenge of changing perceptions about disability, tearing down barriers to equality, and altering the systems that have historically excluded people with disabilities. The Justice Department commemorates the many ways that the ADA has transformed society—by replacing exclusion with access, segregation with integration, and limitations with self-determination.
For more information about the ADA, call the Department’s toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TTY).
To file a complaint with the Department, please visit the Civil Rights Division’s portal at https://civilrights.justice.gov/report/.
For more information about the 30th Anniversary of the ADA, please visit www.ada.gov.# # #
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. Attorney describes USAO’s long history and crucial role in fighting violent crime in Albuquerque; says that derogatory and inflammatory rhetoric about brave men and women in law enforcement has no place in debate about violent crime
U.S. Attorney Justin Herdman announces Operation Legend in ClevelandRead the Press Release
United States Attorney Justin Herdman announced today that Operation Legend, a sustained, systematic and coordinated law enforcement initiative in which federal law enforcement agencies work in conjunction with state and local law enforcement officials to fight violent crime, will be expanding into the city of Cleveland.
“Today we are announcing that Operation Legend has come to Cleveland,” said U.S. Attorney Justin Herdman. “Operation Legend is the best of what we do every day. It’s federal, state and local law enforcement partnerships – working side-by-side, on long-term investigative efforts to deliver safety and security for the residents of Cleveland. I want to thank Mayor Jackson and Police Chief Calvin Williams for their partnership as well as the various federal and state agencies that make this initiative possible.”
“The City of Cleveland will continue to partner with federal law enforcement agencies to combat violent crime in our neighborhoods within the realm of constitutional policing,” said Mayor Jackson. “Residents and their families have a right to feel safe and be safe in their own communities. Coordinated efforts between local, state and federal law enforcement agencies will allow us to more effectively address and reduce violent crimes in Cleveland neighborhoods to build a safer Cleveland for all.”
Operation Legend is named in honor of four-year-old LeGend Taliferro, who was shot and killed while he slept early on the morning of June 29 in Kansas City. The operation was first launched on July 8 in Kansas City, Missouri, and expanded on July 22, 2020, to Chicago and Albuquerque. Today, the expansion of Operation Legend was announced in Cleveland, Detroit, and Milwaukee.
As part of Operation Legend, Attorney General Barr directed the FBI, U.S. Marshals Service, DEA, and ATF to significantly increase resources into Cleveland, Detroit, and Milwaukee in the coming weeks to help state and local officials fight high levels of violent crime, particularly gun violence. Cleveland is currently experiencing a significant increase in violent crime, with homicides up more than 13% and shootings up over 35% over 2019.
“We, the US Marshals, have a long-standing partnership with the Cleveland Division of Police, the Cuyahoga County Sheriffs Department, Ohio State Highway Patrol and the Ohio Adult Parole in apprehending violent fugitives,” said Assistant Chief of the U.S. Marshals, Assistant Chief Brian Fitzgibbon. “Operation Legend will build upon these strong relationships and strengthen our commitment to protect and serve the citizens of the City of Cleveland and surrounding areas.”
During a press conference to announce the expansion of Operation Legend, FBI Special Agent in Charge Eric Smith announced that as part of the initiative, a reward of up to $25,000 would be made available for information leading to the identification and arrest of the individual responsible for the carjacking and homicide of Eric Hakizimana.
"Someone knows who shot and killed 17-year-old Eric Hakizimana,” said FBI Special Agent in Charge Eric Smith. “The community and law enforcement must continue to work together to hold murderers accountable for taking our loved ones away. Operation Legend allows the FBI to offer a $25,000 reward for information leading to the successful identification and prosecution of the shooter. The FBI will continue to work collaboratively with our partners on all violent crime matters to ensure a safer community."
In the city of Cleveland, the Department of Justice will supplement state and local law enforcement agencies by sending more than 25 federal investigators from the FBI, DEA, and ATF to the city. Under the leadership of U.S. Attorney Justin Herdman, these investigators will complement the work already underway by existing joint federal, state and local task forces focused on combatting violent gangs, gun crime, and drug trafficking organizations.
The Bureau of Justice Assistance will make available $1 million to support Operation Legend’s violent crime reduction efforts in Cleveland, and the COPS Office has also made almost $8 million available to fund the hiring of 30 Cleveland Police officers, five Ohio State Highway Patrol troopers, and four Adult Parole Authority officers.
The Department of Justice has also provided assistance through the Joint Law Enforcement Operations (JLEO) fund to assist reimbursement of local law enforcement serving as federal task force officers with FBI, ATF, DEA, and the U.S. Marshals Service. Each Operation Legend city will receive $100,000 from ATF to help local agencies defray costs associated with installing or maintaining shot detection technology.
Two Rochester Men Sentenced for Food Stamp FraudRead 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 Hicham Khallad, 47, and Karim Euchi, 47, both of Rochester, NY, who were convicted of food stamp fraud, were sentenced by Chief U.S. District Judge Frank P. Geraci, Jr. Khallad was sentenced to a term of imprisonment of 45 days, and three years of supervised release. Euchi, an employee of Khallad, received a sentence of two years’ probation. The defendants were also ordered to pay $74,500 in restitution to the United States Department of Agriculture.
Assistant U.S. Attorney Kyle Rossi, who handled the case, stated that the Supplemental Nutrition Assistance Program (SNAP), uses federal tax dollars to help low-income individuals purchase food. Eligible individuals are given a debit card containing their SNAP benefits, from which they can make food purchases at authorized food stores. A business that accepts SNAP benefits must be authorized to do so and can only accept SNAP benefits in connection with the sale of eligible food products. It is unlawful for any store to accept SNAP benefits for non-food items, such as cigarettes, beer, or cash.
Between May 2018 and February 2019, Khallad and Euchi operated the Joseph Market at 900 Joseph Avenue in Rochester. During that time, the defendants fraudulently accepted SNAP benefits from customers in exchange for non-food items, such as cigarettes. Khallad and Euchi also purchased food stamp benefits for less than their full value for cash, resulting in a profit for the defendants. In so doing, Khallad and Euchi caused the United States Government to deposit money into the Joseph Market’s bank accounts for food that was never purchased.
The sentencing is the result of an investigation by the U.S. Department of Agriculture, Office of Inspector General, under the direction of Special Agent-in Charge Bethanne M. Dinkins, Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly, and the Monroe County Department of Social Services, under the direction of Commissioner Corinda Crossdale.
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Two Buffalo Men Arrested, Charged with Cocaine ConspiracyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Juan Padua, 32, and Michael Vasquez, 24, both of Buffalo, NY, were arrested and charged by criminal complaint with conspiring to possess with intent to distribute 500 grams or more of cocaine. The charge carries a minimum penalty of five years in prison, and a maximum of 40 years.
Assistant U.S. Attorney Charles E. Watkins, who is handling the case, stated that according to the complaint, the U.S. Postal Inspection Service (USPIS) intercepted a U.S. Postal Service Priority Express Mail parcel shipped from Puerto Rico and addressed to an apartment in which defendant Padua resided. The box was turned over the Buffalo Office of the Drug Enforcement Administration.
On July 22, 2020, investigators executed a federal search warrant on the box, which contained toys, coloring books, paper plates, napkins, and a Nickelodeon slime box. The slime box, which was wrapped in red wrapping paper with multi-colored stars and Spanish writing, contained a large, white, brick-like substance that was comprised of a loosely packed white powder. Field tests indicated the presence of both cocaine and fentanyl.
On July 23, 2020, a transmitting device was installed in the parcel and a controlled delivery was conducted. A short time later, investigators received a tone indicating that the parcel was opened. Investigators then executed a search warrant at the apartment in which Padua resided. The parcel was found in the rafters in the attic. Additional search efforts led to the recovery of the USPIS transmitting device, which was broken and recovered from the roof top of the rear porch at the premises. The defendants were taken into custody.
The defendants made an initial appearance before U.S. Magistrate Judge Michael J. Roemer. Vasquez was released on conditions, Padua is being held pending a detention hearing.
The complaint is the result of an investigation by the U.S. Postal Inspection Service, under the direction of Boston Division Inspector-in-Charge Joseph W. Cronin, and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, 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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Troy Man Sentenced to 78 Months for Distributing and Receiving Child PornographyRead the Press Release
ALBANY, NEW YORK – Kurtis Walter, age 27, of Troy, New York, was sentenced today to serve 78 months in prison for distribution and receipt of child pornography, announced United States Attorney Grant C. Jaquith, and Thomas F. Relford, Special Agent in Charge of the FBI Albany Field Office.
United States District Court Judge Mae A. D’Agostino also sentenced Walter to 15 years of supervised release, to begin following his term of imprisonment. Walter will also be required to register as a sex offender upon his release from prison.
Walter pled guilty on January 23, 2020. At that time, he admitted that in November 2017, he used a laptop computer equipped with an Internet-based instant messaging and file-sharing application to distribute child pornography. He also admitted to using the same laptop to search for and download child pornography, which he accessed through sites located on the Internet’s so-called dark web. Walter’s laptop and external devices contained approximately 98 video files and 2,349 image files depicting child pornography.
This case was investigated by the FBI, with assistance from the New York State Police, and was prosecuted by Assistant U.S. Attorney Emmet O’Hanlon. This case was prosecuted as part of Project Safe Childhood. Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Tennessee State Senator Katrina Robinson Charged in Criminal Complaint for Theft and Embezzlement Involving Government Programs and Wire FraudRead the Press Release
Memphis, TN – Tennessee State Senator Katrina Robinson, 39, has been federally charged with theft and embezzlement involving government programs and wire fraud. D. Michael Dunavant, U.S. Attorney announced the unsealing of the criminal complaint today.
According to the information presented in the complaint, Katrina Robinson is the Director of The Healthcare Institute (THI), a provider of educational and training programs for jobs in the healthcare field. She is also a Tennessee State Senator, having been elected to represent the 33rd District in Shelby County in 2018.
Between 2015 and 2019, The Healthcare Institute received over $2.2 million in federal grants from the Health Resources and Services Administration (HRSA), an agency of the U.S. Department of Health and Human Services. During that same time period, Robinson stole in excess of $600,000 from THI by compensating herself in excess of what was allowed under the terms of the HRSA grant and by using Institute funds for payments and purchases for her own personal benefit and that of her immediate family.
Payments and purchases included a vehicle for her daughter; clothing, accessories, and hair and beauty products; expenses related to her wedding and honeymoon, and later, legal fees for her divorce; payments on her personal debts, including credit cards, store charge cards, student loans, and other personal loans; travel and entertainment for herself and her family; improvements to her personal residence; expenses related to a body aesthetics business she owned and a snow cone business operated by her children; and an event for her State Senate campaign.
If convicted, Robinson faces a possible sentence of up to 20 years in federal prison, 3 years supervised release, and a $250,000 fine. There is no parole in the federal system.
The case will be presented to a federal grand jury at a later date to consider an indictment against the defendant.
U.S. Attorney D. Michael Dunavant said: "Protection of the United States Treasury and federal grant programs against theft, fraud, waste, and abuse is a top priority of this office and the Department of Justice. We commend the FBI and the HHS-OIG for their diligent and thorough investigation in this case."
"Anyone who seeks to take advantage of government programs will be vigorously investigated by the FBI, regardless of who they are or any position they hold," said Acting Special Agent in Charge Jermicha L. Fomby of the Memphis Field Office of the Federal Bureau of Investigation. "The public should know that the FBI will continue to work diligently with our law enforcement partners to identify and investigate those who seek to exploit government programs and line their own pockets."
This case was investigated by the Federal Bureau of Investigation (FBI) and the U.S. Department of Health and Human Services –Office of the Inspector General (HHS-OIG).
The charges and allegations contained in the complaint are merely accusations of criminal conduct, not evidence. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt, and convicted through due process of law.
Assistant U.S. Attorney Christopher E. Cotten is prosecuting this case on behalf of the government.
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Tahlequah Man Pleads Guilty to Possession of Firearm and Ammunition, Threatening Federal Official's Family MemberRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Hurley Dewayne Pitts, age 46, of Tahlequah, Oklahoma entered a guilty plea to Felon In Possession Of Firearm & Ammunition, in violation of Title 18, United States Code, Sections 922(g)(1), 924(a)(2) and 924(e)(1), punishable by not more than 10 years imprisonment, a fine up to $250,000.00, or both; and to Influencing Federal Official By Threatening Family Member, in violation of Title 18, United States Code, Sections 115(a)(1)(A) and 115(b)(4), punishable by 10 years imprisonment, a fine up to $250,000.00, or both.
The Indictment alleged that on or about January 18, 2020, within the Eastern District of Oklahoma, the defendant, having been convicted of a crime punishable by imprisonment for a term exceeding one year, and knowing of said conviction, did knowingly possess in and affecting commerce, a firearm and ammunition which had been shipped and transported in interstate commerce.
The Indictment further alleged that on or about February 22, 2020, within the Eastern District of Oklahoma, the defendant, did threaten to assault, kidnap, and murder the immediate family members of T.C., a Task Force Officer for the Federal Bureau of Investigation, with intent to impede, intimidate, and interfere with T.C. while he was engaged in the performance of his official duties, and to retaliate against T.C. on account of the performance of his official duties.
The charges arose from an investigation by the Tahlequah Police Department and the Federal Bureau of Investigation.
The Honorable Steven P. Shreder, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Clay Compton represented the United States at the change of plea hearing.
Statement of AAG Makan Delrahim Thanking Participants in Workshop on Competition in the Licensing of Public Performance Rights in the Music IndustryRead the Press Release
On Wednesday July 29, the Justice Department’s Antitrust Division concluded its two-day virtual workshop on competition in the licensing of public performance rights in the music industry.
“I want to thank our panelists and keynote songwriters for participating in this important workshop on the ASCAP and BMI consent decrees,” said Assistant Attorney General Makan Delrahim. “Watching and listening to them over the last two days, I was struck by how many talented people with very different backgrounds the workshop brought together. Songwriters, lawyers, economists, and CEOs obviously have very different skill sets. Yet all the participants were exceptional, talented, and insightful.”
“This diverse representation underscores the free market principles that the Antitrust Division defends. The ability to succeed as an entrepreneur, as an innovator, as a songwriter, or as another creative professional is the economic freedom promised by competitive markets. That freedom is what the attorneys and economists at the Antitrust Division devote themselves to upholding.”
“This week’s proceedings underscored that liberty in free markets is important to our country, and it’s important to the music industry. As the Antitrust Division considers the appropriate path forward, we will strive to find the one that best supports this critical industry.”
The participants in the event included:
- LeAnn Rimes
- Pharrell Williams
- Jon Bon Jovi
- David Israelite, President and CEO, National Music Publishers’ Association (NMPA)
- Michelle Lewis, Executive Director, Songwriters of North America (SONA)
- Elizabeth Matthews, CEO, American Society of Composers, Authors, and Publishers (ASCAP)
- Michael O’Neill, President and CEO, Broadcast Music Inc. (BMI)
- The Honorable Gordon Smith, President and CEO, National Association of Broadcasters (NAB)
- Jackie Brenneman, General Counsel, National Association of Theatre Owners
- Ted Cohen, Managing Partner, TAG Strategic
- David Kokakis, Chief Counsel, Universal Music Publishing Group
- Janet McHugh, Executive Director, TV Music License Committee
- Mike Steinberg, Executive Vice President of Creative and Licensing, BMI
- Danielle Aguirre, Executive Vice President and General Counsel, NMPA
- Jordan Bromley, Board Member, Music Artists Coalition
- Bart Herbison, Executive Director, Nashville Songwriters Association International
- Clara Kim, Executive Vice President and General Counsel, Business and Legal Affairs, ASCAP
- Jack Kugell, Board Member, SONA
- John Bodnovich, Executive Director, American Beverage Licensees
- Peter Brodsky, General Counsel and Executive Vice President, Business Affairs, Sony/ATV Music Publishing
- Rick Kaplan, General Counsel and Executive Vice President, Legal and Regulatory Affairs, NAB
- Stuart Rosen, Senior Vice President and General Counsel, BMI
- Tres Williams, Executive Vice President, Business Affairs, iHeartMedia, Inc.
- Adam B. Jaffe, Brandeis University
- Kevin M. Murphy, University of Chicago
A transcript and video of the proceedings will be available in the coming days on the workshop page, located at https://www.justice.gov/atr/events/public-workshop-competition-licensing-music-public-performance-rights. Assistant Attorney General Makan Delrahim’s opening statement is available at here.
Schuylkill County Man Sentenced to 30 Months’ Imprisonment for Heroin TraffickingRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that Carlos Correa, age 32, of Shenandoah, Pennsylvania, was sentenced on July 23, 2020, by U.S. District Court Judge Robert D. Mariani to 30 months’ imprisonment for his participation in a heroin trafficking conspiracy in Schuylkill and Luzerne Counties.
According to United States Attorney David J. Freed, Correa previously pleaded guilty to conspiracy to distribute more than 100 grams of heroin, which is equivalent to more than 4,000 retail bags of heroin. The drug conspiracy operated in the Shenandoah area of Schuylkill County and the Hazleton area of Luzerne County during 2012 through 2015.
The matter was investigated by the Federal Bureau of Investigation, the Pennsylvania State Police, and the Shenandoah Police. Assistant U.S. Attorneys Francis P. Sempa 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.
This case was also brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
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Pittsburgh Woman Pleads Guilty to Narcotics TraffickingRead the Press Release
PITTSBURGH, PA - A resident of Pittsburgh, Pennsylvania, pleaded guilty in federal court to a charge of narcotics trafficking in connection with a large-scale investigation conducted by the Greater Pittsburgh Safe Streets Task Force, United States Attorney Scott W. Brady announced today.
Theresa Somerville, 50, pleaded guilty to one count of conspiracy to distribute and possess with intent to distribute heroin and fentanyl before United States District Judge William S. Stickman IV. Ms. Somerville was one of 37 defendants charged in the original Indictment and is one of 22 defendants charged in the Superseding Indictment.
In connection with the guilty plea, the court was advised that in 2017, the Greater Pittsburgh Safe Streets Task Force, led by the Federal Bureau of Investigation, initiated an investigation primarily targeting the Darccide/Smash 44, or DS44, neighborhood gang, and drug-trafficking activity in and around the South Side area of Pittsburgh. As part of this large-scale narcotics and firearms investigation, the United States received authorization to conduct a federal wire investigation, which continued through June of 2019. Intercepted communications revealed that Ms. Somerville was involved in the distribution of heroin and fentanyl. Specifically, Theresa Somerville assisted her son and co-defendant, Ronald Williams, with heroin/fentanyl transactions by preparing drugs for pickup by him or serving customers outside her house.
Judge Stickman scheduled sentencing for Dec. 14, 2020, at 10:30 am. The law provides for a total sentence of 20 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant. Ms. Somerville remains on bond pending an August 3, 2020 bond violation hearing.
Assistant United States Attorneys Christy C. Wiegand and Brendan McKenna are prosecuting this case on behalf of the government.
The Federal Bureau of Investigation led the multi-agency investigation of this case, which also included the Bureau of Alcohol Tobacco Firearms and Explosives, Allegheny County Adult Probation, Allegheny County Police Department, Allegheny County Sheriff’s Office, Pennsylvania Attorney General’s Office Bureau of Narcotics, Pittsburgh Bureau of Police, and the Wilkinsburg Police Department. Other assisting agencies include the Green Tree Police Department, New York City Police Department, Mount Oliver Police Department, Pennsylvania State Police, Yonkers Police Department, United States Marshals Fugitive Task Force, and the United States Postal Inspection Service.
The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
Pass Christian Man Pleads Guilty to being an Unlawful Narcotics User in Possession of a FirearmRead the Press Release
Gulfport, Miss. – Travis W. Fennel, 32, of Pass Christian, Mississippi, pled guilty today before U.S. District Judge Sul Ozerden to one count of possession of a firearm by an unlawful user of illegal narcotics, announced U.S. Attorney Mike Hurst and ATF Special-Agent-in-Charge Kurt Thielhorn.
On October 14, 2019, a Harrison County Sheriff’s Deputy initiated a traffic stop on a vehicle driven by Fennel for speeding and following too closely. The Deputy recovered a Rock Island M1911 .45 caliber semi-automatic handgun from Fennel who later admitted to being an unlawful user of illegal narcotics. On May 12, 2020, Fennel was charged in a federal criminal indictment.
Fennel will be sentenced by Judge Ozerden on October 29, 2020 at 9:30 a.m. He faces a maximum penalty of 10 years in prison and a $250,000 fine.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Erica Rose.
Parent in College Admissions Case Sentenced to PrisonRead the Press Release
BOSTON – A California man was sentenced today for agreeing to pay more than $500,000 to participate in the college admissions scheme for his two children.
Manuel Henriquez, 56, the founder of Hercules Capital, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to six months in prison, two years of supervised release during which time he is ordered to conduct 200 hours of community service, and ordered to pay a fine of $200,000. In October 2019, Henriquez pleaded guilty to one count of conspiracy to commit mail and wire fraud and honest services mail and wire fraud and one count of conspiracy to commit money laundering.
Beginning in 2015, Henriquez conspired with William “Rick” Singer and others to secure his children’s admission to selective colleges and universities through bribery and fraud. In June 2015, Henriquez paid Singer to have a corrupt proctor correct his older daughter’s answers on the SAT II subject tests. In October 2015, Henriquez again paid Singer to have a third party correct his older daughter’s answers on the SAT exam. Henriquez pursued exam cheating through Singer for his younger daughter on three additional occasions in 2016 and 2017, once in Houston, Texas and twice in Los Angeles, Calif. Finally, Henriquez paid Singer $400,000 to facilitate his older daughter’s admission to Georgetown University as a purported tennis recruit, even though she did not play tennis competitively.
In March 2020, the defendant’s wife, Elizabeth Henriquez, was sentenced to seven months in prison, two years of supervised release, during which time she is ordered to conduct 300 hours of community service, and ordered to pay a fine of $200,000.
Manuel Henriquez is the 28th parent to have pleaded guilty and the 20th parent to be sentenced in this case.
Singer previously pleaded guilty and is cooperating with the government’s investigation.
Case information, including the status of each defendant, charging documents and plea agreements are available here: https://www.justice.gov/usao-ma/investigations-college-admissions-and-testing-bribery-scheme.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. Assistant U.S. Attorneys Eric S. Rosen, Justin D. O’Connell, Leslie A. Wright, Kristen A. Kearney, Karin M. Bell and Stephen E. Frank of Lelling’s Criminal Division are prosecuting the case.
The details contained in the court documents are allegations and the remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Owner and Employees of Monmouth County Marine Equipment and Servicing Company Charged with Defrauding U.S. Department of DefenseRead the Press Release
TRENTON, N.J. – Three people have been charged for their alleged roles in a years-long conspiracy to defraud the U.S. Department of Defense (DoD) by providing military equipment parts that were not authorized by contract, U.S. Attorney Craig Carpenito announced today.
Linda Mika, 69, and Paul Mika, 73, both of Jackson, New Jersey, and Kenneth Mika, 49, of Ewing, New Jersey, were arrested today and are scheduled to have their initial appearances this afternoon before U.S. Magistrate Judge Lois H. Goodman in Trenton federal court.
“As described in the criminal complaint, these defendants sought to make a greater profit by substituting products that were not those they had contractually agreed to provide to the Department of Defense,” U.S. Attorney Carpenito said. “By doing so, they potentially risked the safety of our men and women in uniform. We will continue to work with our law enforcement partners to root out this kind of fraud.”
“Protecting the integrity of the defense procurement system is a top priority for the Defense Criminal Investigative Service (DCIS),” Special Agent in Charge Leigh-Alistair Barzey, DCIS Northeast Field Office, said. “This case, which resulted in today's arrests, confirms the DCIS’ ongoing commitment to work with the USAO-NJ and the FBI, to investigate and prosecute contractors who engage in fraudulent schemes targeting the U.S. Department of Defense.”
“Today's arrest of Linda Mika, Paul Mika and Kenneth Mika reflects the continuing impact federal and state partnerships have on combatting those who defraud the Department of Defense,” Acting FBI Special Agent in Charge Joe Denahan said. “These contractors of Monmouth Marine Engines Inc. knowingly provided substituted parts for military equipment for their own personal gain. We will continue to investigate these types of schemes and hold those who endanger the U.S. military accountable.”
According to documents filed in this case and statements made in court:
From at least March 2017 through February 2020, the Mikas conspired with each other and others to defraud the DoD and its combat logistic support arm, the Defense Logistics Agency (DLA), by engaging in a pattern of unlawful product substitution. Paul Mika was the founder and owner of Monmouth Marine Engines Inc. (Monmouth Marine), a maritime equipment and servicing facility, which, as an approved federal contractor, also entered into contracts with DLA to supply DoD contracting entities with replacement parts for Naval vessels. Paul Mika’s wife and son, Linda Mika and Kenneth Mika, were employees of Monmouth Marine.
The Mikas, on behalf of Monmouth Marine, obtained contracts with the DoD by falsely claiming that the military parts they contracted to provide would be exact products furnished by authorized manufacturers. Once awarded the contracts, however, the Mikas sourced non-conforming substitute parts at a significantly reduced cost to fill the contracts. They did this to maximize their profit margin while also suppressing fair competition in the bidding of federal contracts. Upon receipt by Monmouth Marine, the non-conforming parts were then shipped to DLA in packaging disguising the parts’ identity in an effort by the Mikas to deceive DLA and its unwitting downstream purchasers.
The count of conspiracy to commit wire fraud carries a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Defense, Defense Criminal Investigative Service Northeast Field Office, under the direction of Special Agent in Charge Barzey; and special agents of the FBI, under the direction of Acting Special Agent in Charge Denahan with the investigation leading to today’s arrests.
The government is represented by Assistant U.S. Attorney Eric A. Boden of the U.S. Attorney=s Office Criminal Division in Trenton.
The charge and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Operation Legend Expands to DetroitRead the Press Release
DETROIT – United States Attorney Matthew Schneider announced today the expansion of Operation Legend to Detroit. Schneider was joined at a press conference at ATF Headquarters with the heads of Michigan’s federal law enforcement, including ATF Special Agent in Charge James Deir, DEA Assistant Special Agent in Charge Kent Kleinschmidt, FBI Special Agent in Charge Steve D’Antuono, and United States Marshal Owen Cypher.
United States Attorney Matthew Schneider stated, “Operation Legend continues and expands what we have been doing for decades, which is sending federal agents and money to Detroit to fight gun and gang violence. Our children are being caught in the crossfire and murdered in senseless acts of gun violence, and I am very thankful that our community supports federal help to fight the current crime wave in Detroit.”
In December 2019, United States Attorney Matthew Schneider and Detroit Police Chief James Craig joined Attorney General William Barr and the heads of the FBI, DEA, ATF, and U.S. Marshals Service in Detroit to launch Operation Relentless Pursuit. This initiative surged federal resources to fight back against violent crime, gangs, and gun violence in seven of America’s most affected cities, including Detroit. This effort continues and expands with Operation Legend.
Operation Legend is a sustained, systematic and coordinated law enforcement initiative in which federal law enforcement agencies work in cooperation with state and local law enforcement officials to fight violent crime. The Operation was launched on July 8 in Kansas City, Missouri, as a result of President Trump’s promise to assist America’s cities that are plagued by violence and has since expanded to include Albuquerque, Chicago, Cleveland, Milwaukee, and Detroit.
Operation Legend is named after four-year-old LeGend Taliferro, who was shot and killed while he slept early in the morning of June 29 in Kansas City. Similar crimes are happening in Detroit. Detroit is currently experiencing a significant increase in violent crime, with homicides currently up 31% and shootings up 53%.
Operation Legend, combined with Operation Relentless Pursuit, will bring a total of approximately 42 federal agents to Detroit, in addition to the many federal agents who have worked for decades with state and local partners on violent crime and other offenses. An additional 10 Detroit ATF agents have been reassigned to work on violent gun crimes.
These federal agents come from the FBI, DEA, ATF, and U.S. Marshal’s Service. Some are temporary assignments that came to Detroit in December 2019. Others are permanent assignments who will provide long-term support to our local partners. Our primary local partner is the Detroit Police Department.
Our federal-local partnership will build upon proven, existing violent-crime fighting strategies. Specifically, we will address (1) fugitive apprehension; (2) gun violence; (3) gang violence; (4) illegal firearm possession, use, and trafficking; and (5) violent drug trafficking. As we have for many years, we will work with the Detroit Police Department to use intelligence-led, data-driven approaches to solve homicides and shootings. The Department of Justice’s assets will supplement local law enforcement efforts, as we work together to take the shooters and chronic violent criminals off of our streets.
Starting in December 2019, the enhancement to our federal-local law enforcement partnership has included the following:
● 10 new U.S. Marshal Task Force Officers began temporary detail assignments; ATF had 4 special agents assigned to the group targeting armed fugitives who were apprehended
● 7 new DEA personnel began temporary detail assignments (5 Special Agents, 1 Special Agent Supervisor, and 1 Intelligence Analyst)
● $3.9 million in grants to Detroit and Wayne County to fight gang and gun violence
Starting in July 2020, Operation Legend expands our partnership to include the following for the City of Detroit:
● Approximately $1 million BJA grant awarded to local law enforcement to assist in gun and gang violence prevention
● Approximately $100,000 JLEO grant awarded for acoustic gunshot detection technology and equipment
ATF
● 10 new/permanent ATF Special Agents
● 1 new/permanent ATF Supervisory Special Agent
● 4 new/permanent ATF Intelligence Specialists
● 4 new/permanent ATF Industry Operations Investigators
● 15 ATF Special Agents begin temporary detail assignments
● 10 ATF Special Agents reassigned internally to this initiative
● ATF creates additional unit to focus on gun violence
FBI
● 5 FBI Special Agents realigned from other FBI programs
● 3 FBI Analysts from other FBI programs
● 3 FBI Special Agents begin temporary detail assignments
● 1 FBI Intelligence Analyst begins temporary detail assignment
● FBI issues $25,000 rewards for information leading to the arrest of suspects in gun violence cases
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Operation Legend Expanded to Milwaukee to Confront Violent CrimeRead the Press Release
Matthew D. Krueger, United States Attorney for the Eastern District of Wisconsin, joined the Department of Justice in officially announcing the expansion of Operation Legend to Milwaukee. Operation Legend is a sustained, systematic, and coordinated law enforcement initiative in which federal law enforcement agencies work in conjunction with state and local law enforcement officials to fight violent crime. In addition to Milwaukee, Operation Legend is now underway in Kansas City, Chicago, Albuquerque, Detroit, and Cleveland.
The expansion of Operation Legend to Milwaukee marks a continuation of violent crime reduction efforts that began in Milwaukee under Operation Relentless Pursuit in December 2019. Operation Legend is named after four-year-old LeGend Taliferro, who was shot and killed while he slept early in the morning of June 29 in Kansas City.
The addition of these resources will help address a spike in violent crime. In Milwaukee, there already have been 97 homicides in 2020, an 85% increase over last year. Non-fatal shootings in the city also are up 64%.
As part of Operation Legend, the Department of Justice will supplement state and local law enforcement agencies by sending more than 25 federal investigators from the FBI, DEA, ATF, and United States Marshals Service to the city. These investigators will join the work already underway by existing joint federal, state and local task forces focused on combatting violent crime, including offenses involving firearms and violent drug trafficking organizations. Ten of those federal investigators are assigned to work in Milwaukee temporarily to provide immediate assistance, and the others will be assigned over the coming year to Milwaukee permanently to provide long-term assistance.
United States Attorney Krueger held a press conference in Milwaukee to make the announcement along with leadership from the FBI, ATF, DEA, United States Marshal’s Service, Milwaukee County Sheriff’s Office, and the Milwaukee Police Department.
At the press conference, FBI Special Agent in Charge Robert Hughes announced that the FBI is offering a reward of up to $25,000 for information leading to the identification and arrest of the individuals responsible for the murder of Qunyonce Louis-Moore of Milwaukee on June 30, 2020. Louis-Moore, who was 16 years old at the time of her death, was shot when unknown individuals opened fire on the 3400 block of North 8th Street at approximately 10:28 p.m. Louis-Moore was on a walk with her friends when she was struck by gunfire.
In addition to the increased number of federal agents described above, through the Bureau of Justice Assistance, the Department of Justice will make available $1.9 million in funding to support Operation Legend’s violent crime reduction efforts in Milwaukee. In addition, the Department of Justice’s COPS Office also has made $10.2 million available to the Police Departments of Milwaukee, Wauwatosa, and Cudahy to fund the hiring of 29 new officers to facilitate those Police Departments’ ability to assign existing officers to task forces.
The Department has also provided assistance through the Joint Law Enforcement Operations fund to assist reimbursement of local law enforcement serving as federal task force officers with the FBI, ATF, DEA, and U.S. Marshals Service. ATF also has provided $100,000 to help agencies in the Milwaukee area defray costs associated with installing or maintaining shot detection technology.
During the press conference, the results of the initial phase of Operation Relentless Pursuit were announced. This phase ran from January to April 2020 and focused on apprehension of violent fugitives. The efforts in Milwaukee were led by the United States Marshal’s Service in coordination with the ATF, FBI, DEA, and the Milwaukee Police Department. In Milwaukee, the operation resulted in the arrest of 96 individuals wanted for violent offenses, including homicide, robbery, aggravated assault, and forcible sexual assault.
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.
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Operation Legend Expanded to Cleveland, Detroit, and MilwaukeeRead the Press Release
Today, the expansion of Operation Legend was announced in Cleveland, Detroit, and Milwaukee. Operation Legend is a sustained, systematic and coordinated law enforcement initiative in which federal law enforcement agencies work in conjunction with state and local law enforcement officials to fight violent crime. The Operation was first launched on July 8 in Kansas City, Missouri, and expanded on July 22, 2020, to Chicago and Albuquerque.
Operation Legend is named in honor of four-year-old LeGend Taliferro, who was shot and killed while he slept early in the morning of June 29 in Kansas City. The first federal arrest under Operation Legend was announced on July 20.
“The most basic responsibility of government is to protect the safety of our citizens,” said Attorney General William P. Barr. “Today, we have extended Operation Legend to Cleveland, Detroit, and Milwaukee, three cities that have seen disturbing increases in violent crime, particularly homicides. For decades, the Department of Justice has achieved significant success when utilizing our anti-violent crime task forces and federal law enforcement agents to enforce federal law and assist American cities that are experiencing upticks in violent crime. The Department of Justice’s assets will supplement local law enforcement efforts, as we work together to take the shooters and chronic violent criminals off of our streets.”
As part of Operation Legend, Attorney General Barr directed the FBI, U.S. Marshals Service, DEA, and ATF to significantly increase resources into Cleveland, Detroit, and Milwaukee in the coming weeks to help state and local officials fight high levels of violent crime, particularly gun violence. Cleveland is currently experiencing a significant increase in violent crime, with homicides currently up more than 13 percent and shootings up over 35 percent over 2019. Similarly, homicides are up in Detroit nearly 31 percent and shootings resulting in wounds are up over 53 percent. In Milwaukee, homicides are up 85 percent this year, and non-fatal shootings are up 64 percent.
In Cleveland, the Department of Justice will supplement state and local law enforcement agencies by sending more than 25 federal investigators from the FBI, DEA, and ATF to the city. Under the leadership of Justin Herdman, U.S. Attorney for the Northern District of Ohio, these investigators will complement the work already underway by existing joint federal, state and local task forces focused on combating violent gangs, gun crime, and drug trafficking organizations.
The Bureau of Justice Assistance will make available $1 million to support Operation Legend’s violent crime reduction efforts in Cleveland, and the COPS Office has also made almost $10 million available to the Cleveland Police Department to fund the hiring of 30 officers, five Ohio State Highway Patrol troopers, and four Adult Parole Authority officers.
In Detroit, the Department of Justice will supplement state and local law enforcement agencies by sending approximately 42 federal agents from the FBI, DEA, and ATF to the city. An additional 10 Detroit ATF agents have been reassigned to work on violent gun crimes. Under the leadership of Matthew Schneider, U.S. Attorney for the Eastern District of Michigan, these federal agents will work cooperatively with the Detroit Police Department to combat gun and gang violence, as they have been doing since December 2019. These additional resources include 11 new and permanent ATF Special Agents and five new and permanent FBI Special Agents who will focus on violent crime in the City of Detroit.
The Bureau of Justice Assistance will make available $1.4 million to support Operation Legend’s violent crime reduction efforts in Detroit, and the COPS Office has also made $2.4 million available to the Detroit Police Department to fund the hiring of 15 officers.
In Milwaukee, the Department of Justice will supplement state and local law enforcement agencies by sending more than 25 federal investigators from the FBI, DEA, ATF, and U.S. Marshals Service to the city. Under the leadership of Matthew Krueger, U.S. Attorney for the Eastern District of Wisconsin, these investigators will complement the work already underway by existing joint federal, state and local task forces focused on combatting violent crime, including offenses involving firearms and violent drug trafficking organizations. 10 of those federal investigators are assigned to work in Milwaukee temporarily to provide immediate assistance, and the others will be assigned over the coming year to Milwaukee permanently to provide long-term assistance.
The Bureau of Justice Assistance will make available $1.9 million in funding to support Operation Legend’s violent crime reduction efforts in Milwaukee, and the COPS Office has also made $10.2 million available to the Police Departments of Milwaukee, Wauwatosa, and Cudahy to fund the hiring of 29 officers.
The Department has also provided assistance through the Joint Law Enforcement Operations (JLEO) fund to assist reimbursement of local law enforcement serving as federal task force officers with FBI, ATF, DEA, and the U.S. Marshals Service. Each city will receive $100,000 from ATF to help local agencies defray costs associated with installing or maintaining shot detection technology.
Okmulgee Man Pleads Guilty to Methamphetamine DistributionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Kenneth Roy Nester, age 26, of Okmulgee, Oklahoma entered a guilty plea to Possession With Intent To Distribute Methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C), punishable by not more than 20 years imprisonment, a fine up to $1,000,000.00, or both.
The Indictment alleged that on or about December 30, 2019, in the Eastern District of Oklahoma, the defendant, did knowingly and intentionally possess with intent to distribute a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance.
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The charges arose from an investigation by the Okmulgee Police Department and the Federal Bureau of Investigation as part of the Project Safe Neighborhoods (“PSN”) effort in the Eastern District of Oklahoma to reduce violent crime. PSN is an initiative led and coordinated by the United States Attorney’s Office.The Honorable Steven P. Shreder, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Jarrod Leaman represented the United States at the change of plea hearing.
Odenton Felon Sentenced to 30 Years in Federal Prison for Charges Related to the Attempted Armed Robbery of His Former Employer—A Food Service Company—Including Shooting an EmployeeRead the Press Release
Baltimore, Maryland – U.S. District Judge Richard D. Bennett today sentenced Cornell Slater, a/k/a Chopper, age 34, of Odenton, Maryland, to 30 years in federal prison, followed by five years of supervised release, for using, carrying, and discharging a firearm during and in relation to a crime of violence; for committing a commercial robbery; and for being a felon in possession of a firearm. Slater’s convictions arose from the attempted armed robbery of a food service business in Baltimore on December 5, 2018, during which Slater shot an employee of the business, and from another shooting on November 14, 2018, during which Slater shot the driver of a nearby vehicle.
Co-defendant Alex Smith, a/k/a Skeet, age 34, of Halethorpe, Maryland, was convicted at trial on January 10, 2020, on federal charges of conspiracy to commit a commercial robbery, attempted robbery, and using, carrying, and discharging a firearm during and in relation to a crime of violence, for his role in the crime.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Timothy Jones of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; Commissioner Michael Harrison of the Baltimore Police Department; and Acting Chief William Lowry of the Anne Arundel County Police Department.
According to Slater’s guilty plea, which was entered on the eve of trial, as well as evidence presented at Smith’s trial, on December 5, 2018, Slater and Smith committed an attempted armed robbery of a food service business, which was Slater’s former employer. At approximately 3:22 a.m., Slater picked Smith up at his residence and the two traveled to the business. At 4:30 a.m., four employees arrived for the morning shift to open the store. Surveillance cameras showed Slater and Smith, who were wearing masks, walking across a parking lot in the direction of the employee entrance. As employees entered the store, Slater and Smith trailed them through the open door, posing as employees.
As detailed in the plea agreement and described during trial testimony, upon entering the building Slater confronted two victims outside of the manager’s office, pulled out a gun and shot one of the victims in the face. Slater then forced the other employee toward the direction of the cash room, where the safe was stored. In the meantime, Smith entered the employee breakroom and confronted two other victims, brandishing a firearm while he ordered the victims to hand over their cell phones and get on the floor. Once Slater and the victim reached the cash room, the victim quickly entered the room and shut the door behind him, knowing that the door would lock automatically.
Knowing that they had been locked out of the cash room, Smith and Slater fled to Slater’s vehicle and drove off.
In addition to the attempted robbery, Slater admitted that on November 14, 2018, he fired two shots at a woman, striking her in the side. The woman’s temporary license plate had been stolen from her vehicle on October 26, 2018. While driving in her neighborhood in the 2500 block of Springhill Avenue in Baltimore on November 14, 2018, the victim saw her stolen license plate on Slater’s car and pulled beside the vehicle to see who had stolen the plate. Slater confronted the victim for following him and shot her. The victim was able to describe Slater and his girlfriend, who had also been in the car at the time of the shooting.
Both of the shootings were forensically linked through the National Integrated Ballistic Information Network (NIBIN) by the shell casings recovered at each shooting scene. Using information gleaned from both investigations, law enforcement officers were able to locate Slater and subsequently arrest him on December 18, 2018, outside of his residence in Odenton. At the time of his arrest, Slater’s vehicle was displaying another temporary license plate that Slater stole approximately two weeks earlier. During a search of Slater’s residence, law enforcement recovered the 9mm pistol used in the two shootings from under Slater’s bed, as well as 10 rounds of 9mm ammunition. Slater had previous felony convictions, including a prior federal conviction, and was prohibited from possessing a firearm or ammunition.
Smith faces a maximum of 20 years in federal prison for a commercial robbery; and a mandatory minimum of 10 years and a maximum of life in federal prison for aiding and abetting the discharge of a firearm during and in relation to a crime of violence. Actual sentences for federal crimes are typically less than the maximum penalties. Judge Bennett has scheduled sentencing for Smith on October 21,, 2020, at 3:00 p.m.
This case was made possible by investigative leads generated from the Bureau of Alcohol, Tobacco, Firearms, and Explosives’ (ATF) NIBIN. NIBIN is the only national network that allows for the capture and comparison of ballistic evidence to aid in solving and preventing violent crimes involving firearms. NIBIN is a proven investigative and intelligence tool that can link firearms from multiple crime scenes, allowing law enforcement to quickly disrupt shooting cycles. For more information on NIBIN, visit https://www.atf.gov/firearms/national-integrated-ballistic-information-network-nibin.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
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; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian.
United States Attorney Robert K. Hur commended the ATF, the Baltimore Police Department, and the Anne Arundel County Police Department for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Michael Goldsticker and James G. Warwick, who are prosecuting the case.
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Ninth Circuit Court of Appeals upholds conviction of former State Auditor Troy X. KelleyRead the Press Release
Seattle - The 9th Circuit Court of Appeals today rejected the appeal of former Washington State Auditor TROY X. KELLEY, clearing the way for him to start serving the one-year-and-one-day sentence imposed by U.S. District Judge Ronald B. Leighton on June 28, 2018. The court declined to hear oral argument and upheld the conviction with an order today.
“Through two trials and multiple appeals, the attorneys in this office have sought nothing but justice for those Kelley defrauded and the members of our community who expect law breakers to be held accountable regardless of their station or standing in society,” said U.S. Attorney Brian T. Moran. “The time has come for Troy Kelley to accept his punishment and report to custody and conclude this lengthy legal odyssey.”
According to the evidence at trial, between 2003 and 2008, KELLEY operated a business that monitored real estate filings on county websites. KELLEY agreed with escrow companies that his business would charge a flat fee of $15 or $20 for each real estate transaction it monitored for the escrow companies’ customers. In addition to the flat fee, the escrow companies also gave Kelley $100-$150 of customer money for each transaction, which KELLEY agreed to use to pay expenses if necessary. KELLEY agreed to refund the money to the homeowners if there were no expenses. However, beginning in 2005, in virtually every case he handled, KELLEY kept the entire amount withheld on each transaction, thereby stealing nearly $3 million.
In 2008, class action lawsuits were filed against escrow companies, claiming that homeowners had been charged excessive fees in real estate transactions. After the lawsuits were filed, KELLEY falsified a letter to the plaintiff in one lawsuit to make it appear that KELLEY had refunded the plaintiff’s money, when in fact he had not. Concerned that the lawsuits would lead to his downfall, KELLEY transferred millions of dollars of stolen money through a series of bank accounts, ultimately placing the funds in an investment account for a company controlled by a Central American trust controlled by KELLEY. One of the escrow companies sued KELLEY to retrieve the stolen money. KELLEY testified falsely under oath in the lawsuit that he had only kept money he had earned for services provided. One of KELLEY’s convictions for making false declarations in a court proceeding is based on that testimony.
Beginning in 2011, KELLEY spent the stolen money on personal expenses and his campaign for State Auditor. To hide the fact that this was money he had stolen years earlier, KELLEY claimed on his tax returns that he was continuing to perform real estate services and to earn income through his business, when in fact he had not operated the business for years. In the same tax returns, KELLEY claimed tens of thousands of dollars of business deductions for personal items like spa treatments, a family trip, and household purchases such as sheets and toys. KELLEY’s tax fraud convictions are based on this conduct.
In December 2017, a unanimous jury convicted KELLEY of possession of stolen property, two counts of making false declarations under oath, and six counts of tax fraud. Following the trial, an unrelated U.S. Supreme Court ruling resulted in the dismissal of one of the tax fraud counts.
A first trial in March 2016 ended with the jury being able to reach a verdict on only one count, acquitting KELLEY on lying to the Internal Revenue Service agent who questioned him about his scheme in 2013.
The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI) and the FBI.
The case was prosecuted by Assistant United States Attorneys Arlen Storm, Andrew Friedman, Seth Wilkinson and Katheryn Frierson. Assistant United States attorney Michael Morgan handled the appeal.
18-30153._dkt._64_usv_kelley_002.pdfNew Jersey Public University Employee Admits Role in $5.3 Million Compounded Prescription Drug SchemeRead the Press Release
NEWARK, N.J. – An employee of a public university in New Jersey today admitted his role in a scheme to defraud public and private health benefits programs of at least $5.3 million for the billing of medically unnecessary compounded prescriptions, U.S. Attorney Craig Carpenito announced.
John Cuffari, 58, of Cedar Grove, New Jersey, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to an information charging him with conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredients in the prescription.
Between November 2014 and July 2016, Cuffari participated in a conspiracy that involved the submission of fraudulent prescriptions for compounded medications to public and private insurance plans. The scheme centered on the discovery that certain insurance plans paid for prescription compounded medications – including scar creams, wound creams, and metabolic supplements/vitamins – at exorbitant reimbursement rates.
Cuffari exploited this opportunity through working as a sales representative for several compounding pharmacies. In order to profit as a sales representative, Cuffari targeted individuals who had insurance plans that covered compounded medications and then convinced those individuals to obtain prescriptions for compounded medications, regardless of medical necessity, often by providing them with cash payments. In order to obtain prescriptions for compounded medications for some of the recruited individuals, Cuffari caused payments to be made to a New Jersey-based physician.
Once the prescriptions were written, they were filled by the compounding pharmacies with which Cuffari worked. The compounding pharmacies would then receive reimbursement from the insurance plans, and would pay Cuffari a percentage of the reimbursement amount.
As part of his plea agreement, Cuffari must forfeit $539,580 in criminal proceeds he received for his role in the scheme and pay restitution of at least $5,392,214. He faces a statutory maximum of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Dec. 9, 2020.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark, with the ongoing investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Sean M. Sherman of the United States Attorney’s Office, Opioid Abuse Prevention and Enforcement Unit in Newark.
More Members of Family-Run Heroin-Trafficking Ring Sentenced to PrisonRead the Press Release
NORFOLK, Va. – Two Portsmouth men were was sentenced to a combined 21 years in prison for their respective roles in a family-run heroin-trafficking organization in which members trafficked at least one kilogram of heroin throughout Hampton Roads and sold handguns, rifles, and shotguns with their drugs.
According to court documents, Dominic Donta Jones, 27, and Raewkon Akil Pierce, 24, were members of the Jones DTO run by Malcolm Jones, Sr., Jones and Pierce’s father. The organization operated at least three drug premises, including the “Court,” a residence serving as the distribution point for Jones Sr.’s drugs—heroin, fentanyl, Acetyl fentanyl, crack, and powder cocaine. Since the beginning of 2017, the Court serviced 50 to 100 customers a day until authorities shut down the operation on Sept. 11, 2019. During that time, Jones and Pierce stayed at the Court, managed drug-trafficking efforts there, and stockpiled firearms there to protect their drug trade. Jones also sold a handgun during one of his heroin transactions, and that heroin turned out to be a mixture of fentanyl and Acetyl fentanyl.
This case is part of Operation High Tide, a proactive, large-scale narcotics trafficking and firearms investigation that focused on high-impact targets driving crime in some of the hardest hit neighborhoods in Hampton Roads.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. Click here for more information about Project Guardian.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; Ashan M. Benedict, Special Agent in Charge of the ATF’s Washington Field Division; and Col. K.L. Wright, Chief of Chesapeake Police, made the announcement after sentencing by U.S. District Judge Raymond A. Jackson. Assistant U.S. Attorney William B. Jackson and Special Assistant U.S. Attorney Kristin Bird prosecuted the 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. 2:19-cr-155.
Monterey, Louisiana Couple Sentenced for Felony Violations of the Lacey ActRead the Press Release
ALEXANDRIA, La. – United States Attorney David C. Joseph announced that a couple from Monterey, Louisiana, was sentenced in federal court in Shreveport on July 23, 2020, to three years of federal probation for felony Lacey Act violations in relation to illegally operating a woodcock guide service on Richard K. Yancey Wildlife Management Area (RKYWMA). The Suttons pleaded guilty on August 19, 2019.
Senior U.S. District Judge Dee D. Drell ordered William K. Sutton, 66, to pay a fine in the amount of $5,000; Karen S. Sutton, 61, was ordered to pay a fine in the amount of $1,000. Additionally, Judge Drell ordered the couple to pay restitution in the amount of $7,850 to the RKYWMA and the United States Fish and Wildlife Service, Office of Law Enforcement.
The Suttons were named in a federal indictment for conspiracy and Lacey Act violations in March of 2019 after agents with the United States Fish and Wildlife Service completed a successful criminal investigation of their Woodcock guide service. State Wildlife officers had cited Mr. Sutton during the previous hunting season, but the Suttons continued their illicit activity. The investigation culminated with joint search warrant executions by Federal and State Wildlife agents at the Sutton’s residence and hunting lodge. The investigation yielded evidence indicating the Suttons had conducted approximately 82 illegal hunts over a two-year period netting an estimated monetary gain of over $100,000.
The Lacey Act is a comprehensive federal law that protects against wildlife crimes, such as international and domestic wildlife trafficking. The Act prohibits trade in wildlife, fish, and plants that have been taken, possessed, transported or sold in violation of other federal, state, or foreign laws.
United States Fish and Wildlife Service Acting Special Agent in Charge Stephen Clark stated, “We take our mission working with the Louisiana Department of Wildlife and Fisheries and the citizens of Louisiana in conserving, protecting, and enhancing fish, wildlife, plants and their habitats very seriously. The U.S. Fish and Wildlife Service, Office of Law Enforcement, considers the illegal commercialization of wildlife resources a high priority, and we will continue to work closely with our State partners to assist them in these important investigations."
"This is a great example of federal and state agencies working together to protect Louisiana's wonderful natural resources. This couple was stealing from the citizens of Louisiana and justice was served," said Louisiana Department of Wildlife and Fisheries, Enforcement Division, Colonel Chad Hebert.
The United States Fish and Wildlife Service and the Louisiana Department of Wildlife and Fisheries conducted the investigation. Assistant U.S. Attorney Brian C. Flanagan prosecuted the case.
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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.
Milwaukee Man Sentenced to Prison for Arson of DuplexRead the Press Release
Matthew D. Krueger, United States Attorney for the Eastern District of Wisconsin, announced today that Dameon Johnson (46) was sentenced to five years in prison for his involvement in the arson of a duplex located on North 37th Street in Milwaukee. Johnson also will spend three years on supervised release following his prison term.
According to court documents, on November 19, 2019, after becoming upset with his girlfriend, Johnson used the stovetop in her kitchen in an upper unit of duplex to set fire to several pieces of his clothing. Johnson then piled the burning clothes on the hallway floor, burning a hole through the floor and causing damage to the ceiling of a rental unit on the first floor.
United States Attorney Krueger commended the quick response of the Milwaukee Fire Department (MFD) and the collaborative investigative work of MFD, the Milwaukee Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
By virtue of its statutory authority under the Organized Crime Control Act of 1970, ATF initiates investigations and assists in state and local bomb and arson investigations that impact interstate commerce. ATF has developed scientifically proven investigative capabilities, expertise and resources and has proved that the cooperative effort between trained State and local officers and ATF results in more effective investigations.
The case was prosecuted by Assistant United States Attorney Karine Moreno-Taxman.
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.
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For Additional Information Contact:
Public Information Officer Kenneth Gales 414-297-1700
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Marquez Pleads Guilty to Possession of Methamphetamine with Intent to Distribute, Agrees to 120-Month SentenceRead the Press Release
SALT LAKE CITY – Roberto Manuel Marquez, 43, of Tooele, pleaded guilty Monday afternoon to one count of possession of methamphetamine with intent to distribute in U.S. District Court in Salt Lake City.
Marquez, a Sureno gang member, was a fugitive from state parole when he was arrested Oct. 10, 2018, during a fugitive operation conducted by the U.S. Marshals Service’s Violent Fugitive Apprehension Team (VFAST) in the Salt Lake Valley. The Utah Board of Pardons and Parole had issued a warrant for Marquez after he removed a GPS ankle monitor and failed to report. The Tooele County Sheriff’s Office was also looking to talk to Marquez about a drive-by shooting in Middle Canyon in Tooele County on Oct. 3, 2018.
Task force officers developed information on Marquez’s location. Officers attempted to initiate a traffic stop in West Valley City, but the driver of the car fled at a high rate of speed and then attempted a U turn. After law enforcement officers tried to block the vehicle, the car hit two task force cars and came to a stop.
Marquez, who was in the passenger seat, was non-complaint, tased, and removed from the vehicle. After his arrest, officers found a key in his pocket that fit a gray lock box in the vehicle. They found meth, heroin, plastic baggies, drug paraphernalia and $3,269 in the box.
As a part of the plea agreement, Marquez admitted he possessed 346 grams of methamphetamine and $3,269. He agreed he was planning to distribute the methamphetamine to other people.
The plea agreement includes a stipulated sentence of 120 months in federal prison, subject to the approval of the Court. As a part of the plea agreement, federal prosecutors have agreed to dismiss a second count in the indictment, possession of heroin with intent to distribute, at sentencing.
While federal prosecutors cannot bind the State of Utah or Tooele County, parties to the federal plea agreement understand that the Tooele County Attorney’s Office will dismiss its pending case charging Marquez with discharge of a firearm during the drive-by shooting in Tooele after sentencing in the federal case.
There is no parole in the federal criminal justice system, so if the stipulated sentence is approved by the court, Marquez will serve 10 years in federal prison.
Assistant U.S. Attorneys in the U.S. Attorney’s Office in Salt Lake City are prosecuting the case. Special agents and task force officers with the U.S. Marshals Service’s VFAST and the DEA are investigating the case.
Manhattan U.S. Attorney Announces $2.775 Million Settlement of Medicaid Billing Fraud Case Against New York City and Computer Sciences CorporationRead the Press Release
Audrey Strauss, the Acting United States Attorney for the Southern District of New York, and Scott Lampert, the Special Agent in Charge for the New York Office of Inspector General of the U.S. Department of Health and Human Services (“HHS-OIG”), announced today the entry of two settlements in a Medicaid billing fraud lawsuit against New York City (the “City”) and Computer Sciences Corporation (“CSC”). The settlements resolved allegations brought by the United States and the State of New York that defendants knowingly failed to take reasonable measures to obtain private insurance coverage before billing Medicaid for early intervention program (“EIP”) services, such as speech and physical therapy, for young children.
Under the settlements, which were approved yesterday by U.S. District Judge Jed S. Rakoff, the City and CSC agreed to pay a total sum of $2.775 million, with $1,585,435 being paid to the United States and the remaining amount to the State of New York. As part of the settlements, defendants admitted, acknowledged, and accepted responsibility for conduct that resulted in the City having received payments from Medicaid for EIP services that Medicaid would not otherwise have made pursuant to its payment regulations and procedures.
Acting U.S. Attorney Audrey Strauss said: “Medicaid covers vitally needed medical care for millions of people in New York. Compliance with billing requirements ensures the financial integrity of the Medicaid program. This Office is committed to holding recipients of Medicaid funding and their billing agents responsible for complying with these billing requirements.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “Millions of people in New York depend on Medicaid for vital services, and taxpayers across the state pay for that care. HHS-OIG will continue close cooperation with our State and Federal law enforcement partners to preserve this essential funding and ensure that it is used properly.”
As alleged in the complaint filed by the United States in September 2016, the City was responsible for paying for EIP services for young children in New York City and then was permitted to seek reimbursement from private insurers, Medicaid, and other funding sources. In 2007, the City retained CSC as its billing agent to submit EIP reimbursement claims. Although the City and CSC knew that Medicaid rules required them to take reasonable measures to obtain private insurance coverage before submitting EIP claims to Medicaid, they frequently ignored that billing requirement. For example, although the City knew that it received no response from private insurers for many EIP claims, the City and CSC failed to contact those insurers in a significant number of cases to follow up on the claims and determine the reason for the lack of a response. Instead, the City instructed CSC to treat those claims as having been denied by the private insurers and submit them to Medicaid using a code – known as “0Fill” – to indicate there was in fact no private insurance coverage.
In the two settlements, the City and CSC made numerous factual admissions. The City admitted, acknowledged, and accepted responsibility for, among others, the following conduct:
- the City was responsible for the provision of EIP services to eligible children in New York City, including preparing individualized family service plans, contracting with and paying treating providers such as audiologists and speech therapists who delivered EIP services, and seeking reimbursement for the EIP services provided to eligible children;
- in 2005, the City issued a request for proposal for a new fiscal agent for EIP, and a corporate predecessor of CSC responded to that request for proposal;
- between 2005 and 2007, the City and CSC engaged in discussions about the City’s expectations for CSC as the City’s EIP fiscal agent, during which the City advised CSC that when seeking reimbursement for EIP services for an eligible child with health coverage from both private insurance and Medicaid (“dual-eligible EIP beneficiaries”), the sequence of billing was to be: 1) private insurance, 2) Medicaid, and 3) EIP funds from New York State;
- in September 2007, the City and CSC signed a fiscal agent contract, after which CSC began developing systems and computer programs for the City; and
- from 2009 to 2012, the City received reports from CSC regarding instances where there had been no responses from private insurers for EIP claims involving dual-eligible beneficiaries; in a significant number of such cases, the City did not inquire with private insurers to determine the cause(s) for their lack of response, and did not direct CSC to so inquire.
CSC also admitted, acknowledged, and accepted responsibility for, among others, the following:
- in or about September 2010, CSC and the City discussed a plan to develop a procedure for designating claims as “denied” in CSC’s internal EIP database once those claims had been pending with private insurers for 90 days without an adjudication;
- the City approved that plan, and CSC proceeded to populate the claims that had received no response from private insurers after 90 days with the “denial” designation in its claims database;
- CSC also obtained permission from the City to submit those claims to Medicaid with the “0Fill” modifier – which, according to Medicaid’s claim submission guide, was to be used either for “when it is known that the primary payer or any other payer prior to Medicaid[] does not cover the services and so will not pay any amount towards the claim,” or for claims that “have been denied (the services were not covered) or were paid zero (the entire charge was adjusted, for example, applied to deductible) by any prior payer;” and
- as result, the City received payments from Medicaid for EIP services that Medicaid would not otherwise have made pursuant to its payment regulations and procedures.
These settlements arise from a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act, which allow private persons – known as “relators” – to file civil actions on behalf of the United States and share in any recovery.
Ms. Strauss praised the outstanding investigative work of the HHS-OIG, and she thanked the Medicaid Fraud Control Unit at the New York State Attorney General’s Office for its extensive collaboration in the investigation and litigation of this case.
This case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Li Yu and Arastu Chaudhury are in charge of this case.
Man from Albuquerque faces federal firearms charges under Operation LegendRead the Press Release
ALBUQUERQUE, N.M. – Carlos Trevon Morris, 44, of Albuquerque, New Mexico made an initial appearance in federal court in Albuquerque today on a criminal complaint charging him with felon in possession of a firearm.
This case is being prosecuted as part of Operation Legend, a sustained and coordinated law enforcement initiative in which the U.S. Attorney’s Office and federal law enforcement agencies work with state and local law enforcement to prosecute gun and dangerous crimes arising in the City of Albuquerque.
“This case exemplifies the goals and aims of Operation Legend: to make Albuquerque a safer place to live by reducing gun violence.” said John Anderson, U.S. Attorney for the District of New Mexico.
As alleged in the criminal complaint, police officers responded to a call of shots fired at an apartment complex in Albuquerque. As officers approached the complex on foot, they saw Morris as he attempted to place what appeared to be an unconscious male into a vehicle. After shining their flashlights at Morris, officers noticed what appeared to be blood on his arms, shirt, and pants. Directly underneath Morris was the motionless body of the victim. The complaint further alleges that officers saw a bottle of bleach next to the vehicle. Police officers then commanded Morris to the ground and arrested him. The complaint further alleges that the police observed a blood trail from where the body and Morris were located and followed it all the way to an apartment walkway, where they discovered bullet casings and odors of bleach. Police officers also discovered a handgun in Morris’s left pant pocket. Morris was transported to a hospital for a gunshot wound on his right arm. Homicide detectives responded to the scene.
Morris is currently in custody awaiting a detention hearing scheduled for July 31. He faces up to 10 years in prison if convicted of the charged offense. A criminal complaint is only an accusation. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Albuquerque Police Department investigated this case. Assistant U.S. Attorney Thomas Outler is prosecuting the case.
Man Pleads Guilty in Scheme to Steal Debit CardsRead the Press Release
A U.S. citizen who formerly resided in the Dominican Republic has pleaded guilty to his role in a scheme to steal debit cards from bank customers, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
Gregory Jean-Louis, 46, pleaded guilty on Wednesday to conspiracy to commit bank fraud before U.S. Magistrate Judge Jeffrey L. Cureton in Fort Worth.
Mr. Jean-Louis, a U.S. citizen living in the Dominican Republic at the time of his crime, was charged via criminal complaint in November 2019. He was removed from the Dominican Republic to the United States in May 2020. A federal grand jury in Texas returned an indictment against him a week after his arrest.
According to plea papers, Mr. Jean-Louis admits that he and his coconspirators used stolen PII (personal identification information) to obtain debit cards in the names of customers of Bank of America and Citizens Bank.
Posing as actual customers of the financial institutions, Mr. Jean-Louis – also known to his coconspirators as “G.” – reached out to the banks, requesting that they mail duplicate debit cards and PIN numbers to customers’ actual addresses, he admits.
He then directed coconspirators to steal the debt cards and PIN numbers from the customers’ mailboxes, and to send him photos of the cards and PINs so he could activate them.
Using the fraudulently obtained cards, the group withdrew thousands of dollars from customers’ accounts from ATMs across the country, including in Texas, New York, Massachusetts, Rhode Island, Connecticut, California, and Pennsylvania. Much of the money was wired to Mr. Jean-Louis.
The defendant now faces up to 30 years in federal prison. Sentencing has been set for Nov. 20 before U.S. District Judge Reed O’Connor in Fort Worth.
The United States Postal Inspection Service conducted the investigation; the U.S. Marshals Service assisted in Mr. Jean-Louis’ apprehension. Assistant U.S. Attorney Robert Boudreau is prosecuting the case.