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Friday 24 July 2020
Three Individuals Charged in Federal Court with Illegally Possessing Guns or Ammunition in ChicagoRead the Press Release
CHICAGO — Three individuals have been charged with federal offenses for allegedly illegally possessing guns or ammunition in Chicago this week. The charges are the first federal prosecutions in Chicago under the Department of Justice’s Operation Legend.
DARRYL COLLINS, 30, of Dolton, is charged with one count of illegal possession of ammunition by a convicted felon, while ROMEO HOLLOWAY, 21, of Chicago, is charged with one count of illegal possession of a firearm by a convicted felon. Collins and Holloway were previously convicted of criminal felonies and were not lawfully allowed to possess a firearm or ammunition.
DARRYL PHILLIPS, 22, of Chicago, is charged with one count of illegal possession of a machinegun.
All three defendants are currently detained in federal custody.
The federal charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kristen deTineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; and David Brown, Superintendent of the Chicago Police Department. The government is represented in the Collins case by Assistant U.S. Attorney Julia K. Schwartz; in the Holloway case by Assistant U.S. Attorney Jared Hasten; and in the Phillips case by Assistant U.S. Attorney Jeannice W. Appenteng.
The charges are the first federal prosecutions brought under Operation Legend, a Department of Justice initiative in which federal law enforcement agencies work in conjunction with state and local law enforcement officials to fight violent crime. As part of Operation Legend, Attorney General William P. Barr directed ATF, FBI, U.S. Marshals Service, and DEA to significantly increase resources into Chicago to help state and local officials fight violent crime, particularly gun offenses. ATF has deployed its national Crime Gun Intelligence Mobile Command Vehicle to assist local law enforcement with analysis of crime scenes and spent shell casings through the National Integrated Ballistic Information Network (NIBIN).
“Operation Legend has strengthened our efforts to apprehend and charge illegal gun offenders in Chicago,” said U.S. Attorney Lausch. “Under Operation Legend, we are working closer than ever with the Chicago Police Department, ATF, and other federal, state, and local law enforcement partners to arrest and prosecute individuals engaging in violent crime in the city.”
According to criminal complaints filed in U.S. District Court in Chicago, Collins was arrested Wednesday afternoon by Chicago Police officers for illegally possessing ammunition, which was in a loaded handgun, in the 8200 block of South Maryland Avenue in the East Chatham neighborhood.
Holloway was arrested Tuesday night by federal and local law enforcement officers for illegally possessing a loaded handgun in the 2700 block of West Flournoy Street in the East Garfield Park neighborhood, according to the complaint. The gun contained ten rounds of live ammunition and had a bullet in the chamber, the complaint states.
Phillips was arrested early Wednesday morning by federal and local law enforcement officers executing a court-authorized search warrant in the 2700 block of West Flournoy Street in the East Garfield Park neighborhood, according to the complaint. Officers discovered a semiautomatic handgun in a bedroom, the complaint states. An ATF special agent reviewed the firearm and determined it was equipped with an auto-sear device, also known as a “switch,” which transformed the firearm into a machinegun capable of automatically shooting more than one shot without manually reloading, the complaint states.
The public is reminded that a complaint is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. The charges are punishable by up to ten years in federal prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
In addition to the resources allocated under Operation Legend, the U.S. Attorney’s Office holds gun offenders accountable through Project Guardian and Project Safe Neighborhoods – the Department of Justice’s violent crime reduction strategies. Project Guardian focuses specifically on investigating, prosecuting, and preventing gun crimes, and it emphasizes the importance of using modern technologies to promote gun crime intelligence. The U.S. Attorney’s Office has deployed the Guardian and PSN programs to attack a broad range of violent crime issues facing the district, including by prosecuting individuals who illegally possess firearms.
The Americans with Disabilities Act – 30th AnniversaryRead the Press Release
On July 26, 2020, the nation celebrates the 30th anniversary of the landmark legislation known as the Americans with Disabilities Act (ADA). The U.S. Attorney’s Office for the Northern District of Iowa is proud to play a critical role in the Department of Justice’s enforcement efforts under the ADA.
The ADA prohibits discrimination on the basis of disability in many contexts, including employment, state and local government activities, places of public accommodation, transportation, and telecommunications. The Department of Justice is authorized to investigate complaints, conduct compliance reviews to ensure accessibility, initiate and intervene in litigation, and provide technical assistance to businesses, governments, and the general public to promote voluntary compliance with the ADA.
“Our office is proud to continue its work to enforce the ADA and to uphold its promise of equal access and opportunity for all,” said U.S. Attorney Peter E. Deegan, Jr.
Over the past 30 years, our country has undertaken the hard work of changing attitudes about disability, tearing down barriers to equality, and dismantling the systems that have historically excluded people with disabilities. On this anniversary, we commemorate the many ways that the ADA has transformed our society—by replacing exclusion with access, segregation with integration, and limitations with self-determination. The ADA has advanced the promise of the American dream, ensuring that people with disabilities can write their own stories. And as a society, we are better and stronger because of the contributions that people with disabilities make.
For more information on the ADA, please call the Department of Justice’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov. To file a complaint with the Department, please visit the Civil Rights Division’s portal at https://civilrights.justice.gov/report/.
Tennessee resident sentenced to 56 monthsRead the Press Release
Indianapolis – United States Attorney Josh J. Minkler announced today, George Ruth, 64, Morristown, Tennessee, was sentenced to 56 months in federal prison for defrauding the United States Department of the Treasury, Internal Revenue Service, and the Social Security Administration.
“Mr. Ruth has tried making a career of getting something for nothing,” said Minkler. “He was not that good at it and this sentence should put an end to it. Don’t steal from the government and the programs in place to help those in need and expect law abiding citizens to carry your responsibility.
Beginning January 2010, and continuing until in or around November 2017, Ruth and his co-conspirators, Norman Flick, Kenneth Burton, and Carlos Aubrey, conspired to file earnings statements with the Social Security Administration that reported false earnings, false employment, and other false items, to obtain money, in the form of fraudulent Social Security benefits.
Ruth and others sought to enrich themselves by submitting false and fictitious IRS Forms purportedly from Lehman Brothers and other bankrupt companies, to the SSA. The IRS Forms contained false and fraudulent earnings and employment information that would increase their monthly Social Security benefits and result in lump sum “back pay” payments to themselves and others.
In total, Ruth unlawfully obtained or attempted to obtain approximately $1,083,180 in Social Security benefits to which he was not entitled.
Beginning January 2011, and continuing until in or around October 2017, Ruth and his co-conspirators also conspired to prepare and submit to the IRS false and fraudulent federal income tax returns so they could unlawfully obtain federal income tax refunds.
They continued to enrich themselves by preparing and submitting to the IRS false and fraudulent U.S. individual income tax returns to unlawfully obtain federal income tax refunds to which they were not titled. In total, Ruth and the others unlawfully obtained or attempted to obtain approximately $3,707,585.98 in federal income tax refunds to which they were not entitled.
Co-conspirators, Kenneth Burton and Carlos Aubrey were previously sentenced. Norman Flick is deceased.
This case was investigated by the Social Security Administration, Office of Inspector General and IRS Criminal Investigation.
“The stiff sentence announced today is a demonstration of our tireless commitment to hold individuals accountable who seek to defraud SSA by submitting false documentation for unlawful financial gain,” said Gail S. Ennis, Inspector General of Social Security. “I am pleased to see the final chapter today of this far-reaching conspiracy, which was designed to steal more than $1 million from the taxpayers. I appreciate the U.S. Attorney’s support of our investigation, and I want to recognize IRS Criminal Investigation and the U.S. Postal Inspection Service for their efforts to see justice done in this case.”
“Mr. Ruth has been prosecuted previously and has not learned his lesson,” said Kathy Enstrom, Special Agent in Charge of the IRS Criminal Investigation Chicago Field Office. “This prosecution of Mr. Ruth shows the American taxpayers that IRS-CI, the United States Attorney’s Office, and our federal counterparts are working hard to protect taxpayer funds. We will continue to investigate and prosecute these offenders, especially when they don’t get the message the first time.”
According to Assistant United States Attorney Jeffery D. Preston, who prosecuted this case for the government, Ruth must also serve three years of supervised release, pay $1,083,160 to the Social Security Administration and $95,132 to the Internal Revenue Service.
In October 2017, United States Attorney Josh J. Minkler announced a Strategic Plan designed to shape and strengthen the District’s response to its most significant public safety challenges. This prosecution sentencing demonstrates the office’s firm commitment to partner with federal and local law enforcement agencies to prosecute complex and large-scale fraud schemes and those engaged in income tax evasion; filing false tax returns and schemes to defraud involving tax returns. See United States Attorney’s Office, Southern District of Indiana Strategic Plan Sections 5.1, 5.4)
Supplier to Puerto Rican Aquarium Business Pleads Guilty to Two Lacey Act Felonies for Illicit Trafficking of Protected Reef CreaturesRead the Press Release
A resident of Juncos, Puerto Rico, pleaded guilty today to two felony violations of the Lacey Act for collecting, falsely labeling, and shipping protected marine invertebrate species as part of an effort to subvert Puerto Rican law designed to protect corals and other reef species, the Department of Justice announced.
In 2015 and 2016, Juan Pablo Castro-Torres, aka Paoly, supplied marine invertebrates, such as Ricordea, to an Arecibo-based aquarium store known as “Wonders of the Reef.” The business would sell these coral-like organisms to customers in the mainland United States and foreign countries for use in high-end saltwater aquariums, even though it is illegal to harvest Ricordea, zoanthids, and anemones in Puerto Rico if the specimens are going to be sent off-island or otherwise sold commercially. Castro-Torres personally collected many of the Ricordea and other reef creatures that were sold off-island. Because Ricordea are attached to the reef substrate, the defendant would utilize a chisel to break off the animals, and in doing so, take chunks of the reef with him, which caused habitat damage in addition to removing the individual creatures.
The Arecibo store was run by Aristides Sanchez. Castro-Torres began supplying Sanchez’s business with Ricordea after Puerto Rican law enforcement seized one of Sanchez’s illegal shipments of marine invertebrates in March 2015. Sanchez pleaded guilty to related Lacey Act violations in August 2017 and is awaiting sentencing.
In order to cover up the nature of his shipments and to avoid detection from governmental inspection authorities, Castro-Torres also falsely labeled live shipments as inanimate objects. While there is some variation in the price of Ricordea depending on coloration, size, and other factors, Castro-Torres admitted that the value of the illegal marine life directly attributable to him was worth approximately $15,000.
Castro-Torres will be sentenced at a later date.
This case was investigated as part of Operation Rock Bottom and Operation Borinquen Chisel by Special Agents of the U.S. Fish and Wildlife Service (USFWS) and the National Oceanic and Atmospheric Administration with support from the USFWS Inspectors. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section along with Assistant U.S. Attorney Carmen Marquez of the U.S. Attorney’s Office for the District of Puerto Rico.
Strip mall property owners settle ADA violationsRead the Press Release
HOUSTON – The owners of several Houston-area properties have settled allegations under Title III of the Americans with Disabilities Act (ADA) to remove barriers and greatly improve physical accessibility, announced U.S. Attorney Ryan K. Patrick.
The announcement comes as the nation commemorates the 30th anniversary of the passage of the ADA on July 26.
Under the ADA, persons with disabilities shall be afforded the opportunity to participate in or benefit from the goods, services, facilities, privileges, advantages or accommodations equal to that afforded to other individuals. Title III mandates that no individual shall be discriminated against on the basis of a disability by any person who owns, leases or operates a place of public accommodation.
Strip shopping centers are places of public accommodation. As such, the owners are subject to Title III requirements.
To date, five such property owners have entered into settlements to remedy all violations the United States has identified and bring them into compliance with the ADA. Those include 11120-A North Freeway which Hana Assets Ltd. owns as well as the SS Village LLC-owned properties known as Fondren Southwest Village-East and Fondren Southwest Village-West. These actions add to the two other previous announcements regarding 5101 Bingle and 10092 Veterans Memorial Dr.
Investigators continue to conduct on-site inspections to evaluate compliance with the ADA. Those found to be in violation have the option of entering into voluntary settlement agreements in which they agree to modify their property to meet ADA requirements. Property owners who refuse to do so could face a civil lawsuit.
The United States Attorney is authorized to commence a civil action when there is a belief discrimination exists, seeking full compliance with the ADA, including requiring the owners and operators of places of public accommodations to remedy the violations and pay civil monetary penalties.
Assistant U.S. Attorneys Keith Edward Wyatt and Annalisa Cravens are handling the matters with the assistance of Paralegal Specialist Raymond Babauta.
Statement on the arrest of Juan TangRead the Press Release
UPDATE
Pursuant to a motion by the government, the case against defendant Juan Tang described in the news release below was dismissed by the court on July 23, 2021.
Juan Tang, a Chinese national and former researcher at the University of California at Davis, was recently taken into federal custody by the FBI on an arrest warrant and complaint that were filed on June 26, and unsealed on July 20. Tang is scheduled to make an initial appearance in Sacramento on July 27 at 2:00 PM.
Statement of U.S. Attorney Brian T. MoranRead the Press Release
“I want to be very clear regarding the role of federal agents summoned to Seattle. They are here to protect federal properties and the important work that occurs in our courthouses and federal buildings. These are the places where federal judges decide cases and controversies, including those filed by protestors against the City, where social security benefits are processed, citizenship is made possible, and where the rights of the accused are protected.
Last weekend, the Nakamura Federal Courthouse was broken into, a smoke bomb and an American flag were burned, and the building was tagged with graffiti inside and out. These actions were not peaceful protests that my office and the Constitution works to protect. The Nakamura building bears the name of Seattle native Private First Class William Kenzo Nakamura. Before joining the U.S. Army in 1942, Nakamura and his Japanese American family were sent to an incarceration camp. He died in action near Castellina, Italy on July 4th, 1944, while protecting his platoon from withering machine gun fire. Private Nakamura was posthumously awarded the Congressional Medal of Honor, our nation’s highest award for heroism. The people who attacked this building, a building where wrongs are righted and disputes are settled according to the rule of law, are not protesting anything; they seek only to disrupt and destroy, and through their acts, they dishonor Private Nakamura’s memory and his extraordinary sacrifice for his country.
I and my colleagues are reaching out to community leaders with one message: Let’s not let the violence that has marred the Portland protests damage peaceful movements here for a more just society. These federal agents will join our usual law enforcement staff to safeguard our federal buildings. My hope is our community will speak with one voice to discourage those who seek to hijack peaceful protests with damage and destruction. “
Statement of Civil Rights Division Assistant Attorney General Eric Dreiband on the 30th Anniversary of the Americans with Disabilities ActRead the Press Release
Assistant Attorney General for the Civil Rights Division Eric Dreiband released the following statement on the 30th anniversary of the Americans with Disabilities Act (ADA):
“With the passage of the ADA, our nation committed itself to a clear and comprehensive mandate: the elimination of discrimination against people with disabilities. As President George H.W. Bush said just before he signed the ADA into law, “with today’s signing of the landmark Americans for Disabilities Act, every man, woman, and child with a disability can now pass through once-closed doors into a bright new era of equality, independence, and freedom.”
Today, on the thirtieth anniversary of this historic law, we commemorate the many ways that the ADA has transformed our society — by replacing exclusion with access, segregation with integration, and limitations with self-determination. The ADA has advanced the promise of the American dream, ensuring that people with disabilities enjoy the same opportunity as all Americans to participate in everything this great nation has to offer.
Since the passage of the ADA, the Civil Rights Division has been at the forefront of enforcing its protections and vindicating the rights of people with disabilities across this country. The division works day in and day out to further the goals of the ADA — through mediation, technical assistance, outreach, and enforcement.
Since 2017, the department has entered into more than 200 agreements to further accessibility for people with disabilities. From ensuring equal employment opportunities to ensuring equal access to polling places; from ensuring inclusive child care and schools to ensuring nondiscriminatory health care — the breadth of the division’s work reflects the remarkable breadth of the statute itself.
Indeed, the department’s work enforcing the ADA touches every aspect of American life. For instance, in the area of employment, the department works to ensure that people with disabilities have an equal opportunity to pursue their career goals. In the housing sphere, the department strives to ensure that people with disabilities have an equal opportunity to access housing, including through its through its work to ensure the accessibility of rental offices and its challenges to discriminatory zoning laws.
With respect to education, the department’s enforcement efforts span from early learning centers through postsecondary programs to ensure that the doors of educational opportunity are fully open to students with disabilities. And the department’s ADA Voting Initiative helps voters with disabilities to exercise one of their most fundamental rights — to cast their ballot on the same terms and with the same level of independence and privacy as voters without disabilities. Through this initiative, the department has surveyed more than 2,000 polling places and increased polling place accessibility in more than 50 jurisdictions.
The department also recognizes that equal access to medical providers like doctor’s offices, pharmacies, and hospitals is vital to ensuring the wellbeing of people with disabilities. The department’s Barrier-Free Health Care Initiative ensures that people with disabilities are able to access health care, without physical, attitudinal, or communication barriers. And recognizing that transportation serves as a gateway to participation in all aspects of community life, the department continues to vigorously enforce the ADA’s guarantees of increased access to public and private transportation.
Finally, the department’s efforts to enforce the Supreme Court’s decision in Olmstead v. L.C. to redress the unnecessary segregation of people with disabilities go to the heart of the ADA’s promises. Through the department’s Olmstead work, more than 50,000 individuals with disabilities now have opportunities to live and work in their communities, alongside their neighbors.
The department is proud to play a leading role in safeguarding the civil rights of individuals with disabilities. Yet, even as we celebrate the last 30 years’ progress, we know that our work is not done and that barriers to equal opportunity remain. We recommit to our work of making the promise of the ADA a reality, enabling all Americans with disabilities to achieve their dreams and reach their full potential. On this anniversary, we remember the words of President George H.W. Bush, who explained the ADA’s importance saying:
“Our success with this act proves that we are keeping faith with the spirit of our courageous forefathers who wrote in the Declaration of Independence: ‘We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights.’ . . . Today’s legislation brings us closer to that day when no Americans will ever again be deprived of their basic guarantee of life, liberty, and the pursuit of happiness.”
Please visit the department’s ADA Anniversary webpage to learn more about the ADA’s history and impact. To learn more about the Department’s ADA work generally, see www.ada.gov.
South San Francisco Resident Pleads Guilty to Tax FraudRead the Press Release
SAN FRANCISCO –Robert Stein, also known as Mikhail Solovey and Michael Swarovski, pleaded guilty to filing a false tax return announced United States Attorney David L. Anderson and Internal Revenue Service – Criminal Investigation Special Agent in Charge Kareem Carter. The plea was accepted by the Hon. Susan Illston, United States District Judge
According to the plea agreement, Stein, 55, of South San Francisco, admitted that while he was in prison serving a prior sentence for fraud, he met S.Z., who was also in prison serving a sentence for investment and securities fraud. After Stein and S.Z. were released from prison, S.Z. offered Stein a marketing job, to be paid by commission, selling securities and recruiting investors. Stein worked for S.Z. beginning in late 2012, and continuing through 2017. S.Z. provided Stein with a database of potential investors for him to make cold calls for securities sales. S.Z. also provided Stein with a misleading script for these cold calls. Stein admitted in his plea agreement that he lied to investors in at least two ways. First, Stein concealed his prior fraud convictions by misrepresenting his name and his background. Second, he misled the investors as he eventually figured out that the investments S.Z had him sell had overstated financial results. During that time, Stein convinced investors to send at least $2,336,681 to S.Z. who paid Stein approximately $416,564 in commissions as part of the scheme. Stein failed to report the commissions on his U.S. Individual Income Tax Returns. To conceal the commission income from the IRS, Stein deposited the commissions into two nominee corporations’ bank accounts, Massachusetts Diagnostic Service, Inc. (MDS) and R&M Marketing (R&M) accounts in 2014, 2015, 2016, and 2017. To further conceal commission income from the IRS, Stein also caused a tax return preparer to prepare and file false corporate income tax returns for MDS and R&M. The unreported income resulted in a tax due in the amount of $98,197.
Stein’s sentencing hearing is scheduled for October 30, 2020, before Judge Illston. Stein was charged by information on July 6, 2020 with one count of filing a false tax return for the year 2013. He pleaded guilty to the one count. The maximum statutory penalty for filing a false tax return, in violation of Title 26, U.S.C. § 7206(1) is three years in prison, a fine of $250,000 and one year of supervised release. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The case is being prosecuted by the Special Prosecutions Unit of the United States Attorney’s Office for the Northern District of California. The prosecution is the result of an investigation by the Internal Revenue Service – Criminal Investigation.
Six Former NFL Players Charged in Superseding Indictment Alleging Nationwide Fraud on Health Care Benefit Program for Retired NFL PlayersRead the Press Release
Six former National Football League (NFL) players have been charged in a superseding indictment in the Eastern District of Kentucky for their alleged roles in a nationwide fraud on a health care benefit program for retired NFL players.
Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney Robert M. Duncan, Jr. for the Eastern District of Kentucky, and FBI Special Agent in Charge George L. Piro of the Miami Field Office made the announcement.
Darrell Reid, 38, of Farmingdale New Jersey, Antwan Odom, 38, of Irvington, Alabama, Anthony Montgomery, 36, of Cleveland, Ohio, Clinton Portis, 38, of Fort Mill, South Carolina, Tamarick Vanover, 46, of Tallahassee, Florida, and Robert McCune, 41, of Riverdale, Georgia, were charged in the superseding indictment. Each of the defendants was charged with one count of conspiracy to commit health care fraud and wire fraud. Reid, Odom, Montgomery, and Portis were also each charged with one count of wire fraud and one count of health care fraud. Vanover was also charged with two counts of wire fraud and two counts of health care fraud. And McCune was also charged with 10 counts of wire fraud, 12 counts of health care fraud, and three counts of aggravated identity theft.
McCune and 11 other former NFL players, including Portis and Vanover, were previously charged in the Eastern District of Kentucky in December 2019 for their alleged roles in the fraud. The alleged fraud targeted the Gene Upshaw NFL Player Health Reimbursement Account Plan (the Plan), which was established pursuant to the 2006 collective bargaining agreement and provided for tax-free reimbursement of out-of-pocket medical care expenses that were not covered by insurance and that were incurred by former players, their wives and their dependents – up to a maximum of $350,000 per player. According to the charging documents, over $3.9 million in false and fraudulent claims were submitted to the Plan, and the Plan paid out over $3.4 million on those claims between June 2017 and December 2018.
Since the initial charges were announced, seven of the defendants have entered guilty pleas. Correll Buckhalter, James Butler, Joseph Horn, Etric Pruitt, Ceandris Brown, John Eubanks and Donald “Reche” Caldwell, who passed away in June, each pleaded guilty to conspiracy to commit health care fraud. On June 22, 2020, Brown was sentenced for his role in the scheme to a term of incarceration of 12 months and one day. Sentencing for the remaining defendants is pending.
The superseding indictment adds Reid, Odom, and Montgomery as defendants for their roles in the scheme, and it adds additional charges against McCune: three counts of aggravated identity theft for McCune’s unlawful use of the identity of other persons as part of this scheme; and two counts of health care fraud for a scheme whereby McCune allegedly submitted or caused the submission of false and fraudulent claims to the Plan on his own behalf.
The superseding indictment alleges that the scheme to defraud involved the submission of false and fraudulent claims to the Plan for expensive medical equipment – typically between $40,000 and $50,000 for each claim – that was never purchased or received. The expensive medical equipment described on the false and fraudulent claims included hyperbaric oxygen chambers, cryotherapy machines, ultrasound machines designed for use by a doctor’s office to conduct women’s health examinations and electromagnetic therapy devices designed for use on horses.
The superseding indictment further alleges that McCune, Vanover, and others recruited other players into the scheme by offering to submit or cause the submission of these false and fraudulent claims in exchange for kickbacks and bribes that ranged from a few thousand dollars to $10,000 or more per claim submitted. As part of the scheme, the defendants allegedly fabricated supporting documentation for the claims, including invoices, prescriptions and letters of medical necessity.
This case was investigated by the FBI and is being prosecuted by the Health Care Fraud Unit of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Kentucky. The investigation included efforts by various FBI Field Offices and Resident Agencies, including: Augusta, Georgia; Birmingham and Mobile, Alabama; Cleveland, Ohio; Chicago, Illinois; Columbia, South Carolina; Dallas and Houston, Texas; Denver, Colorado; Jackson, Mississippi; Lexington, Kentucky; New Orleans, Louisiana; Miami, Jacksonville and Tampa, Florida; Newark, New Jersey; Los Angeles, San Diego, Sacramento and Newport Beach, California; Phoenix, Arizona; Salt Lake City, Utah and Washington, D.C.
Trial Attorneys John (Fritz) Scanlon, Alexander J. Kramer and Thomas J. Tynan of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Paul C. McCaffrey and Andrew E. Smith of the Eastern District of Kentucky are prosecuting the cases.
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.
Sioux Falls Man Convicted by Federal Jury of Conspiracy to Distribute MethRead the Press Release
United States Attorney Ron Parsons announced that Gabriel Orlando Ramirez, a/k/a “Cheech,” age 43, of Sioux Falls, South Dakota, was found guilty of Conspiracy to Distribute a Controlled Substance as a result of a federal jury trial in Sioux Falls, South Dakota.
The charges carry a mandatory minimum of 10 years, up to life, in federal prison and/or a $10 million fine, a mandatory minimum of 5 years, up to life, of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Ramirez was indicted by a federal grand jury on May 8, 2019.
Beginning on an unknown date and continuing until May 8, 2019, Ramirez knowingly and intentionally conspired with others to distribute over 500 grams of methamphetamine, which is a Schedule II controlled substance.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the South Dakota Division of Criminal Investigation, the Minnehaha County Sheriff’s Office, the Sioux Falls Police Department, the Drug Enforcement Administration, and the South Dakota Highway Patrol. Assistant U.S. Attorneys Jeffrey C. Clapper and Jennifer Mammenga prosecuted the case.
A presentence investigation was ordered and a sentencing date has not been set. The defendant was remanded to the custody of the U.S. Marshals Service.
Singaporean National Pleads Guilty to Acting in the United States as an Illegal Agent of Chinese IntelligenceRead the Press Release
Jun Wei Yeo, also known as Dickson Yeo, entered a plea of guilty today to one count of acting within the United States as an illegal agent of a foreign power without first notifying the Attorney General, in violation of 18 U.S.C. § 951. Yeo’s plea was entered via videoconference before the Honorable Tanya S. Chutkan in the U.S. District Court for the District of Columbia.
The announcement was made by John G. Demers, Assistant Attorney General; Michael R. Sherwin, Acting U.S. Attorney for the District of Columbia; Timothy R. Slater, Assistant Director in Charge of the Federal Bureau of Investigation’s (FBI) Washington Field Office; and Alan E. Kohler, Jr., Assistant Director of the FBI's Counterintelligence Division.
“The Chinese Government uses an array of duplicity to obtain sensitive information from unsuspecting Americans,” said Assistant Attorney General for the Justice Department's National Security Division John C. Demers. “Yeo was central to one such scheme, using career networking sites and a false consulting firm to lure Americans who might be of interest to the Chinese government. This is yet another example of the Chinese government’s exploitation of the openness of American society.”
“Today’s guilty plea underscores the ways that the Chinese government continues to target Americans with access to sensitive government information, including using the Internet and non-Chinese nationals to target Americans who never leave the United States,” said Michael R. Sherwin, Acting U.S. Attorney for the District of Columbia. “We will continue to prosecute those who use deceptive practices on the Internet and elsewhere to undermine our national security.”
“At the direction of Chinese intelligence operatives, the defendant targeted U.S. government employees and an Army officer to obtain information for the government of China. Mr. Yeo admits he set up a fake consulting company to further his scheme, looked for susceptible individuals who were vulnerable to recruitment, and tried to avoid detection by U.S. authorities,” said Alan E. Kohler Jr., Assistant Director of the FBI's Counterintelligence Division. “But this isn't just about this particular defendant. This case is yet another reminder that China is relentless in its pursuit of U.S. technology and policy information in order to advance its own interests. The FBI and our partners will be just as aggressive in uncovering these hidden efforts and charging individuals who break our laws.”
“Mr. Yeo admitted that he not only provided valuable information to Chinese intelligence, but also that he knowingly recruited others in the U.S. to do the same,” said FBI Washington Field Office Assistant Director in Charge Timothy R. Slater. “The tactics Mr. Yeo used to target cleared individuals on professional networking social media sites are just one facet of the full court press China employs on a daily basis to obtain non-public U.S. government information. The FBI urges citizens, especially those holding security clearances, to be cautious when being approached by individuals on social media sites with implausible career opportunities. We are committed to holding those accountable who attempt to work for Chinese intelligence and other adversaries to the detriment of our national security.”
“The Diplomatic Security Service is firmly committed to working with the U.S. Attorney’s Office and our other law enforcement partners to investigate allegations of crime and protect our national security,” said Galen J. Nace, Deputy Assistant Director for Counterintelligence of the Department of State’s Diplomatic Security Service (DSS).
As outlined in the statement of offense, Yeo began working with Chinese intelligence officers as early as 2015, initially targeting other Asian countries, but then focusing on the United States. In response to taskings from his Chinese intelligence contacts, Yeo worked to spot and assess Americans with access to valuable non-public information, including U.S. military and government employees with high-level security clearances. After Yeo identified American targets, he solicited them for non-public information and paid them to write reports. Yeo told these American targets that the reports were for clients in Asia, without revealing that they were in fact destined for the Chinese government.
Yeo made use of various social media sites to carry out the taskings given to him by Chinese intelligence operatives. In 2018, Yeo created a fake consulting company that used the same name as a prominent U.S. consulting firm that conducts public and government relations, and Yeo posted job advertisements under that company name. Ninety percent of the resumes Yeo received in response were from U.S. military and government personnel with security clearances, and he passed resumes of interest to one of the Chinese intelligence operatives.
Yeo also used a professional networking website that is focused on career and employment information to carry out the taskings he received from Chinese intelligence officials. Yeo used the professional networking website to find individuals with resumes and job descriptions suggesting that they would have access to valuable information. After he identified individuals worth targeting, Yeo followed guidance he received from Chinese intelligence operatives regarding how to recruit potential targets, including identifying their vulnerabilities, such as dissatisfaction with work or financial difficulties.
The maximum penalty for a violation of 18 U.S.C. § 951 is ten years. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. The defendant’s sentence will be determined by the court based on the advisory sentencing guidelines and other statutory factors. Sentencing is set for Oct. 9, 2020 before the Honorable Tanya S. Chutkan.
The investigation into this matter was conducted by the FBI’s Washington Field Office and DSS. The case is being prosecuted by Assistant U.S. Attorneys Thomas N. Saunders and Erik M. Kenerson of the National Security Section of the U.S. Attorney’s Office for the District of Columbia, along with David Aaron of the Counterintelligence and Export Control Section of the National Security Division. If you suspect you have been the target of a recruitment scheme, contact your local FBI Field Office.
Singaporean National Pleads Guilty to Acting in the United States as an Illegal Agent of Chinese IntelligenceRead the Press Release
WASHINGTON – Jun Wei Yeo, also known as Dickson Yeo, entered a plea of guilty today to one count of acting within the United States as an illegal agent of a foreign power without first notifying the Attorney General, in violation of 18 U.S.C. § 951. Mr. Yeo’s plea was entered via videoconference before the Honorable Tanya S. Chutkan in the United States District Court for the District of Columbia. The announcement was made by John G. Demers, Assistant Attorney General; Michael R. Sherwin, Acting United States Attorney for the District of Columbia; Timothy R. Slater, Assistant Director in Charge of the Federal Bureau of Investigation’s (FBI) Washington Field Office; and Alan E. Kohler, Jr., Assistant Director of the FBI's Counterintelligence Division.
“The Chinese Government uses an array of duplicity to obtain sensitive information from unsuspecting Americans,” said Assistant Attorney General for National Security John C. Demers. “Yeo was central to one such scheme, using career networking sites and a false consulting firm to lure Americans who might be of interest to the Chinese government. This is yet another example of the Chinese government’s exploitation of the openness of American society.”
“Today’s guilty plea underscores the ways that the Chinese government continues to target Americans with access to sensitive government information, including using the Internet and non-Chinese nationals to target Americans who never leave the United States,” said Michael R. Sherwin, Acting United States Attorney for the District of Columbia, “We will continue to prosecute those who use deceptive practices on the Internet and elsewhere to undermine our national security.”
“Mr. Yeo admitted that he not only provided valuable information to Chinese intelligence, but also that he knowingly recruited others in the U.S. to do the same,” said FBI Washington Field Office Assistant Director in Charge Timothy R. Slater. “The tactics Mr. Yeo used to target cleared individuals on professional networking social media sites are just one facet of the full court press China employs on a daily basis to obtain non-public U.S. government information. The FBI urges citizens, especially those holding security clearances, to be cautious when being approached by individuals on social media sites with implausible career opportunities. We are committed to holding those accountable who attempt to work for Chinese intelligence and other adversaries to the detriment of our national security."
"At the direction of Chinese intelligence operatives, the defendant targeted U.S. government employees and an Army officer to obtain information for the government of China. Mr. Yeo admits he set up a fake consulting company to further his scheme, looked for susceptible individuals who were vulnerable to recruitment, and tried to avoid detection by U.S. authorities," said Alan E. Kohler, Jr., Assistant Director of the FBI's Counterintelligence Division. "But this isn't just about this particular defendant. This case is yet another reminder that China is relentless in its pursuit of U.S. technology and policy information in order to advance its own interests. The FBI and our partners will be just as aggressive in uncovering these hidden efforts and charging individuals who break our laws."
“The Diplomatic Security Service is firmly committed to working with the U.S. Attorney’s Office and our other law enforcement partners to investigate allegations of crime and protect our national security,” said Galen J. Nace, Deputy Assistant Director for Counterintelligence of the Department of State’s Diplomatic Security Service (DSS).
As outlined in the Statement of Offense, Yeo began working with Chinese intelligence officers as early as 2015, initially targeting other Asian countries, but then focusing on the United States. In response to taskings from his Chinese intelligence contacts, Yeo worked to spot and assess Americans with access to valuable non-public information, including U.S. military and government employees with high-level security clearances. After Yeo identified American targets, he solicited them for non-public information and paid them to write reports. Yeo told these American targets that the reports were for clients in Asia, without revealing that they were in fact destined for the Chinese government.
Yeo made use of various social media sites to carry out the taskings given to him by Chinese intelligence operatives. In 2018, Yeo created a fake consulting company that used the same name as a prominent U.S. consulting firm that conducts public and government relations, and Yeo posted job advertisements under that company name. Ninety percent of the resumes Yeo received in response were from U.S. military and government personnel with security clearances, and he passed resumes of interest to one of the Chinese intelligence operatives.
Yeo also used a professional networking website that is focused on career and employment information to carry out the taskings he received from Chinese intelligence officials. Yeo used the professional networking website to find individuals with resumes and job descriptions suggesting that they would have access to valuable information. After he identified individuals worth targeting, Yeo followed guidance he received from Chinese intelligence operatives regarding how to recruit potential targets, including identifying their vulnerabilities, such as dissatisfaction with work or financial difficulties.
The maximum penalty for a violation of 18 U.S.C. § 951 is ten years. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. The defendant’s sentence will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors. Sentencing is set for October 9, 2020 before the Honorable Tanya S. Chutkan.
The investigation into this matter was conducted by the Federal Bureau of Investigation’s Washington Field Office and the U.S. Department of State’s Diplomatic Security Service. The case is being prosecuted by Assistant U.S. Attorneys Thomas N. Saunders and Erik M. Kenerson of the National Security Section of the U.S. Attorney’s Office for the District of Columbia, along with David Aaron of the Counterintelligence and Export Control Section of the National Security Division of the Department of Justice. If you suspect you have been the target of a recruitment scheme, contact your local FBI Field Office.
Sinclairville Man Pleads Guilty to Drug Conspiracy ChargeRead 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 Tracy Griffin, 38, of Sinclairville, NY, pleaded guilty before U.S. District Judge Richard J. Arcara to conspiring to possess with intent to distribute, and distributing, acetyl fentanyl, fentanyl, and crack cocaine. The charge carries a maximum penalty of 20 years in prison, and a $1,000,000 fine.
Assistant U.S. Attorney Joshua A. Violanti, who is handling the case, stated that in January 2019, the defendant, and co-defendant Brandon Blackshear, conspired to sell acetyl fentanyl, fentanyl, and crack cocaine. On January 2 and January 22, 2019, members of the Southern Tier Regional Drug Task Force conducted controlled purchases of crack cocaine from Griffin and Blackshear.
Charges remain pending against Brandon Blackshear. 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.
The plea is the result of an investigation by the Bureau of Indian Affairs, under the direction of Jason Thompson, Associate Director of the Office of Justice Services; the Southern Regional Drug Task Force, under the direction of the Cattaraugus County Sheriff’s Office and Sheriff Timothy Whitcomb; and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division.
Sentencing is scheduled for October 29, 2020, at 12:30 p.m. before Judge Arcara.
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Romanian Pleads Guilty to Attempted Bank Fraud Using an ATM Skimming DeviceRead the Press Release
LAKE CHARLES, La. – United States Attorney David C. Joseph announced that a Romanian citizen pleaded guilty to attempted bank fraud on Tuesday morning, July 21, 2020, admitting that he used an ATM skimming device in an attempt to steal money from the City Savings Bank in Deridder, Louisiana. U.S. District Judge James D. Cain, Jr. presided over the hearing.
As part of his plea agreement, Gigi Velcu, 37, admitted that he attempted to defraud and intended to defraud the bank’s customers by using skimming equipment, including a camera, at the bank’s ATM. The skimming equipment was used to collect bank customer card data and the camera recorded the keypad as customers entered their PINs.
After receiving a complaint from City Savings Bank, the DeRidder Police Department initiated surveillance of the ATM. Velcu was seen on the surveillance video inserting a card into the ATM’s reader in order to activate the harvesting of the bank account numbers contained on the skimming device’s hard drive. Velcu further admitted that the bank account information and video recordings of the PINs would have been used to create counterfeit debit cards which would then be used to make purchases and obtain cash.
At sentencing on October 15, 2020, Velcu faces 30 years in prison, a $1,000,000 fine, five years of supervised release, and possible deportation.
The Federal Bureau of Investigation and the DeRidder Police Department investigated the case. Assistant U.S. Attorney David J. Ayo is prosecuting 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.
Rochester Man Pleads Guilty to Threatening to Shoot U.S. CongressmanRead the Press Release
SPRINGFIELD, Ill. – A Rochester, Ill., man, Randall E. Tarr, today entered a plea of guilty to making a threat against U.S. Congressman Rodney Davis. Tarr, 65, of the 200 block of E. Mill St., Rochester, Ill., entered his plea by video conference before U.S. Magistrate Judge Tom Schanzle-Haskins in Springfield. Sentencing for Tarr has been scheduled on Nov. 20, 2020, before U.S. District Judge Sue E. Myerscough.
At today’s hearing, Tarr admitted that on the morning of Nov. 25, 2019, he called the Decatur, Ill., office of Congressman Davis and left a profanity-filled voicemail message in which he threatened to shoot the congressman.
According to court documents, the voicemail message was forwarded to U.S. Capitol Police, in Washington, D.C. Through caller ID, police identified Tarr as the alleged caller and U.S. Capitol Police contacted the Rochester Police Department to ask officers to make contact with Tarr. Rochester police officers made initial contact with Tarr on Nov. 25, at his residence, and FBI special agents subsequently interviewed Tarr.
The offense, making a threat to a federal official, carries a maximum penalty of up to 10 years in prison.
Assistant U.S. Attorney Crystal C. Correa is representing the government in the prosecution. The U.S. Capitol Police, FBI, and the Rochester Police Department conducted the investigation.
Rochester Man Pleads Guilty to Fraud Scheme, Sham Business to Resell Medical Equipment Defrauded Victims of more than $250,000Read the Press Release
SPRINGFIELD, Ill. – A Rochester, Ill., man, Chase Brown, 20, of the 1000 block of Heathrow Lane, today entered pleas of guilty to charges as filed for operating a medical equipment reseller business that defrauded businesses from various states of more than $250,000. Brown entered his pleas before U.S. Magistrate Judge Tom Schanzle-Haskins this afternoon. Sentencing for Brown is scheduled on Dec. 3, 2020, before U.S. District Judge Richard Mills.
Brown admitted that he established a business known as Midwest Surgical, LLC, in May 2019, purportedly to engage in the purchase and resale of medical equipment. As part of the scheme, in December 2018, Brown applied for an aviation credit card. In the application, Brown falsely stated that Midwest’s annual revenue was more than $18 million and that it employed 26 employees. After obtaining the credit card, Brown incurred more than $200,000 in charges for fuel, private charter flights and plane maintenance, including approximately $4,500 from an aviation company in Springfield, Ill.
Brown admitted that he repeatedly made false promises and representations to persons and businesses throughout the country that he would buy or sell medical equipment that he had no intention or ability to sell or purchase. After falsely representing that he would sell medical equipment, Brown used the buyers’ credit card information for personal purchases for himself and one or more of his friends but never provided the equipment to the buyer, Similarly, after falsely representing to a seller that he would purchase medical equipment, Brown provided false or fraudulent payment information, knowing that he had no intention or ability to legitimately fund the purchases.
The Federal Deposit Insurance Corporation (FDIC) Office of Inspector General and the Springfield Police Department conducted the investigation. Assistant U.S. Attorney Timothy A. Bass represents the government in the prosecution.
At sentencing, the statutory penalty for each count of wire fraud (two counts) is up to 30 years in prison; for access device fraud, the penalty is up to 10 years in prison.
Brown remains detained in the custody of the U.S. Marshals Service since his arrest in Florida on March 10, 2020.
Rochester Man Pleads Guilty to Production of Child PornographyRead 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 Sean R. Sullivan, 50, of Rochester, NY, pleaded guilty before Chief U.S. District Judge Frank P. Geraci, Jr. to production of child pornography. The charges carry a mandatory minimum sentence of 15 years in prison, a maximum of 30 years, and a fine of $250,000 fine.
Assistant U.S. Attorney Melissa M. Marangola, who is handling the case, stated that between 2005 and 2009, the defendant produced several images of Minor Victim 1 (MV1) sleeping in her bed. MV1 was approximately five years old in 2005. The images show Sullivan performing a sexual act on MV1 while she slept. In addition, between 2009 and 2014, Sullivan hid surveillance cameras in his residence in the bathroom, living room, and MV1’s bedroom. Using those cameras, defendant produced several images of MV1 in various stages of undress which constitute child pornography. MV1 also produced images of MV1 engaging in a sexual act with Minor Victim 2 (MV2), another individual under the age of 18.
The plea is the result of an investigation led by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia.
Sentencing is scheduled for November 4, 2020, at 2:00 p.m. before Chief Judge Geraci.
Rochester Man Pleads Guilty to Possession of Child PornographyRead 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 Jason Schwartz, 48, of Rochester, NY, pleaded guilty before Chief U.S. District Judge Frank P. Geraci, Jr. to possession of child pornography, including prepubescent images. The charge carries a mandatory minimum penalty of 10 years in prison, a maximum of 20 years, and a fine of $250,000.
Assistant U.S. Attorney Melissa M. Marangola, who is handling the case, stated that in October 2018, an undercover law enforcement officer connected with an IP address over a Peer-to-Peer Network. The IP address shared two videos containing child pornography with the undercover officer. Subsequent investigation located the residence associated with that IP address. On December 11, 2018, the owner, a friend of Schwartz, advised investigators that the defendant was using his computer equipment to “download movies.” Investigators then searched the computer used by Schwartz and found approximately 475 images containing child pornography. Some of the images depicted prepubescent minors and violence.
On September 23, 2016, Schwartz pleaded in state court to Possessing a Sexual Performance by a Child and is a registered sex offender.
The plea is the result of an investigation led by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia.
Sentencing is scheduled for October 16, 2020, at 2:00 p.m. before Chief Judge Geraci.
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Rebecca Armell Imprisoned for Frauds on EmployerRead the Press Release
The United States Attorney for the District of Vermont announced that Rebecca Armell, 47, of Shelburne, was sentenced today in United States District Court in Burlington to one year and one day of imprisonment following her guilty plea to a charge of credit card fraud. U.S. District Judge Christina Reiss also ordered that Armell serve three years of supervised release following completion of her prison term and pay restitution totaling $301,000. The court directed Armell to surrender to the Bureau of Prisons on October 13 to begin serving her sentence.
Last December, the United States Attorney filed a one-count information charging Armell with access device fraud. According to the information, in 2018, while employed at the Chimney Sweep in Shelburne, Armell misused the company’s Lowe’s credit card to obtain merchandise having a value in excess of $1000. Armell pleaded guilty to that charge last January.
According to court records, for 20 years prior to December 2018 when she was fired, Armell had worked at the Chimney Sweep – the last ten as a bookkeeper who had check-signing authority. Beginning around 2016, Armell began stealing from the company. She wrote checks to petty cash that she cashed and pocketed the proceeds. She wrote checks to herself that she deposited, falsifying entries in the company’s books to make it appear the checks had been issued to fellow employees. She also misused the company credit card to benefit herself, and charged personal automobile repairs to the Chimney Sweep account. In the aggregate, the losses total around $301,000.
The case was investigated by the U.S. Secret Service upon referral from the Shelburne Police Department.
Armell is represented by Brooks MacArthur. The prosecutor is Assistant U.S. Attorney Gregory Waples.
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.
Queens Man Indicted for Defrauding Pharmaceutical ManufacturerRead the Press Release
Earlier today, at the federal courthouse in Central Islip, an indictment was filed charging Arkadiy Khaimov with conspiring to commit mail and wire fraud by defrauding a pharmaceutical manufacturer of approximately $6.9 million by submitting fraudulent claims under the manufacturer’s Co-pay Coupon Program. Khaimov will be arraigned at a later date.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service (USPIS), Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, announced the indictment.
As alleged in the indictment, the pharmaceutical manufacturer, referred to in the indictment as “John Doe Company 1,” established the Co-pay Program to reimburse pharmacies for dispensing a prescription medication. Between approximately February 2017 and July 2018, Khaimov and his co-conspirators submitted claims for approximately $6.9 million in reimbursements under the Co-pay Program for the medications that pharmacies operated by the defendant and his co-conspirators never actually dispensed. In most cases, the pharmacies that the defendant and his co-conspirators operated sought reimbursements for highly unusual 18 or 21-day supplies of the medication, as compared to the 28-day supply that is commonly used in legitimate medical treatment. This enabled the defendant and his co-conspirators to submit approximately two reimbursement claims in the same month. In some cases Khaimov and his co-conspirators fraudulently used the credentials of a Nassau County-based physician to submit the false claims.
“Khaimov allegedly stole millions of dollars from a program that was established to assist patients in need of high-cost medication,” stated Acting United States Attorney DuCharme. “Due to the hard work of our investigators and prosecutors, he will now be held accountable.”
“Taking advantage of a program established to help pharmacies defray the cost of dispensing vital prescription medicine to those who need it most, Khaimov and his co-conspirators allegedly sought to profit from fraudulent claims totaling more than $6 million. It’s utterly discouraging to see people capitalize on any initiative designed to contribute to the greater good, but when the crime is healthcare related, and manufacturers stand to lose millions, nobody wins in the long run. Today’s charges signal an end to this particular instance of fraud, but rest assured, along with our partners, we will continue to seek out and pursue criminal charges wherever else this activity exists,” stated FBI Assistant Director-in-Charge Sweeney.
“Rebate fraud is not a new crime, it’s been investigated by Postal Inspectors for decades. What makes this case different is the size and scope of the scheme. The investigation of fraud crimes involving the U.S. Mail will always be a top priority for the Postal Inspection Service. Today’s arrest reflects a commitment by law enforcement to bring those to justice who participate in schemes to defraud” stated USPIS Inspector-in-Charge Bartlett.
“Fraud schemes that prey on funds intended for the use of those in need in our society, such as the one Mr. Khaimov has perpetrated here, are egregious and a serious concern for law enforcement and the tax-paying public in general”, stated IRS-CI Special Agent-in-Charge Larsen, “In a case like this, IRS-Criminal Investigation takes pride in working shoulder to shoulder with our law enforcement partners to see that the offenders are punished to the fullest extent of the law.”
The charges announced today are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Khaimov faces a maximum sentence of 20 years’ imprisonment.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Bradley T. King, Madeline O’Connor and Department of Justice Trial Attorney Andrew Estes are in charge of the prosecution.
The Defendant:
ARKADIY KHAIMOV, also known as “Alex”
Age: 37
Forest Hills, QueensE.D.N.Y. Docket No. 20-CR-267 (JS)
Quebec trio charged with running fraudulent cryptocurrencyRead the Press Release
United States Attorney Justin Herdman announced today that a federal grand jury sitting in Cleveland has returned a five-count indictment charging Dominic Lacroix, age 38, Yan Ouellet, age 36, and Sabrina Paradis-Royer, age 26, all of Quebec, Canada, with conspiracy to commit securities fraud and wire fraud, wire fraud, and conspiracy to commit money laundering.
"While technologies and the means to make investments may change, one thing remains constant – securities fraud ruins lives and deprives victims of their hard-earned money and savings," said U.S. Attorney Justin Herdman. "Digital currencies are a new type of investment, and just like with traditional securities, you should take the time to research and know exactly what you're getting into before making any type of investment."
"This investigation highlights the specialized skills of FBI Cleveland's Midwestern Cryptocurrency Task Force in addressing matters involving cryptocurrency," said FBI Special Agent in Charge Eric B. Smith. "FBI Cleveland and its task force partners are committed to ensuring new and evolving financial technology is not used as a license to steal and evade scrutiny by law enforcement."
According to the indictment, from May 2017 to December 2017, the defendants conspired together to induce investors to purchase PlexCoin, a cryptocurrency offered through an entity known as PlexCorps. The cryptocurrency would become available to investors during an ICO or Initial Coin Offering. The defendants intended to use the ICO as a way to defraud investors and enrich themselves.
To carry out their alleged scheme, the defendants and their co-conspirators marketed and promoted PlexCorps and the PlexCoin ICO to the public, including investors within the Northern District of Ohio, via social media and publicly accessible Internet websites.
The indictment states that the defendants made numerous false claims about PlexCorps and PlexCoin in order to obtain digital and fiat currency from investors, including that PlexCorps' management consisted of a global "team" of financial, managerial and other subject-matter experts headquartered in Singapore; the proceeds of the PlexCoin ICO would be used to develop other PlexCorps products; and that investors would receive significant returns for their initial investment. The defendants are also alleged to have omitted certain materials facts about the ownership and operations of PlexCorps to conceal their true intent.
According to the indictment, around June 2017, PlexCorps began promoting PlexCoin to the public as a new digital cryptocurrency that would be available through an upcoming ICO. Around August 2017, PlexCorps published a whitepaper for PlexCoin entitled "PlexCoin: The Next Cryptocurrency" ("Whitepaper"), which was available for review on the internet by potential investors. This Whitepaper contained numerous false claims, including that some investments in PlexCoin could result in a 1,354% return.
This Whitepaper explained that funds raised through the PlexCoin ICO and pre-sale would be used to further the maintenance and development of PlexCoin and, later on, allow for PlexCorps to offer additional products and services for sale.
Investors were permitted to begin investing in PlexCoin in August of 2017. During the ICO, investors purchased PlexCoin using a variety of methods, including digital currency, such as Bitcoin, Ether and Litecoin, to wallet addresses on a blockchain. Investors also tendered fiat currency, including USD and Canadian dollars (CAD), and provided credit card information through payment portals available on the PlexCoin website or through U.S.-based online payment processors such as PayPal, Square, or Stripe.
The indictment states that the first transfer of PlexCoin occurred in August of 2017, and the PlexCoin ICO continued through October of 2017. Court documents show that the defendants and their co-conspirators regularly transferred investor funds from the PlexCoin ICO into fiat currency accounts, and cryptocurrency addresses belonging to themselves for the purpose of daily living expenses and home renovation products. Investors purchased approximately $8,000,000 USD worth of PlexCoin throughout the ICO.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
If convicted, the defendant's sentence will be determined by the Court after review of factors unique to this case, including the defendant's prior criminal record, if any, the defendant's role in the offense and the characteristics of the violation.
In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This investigation was conducted by the Cleveland Division of the FBI and is being prosecuted by Assistant U.S. Attorney Megan Miller.
Presidential Task Force on Protecting Native American Children in the Indian Health Service System Presents Findings to First Lady Melania TrumpRead the Press Release
task_force_report_-_protecting_native_american_children_in_the_indian_health_service_system_april_2020_-_7.23.20_final.pdfThe Presidential Task Force on Protecting Native American Children in the Indian Health Service System presented their findings and recommendations to First Lady Melania Trump at the White House on Thursday.
President Donald Trump announced the formation of the task force in March 2019. He charged the members with investigating the institutional and systemic breakdown that failed to prevent a predatory pediatrician, Dr. Stanley Weber, from sexually assaulting children while acting in his capacity as a doctor in the Indian Health Service (IHS). Weber was eventually convicted in U.S. District Court in Montana and South Dakota and now resides in federal prison.
The First Lady opened Thursday’s session by welcoming participants and thanking them for their work on behalf of the well-being of children and noted that “strong Native American communities are strong American communities.”
Following the First Lady’s remarks, U.S. Attorney Trent Shores, co-chair of the task force, shared an overview of the task force findings.
“The President’s creation of this task force transcends politics. The idea of protecting children is not just a moral obligation, it is a righteous one,” said U.S. Attorney Trent Shores. “The mission he gave us was about government accountability to the people, especially a group of people who historically have been marginalized. We were directed to ask the tough questions and to follow where ever the evidence may lead.”
The Task Force traveled throughout Indian country over a four month period, including visits to Oklahoma, New Mexico, Montana, and South Dakota where the group interviewed healthcare professionals, Native American citizens, tribal leaders, sexual assault experts, tribal school administrators, and teachers.
“The Task Force found dedicated employees for the IHS who were frustrated by institutional inefficiency, bureaucratic red tape, and a lack of clarity when it came to policies that pertain to the reporting of suspected physical and sexual abuse of children.
There were decades of systemic institutional problems that led to an environment where a predatory pedophile could take advantage of government inefficiencies and confusion to sexually abuse children,” U.S. Attorney Shores said.
The task force found that not only did IHS need more uniform policies and training that apply to the reporting of child sex abuse, but that there were larger problems, like IHS’s difficulty in recruiting and training top health professionals and in properly vetting them through a credentialing and licensing committee. When a doctor’s background appeared problematic, licensing committees would often accept the doctor into their hospital because of the overwhelming need to fill the position.
Listed in the report were fundamental and longstanding deficiencies at IHS that included:
• Employees not understanding child abuse reporting obligations;
• Inadequate training of employees regarding child sexual abuse reporting;
• Confusing policies, procedures, and jurisdictional issues when reporting suspected child abuse;
• Systemic issues of low-morale, lack of leadership, and inability to recruit and retain enough qualified healthcare professionals; and
• Deficiencies in verifying and credentialing processes.
Recommendations were presented in the report as collective guidance to provide greater protection to Native American children in IHS. The Task Force made ten recommendations regarding policy, process, and culture change:
I. Require annual, in-person, standardized training of IHS employees conducted by instructors with law enforcement and/or child welfare experience.
II. Make reporting of child abuse easier and more streamlined by creating and publicizing a centralized child abuse hotline.
III. The Director should establish policies and procedures pertaining to allegations of child sexual abuse.
IV. Withhold retiree pay and benefits for civil service employees and USPHS Commissioned Corps officers convicted of sexual exploitation crimes against children.
V. Designate all Federal employees, contractors, and volunteers at Federal facilities, including IHS, as mandatory reporters for reasonable suspicion of child abuse.
VI. IHS should explore the viability and benefits of expanded use of telemedicine.
VII. Bolster recruitment and retention of quality of healthcare professionals.
VIII. Develop and implement a uniform credentialing and privileging policy.
IX. The Secretary of HHS should commission an independent review of USPHS Commissioned Corps management practices within 180 days of this report.
X. Recommend that the President task the Secretary of HHS with following up on the Task Force’s recommendations, including legislative or other actions, every ninety days until implemented.
Recommendations included elevating the Director of IHS to Assistant Secretary of Indian Health within the Department of Health and Human Services. The reported stated that the predominately symbolic change could increase agency morale and would provide parity within the Department of the Interior, which has an Assistant Secretary for Indian Affairs. The task force noted that Tribes had advocated for this change for years. The report also urged Congress to create a way for IHS to reclassify some jobs so the agency could offer better benefits to recruits. The report also recommended that convicted child sex offenders be denied federal pensions.
Task Force Members Include:
Joseph Grogan, Former Assistant to the President for Domestic Policy, Co-Chair
Trent Shores, United States Attorney for the Northern District of Oklahoma, Co-Chair and member of the Choctaw Nation
Shannon Bears Cozzoni, Tribal Liaison and Assistant United States Attorney for the Northern District of Oklahoma
Bo Leach, SE Region Agent in Charge, Bureau of Indian Affairs, Office of Justice Services, Branch of Criminal Investigations and member of the Choctaw Nation
Stephanie Knapp, MSW, LCSW, Child/Adolescent Forensic Interviewer, Federal Bureau of Investigation’s Office for Victims Assistance, Child Victim Services Unit
Caitlin A. Hall, MD, FAAP, Clinical Director/Pediatrician, Dzilth-na-o-dith-hle Health Center, Indian Health Service
Farnoosh Faezi-Marian, Program Examiner, Office of Management and Budget
Owners of Philadelphia Cheesesteak Restaurant Indicted for Tax EvasionRead the Press Release
A federal grand jury in Philadelphia returned an indictment that was unsealed today, charging the owners of a popular cheesesteak restaurant with conspiracy to defraud the IRS, tax evasion, and aiding and assisting in filing false tax returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney William M. McSwain for the Eastern District of Pennsylvania.
According to the indictment, Anthony Lucidonio Sr., and his son, Nicholas Lucidonio, both of New Jersey, owned and operated Tony Luke, a cheesesteak and sandwich restaurant located in South Philadelphia. From 2006 through 2016, the Lucidonios allegedly hid from the IRS more than $8 million in receipts by depositing only a portion of Tony Luke’s receipts into business bank accounts and filing with the IRS false business and personal tax returns that substantially understated their income.
The indictment further alleges that the Lucidonios committed employment tax fraud by paying employees a portion of their wages and salaries “on the books” for some hours they worked, but then paying substantial additional wages for the remaining hours worked “off the books” in cash, without withholding and paying to the IRS the required employment taxes. From 2014 through 2015, they also allegedly filed false quarterly employment tax returns with the IRS substantially understating wages paid and taxes due.
It is also alleged that after a dispute over franchising rights arose between the Lucidonios and another individual in 2015, the Lucidonios, concerned that their tax fraud scheme would be revealed, amended prior year tax returns to increase reported sales, but then falsely offset the increased income by inflating expenses.
If convicted, the defendants face a maximum sentence of five years in prison for the conspiracy charge and each count of tax evasion, and three years in prison for each false return charge. Defendants also face a period of supervised release, restitution, and monetary penalties.
An indictment merely alleges that crimes have been committed. The defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney McSwain commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant Chief John Kane of the Tax Division and Assistant U.S. Attorney Paul Gray, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.
Operation Shutdown Corner Update: Beckley Man 10th Defendant Sentenced for Federal Drug CrimesRead the Press Release
BECKLEY, W.Va. – The 10th defendant was sentenced for his participation in an extensive drug trafficking organization (DTO) operating between California and the Southern District of West Virginia, announced United States Attorney Mike Stuart. Corey Moore, 47, of Beckley, was sentenced to 60 months in prison, to be followed by three years of supervised release, for conspiring to distribute methamphetamine. Moore was one of 17 defendants charged as a result of a long-term, multi-state DTO investigation known as Operation Shutdown Corner.
“It is a priority of mine to break up the drug trafficking networks that are destroying our communities,” said United States Attorney Mike Stuart. “Operation Shutdown Corner was a huge success, taking down a multi-state meth pipeline and saving countless lives.”
At his plea hearing, Moore admitted that between June 2018 and September 17, 2019, he worked with other members of a DTO operating in Raleigh County to distribute methamphetamine. During that time period, Moore allowed packages containing methamphetamine to be delivered to his residence in Beckley. He then would receive directions from other members of the DTO as to who or where the package should be delivered. Moore followed those directives. In July of 2019, law enforcement officers determined that a package was delivered to Moore’s residence in Beckley. Officers conducting surveillance on Moore’s residence discovered that Moore delivered the package to another member of the DTO. Further investigation revealed that the package contained approximately five pounds of methamphetamine.
The investigation was handled by the Federal Bureau of Investigation (FBI), the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the United States Postal Inspection Service (USPIS), the Beckley/Raleigh County Drug and Violent Crimes Task Force, the Raleigh County Sheriff’s Office, the Beckley Police Department and the West Virginia State Police.
Assistant United States Attorney Timothy D. Boggess handled the prosecution. United States District Judge Frank W. Volk imposed the sentence.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 5:19-cr-00227.
Follow us on Twitter: SDWVNews and USAttyStuart
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Omaha Man Sentenced for Conspiracy to Distribute Methamphetamine and HeroinRead the Press Release
United States Attorney Joe Kelly announced that on July 24, 2020, Dawon L. Hughes, 37, of Omaha, Nebraska, (formerly of Lincoln, Nebraska), was sentenced to 11 years and seven months (139 months) in federal prison by Chief United States District Judge John M. Gerrard. Hughes was sentenced for conspiracy to distribute and possess with the intent to distribute 50 grams or more of methamphetamine (actual), 500 grams or more of methamphetamine mixture, and an unspecified amount of heroin. Following the prison term, Hughes will serve five years on supervised release. There is no parole in the federal system.
Information provided to law enforcement indicated that Hughes was responsible for the distribution of at least 50 grams (approximately 1 ¾ ounces) of actual/pure methamphetamine, at least five kilograms (approximately 11 pounds) of methamphetamine mixture and at least 40 grams (approximately 1 ½ ounces) of heroin in the Lincoln area between March of 2015 and April of 2018.
This case was investigated by the Lincoln/Lancaster County Narcotics Task Force.
Odessa Man Indicted on Possession of a Destructive DeviceRead the Press Release
In Midland on Wednesday, a federal grand jury indicted 44-year-old Jeffrey Allen Smerud on one count of possession of a destructive device, announced U.S. Attorney John F. Bash and Federal Bureau of Investigation (FBI) Special Agent in Charge Luis M. Quesada, El Paso Division.
According to court documents, on March 10, 2020, Odessa police officers responded to reports of a suspicious person at a Lowe’s Home Improvement Center. A Lowe’s employee observed the suspicious person (later identified as Jeffery Allen Smerud) placing an unknown object under a pallet of mulch and then leaving the area. Shortly thereafter, the employee observed an explosion coming from the pallet.
Using the vehicle description and surveillance footage, law enforcement officers determined the suspect to be Jeffrey Allen Smerud. On March 13, Smerud was arrested. Smerud admitted to law enforcement officers to planting the explosive device at Lowe’s. Smerud also admitted he manufactured the explosive device.
Smerud is scheduled for an arraignment before U.S. Magistrate Ronald C. Griffen later this month. If convicted, Smerud faces up to ten years imprisonment and up to a $250,000 fine. Smerud has remained in federal custody since his arrest on March 13.
The Federal Bureau of Investigation, along with assistance from the Odessa Police Department, is investigating this case. Assistant U.S. Attorney Shane Chriesman is prosecuting this case on behalf of the government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Norton Doctor Sentenced for Illegally Prescribing, Health Care FraudRead the Press Release
ABINGDON, VIRGINIA – United States Attorney Thomas T. Cullen and Virginia Attorney General Mark Herring announced today that Dr. Raymond Michael Moore, who had a medical practice in Norton, Va., was sentenced today to 108 months in federal prison for a litany of federal crimes, including illegally prescribing more than 25,000 oxycodone pills, 17,000 hydrocodone pills, and 10,000 benzodiazepine pills without a legitimate medical purpose.
Moore, 62, of Wise, Va. pleaded guilty in December 2019 to fourteen federal charges, including illegally prescribing pain pills, obtaining drugs by fraud, health care fraud, making a false statement to law enforcement; and failing to maintain required records.
According to evidence presented at the sentencing hearing and in court records, Moore issued prescriptions for opioids and benzodiazepines without a legitimate medical purpose and beyond the bounds of medical practice, totaling more than 50,000 dose units of those illegally prescribed controlled substances.
During the execution of a search warrant at his medical practice, law enforcement discovered filled prescriptions for controlled substances that Moore had written to patients. When questioned about the controlled substances, Moore initially told law enforcement that patients surrendered the prescriptions to him for destruction. After additional controlled substances issued in patients’ names were recovered from his home, Moore later admitted that he took the prescriptions back from patients for his personal use. Moore failed to maintain required records concerning the controlled substances found in his home and residence.
Pursuant to his plea agreement, Moore paid more than $50,000 in restitution to Virginia Medicaid and forfeited more than $100,000. In addition, Moore agreed to never again be a medical provider. He permanently surrendered his medical license in October 2019.
“When the defendant chose greed and his own desire for controlled substances over caring for his patients’ needs he violated the public trust and fueled the cycle of addiction and despair,” First Assistant United States Attorney Daniel P. Bubar stated today. “Our office has no higher priority than investigating and prosecuting drug-dealing doctors and other corrupt health-care workers who violate the law and put our communities at risk.”
“Doctors who write prescriptions for dangerous controlled substances without due regard for patient health and safety directly contribute to the opioid epidemic in the Commonwealth,” said Attorney General Herring. “My office will aggressively prosecute those who violate their oaths to ‘first do no harm’ and endanger our communities by flooding them with these addictive substances.”
Special Assistant United States Attorney M. Suzanne Kerney-Quillen, a Virginia Assistant Attorney General assigned to the Attorney General’s Major Crimes and Emerging Threats Section, prosecuted the case for the United States. The case was investigated by the Drug Enforcement Administration’s Tactical Diversion Squad, Virginia Medicaid Fraud Control Unit, Virginia State Police, Southwest Virginia Drug Task Force, Buena Vista Police Department, and Martinsville Police Department. Assistance with the search warrants was provided by the Norton Police Department, Big Stone Gap Police Department, Wise County Sheriff’s Office, the Office of the Wise County Commonwealth’s Attorney, Bristol Police Department, Wise Police Department, and the United States Department of Justice’s Appalachian Regional Prescription Opioid (ARPO) Strike Force.
North Branford Woman Pleads Guilty to Fraud and Tax Offenses Stemming from Embezzlement SchemesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that MELISSA MEOLE, 35, of North Branford, waived her right to be indicted and pleaded guilty today before U.S. District Judge Victor A. Bolden to fraud and tax offenses stemming from embezzlement schemes.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the court proceeding occurred via videoconference.
According to court documents and statements made in court, Meole was employed by Bridgeport Health Care Center Inc. (“BHCC-INC”), a corporation that operates a nursing and rehabilitation facility in Bridgeport known as Bridgeport Health Care Center (“BHCC”). Prior to November 2018, BHCC-INC also operated a second nursing and rehabilitation facility in Bridgeport known as Bridgeport Manor. Meole worked in BHCC-INC’s business office and was responsible for processing payroll and for handling the finances of the Bridgeport Manor resident trust account. From 2015 to October 2018, Meole stole more than $415,000 by writing checks to cash out of the facilities’ resident trust accounts, which held the personal funds of residents. She then deposited the cash into her bank account. She also stole more than $29,000 by writing false payroll checks to current and former BHCC employees and then depositing those checks into her bank account by forging the employees’ signatures.
After Meole’s employment with BHCC-INC was terminated in October 2018, Meole defrauded another employer of more than $9,000 by stealing and fraudulently depositing into her own account certain checks that were returned to the company, often for incorrect addresses. She also defrauded three banks in a check kiting scheme.
For the 2015 through 2018 tax years, Meole failed to report $487,523 income, most of which was fraudulently obtained, to the Internal Revenue Service, resulting in a tax loss of $103,217.
Meole pleaded guilty to one count of wire fraud, which carries a maximum term of imprisonment of 20 years, and one count of filing a false tax returns, which carries a maximum term of imprisonment of three years. Meole also has agreed to pay restitution of $456,594.56 to victims of her schemes, and $103,217, plus interest and penalties, to the IRS. A sentencing date has not been scheduled.
Meole was arrested on a criminal complaint on September 17, 2019. She is released on a $200,000 bond pending sentencing.
This matter is being investigated by the U.S. Department of Labor – Office of Inspector General, U.S. Department of Labor – Employee Benefits Security Administration, Boston Regional Office, Internal Revenue Service – Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorneys David E. Novick and Neeraj N. Patel.
Newark Man Charged with Attempted Carjacking in Jersey City During Which Victim was ShotRead the Press Release
NEWARK, N.J. – A Newark man made his initial appearance today on charges stemming from a July 9, 2020, attempted carjacking in Jersey City during which a victim was shot in the abdomen, U.S. Attorney Craig Carpenito announced.
Tevin Browning, 29, of Newark, is charged by complaint with one count of conspiracy to commit carjacking, one count of attempted carjacking, one count of discharge of a firearm during a crime of violence, and one count of possession of a firearm and ammunition by a convicted felon. He is appeared by video conference this afternoon before U.S. Magistrate Judge James B. Clark III and was detained.
According to documents filed in this case and statements made in court:
At approximately 5:00 p.m. on July 9, 2020, a carjacking occurred in the area of Tonnelle and Broadway avenues in Jersey City, which was recorded on several video cameras in the area. Browning and an armed conspirator attempted to forcibly enter an Acura MDX which had pulled over to the side of Tonnelle Avenue to pick up a passenger. As the passenger entered the Acura, Browning and his conspirator forcibly attempted to enter the vehicle. Browning attempted to enter the rear right passenger side of the Acura, and punched the passenger in the head. At that point, the driver quickly attempted to drive away from the area. As the driver drove away, the gunman attempted to enter the front passenger side of the Acura and held onto the Acura. After a short distance, the gunman shot the driver in the abdomen, and then fell off the Acura as its driver was able to escape.
Moments later, a Dodge Challenger arrived at the scene and picked up the gunman before fleeing the area. Police officers found a spent .45 caliber shell casing stamped “Blazer .45 Auto” in the area where the gunman had fallen to the ground.
At approximately 8:00 p.m., Jersey City Police officers observed the Challenger parked and unoccupied on a residential street in Jersey City. The officers then observed Browning place an unknown item in the trunk of the car before walking into a nearby residence. Moments later, the officers observed Browning re-enter the trunk of Challenger before he was taken into custody. A lawful search warrant of the Challenger produced a .45 caliber Hi-Point Model JHP semiautomatic handgun, bearing serial number 406099, which was loaded with four rounds of ammunition. Two of the rounds were stamped “Blazer .45 Auto” on the shell casing.
The counts of conspiracy to commit carjacking and attempted carjacking carry a maximum potential sentence of 25 years in prison. The count of discharge of a firearm during a crime of violence is punishable by a mandatory minimum of 10 years in prison and a maximum sentence of life in prison, which must run consecutively to any term of imprisonment imposed on any other charges. On the count of possession of a firearm and ammunition by a convicted felon, Browning faces a maximum of 10 years in prison.
U.S. Attorney Carpenito credited the Jersey City Police Department, under the direction of Public Safety Director James Shea; the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez; and special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark, with the investigation leading to the charges and arrest.
This investigation was conducted as part of the Jersey City Violent Crime Initiative (VCI). The VCI was formed in 2018 by the U.S. Attorney’s Office for the District of New Jersey, the Hudson County Prosecutor’s Office, and the Jersey City Police Department, for the sole purpose of combatting violent crime in and around Jersey City. As part of this partnership, federal, state, county, and city agencies collaborate to strategize and prioritize the prosecution of violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the FBI, the ATF, the Drug Enforcement Administration’s (DEA) New Jersey Division, the U.S. Marshals, the Jersey City Police Department, the Hudson County Prosecutor’s Office, the Hudson County Sheriff’s Office, New Jersey State Parole, the Hudson County Jail, and the New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center.
The government is represented by Assistant U.S. Attorney Jonathan W. Romankow of the Violent Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
New Orleans Man Federally Charged for Armed Bank RobberyRead the Press Release
NEW ORLEANS, LOUISIANA - U.S. Attorney Peter Strasser announced that a federal grand jury on July 24 returned an indictment against defendant JIMMIE POWELL age 27, of New Orleans, for armed bank robbery, in violation of Title 18, United States Code, Sections 2113(a) and 2113(d).
The indictment alleges that on June 25, 2020, JIMMIE POWELL, entered the Chase Bank at 1425 North Broad Street, New Orleans, Louisiana, brandished a firearm at an ATM teller, and took over $52,000 in cash.
If convicted, POWELL faces a maximum term of imprisonment of twenty-five (25) years, a $250,000 fine, up to three (3) years of supervised release following any term of imprisonment, and a mandatory $100 special assessment.
U.S. Attorney Strasser praised the work of the Federal Bureau of Investigation and the New Orleans Police Department in investigating this matter. Assistant U.S. Attorney Melissa Bücher, is in charge of the prosecution.
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NDTX Round-Up: July 13-19Read the Press Release
GUILTY PLEA – AMBER RENEE PRICE
On July 14, Amber Renee Price, 33, pled guilty to possession of stolen mail. While an employee of the United States Postal Service (USPS), Price admitted to have in her possession a gift card which had been stolen from a mailbox. Price admitted to stealing serval gift cards and cash during her employment with the USPS. She faces up to five years in federal prison for the crimes. The United States Postal Service – Office of Inspector General conducted the investigation. Assistant U.S. Attorney Jennifer Bray is prosecuting the case.
SENTENCING – MIKAI WILLIAMS
On July 16, Mikai Williams, 34, was sentenced to 41 months in federal prison for theft of a firearm from a licensed dealer. Williams entered Shoot Smart in Grand Prairie, Texas, a federally licensed firearms dealer, to practice shooting on the indoor firing range. While a store clerk was attending to other customers, Williams pocketed a 9mm handgun before exiting the store without purchasing the firearm. The Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant U.S. Attorney Matthew Weybrecht is prosecuting the case.
SENTENCING – JEREMY ALLAN ISBELL
On July 17, Jeremy Allan Isbell, 39, was sentenced to 63 months in federal prison for possession of a visual depiction of a minor engaged in sexually explicit conduct. While at his home in Jacksboro, Texas, Isbell used his cell phone to communicate with another user via Kik, a messaging app popular among teenagers, to obtain child pornography. Isbell admitted to authorities that the images stored on his Samsung cell phone were of a minor female performing sex acts. The Federal Bureau of Investigation, Jacksboro Police Department, and Wise County District Attorney conducted the investigation. Assistant U.S. Attorney A. Saleem is prosecuting the case.
Michigan Man Charged for 2019 Threat to Green Mountain Union High SchoolRead the Press Release
The Office of the United States Attorney for the District of Vermont announced today that a federal grand jury, sitting in Burlington, Vermont, returned an indictment charging Jason Graham, 24, of Michigan, for his role in causing a threat to Green Mountain Union High School. On February 7, 2019, an anonymous caller claimed there was a bomb in the school building and indicated that students would be shot if evacuated. The incident caused a massive law enforcement response and terrified the community. Investigation later revealed that Graham had threatened to “shoot up” the school only days before the incident, and had arranged for the anonymous call.
"It is important to know that you are never truly anonymous in this day and age,” said Chester Police Detective Adam Woodell, one of the first investigators in the case. “This type of behavior will not be tolerated and perpetrators will be identified and brought forth for prosecution.” U.S. Attorney Christina E. Nolan agreed. “Nothing could be more serious than threats to our schools and our students,” Nolan said. “We will show zero tolerance for conduct that makes students feel unsafe in their place of learning. The U.S. Attorney’s Office and the law enforcement community in Vermont will vigorously pursue any threats to the safety of our children. Those who instill fear in children and school communities will not be allowed to hide behind their computer screens. We will find them and bring them to federal court to face serious consequences.”
Nolan thanked the Chester Police Department, the Vermont State Police, the Vermont Intelligence Center, and the Federal Bureau of Investigation’s Joint Terrorism Task Force for their collective work in investigating the threats.
Graham is charged with violations of 18 U.S.C. §§ 875(c) and 2 for threatening to “shoot up” the school in a February 4, 2019 Facebook group chat, and aiding and abetting the February 7, 2019 phone threat. If convicted, Graham faces up to five years in prison and up to a $250,000 fine on each count. The current indictment is an accusation only. Graham is presumed innocent until proven guilty.
The United States will be represented in the case by Criminal Chief Eugenia A. P. Cowles. Counsel for the defendant will be appointed at the time of Graham’s initial appearance.
Maple Heights man charged with elder fraudRead the Press Release
United States Attorney Justin Herdman announced today that a federal grand jury sitting in Cleveland has returned a six-count indictment charging Andrew V. Thomas, age 34, of Maple Heights with three counts of wire fraud and three counts of aggravated identity theft.
“The defendant is alleged to have used his position to access the sensitive financial information of his elderly victims,” said U.S. Attorney Justin Herman, “Robbing our community’s elderly members of their hard-earned life savings ruins trust and lives. The Department of Justice takes allegations and cases of elder fraud very seriously and will prosecute them to their fullest extent.”
According to the indictment, from November 2018 to November 2019, the defendant was employed as a Call Center Representative for an insurance company in Cleveland, Ohio. The defendant’s responsibilities included speaking with clients and their agents about annuities, updating client bank account information, and processing withdrawal transactions.
During this time, the defendant allegedly devised a scam to defraud three elderly victims by transferring money from his victim’s annuities into personal bank accounts. Court documents state that Victim 1 is an 84-year-old woman in Avon, Connecticut; Victim 2, an 83-year woman with dementia in Philadelphia, Pennsylvania; and Victim 3, a 96-year-old woman and a resident of Metairie, Louisiana were all part of the defendant’s fraud. Victim 1, Victim 2’s power of attorney, and Victim 3 all called the defendant to inquire about a policy-related matter. The defendant spoke to all of the victims and had access to their accounts.
The defendant would then use the company’s computer system to make unauthorized transfers from the annuities of Victim 1, Victim 2, and Victim 3 into the defendant’s personal bank accounts. As a result of the unauthorized transfers, Victim 1, Victim 2, and Victim 3 suffered a total loss of approximately $62,600.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The investigation preceding the complaint was conducted by the Federal Bureau of Investigation, Cleveland Division. The case is being prosecuted by Assistant U.S. Attorney Brian McDonough.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. In particular, in March 2020, the department announced the largest elder fraud enforcement action in American history, charging more than 400 defendants in a nationwide elder fraud sweep. The department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act. For more information about the Elder Justice Initiative, please visit https://www.justice.gov/elderjustice.
If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed 7 days a week from 6:00 a.m. to 11:00 p.m. eastern time. English, Spanish and other languages are available.
Man Sentenced to Federal Prison for Sex Offense Involving a MinorRead the Press Release
BECKLEY, W.Va. – An Eagle Rock, Virginia man was sentenced today for a sex offense involving a minor, according to United States Attorney Mike Stuart. Joshua T. Haynes, 42, was sentenced to 10 years in prison, to be followed by 15 years of supervised release, for attempted sex trafficking of a minor. He also will be required to register as a sex offender.
“Child exploitation is a tragic pandemic around the world,” said United States Attorney Mike Stuart. “My office has prosecuted so many cases like this but every single one is unique and every single one is tragic by its own facts and circumstances. The mere idea that someone would attempt to knowingly purchase sex with a child, well, I’m not sure there are words that adequately describe the full nature of the crime. It is criminal on every conceivable level. Our kids - our precious kids - must be our priority and we must do everything in our power to protect them.”
Haynes previously admitted that between October 31, 2019 and November 2, 2019, he communicated with a man who stated he could provide a 14- or 15-year-old female to Haynes. Haynes agreed to pay the man money in exchange for sexual activity with the purported minor female. On November 2, 2019, Haynes met with the man in Sam Black Church and paid him the agreed upon sum in order to have sex with the minor, at which time Haynes was placed under arrest.
The investigation was conducted by the Federal Bureau of Investigation’s West Virginia Child Exploitation and Human Trafficking Task Force, which includes task force officers from the West Virginia State Police, the Kanawha County Sheriff’s Office and the Ashland (Kentucky) Police Department, with additional assistance from the Greenbrier County Sheriff’s Office. Assistant United States Attorney Jennifer Rada Herrald handled the prosecution. United States District Judge Frank W. Volk imposed the sentencing.
The case was prosecuted as part of Project Safe Childhood, a nationwide initiative of the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 5:19-cr-00292.
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Man Indicted for Threatening a Government OfficialRead the Press Release
NEW ORLEANS, LOUISIANA – BRYANT LAMONT HARRIS, age 46, a resident of Monticello, Mississippi, was indicted for threatening a federal judge in violation of Title 18, United States Code, Section 115(a)(1)(B), announced U.S. Attorney Peter G. Strasser. If convicted, the defendant faces a maximum sentence of six years imprisonment, a $250,000 fine, three years of supervised release, and a $100 special assessment.
According to court records, on or about February 13, 2020, HARRIS called the chambers of a federal judge, and asked how many security officers were assigned to the court because “[he] needed to know how many people [he] need[ed] to take out to get to the Judge.” Prior to this, HARRIS had placed other calls to chambers, and claimed that he was an expertly trained military marksman, and that he “was going to take things into his own hands, watch CNN.”
United States Attorney Strasser reiterated that the indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Strasser praised the work of the Federal Bureau of Investigation in investigating this matter. The prosecution of this case is being handled by Assistant U. S. Attorney G. Dall Kammer, Supervisor of the General Crimes Unit.
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Lockport Woman Sentenced on Wire Fraud Charge for Her Role in Debt Collection SchemeRead 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 Shauniqua Rodriguez, 41, of Lockport, NY, who was convicted of conspiracy to commit wire fraud, was sentenced to serve 12 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Laura A. Higgins, who handled the case, stated that between January 2014 and February 2017, Rodriguez conspired with others in a debt collection scheme that was spearheaded by co-defendant Joseph Ciffa. Specifically, defendant was an intermittent employee of the debt collection agency, which operated under various names, including Lakeside Mediations, Lincoln Mediation, Valentine Legal Mediation, First Point Mediation, State Filing and Legal Services, and Elite Services. Rodriguez placed telephone calls to “debtors” throughout the United States, using various fraudulent tactics and misrepresentations, including false representing her identity, false threating arrest, and fabricating criminal charges against the “debtors” in order to induce them to make payments. The “debtors” were often directed to other employees posing as attorneys and were provided with payment instructions, supposedly to settle their outstanding debts. In addition to making collection calls, defendant also served as an informal trainer for other, less experienced employees.
Rodriguez and the employees she worked with and trained routinely collected on debts which they knew had already been satisfied, and collected money from “debtors” from whom they had already collected payment, who were deemed to be “easy targets.” “Debtors” were instructed to make payment to the various debt collection businesses through various means, including MoneyGram payments, bank wire transfers, and debit/credit card payments. Between 2015 and 2016, the debt collection scheme brought in more than $3,000,000.Rodriguez is one of five defendants to be convicted in this case, and the third to be sentenced.
Today’s sentencing is the result of an investigation by Homeland Security Investigations, under the direction of Special-Agent-in-Charge Kevin Kelly; the Internal Revenue Service, Criminal Investigation Division, under the direction of Jonathan D. Larsen, Special Agent-in-Charge, New York Field Office; and the U.S. Postal Inspection Service, under the direction of Boston Division Inspector-in-Charge Joseph W. Cronin.
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Local man in custody for bomb threatRead the Press Release
BROWNSVILLE, Texas – A 73-year-old resident of La Feria has been charged with making a threat to bomb the Veteran’s Administration (VA) Hospital in Harlingen, announced U.S. Attorney Ryan K. Patrick.
Dennis Deane Dailey will appear for his detention hearing Aug. 11 before U.S. Magistrate Judge Ronald Morgan.
On July 20, Dailey allegedly called the VA suicide prevention hotline expressing he was having suicidal thoughts. He claimed to be angry and that he planned to shoot employees at the VA hospital in Harlingen, according to the charges. Dailey also allegedly stated he planned to kill people between the ages of 18 and 30 because they are spreading COVID-19. The criminal complaint further alleges Dailey claimed to have “many guns and bombs” and would blow up the VA and kill whoever needed to be killed.
Federal authorities arrested Dailey July 22. He made his initial appearance the following day, at which time he was ordered into custody pending further criminal proceedings.
If convicted, Dailey faces up to 10 years in federal prison and a possible $250,000 maximum fine.
The FBI conducted the investigation. Assistant U.S. Attorney Oscar Ponce is prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Local Hospital Nurse Charged with Distribution and Possession of Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that a federal grand jury has returned an indictment charging Craig Marranca, 32, of Buffalo, NY, with distribution and possession of child pornography. The charges carry a mandatory minimum penalty of five years in prison, a maximum of 20 years, and a $250,000.
Assistant U.S. Attorney Laura A. Higgins, who is handling the case, stated that according to the indictment, on September 18, 2017, the defendant distributed child pornography. In addition, on October 27, 2017, Marranca possessed images of child pornography on a laptop computer and a hard drive. Some of the images depicted a prepubescent minor and a minor younger than 12 years old.
The defendant was arraigned this afternoon before U.S. Magistrate Judge Michael J. Roemer and released on conditions. The indictment is are the result of an investigation by Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly.
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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KC Man Who ‘Terrorized His Neighborhood’ Charged with Illegally Possessing FirearmRead the Press Release
This Glock .40-caliber handgun attached to an extended drum magazine was seized by law enforcement officers at the time of Dorsey's arrest.KANSAS CITY, Mo. – A Kansas City, Missouri, man who was arrested after he allegedly shot three victims in an incident this week has been charged in federal court with illegally possessing a firearm during an earlier firearm incident.
“Court documents cite a long history of gun violence and drug trafficking by this defendant who terrorized his neighborhood, allegedly shooting several victims this week,” Garrison said. “This is his second federal charge for illegally possessing firearms. Operation LeGend is successfully taking armed, violent criminals like this off the street to make our neighborhoods safer.”
Leamandreal Dorsey, 40, was charged with being a felon in possession of a firearm in a complaint filed under seal in the U.S. District Court in Kansas City, Mo. That complaint was unsealed and made public today following Dorsey’s arrest and initial court appearance.
Today’s federal criminal complaint charges Dorsey with illegally possessing a firearm following a threat to shoot event that occurred on April 1, 2020. Dorsey is charged with possessing a Glock .40-caliber handgun attached to an extended drum magazine that contained 40 live rounds of ammunition.
On April 1, 2020, Kansas City, police officers responded to a reported weapons disturbance in the 2500 block of East 68th Terrace. One of Dorsey’s neighbors told officers that Dorsey pointed a gun at him and threatened him. Officers contacted Dorsey at Dorsey’s residence, sitting on the roof of a black Mercedes-Benz C300. According to the affidavit, Dorsey jumped into the driver’s seat when officers approached. Dorsey was removed from his vehicle and taken into custody. The owner of the vehicle provided consent for the officers to search the car, and they found a backpack in the passenger’s seat that contained the Glock .40-caliber handgun attached to an extended drum magazine, as well as a spare magazine.
Although this incident occurred on April 1, Dorsey was arrested following a separate shooting incident that occurred this week in which three individuals were wounded by gunfire.
According to an affidavit filed in support of the federal criminal complaint, Kansas City, Missouri, police officers were dispatched to the 2500 block of E. 68th Terrace at about 1 a.m. on Wednesday, July 22, concerning a shooting. Six individuals were on the front porch of a residence, the affidavit says, when an individual later identified as Dorsey started shooting at them. According to the victims, Dorsey walked away, but returned minutes later and began shooting again, then fled on foot. Three of the individuals were struck by gunfire and transported to Research Medical Center. Investigators found 31 spent shell casings at the scene.
Later the same day, investigators received a Crime Stoppers tip that identified Dorsey as the shooter.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Dorsey has a prior felony conviction for being a felon in possession of a firearm, for which he served three years in federal prison. He also has two prior felony convictions for unlawful use of a weapon, two prior felony convictions for possession of a controlled substance, and a prior felony conviction for drug trafficking.
Today’s affidavit also cites four previous instances in which Dorsey pointed firearms at people and threatened them. Among those incidents, the affidavit says, Dorsey shot a man in the hip who was running from Dorsey’s residence following a disagreement.
The charge contained in this complaint is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Bruce Rhoades. It was investigated by the Kansas City, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Operation LeGend
Operation LeGend is a federal partnership with local law enforcement to address the increase in homicides and violent crime in Kansas City, Mo., in 2020. The operation honors the memory of four-year-old LeGend Taliferro, one of the youngest fatalities during a record-breaking year of homicides and shootings. Additional federal agents were assigned to the operation from the FBI, Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the U.S. Marshals Service.KC Man Charged with Meth Trafficking, Illegal FirearmsRead the Press Release
KANSAS CITY, Mo. – A Kansas City, Missouri, man was charged in federal court today with illegally possessing methamphetamine to distribute and two firearms.
Law enforcement officer seized this Bushmaster .223/5.56-caliber rifle while executing a search warrant at Younce's residence.Steven L. Younce, 38, was charged with one count of possessing methamphetamine to distribute, one count of possessing firearms in furtherance of a drug-trafficking crime, and one count of being a felon in possession of firearms.
According to an affidavit filed in support of today’s criminal complaint, deputies with the U.S. Marshals Service arrested Younce, who had outstanding municipal warrants, at his residence on Thursday, July 23.
Law enforcement officers seized this Glock 9mm handgun while executing a search warrant at Younce's residence.Detectives from the Independence, Mo., Police Department and the Kansas City, Mo., Police Department and deputies from the U.S. Marshals Service executed a search warrant at Younce’s residence on the same day. In Younce’s bedroom, they found 696 grams of methamphetamine on top of the bed, 39 grams of methamphetamine in a dresser drawer, a loaded Bushmaster .223/5.56-caliber rifle, and a loaded Glock 9mm handgun. Additional ammunition, several glass smoking pipes, and drug paraphernalia were found throughout the residence.
Law enforcement officers also seized a stolen 2019 Harley Davidson motorcycle and a stolen Suzuki motorcycle.
Under federal law, it is illegal for anyone who is convicted of a felony to be in possession of any firearm or ammunition. Younce has prior federal felony convictions for being a felon in possession of a firearm and possessing methamphetamine to distribute. He has prior state felony convictions for forgery, tampering with a motor vehicle, possessing a controlled substance, and unlawful use of a weapon.
The charges contained in this complaint are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Mary Kate Butterfield. It was investigated by the U.S. Marshals Service, the Independence, Mo., Police Department, the Kansas City, Mo., Police Department, and the Drug Enforcement Administration.
Operation LeGend
Operation LeGend is a federal partnership with local law enforcement to address the increase in homicides and violent crime in Kansas City, Mo., in 2020. The operation honors the memory of four-year-old LeGend Taliferro, one of the youngest fatalities during a record-breaking year of homicides and shootings. Additional federal agents were assigned to the operation from the FBI, Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the U.S. Marshals Service.Informational: Federal Court arraignmentsRead the Press Release
The U.S. Attorney’s Office announced that the following persons were arraigned or appeared this week before U.S. Magistrate judges on indictments handed down by the Grand Jury or on criminal complaints. The charging documents are merely accusations and defendants are presumed innocent until proven guilty:
Appearing in Billings before U.S. Magistrate Judge Timothy J. Cavan and pleading not guilty on July 20 was:
Kristin Alise Smith, 43, of Billings, on charges of conspiracy to possess with intent to distribute methamphetamine and possession with intent to distribute meth. If convicted of the most serious crime, Smith faces a minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release. Smith was detained pending further proceedings. The FBI Western Transnational Organized Crime Task Force investigated the case. Pacer case reference. 20-80.
Mark Stephen Best, 60, of Billings, on charges of conspiracy to possess with intent to distribute meth, possession with intent to distribute meth and distribution of meth. If convicted of the most serious crime, Best faces a minimum mandatory five years to 40 years in prison, a $5 million fine and at least five years of supervised release. Best was detained pending further proceedings. Pacer case reference. 20-67.
Appearing on July 21 was:
Lisa Ann Emmett, 34, of Billings, and Anthony Scott Walker, 40, of Billings, on charges of conspiracy to possess with intent to distribute controlled substances and possession with intent to distribute controlled substances. If convicted of the most serious crime, Emmett and Walker face minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release. Emmett and Walker were released pending further proceedings. The Drug Enforcement Administration investigated the case. Pacer case reference. 20-53.
Drew Hochhalter, 37, of Hardin, on charges of distribution of methamphetamine. If convicted of the most serious crime, Hochhalter faces a maximum 20 years in prison, a $1 million fine and at least three years of supervised release. Hochhalter was released pending further proceedings. The Drug Enforcement Administration investigated the case. Pacer case reference. 20-54.
Chase Everett Sexton, 30, of Billings, on charges of false statement during firearms transaction. If convicted of the most serious crime, Sexton faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Sexton was released pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. Pacer case reference. 20-63.
Sean Evan Thomas Bad Bear, 28, of Billings, on charges of assault by strangulation of an intimate partner and dating partner. If convicted of the most serious crime, Bad Bear faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Bad Bear was released pending further proceedings. The FBI investigated the case. Pacer case reference. 20-52.
Appearing on July 23 was:
Robert Joseph Speelman, 48, of Ashland, on charges of possession with intent to distribute meth and possession of a firearm in furtherance of a drug trafficking crime. If convicted of the most serious crime, Speelman faces a minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release on the drug count and a minimum mandatory five years to life consecutive to any other sentence on the firearm count. Speelman was detained pending further proceedings. The Bureau of Indian Affairs investigated the case. Pacer case reference. 20-57.
Simon Douglas Stanley, 45, of Miles City, on charges of conspiracy to possess with intent to distribute meth, possession with intent to distribute meth, possession of a firearm in furtherance of a drug trafficking crime and felon in possession of a firearm. If convicted of the most serious crime, Stanley faces a minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release on the drug count and a minimum mandatory five years to life consecutive to any other sentence on the firearm count. Stanley was released pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. Pacer case reference. 20-58.
Cody Raymond Hanson, 39, of Billings, and Danielle Leona Dye, 29, of Billings, on charges of conspiracy to possess with intent to distribute meth and possession with intent to distribute meth. If convicted of the most serious crime, Hanson and Dye face a minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release. Hanson and Dye were detained pending further proceedings. The FBI Western Transnational Organized Crime Task Force investigated the case. Pacer case reference. 20-72.
Appearing in Missoula before U.S. Magistrate Judge Kathleen L. DeSoto and pleading not guilty on July 21 was:
Christopher Anthony Willis, 41, of Missoula, on charges of false statement in firearm acquisition. If convicted of the most serious crime, Willis faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Willis was released pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. Pacer case reference. 20-26.
Justin Patrick Kline, 33, of Bozeman, on charges of prohibited person in possession of a firearm. If convicted of the most serious crime, Kline faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Kline was released pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Montana Department of Corrections Probation and Parole. Pacer case reference. 20-12.
Appearing in Great Falls before U.S. Magistrate Judge John T. Johnston and pleading not guilty on July 22 was:
Mitchell Joseph Wright, 40, of Rancho Palos, CA, on charges of conspiracy to possess with intent to distribute controlled substances and possession with intent to distribute controlled substances. If convicted of the most serious crime, Wright faces a minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release. Wright was detained pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives, Great Falls Police Department, U.S. Postal Inspection Service and Lewistown Police Department investigated the case. Pacer case reference. 20-50.
Christopher Michael Stebbins, 53, of Williston, N.D., on charges of conspiracy to possess with intent to distribute meth and attempted possession with intent to distribute meth. If convicted of the most serious crime, Stebbins faces a minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release. Stebbins was detained pending further proceedings. The FBI and Fort Peck Criminal Investigation investigated the case. Pacer case reference. 20-49.
Austin Lee Pipe Sr., 29, of Wolf Point, on charges of assault with a dangerous weapon and assault resulting in substantial injury to dating partner. If convicted of the most serious crime, Pipe faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Pipe was detained pending further proceedings. The FBI and Fort Peck Criminal Investigation investigated the case. Pacer case reference. 20-48.
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
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Indivior Solutions Pleads Guilty to Felony Charge and Indivior Entities Agree to Pay $600 Million to Resolve Criminal and Civil Investigations as Part of DOJ’s Largest Opioid ResolutionRead the Press Release
NEWARK, N.J. – Indivior Solutions today pleaded guilty to a one-count felony information and, together with its parent companies Indivior Inc. and Indivior plc, agreed to pay a total of $600 million to resolve criminal and civil liability associated with the marketing of the opioid-addiction-treatment drug Suboxone, New Jersey U.S. Attorney Craig Carpenito, other Department of Justice officials, and officials from other state and federal agencies announced. Together with a $1.4 billion resolution with Indivior’s former parent, Reckitt Benckiser Group PLC (RB Group), announced in 2019, and a plea agreement with Indivior plc’s former CEO, Shaun Thaxter, announced last month, the total resolution relating to the marketing of Suboxone is more than $2 billion — the largest-ever resolution in a case brought by the Department of Justice involving an opioid drug.
Suboxone is a drug product approved for use by recovering opioid addicts to avoid or reduce withdrawal symptoms while they undergo treatment for opioid-use disorder. Suboxone contains buprenorphine, a powerful opioid.
“Combatting the opioid crisis is a Department of Justice priority,” said Principal Deputy Associate Attorney General Claire M. Murray. “Today’s announced resolution and related actions hold accountable entities and individuals that unlawfully marketed opioid-addiction products.”
“The opioid crisis is a public health emergency. Prevention and access to effective treatments for opioid addiction are critical to fighting this epidemic,” said Deputy Assistant Attorney General Michael D. Granston for the Department's Civil Division. “When a drug manufacturer claims to be part of a solution for opioid addicts, we expect honesty and candor to government officials, as well as to the physicians and patients making important treatment decisions based on those representations.”
Resolution of the Criminal Investigation
Indivior Solutions pleaded guilty today in U.S. District Court for the Western District of Virginia to a one-count felony criminal information charging false statements relating to health care matters. In connection with its guilty plea, Indivior Solutions admitted making false statements to promote the film version of Suboxone (Suboxone Film) to the Massachusetts Medicaid program (MassHealth) relating to the safety of Suboxone Film around children. The resolution includes a criminal fine, forfeiture, and restitution totaling $289 million. On June 30, 2020, Indivior plc’s former CEO Shaun Thaxter pleaded guilty to a one-count misdemeanor information, also in the Western District of Virginia, related to Indivior’s false and misleading representations to MassHealth.
In 2002, Indivior Inc. received approval to market Suboxone tablets for use in the treatment of opioid addiction and dependence. At that time, Indivior Inc. was an RB Group subsidiary known as Reckitt Benckiser Pharmaceuticals Inc. In December 2014, RB Group spun off Indivior Inc., and the two companies are no longer affiliated. Thereafter, Indivior Inc. became a subsidiary of Indivior plc. On April 9, 2019, a federal grand jury sitting in Abingdon, Virginia, indicted Indivior Inc. and Indivior plc for allegedly engaging in an illicit nationwide scheme to increase prescriptions of Suboxone.
In its guilty plea today, Indivior Solutions, which employed marketing and sales personnel for the Indivior group of companies, admitted to an aspect of the scheme alleged in the indictment. Specifically, Indivior Solutions admitted that, in October 2012, it sought to convince MassHealth to expand Medicaid coverage of Suboxone Film in Massachusetts and sent MassHealth false data and a chart that was misleading in light of the false data indicating that Suboxone Film had the lowest rate of accidental pediatric exposure (i.e., children taking medication by accident) of all buprenorphine drugs in Massachusetts, when in fact, it did not. Indivior Solutions further admitted that sending the false and misleading information occurred in the context of marketing and promotional efforts directed at MassHealth, which were overseen by top executives. MassHealth announced it would provide access to Suboxone Film for patients with children under the age of six shortly after Indivior provided the false and misleading information to agency officials.
“During the nationwide opioid epidemic, Indivior Solutions made false statements about Suboxone’s safety to increase its sales. In doing so, Indivior Solutions misled government health care officials and is being held accountable today for its felonious conduct,” First Assistant United States Attorney Daniel P. Bubar of the Western District of Virginia said today. “This resolution is the culmination of years of work by prosecutors and agents and demonstrates that we will continue to work tirelessly to hold pharmaceutical manufacturers responsible for illegal conduct.”
In addition to its financial aspects, the agreement with Indivior Inc. includes novel provisions that:
- Require Indivior Inc. to disband its Suboxone sales force and not reinstate it;
- Require Indivior Inc.’s CEO to personally certify, under penalty of perjury, on an annual basis that during the prior year (a) Indivior was in compliance with the Food Drug and Cosmetic Act and did not commit health care fraud or (b) list all non-compliant activity and the steps taken by Indivior to remedy these acts;
- Prohibit Indivior Inc. from using data obtained from surveys of health care providers for marketing, sales, and promotional purposes;
- Require Indivior Inc. to remove health care providers from their promotional programs who are at a high risk of inappropriate prescribing; and
- Make Indivior subject to contempt sanctions by the Court and reinstatement of the dismissed charges if it violates the agreement.
“The opioid crisis has devastated families and communities across the Commonwealth and drug manufacturers must be held accountable for their role in creating and prolonging this crisis,” said Virginia Attorney General Mark R. Herring. “I want to thank my Medicaid Fraud Control Unit for their work on this important case, as well as our local, state and federal partners for their continued collaboration. My team and I will continue to do everything in our power to hold pharmaceutical companies accountable for their role in the opioid crisis and help to ensure justice for those families who have been effected by the opioid crisis.”
“Parties that contract with the government will be held to the letter of the contract,” said Kenneth Cleevely, Special Agent in Charge of the Eastern Field Office for the U.S. Postal Service Office of Inspector General. “The U.S. Postal Service spends billions of dollars per year in workers compensation-related costs, most of which are legitimate. However, when medical providers or companies choose to flout the rules and profit illegally, special agents with the USPS OIG will work with our law enforcement partners to hold them responsible. To report fraud or other criminal activity involving the Postal Service, contact USPS OIG special agents at www.uspsoig.gov or 888-USPS-OIG.”
United States District Judge James P. Jones accepted the guilty plea but deferred acceptance of the plea agreement until after the preparation of a presentence report. He scheduled sentencing for Oct. 20, 2020 at the United States Courthouse in Abingdon, Virginia.
The Civil Settlement
Under the civil settlement, Indivior Inc. and Indivior plc have agreed to pay a total of $300 million to resolve claims that the marketing of Suboxone caused false claims to be submitted to government health care programs. The $300 million settlement amount includes approximately $209.3 million to the federal government and $90.7 million to states that opt to participate in the agreement.
The civil settlement resolves allegations by the United States that, from 2010 through 2015, Indivior companies knowingly (a) promoted the sale and use of Suboxone to physicians who were writing prescriptions that were not for a medically accepted indication and that lacked a legitimate medical purpose, were issued without any counseling or psychosocial support, were for uses that were unsafe, ineffective, and medically unnecessary, and were often diverted; (b) promoted the sale or use of Suboxone Film to physicians and state Medicaid agencies using false and misleading claims that Suboxone Film was less susceptible to diversion and abuse than other buprenorphine products and that Suboxone Film was less susceptible to accidental pediatric exposure than tablets; and (c) submitted a petition to the Food and Drug Administration on Sept. 25, 2012, claiming that Suboxone Tablet had been discontinued “due to safety concerns” about the tablet formulation of the drug and took other steps to delay the entry of generic competition for Suboxone to improperly control pricing of Suboxone, including pricing to federal healthcare programs.
“Prescription opioids are both addictive and dangerous when diverted for improper use or prescribed without accurate information about the risks that they pose,” U.S. Attorney Craig Carpenito for the District of New Jersey said. “This resolution holds Indivior to account for placing profit above patient and community safety.”
The civil settlement resolves claims against Indivior in six lawsuits pending in federal court in the Western District of Virginia and the District of New Jersey under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. The False Claims Act also permits the government to intervene in such actions, as the government previously did in the three lawsuits pending in the Western District of Virginia. The whistleblower share to be awarded in this case has not yet been determined.
“Opioid addiction and abuse is an immense public health crisis and taking steps to address it is one of the FDA’s highest priorities,” said FDA Commissioner Stephen M. Hahn, M.D. “Medication-assisted treatments incorporating drugs like Indivior’s Suboxone, in combination with counseling and behavioral therapy, are an important tool in combating opioid use disorder but can quickly become part of the problem if not used responsibly. When companies encourage the use of powerful drugs where not medically necessary and provide misleading information about relative product benefits, they can ultimately risk more misuse, abuse, diversion, and accidental exposure to opioid drugs as well as make treatment more difficult to obtain for those suffering from this crisis. We will continue to work with the Department of Justice to investigate and hold accountable those who devise and participate in schemes to the detriment of the public health.”
Non-monetary Provisions of the Corporate Integrity Agreement
In addition to the criminal and civil resolutions, Indivior executed a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The CIA requires that Indivior implement numerous accountability and auditing provisions. On an annual basis, top executives and the Board of Directors must certify about compliance, Indivior must conduct annual risk assessments and other monitoring, and an independent review organization will conduct multi-faceted audits.
“Addressing the opioid crisis is a top priority for OIG, and we will continue to work closely with the Department of Justice to hold corporations and individuals accountable when they use illegal tactics to promote and sell opioids,” said Gregory E. Demske, Chief Counsel to the Inspector General, HHS-OIG. “Among other things, our CIA with Indivior imposes accountability on the Board and top executives, subjects the company to internal and external auditing, and ensures that the company will separate itself from its prior top leadership.”
“The opioid epidemic has ravaged this nation,” said Elton Malone, Assistant Inspector General for Investigations with the Office of Inspector General of the U.S. Department of Health and Human Services. “This resolution, along with our law enforcement partners’ work, should serve as a warning that large companies will face prosecution if they break the law.”
FTC Resolution
Under a separate agreement with the Federal Trade Commission (FTC), Indivior has agreed to pay $10 million to resolve claims that it engaged in unfair methods of competition in violation of the Federal Trade Commission Act, 15 U.S.C. § 53(b). The FTC filed a complaint in the United States District Court for the Western District of Virginia alleging anticompetitive activities by Indivior designed to impede competition from generic equivalents of Suboxone. As part of a consent decree, Indivior agreed that it would notify the FTC if it filed a Citizen Petition with the FDA in connection with a drug product, it would simultaneously disclose to both the FDA and the FTC all studies and data relevant to that Citizen Petition. Indivior further agreed not to withdraw a drug from the market or otherwise disadvantage a drug after obtaining approval to market another drug containing the same active ingredient.
“As alleged in the FTC’s complaint, in the midst of the nation’s opioid crisis, a critical opioid-addiction treatment was about to become more affordable,” said Gail Levine, a Deputy Director of the FTC’s Bureau of Competition. “But Indivior prevented that. It kept its drug prices high by unlawfully impeding generic manufacturers from competing effectively.”
A Multilateral Effort
The criminal case against Indivior was prosecuted by Randy Ramseyer of the U.S. Attorney’s Office for the Western District of Virginia, Albert P. Mayer and Carol Wallack of the Department of Justice Civil Division’s Commercial Litigation Branch, Charles J. Biro and Matthew J. Lash of the Department of Justice Civil Division’s Consumer Protection Branch, Kristin L. Gray, Joseph S. Hall and Janine M. Myatt of the Virginia Medicaid Fraud Control Unit of the Office of the Virginia Attorney General, and Garth W. Huston of the Federal Trade Commission. This matter was investigated by the Virginia Attorney General’s Medicaid Fraud Control Unit; FDA - Office of Criminal Investigation; United States Postal Service – Office of Inspector General; and Department of Health and Human Services - Office of Inspector General.
The civil settlement was handled by Edward Crooke of the Civil Division’s Commercial Litigation Branch, Sara Bugbee Winn of the U.S. Attorney’s Office for the Western District of Virginia, and Andrew A. Caffrey III of the U.S. Attorney’s Office for the District of New Jersey. Assistance was provided by representatives of the HHS Office of Counsel to the Inspector General; the HHS Office of the General Counsel, CMS Division; FDA’s Office of Chief Counsel; the U.S. Attorney’s Office for the Eastern District of Virginia; the U.S. Department of Agriculture Office of the General Counsel; the National Association of Medicaid Fraud Control Units; the Defense Criminal Investigative Service; the Office of Personnel Management - Office of Inspector General; the Department of Veterans’ Affairs Office of Inspector General; the Department of Labor - Office of Inspector General; and TRICARE Program Integrity.
The joint effort advances the goals of the Department’s Prescription Interdiction & Litigation (PIL) Task Force to deploy all available criminal, civil, and regulatory tools to hold opioid manufacturers accountable for unlawful practices and to ensure that prescription opioid products are marketed truthfully.
Except to the extent admitted as part of the criminal resolution, the claims resolved by the civil settlement are allegations only. There has been no determination of liability in the civil case.
Additional information about the Consumer Protection Branch and the Civil Fraud Section and their enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
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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Indivior Solutions Pleads Guilty to Felony Charge and Indivior Entities Agree to Pay $600 Million to Resolve Criminal and Civil Investigations as Part of DOJ's Largest Opioid ResolutionRead the Press Release
indivior_resolution_documents.pdfABINGDON, VIRGINIA – Indivior Solutions today pleaded guilty to a one-count felony information and, together with its parent companies Indivior Inc. and Indivior plc, agreed to pay a total of $600 million to resolve criminal and civil liability associated with the marketing of the opioid-addiction-treatment drug Suboxone. Together with a $1.4 billion resolution with Indivior’s former parent, Reckitt Benckiser Group PLC (RB Group), announced in 2019, and a plea agreement with Indivior plc’s former CEO, Shaun Thaxter, announced last month, the total resolution relating to the marketing of Suboxone is more than $2 billion
—the largest-ever resolution in a case brought by the Department of Justice involving an opioid drug.Suboxone is a drug product approved for use by recovering opioid addicts to avoid or reduce withdrawal symptoms while they undergo treatment for opioid-use disorder. Suboxone contains buprenorphine, a powerful opioid.
“Combatting the opioid crisis is a Department of Justice priority,” said Principal Deputy Associate Attorney General Claire M. Murray. “Today’s announced resolution and related actions hold accountable entities and individuals that unlawfully marketed opioid-addiction products.”
“The opioid crisis is a public health emergency. Prevention and access to effective treatments for opioid addiction are critical to fighting this epidemic,” said Deputy Assistant Attorney General Michael D. Granston for the Department's Civil Division. “When a drug manufacturer claims to be part of a solution for opioid addicts, we expect honesty and candor to government officials, as well as to the physicians and patients making important treatment decisions based on those representations.”
Resolution of the Criminal Investigation
Indivior Solutions pleaded guilty today to a one-count felony criminal information charging false statements relating to health care matters. In connection with its guilty plea, Indivior Solutions admitted making false statements to promote the film version of Suboxone (Suboxone Film) to the Massachusetts Medicaid program (MassHealth) relating to the safety of Suboxone Film around children. The resolution includes a criminal fine, forfeiture, and restitution totaling $289 million. On June 30, 2020, Indivior plc’s former CEO Shaun Thaxter pleaded guilty to a one-count misdemeanor information related to Indivior’s false and misleading representations to MassHealth.
In 2002, Indivior Inc. received approval to market Suboxone tablets for use in the treatment of opioid addiction and dependence. At that time, Indivior Inc. was an RB Group subsidiary known as Reckitt Benckiser Pharmaceuticals Inc. In December 2014, RB Group spun off Indivior Inc., and the two companies are no longer affiliated. Thereafter, Indivior Inc. became a subsidiary of Indivior plc. On April 9, 2019, a federal grand jury sitting in Abingdon, Virginia, indicted Indivior Inc. and Indivior plc for allegedly engaging in an illicit nationwide scheme to increase prescriptions of Suboxone.
In its guilty plea today, Indivior Solutions, which employed marketing and sales personnel for the Indivior group of companies, admitted to an aspect of the scheme alleged in the indictment. Specifically, Indivior Solutions admitted that, in October 2012, it sought to convince MassHealth to expand Medicaid coverage of Suboxone Film in Massachusetts and sent MassHealth false data indicating that Suboxone Film had the lowest rate of accidental pediatric exposure (i.e., children taking medication by accident) of all buprenorphine drugs in Massachusetts, when in fact, it did not. Indivior Solutions further admitted that sending the false and misleading information occurred in the context of marketing and promotional efforts directed at MassHealth, which were overseen by top executives. MassHealth announced it would provide access to Suboxone Film for patients with children under the age of six shortly after Indivior provided the false and misleading information to agency officials.
“During the nationwide opioid epidemic, Indivior Solutions made false statements about Suboxone’s safety to increase its sales. In doing so, Indivior Solutions misled government health care officials and is being held accountable today for its felonious conduct,” said First Assistant United States Attorney Daniel P. Bubar of the Western District of Virginia said today. “This resolution is the culmination of years of work by prosecutors and agents and demonstrates that we will continue to work tirelessly to hold pharmaceutical manufacturers responsible for illegal conduct.”
In addition to its financial aspects, the agreement with Indivior Inc. includes novel provisions that:
- Require Indivior Inc. to disband its Suboxone sales force and not reinstate it;
- Require Indivior Inc.’s CEO to personally certify, under penalty of perjury, on an annual basis that during the prior year (a) Indivior was in compliance with the Food Drug and Cosmetic Act and did not commit health care fraud or (b) list all non-compliant activity and the steps taken by Indivior to remedy these acts;
- Prohibit Indivior Inc. from using data obtained from surveys of health care providers for marketing, sales, and promotional purposes;
- Require Indivior Inc. to remove health care providers from their promotional programs who are at a high risk of inappropriate prescribing; and
- Make Indivior subject to contempt sanctions by the Court and reinstatement of the dismissed charges if it violates the agreement.
“The opioid crisis has devastated families and communities across the Commonwealth and drug manufacturers must be held accountable for their role in creating and prolonging this crisis,” said Virginia Attorney General Mark R. Herring. “I want to thank my Medicaid Fraud Control Unit for their work on this important case, as well as our local, state and federal partners for their continued collaboration. My team and I will continue to do everything in our power to hold pharmaceutical companies accountable for their role in the opioid crisis and help to ensure justice for those families who have been effected by the opioid crisis.”
“Parties that contract with the government will be held to the letter of the contract,” said Kenneth Cleevely, Special Agent in Charge of the Eastern Field Office for the U.S. Postal Service Office of Inspector General. “The U.S. Postal Service spends billions of dollars per year in workers compensation-related costs, most of which are legitimate. However, when medical providers or companies choose to flout the rules and profit illegally, special agents with the USPS OIG will work with our law enforcement partners to hold them responsible. To report fraud or other criminal activity involving the Postal Service, contact USPS OIG special agents at www.uspsoig.gov or 888-USPS-OIG.”
United States District Judge James P. Jones accepted the guilty plea but deferred acceptance of the plea agreement until after the preparation of a presentence report. He scheduled sentencing for Oct. 20, 2020 at the United States Courthouse in Abingdon, Virginia.
The Civil Settlement
Under the civil settlement, Indivior Inc. and Indivior plc have agreed to pay a total of $300 million to resolve claims that the marketing of Suboxone caused false claims to be submitted to government health care programs. The $300 million settlement amount includes approximately $209.3 million to the federal government and $90.7 million to states that opt to participate in the agreement.
The civil settlement resolves allegations by the United States that, from 2010 through 2015, Indivior companies knowingly (a) promoted the sale and use of Suboxone to physicians who were writing prescriptions that were not for a medically accepted indication and that lacked a legitimate medical purpose, were issued without any counseling or psychosocial support, were for uses that were unsafe, ineffective, and medically unnecessary, and were often diverted; (b) promoted the sale or use of Suboxone Film to physicians and state Medicaid agencies using false and misleading claims that Suboxone Film was less susceptible to diversion and abuse than other buprenorphine products and that Suboxone Film was less susceptible to accidental pediatric exposure than tablets; and (c) submitted a petition to the Food and Drug Administration on Sept. 25, 2012, claiming that Suboxone Tablet had been discontinued “due to safety concerns” about the tablet formulation of the drug and took other steps to delay the entry of generic competition for Suboxone to improperly control pricing of Suboxone, including pricing to federal healthcare programs.
“Prescription opioids are both addictive and dangerous when diverted for improper use or prescribed without accurate information about the risks that they pose,” said U.S. Attorney Craig Carpenito for the district of New Jersey. “This resolution holds Indivior to account for placing profit above patient and community safety.”
The civil settlement resolves claims against Indivior in six lawsuits pending in federal court in the Western District of Virginia and the District of New Jersey under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. The False Claims Act also permits the government to intervene in such actions, as the government previously did in the three lawsuits pending in the Western District of Virginia. The whistleblower share to be awarded in this case has not yet been determined.
“Opioid addiction and abuse is an immense public health crisis and taking steps to address it is one of the FDA’s highest priorities,” said FDA Commissioner Stephen M. Hahn, M.D. “Medication-assisted treatments incorporating drugs like Indivior’s Suboxone, in combination with counseling and behavioral therapy, are an important tool in combating opioid use disorder but can quickly become part of the problem if not used responsibly. When companies encourage the use of powerful drugs where not medically necessary and provide misleading information about relative product benefits, they can ultimately risk more misuse, abuse, diversion, and accidental exposure to opioid drugs as well as make treatment more difficult to obtain for those suffering from this crisis. We will continue to work with the Department of Justice to investigate and hold accountable those who devise and participate in schemes to the detriment of the public health.”
Non-monetary Provisions of the Corporate Integrity Agreement
In addition to the criminal and civil resolutions, Indivior executed a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The CIA requires that Indivior implement numerous accountability and auditing provisions. On an annual basis, top executives and the Board of Directors must certify about compliance, Indivior must conduct annual risk assessments and other monitoring, and an independent review organization will conduct multi-faceted audits.
“Addressing the opioid crisis is a top priority for OIG, and we will continue to work closely with the Department of Justice to hold corporations and individuals accountable when they use illegal tactics to promote and sell opioids,” said Gregory E. Demske, Chief Counsel to the Inspector General, HHS-OIG. “Among other things, our CIA with Indivior imposes accountability on the Board and top executives, subjects the company to internal and external auditing, and ensures that the company will separate itself from its prior top leadership.”
“The opioid epidemic has ravaged this nation,” said Elton Malone, Assistant Inspector General for Investigations with the Office of Inspector General of the U.S. Department of Health and Human Services. “This resolution, along with our law enforcement partners’ work, should serve as a warning that large companies will face prosecution if they break the law.”
FTC Resolution
Under a separate agreement with the Federal Trade Commission (FTC), Indivior has agreed to pay $10 million to resolve claims that it engaged in unfair methods of competition in violation of the Federal Trade Commission Act, 15 U.S.C. § 53(b). The FTC filed a complaint in the United States District Court for the Western District of Virginia alleging anticompetitive activities by Indivior designed to impede competition from generic equivalents of Suboxone. As part of a consent decree, Indivior agreed that it would notify the FTC if it filed a Citizen Petition with the FDA in connection with a drug product, it would simultaneously disclose to both the FDA and the FTC all studies and data relevant to that Citizen Petition. Indivior further agreed not to withdraw a drug from the market or otherwise disadvantage a drug after obtaining approval to market another drug containing the same active ingredient.
“As alleged in the FTC’s complaint, in the midst of the nation’s opioid crisis, a critical opioid-addiction treatment was about to become more affordable,” said Gail Levine, a Deputy Director of the FTC’s Bureau of Competition. “But Indivior prevented that. It kept its drug prices high by unlawfully impeding generic manufacturers from competing effectively.”
A Multilateral Effort
The criminal case against Indivior was prosecuted by Randy Ramseyer of the U.S. Attorney’s Office for the Western District of Virginia, Albert P. Mayer and Carol Wallack of the Department of Justice Civil Division’s Commercial Litigation Branch, Charles J. Biro and Matthew J. Lash of the Department of Justice Civil Division’s Consumer Protection Branch, Kristin L. Gray, Joseph S. Hall and Janine M. Myatt of the Virginia Medicaid Fraud Control Unit of the Office of the Virginia Attorney General, and Garth W. Huston of the Federal Trade Commission. This matter was investigated by the Virginia Attorney General’s Medicaid Fraud Control Unit; FDA - Office of Criminal Investigation; United States Postal Service – Office of Inspector General; and Department of Health and Human Services - Office of Inspector General.
The civil settlement was handled by Edward Crooke of the Civil Division’s Commercial Litigation Branch, Sara Bugbee Winn of the U.S. Attorney’s Office for the Western District of Virginia, and Andrew A. Caffrey III of the U.S. Attorney’s Office for the District of New Jersey. Assistance was provided by representatives of the HHS Office of Counsel to the Inspector General; the HHS Office of the General Counsel, CMS Division; FDA’s Office of Chief Counsel; the U.S. Attorney’s Office for the Eastern District of Virginia; the U.S. Department of Agriculture Office of the General Counsel; the National Association of Medicaid Fraud Control Units; the Defense Criminal Investigative Service; the Office of Personnel Management - Office of Inspector General; the Department of Veterans’ Affairs Office of Inspector General; the Department of Labor - Office of Inspector General; and TRICARE Program Integrity.
The joint effort advances the goals of the Department’s Prescription Interdiction & Litigation (PIL) Task Force to deploy all available criminal, civil, and regulatory tools to hold opioid manufacturers accountable for unlawful practices and to ensure that prescription opioid products are marketed truthfully.
Except to the extent admitted as part of the criminal resolution, the claims resolved by the civil settlement are allegations only. There has been no determination of liability in the civil case.
For more information about the U.S. Attorney’s Office for the Western District of Virginia, visit its website at https://www.justice.gov/usao-wdva. Additional information about the Consumer Protection Branch and the Civil Fraud Section and their enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch and http://www. justice.gov/civil/fraud-section. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
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.
Indivior Solutions Pleads Guilty to Felony Charge and Indivior Entities Agree to Pay $600 Million to Resolve Criminal and Civil Investigations as Part of DOJ’s Largest Opioid ResolutionRead the Press Release
Indivior Solutions today pleaded guilty to a one-count felony information and, together with its parent companies Indivior Inc. and Indivior plc, agreed to pay a total of $600 million to resolve criminal and civil liability associated with the marketing of the opioid-addiction-treatment drug Suboxone. Together with a $1.4 billion resolution with Indivior’s former parent, Reckitt Benckiser Group PLC (RB Group), announced in 2019, and a plea agreement with Indivior plc’s former CEO, Shaun Thaxter, announced last month, the total resolution relating to the marketing of Suboxone is more than $2 billion — the largest-ever resolution in a case brought by the Department of Justice involving an opioid drug.
Suboxone is a drug product approved for use by recovering opioid addicts to avoid or reduce withdrawal symptoms while they undergo treatment for opioid-use disorder. Suboxone contains buprenorphine, a powerful opioid.
“Combatting the opioid crisis is a Department of Justice priority,” said Principal Deputy Associate Attorney General Claire M. Murray. “Today’s announced resolution and related actions hold accountable entities and individuals that unlawfully marketed opioid-addiction products.”
“The opioid crisis is a public health emergency. Prevention and access to effective treatments for opioid addiction are critical to fighting this epidemic,” said Deputy Assistant Attorney General Michael D. Granston for the Justice Department's Civil Division. “When a drug manufacturer claims to be part of a solution for opioid addicts, we expect honesty and candor to government officials, as well as to the physicians and patients making important treatment decisions based on those representations.”
Resolution of the Criminal Investigation
Indivior Solutions pleaded guilty today to a one-count felony criminal information charging false statements relating to health care matters. In connection with its guilty plea, Indivior Solutions admitted to making false statements to promote the film version of Suboxone (Suboxone Film) to the Massachusetts Medicaid program (MassHealth) relating to the safety of Suboxone Film around children. The resolution includes a criminal fine, forfeiture, and restitution totaling $289 million. On June 30, 2020, Indivior plc’s former CEO Shaun Thaxter pleaded guilty to a one-count misdemeanor information related to Indivior’s false and misleading representations to MassHealth.
In 2002, Indivior Inc. received approval to market Suboxone tablets for use in the treatment of opioid addiction and dependence. At that time, Indivior Inc. was an RB Group subsidiary known as Reckitt Benckiser Pharmaceuticals Inc. In December 2014, RB Group spun off Indivior Inc., and the two companies are no longer affiliated. Thereafter, Indivior Inc. became a subsidiary of Indivior plc. On April 9, 2019, a federal grand jury sitting in Abingdon, Virginia, indicted Indivior Inc. and Indivior plc for allegedly engaging in an illicit nationwide scheme to increase prescriptions of Suboxone.
In its guilty plea today, Indivior Solutions, which employed marketing and sales personnel for the Indivior group of companies, admitted to an aspect of the scheme alleged in the indictment. Specifically, Indivior Solutions admitted that, in October 2012, it sought to convince MassHealth to expand Medicaid coverage of Suboxone Film in Massachusetts and sent MassHealth false data indicating that Suboxone Film had the lowest rate of accidental pediatric exposure (i.e., children taking medication by accident) of all buprenorphine drugs in Massachusetts, when in fact, it did not. Indivior Solutions further admitted that sending the false and misleading information occurred in the context of marketing and promotional efforts directed at MassHealth, which were overseen by top executives. MassHealth announced it would provide access to Suboxone Film for patients with children under the age of six shortly after Indivior provided the false and misleading information to agency officials.
“During the nationwide opioid epidemic, Indivior Solutions made false statements about Suboxone’s safety to increase its sales. In doing so, Indivior Solutions misled government health care officials and is being held accountable today for its felonious conduct,” said First Assistant U.S. Attorney Daniel P. Bubar of the Western District of Virginia. “This resolution is the culmination of years of work by prosecutors and agents and demonstrates that we will continue to work tirelessly to hold pharmaceutical manufacturers responsible for illegal conduct.”
In addition to its financial aspects, the agreement with Indivior Inc. includes novel provisions that:
- Require Indivior Inc. to disband its Suboxone sales force and not reinstate it;
- Require Indivior Inc.’s CEO to personally certify, under penalty of perjury, on an annual basis that during the prior year (a) Indivior was in compliance with the Food Drug and Cosmetic Act and did not commit health care fraud or (b) list all non-compliant activity and the steps taken by Indivior to remedy these acts;
- Prohibit Indivior Inc. from using data obtained from surveys of health care providers for marketing, sales, and promotional purposes;
- Require Indivior Inc. to remove health care providers from their promotional programs who are at a high risk of inappropriate prescribing; and
- Make Indivior subject to contempt sanctions by the court and reinstatement of the dismissed charges if it violates the agreement.
“The opioid crisis has devastated families and communities across the Commonwealth and drug manufacturers must be held accountable for their role in creating and prolonging this crisis,” said Virginia Attorney General Mark R. Herring. “I want to thank my Medicaid Fraud Control Unit for their work on this important case, as well as our local, state and federal partners for their continued collaboration. My team and I will continue to do everything in our power to hold pharmaceutical companies accountable for their role in the opioid crisis and help to ensure justice for those families who have been effected by the opioid crisis.”
“Parties that contract with the government will be held to the letter of the contract,” said Kenneth Cleevely, Special Agent in Charge of the Eastern Field Office for the U.S. Postal Service Office of Inspector General. “The U.S. Postal Service spends billions of dollars per year in workers compensation-related costs, most of which are legitimate. However, when medical providers or companies choose to flout the rules and profit illegally, special agents with the USPS OIG will work with our law enforcement partners to hold them responsible. To report fraud or other criminal activity involving the Postal Service, contact USPS OIG special agents at www.uspsoig.gov or 888-USPS-OIG.”
U.S. District Judge James P. Jones accepted the guilty plea but deferred acceptance of the plea agreement until after the preparation of a presentence report. He scheduled sentencing for Oct. 20, 2020 at the U.S. Courthouse in Abingdon, Virginia.
The Civil Settlement
Under the civil settlement, Indivior Inc. and Indivior plc have agreed to pay a total of $300 million to resolve claims that the marketing of Suboxone caused false claims to be submitted to government health care programs. The $300 million settlement amount includes approximately $209.3 million to the federal government and $90.7 million to states that opt to participate in the agreement.
The civil settlement resolves allegations by the United States that, from 2010 through 2015, Indivior companies knowingly (a) promoted the sale and use of Suboxone to physicians who were writing prescriptions that were not for a medically accepted indication and that lacked a legitimate medical purpose, were issued without any counseling or psychosocial support, were for uses that were unsafe, ineffective, and medically unnecessary, and were often diverted; (b) promoted the sale or use of Suboxone Film to physicians and state Medicaid agencies using false and misleading claims that Suboxone Film was less susceptible to diversion and abuse than other buprenorphine products and that Suboxone Film was less susceptible to accidental pediatric exposure than tablets; and (c) submitted a petition to the Food and Drug Administration on Sept. 25, 2012, claiming that Suboxone Tablet had been discontinued “due to safety concerns” about the tablet formulation of the drug and took other steps to delay the entry of generic competition for Suboxone to improperly control pricing of Suboxone, including pricing to federal healthcare programs.
“Prescription opioids are both addictive and dangerous when diverted for improper use or prescribed without accurate information about the risks that they pose,” said U.S. Attorney Craig Carpenito for the District of New Jersey. “This resolution holds Indivior to account for placing profit above patient and community safety.”
The civil settlement resolves claims against Indivior in six lawsuits pending in federal court in the Western District of Virginia and the District of New Jersey under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. The False Claims Act also permits the government to intervene in such actions, as the government previously did in the three lawsuits pending in the Western District of Virginia. The whistleblower share to be awarded in this case has not yet been determined.
“Opioid addiction and abuse is an immense public health crisis and taking steps to address it is one of the FDA’s highest priorities,” said FDA Commissioner Stephen M. Hahn, M.D. “Medication-assisted treatments incorporating drugs like Indivior’s Suboxone, in combination with counseling and behavioral therapy, are an important tool in combating opioid use disorder but can quickly become part of the problem if not used responsibly. When companies encourage the use of powerful drugs where not medically necessary and provide misleading information about relative product benefits, they can ultimately risk more misuse, abuse, diversion, and accidental exposure to opioid drugs as well as make treatment more difficult to obtain for those suffering from this crisis. We will continue to work with the Department of Justice to investigate and hold accountable those who devise and participate in schemes to the detriment of the public health.”
Non-monetary Provisions of the Corporate Integrity Agreement
In addition to the criminal and civil resolutions, Indivior executed a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The CIA requires that Indivior implement numerous accountability and auditing provisions. On an annual basis, top executives and the Board of Directors must certify about compliance, Indivior must conduct annual risk assessments and other monitoring, and an independent review organization will conduct multi-faceted audits.
“Addressing the opioid crisis is a top priority for OIG, and we will continue to work closely with the Department of Justice to hold corporations and individuals accountable when they use illegal tactics to promote and sell opioids,” said Gregory E. Demske, Chief Counsel to the Inspector General, HHS-OIG. “Among other things, our CIA with Indivior imposes accountability on the Board and top executives, subjects the company to internal and external auditing, and ensures that the company will separate itself from its prior top leadership.”
“The opioid epidemic has ravaged this nation,” said Elton Malone, Assistant Inspector General for Investigations with the Office of Inspector General of the U.S. Department of Health and Human Services. “This resolution, along with our law enforcement partners’ work, should serve as a warning that large companies will face prosecution if they break the law.”
FTC Resolution
Under a separate agreement with the Federal Trade Commission (FTC), Indivior has agreed to pay $10 million to resolve claims that it engaged in unfair methods of competition in violation of the Federal Trade Commission Act, 15 U.S.C. § 53(b). The FTC filed a complaint in the U.S. District Court for the Western District of Virginia alleging anticompetitive activities by Indivior designed to impede competition from generic equivalents of Suboxone. As part of a consent decree, Indivior agreed that it would notify the FTC if it filed a Citizen Petition with the FDA in connection with a drug product, it would simultaneously disclose to both the FDA and the FTC all studies and data relevant to that Citizen Petition. Indivior further agreed not to withdraw a drug from the market or otherwise disadvantage a drug after obtaining approval to market another drug containing the same active ingredient.
“As alleged in the FTC’s complaint, in the midst of the nation’s opioid crisis, a critical opioid-addiction treatment was about to become more affordable,” said Gail Levine, a Deputy Director of the FTC’s Bureau of Competition. “But Indivior prevented that. It kept its drug prices high by unlawfully impeding generic manufacturers from competing effectively.”
A Multilateral Effort
The criminal case against Indivior was prosecuted by Randy Ramseyer of the U.S. Attorney’s Office for the Western District of Virginia, Albert P. Mayer and Carol Wallack of the Department of Justice Civil Division’s Commercial Litigation Branch, Charles J. Biro and Matthew J. Lash of the Department of Justice Civil Division’s Consumer Protection Branch, Kristin L. Gray, Joseph S. Hall and Janine M. Myatt of the Virginia Medicaid Fraud Control Unit of the Office of the Virginia Attorney General, and Garth W. Huston of the Federal Trade Commission. This matter was investigated by the Virginia Attorney General’s Medicaid Fraud Control Unit; FDA - Office of Criminal Investigation; United States Postal Service – Office of Inspector General; and Department of Health and Human Services - Office of Inspector General.
The civil settlement was handled by Edward Crooke of the Civil Division’s Commercial Litigation Branch, Sara Bugbee Winn of the U.S. Attorney’s Office for the Western District of Virginia, and Andrew A. Caffrey III of the U.S. Attorney’s Office for the District of New Jersey. Assistance was provided by representatives of the HHS Office of Counsel to the Inspector General; the HHS Office of the General Counsel, CMS Division; FDA’s Office of Chief Counsel; the U.S. Attorney’s Office for the Eastern District of Virginia; the U.S. Department of Agriculture Office of the General Counsel; the National Association of Medicaid Fraud Control Units; the Defense Criminal Investigative Service; the Office of Personnel Management - Office of Inspector General; the Department of Veterans’ Affairs Office of Inspector General; the Department of Labor - Office of Inspector General; and TRICARE Program Integrity.
The joint effort advances the goals of the Department’s Prescription Interdiction & Litigation (PIL) Task Force to deploy all available criminal, civil, and regulatory tools to hold opioid manufacturers accountable for unlawful practices and to ensure that prescription opioid products are marketed truthfully.
Except to the extent admitted as part of the criminal resolution, the claims resolved by the civil settlement are allegations only. There has been no determination of liability in the civil case.
For more information about the U.S. Attorney’s Office for the Western District of Virginia, visit its website at https://www.justice.gov/usao-wdva. Additional information about the Consumer Protection Branch and the Civil Fraud Section and their enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch and http://www. justice.gov/civil/fraud-section. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
Hudson man charged with embezzling $600k from Discovery Tours, IncRead the Press Release
Justin Herdman, United States Attorney for the Northern District of Ohio, announced today that a federal grand jury sitting in Cleveland has returned a eighteen-count indictment charging Joseph A. Cipolletti, age 45, of Hudson, with wire fraud, money laundering, bank fraud, and making a false statement under oath.
“This defendant is accused of embezzling thousands of dollars from hardworking Northeast Ohio families, intended to provide their children and students with meaningful educational experiences, for his own personal use – such as buying vehicles and backyard renovations,” said U.S. Attorney Justin Herdman. “As a result of the defendant’s alleged actions, his place of business was forced into bankruptcy, and our community’s schoolchildren were deprived of invaluable experiences and memories.”
“The fraud perpetrated by Mr. Cipolletti stole money from hardworking families and school districts. The scheme deprived students of annual trips that have become a tradition and provide a lifetime of memories,” said FBI Special Agent in Charge Eric B. Smith. “Great work by partner agencies including the Summit County Prosecutor’s Office, the Geauga County Prosecutor’s Office, and Ohio BCI, laid the initial groundwork for the FBI and the USAO to obtain this federal indictment. We will continue to work with partners throughout Northeast Ohio to seek justice for the communities we serve.”
“When these families paid for a trip, fraud wasn’t on the itinerary,” said Ohio Attorney General Dave Yost. “This business owner didn’t keep his word, so now his next destination will be the courthouse.”
“This individual is a typical con man,” said Cuyahoga County Prosecutor Michael O’Malley. “He took money from parents and never intended on fulfilling his obligations.”
“Thank you to U.S. Attorney Justin Herdman and his office and the FBI for their thorough investigation,” said Summit County Prosecutor Sherri Bevan Walsh. “My office began an investigation into this conduct over two years ago. My hope is those responsible for taking money from local families and depriving students of a once-in-a-lifetime trip will be held accountable.”
According to the indictment, Cipolletti was employed as Vice President of Discovery Tours, Inc., a business located in Mayfield Village, Ohio, that offered educational trips for grade school and high school students to destinations such as Washington, D.C., Chicago, Illinois, New York City, New York, Columbus, Ohio, and Gettysburg, Pennsylvania. These trips took place via coach bus and included transportation, hotel accommodations, meals, sightseeing admissions, and security. The defendant’s responsibilities included managing the organization’s finances, cash withdrawals, general ledger entries, accounts payable, accounts receivable, payroll, taxes and the defendant had signature authority on the business bank accounts.
According to court documents, from June 2014 to May 2018, the defendant is alleged to have devised a scheme to divert payments intended for these trips for personal use. The defendant defrauded parents, other student trip purchasers, and embezzled funds meant for school trips on items such as home renovations and personal vehicles. Overall, the defendant is alleged to have embezzled approximately $609,942 from his place of business.
The defendant allegedly took many actions to further his scheme, including making multiple false entries in the Discovery Tours general ledger claiming embezzled funds were trip-related expenses, forging an email to a hotel vendor claiming that the business suffered a loss of $236,022.27 due to a hacked account, paying vendors for previous student trips with deposits from future trips, and obtaining high-out interest loans to conceal his actions. The high interest on these loans ultimately led to Discovery Tours eventual bankruptcy filing.
In one instance, according to the indictment, on or about May 19, 2016, a hotel vendor sent the defendant an email stating that payment for a previous school trip had not been made and was overdue. The hotel vendor informed the defendant that because of this delay in payment, the business would be required to prepay for future events. The hotel vendor advised the defendant that payment in full for the hotel accommodations was not received by a specific time and date, then the next student group would not be permitted to check-in.
On or about May 21, 2016, knowing that his organization’s business account did not have sufficient funds, the defendant issued five checks totaling $72,540, payable to the hotel, and had an employee travel in interstate commerce from Ohio to Virginia to hand deliver the checks to the hotel. All the checks were returned for insufficient funds.
That indictment states that as a result of the defendant’s actions, on May 7, 2018, Discovery Tours abruptly ended operations and filed for bankruptcy in United States Bankruptcy Court for the Northern District of Ohio. Student trips to Washington, D.C. were cancelled for dozens of schools across Ohio and more than 5,000 families lost the money they had previously paid for trip fees.
Furthermore, on December 10, 2018, in the United States Bankruptcy Court for the Northern District of Ohio, the defendant is alleged to have knowingly made statements under oath in and in relation to his organization’s bankruptcy status. The defendant claimed that he did not owe his business any money, when in fact, and as he then knew, the defendant embezzled $609,942 from his place of business and made false entries in the general ledger.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigation was conducted by the Cleveland Division of the FBI and Akron Resident Agency. The U.S. Attorney’s Office for the Northern District of Ohio would like to acknowledge and thank the Ohio Bureau of Criminal Investigations and the Summit County, Geauga County, and Cuyahoga County Prosecutor Offices for their cooperation with this matter. This case is being prosecuted by Assistant U.S. Attorney Brian McDonough.
Hudson County Man Charged with Being Felon in Possession of WeaponRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man made his initial appearance today on a charge stemming from his arrest for illegally possessing a handgun with a large capacity magazine, U.S. Attorney Craig Carpenito announced.
Malik Holloway, 28, of Jersey City, New Jersey, is charged by complaint with one count of possession of a firearm and ammunition by a convicted felon. He appeared by videoconference before U.S. Magistrate Judge James B. Clark III and was detained.
According to documents filed in this case:
At 8:20 p.m. on July 13, 2020, a Jersey City Police Department (JCPD) officer observed via surveillance camera what he believed to be the transfer of a firearm between two individuals on Neptune Avenue. Approximately 30 minutes later, members of JCPD observed a large group of people. Malik Holloway began to walk away from the group. An officer observed what appeared to be a bulge protruding from the center of Holloway’s waistband and Holloway smelled of marijuana. Holloway was stopped and the officer conducted a pat down for weapons. The officer recovered a Glock Model 17 9mm with a large capacity magazine containing 18 rounds of ammunition
The charge of possession of a weapon by a convicted felon carries a maximum penalty of 10 years in prison and a fine of up to $250,000.
U.S. Attorney Carpenito credited the Jersey City Police Department, under the direction of Public Safety Director James Shea; the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez; and special agents and task force officers of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson, Newark Field Division, with the investigation leading to the charge and arrest.
This investigation was conducted as part of the Jersey City Violent Crime Initiative (VCI). The VCI was formed in 2018 by the U.S. Attorney’s Office for the District of New Jersey, the Hudson County Prosecutor’s Office, and the Jersey City Police Department, for the sole purpose of combatting violent crime in and around Jersey City. As part of this partnership, federal, state, county, and city agencies collaborate to strategize and prioritize the prosecution of violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Federal Bureau of Investigation (FBI), the Drug Enforcement Administration’s (DEA) New Jersey Division, the U.S. Marshals, the Jersey City Police Department, the Hudson County Prosecutor’s Office, the Hudson County Sheriff’s Office, New Jersey State Parole, the Hudson County Jail, and the New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center.
The government is represented by Assistant U.S. Attorney Tracey Agnew of the Organized Crime and Gangs Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
High Desert Man Charged with Unlawfully Importing Ancient MosaicRead the Press Release
LOS ANGELES – A Palmdale resident was charged today with illegally importing a mosaic depicting the Roman god Hercules that is believed to have been made nearly two millennia ago.
Yassin Alcharihi, 53, was named in an indictment that charges him with one count of entry of goods falsely classified.
The indictment alleges that Alcharihi claimed he was importing a mosaic and other items valued at $2,199, when in fact he was importing an ancient mosaic worth more than that. The indictment also alleges that he misrepresented the quality of the mosaic and what the artwork depicted.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
Alcharihi will receive a summons to appear for an arraignment in United States District Court for an arraignment that will likely take place next month.
This case is being investigated by the FBI’s Art and Antiquity Investigations group and Homeland Security Investigation’s Los Angeles Public Safety Group.
The case is being prosecuted by Assistant United States Attorneys Mark A. Williams and Matthew W. O’Brien of the Environmental and Community Safety Crimes Section, and Justice Department Trial Attorney Ann Marie Ursini of the Criminal Division’s Human Rights and Special Prosecutions Section.
The government is pursuing forfeiture of the mosaic, which was seized by FBI and HSI agents in 2016, in both the indictment and a 2018 asset forfeiture complaint being handled by Assistant United States Attorney Katharine Schonbachler.
Hazard Couple Sentenced for Labor Trafficking ChargesRead the Press Release
LONDON, Ky. - Two defendants, Jordan Allen Otis, 26, and Tiffany Louis Walsh, 34, were sentenced in federal court this week, to 360 months and 108 months in federal prison respectively, by U.S. District Judge Robert Wier for labor trafficking charges. Otis had previously pled guilty to using force and threats of force to obtain labor and services, and Walsh had previously pled guilty to benefiting financially from labor trafficking.
According to their plea agreements, Otis and Walsh used threats of physical force to compel minor victims to make various homemade items and sell those items, by walking door to door for approximately six hours a day. Otis also admitted to forcing the victims to hand out flyers he made, which offered various services the victims would provide for payment. Otis further admitted that, if the victims did not comply, they had to choose a punishment from a “punishment jar,” which was filled with handwritten punishments he would impose. Otis kept all or most of the money for himself, and using it to purchase electronics, cigarettes and food for himself and Walsh. Their criminal conduct occurred from March 2016 through May 2017, in Hazard, Kentucky, and other locations, including Tennessee and South Carolina.
“Protecting the most vulnerable, including children, from harm is a fundamental priority for law enforcement. Because of the dedicated work of FBI and KSP personnel, the defendants were held accountable for their crimes,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “The lengthy sentences imposed underscore the seriousness of the conduct and help ensure the defendants are not able to victimize others for the foreseeable future.”
Under federal law, Otis and Walsh must serve 85 percent of their prison sentences and upon their release will be under the supervision of the U.S. Probation Office for three years.
U.S. Attorney Duncan; James Robert Brown, Special Agent in Charge, FBI, Louisville Field Office; and Commissioner Rodney Brewer, Kentucky State Police, jointly made the announcement.
The investigation was directed by the FBI and KSP. The United States was represented by Assistant U.S. Attorney Hydee Hawkins.
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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Harrisburg Man Indicted for EscapeRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Terrell Ike Luster, age 31, of Harrisburg, Pennsylvania, was indicted by a federal grand jury on July 22, 2020, for escape. Luster was taken into custody without incident on July 23, 2020.
According to United States Attorney David J. Freed, the indictment alleges that on July 7, 2020, Luster failed to return to the Capital Pavilion Residential Reentry Center where he was confined for his conviction by the United States District Court for the Middle District of Pennsylvania for unlawful possession of a firearm by a felon, possession of firearm during commission of federal drug charge, and possession with intent to distribute crack cocaine.
The case was investigated by the United States Marshal Services for the Middle District of Pennsylvania. Assistant U.S. Attorney Jaime Keating is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for this offense is 5 years imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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