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Thursday 23 July 2020
Dorchester Man Charged in Second Superseding Indictment with Sex Trafficking over 15 Year PeriodRead the Press Release
BOSTON – A Dorchester man and a Rehoboth woman have been indicted by a federal grand jury in Boston on sex trafficking charges.
Bruce Brown, a/k/a “Arki,” 41, of Boston, was indicted in a second superseding indictment unsealed today in federal court. The second superseding indictment charges Brown with an additional count of sex trafficking by force, fraud or coercion and an additional count of conspiracy to commit sex trafficking. It also charges Muriel Close, 42, of Rehoboth, with conspiracy to commit sex trafficking.
Brown was previously indicted on Feb. 13, 2020, with four counts of sex trafficking by force, fraud, or coercion; one count of sex trafficking of a minor by force, fraud and coercion; one count of transportation of a minor for purposes of prostitution; and one count of conspiracy to commit sex trafficking. On June 16, 2020, Brown was charged in a superseding indictment with obstruction of justice and witness tampering for his attempt to influence a victim’s testimony related to the pending charges against him. Brown dubbed this scheme his “Plan B.”
According to the second superseding indictment, Brown engaged in the sex trafficking of five victims over a 15 year period beginning in June 2004 and continuing through approximately December 2019.
Close’s conspiracy charges are based on her conduct involving three victims, two from 2012, and one from 2019.
The charges of sex trafficking and conspiracy to commit sex trafficking provide for a sentence of up to life in prison, five years of supervised release and a $250,000 fine. The sex trafficking statute also imposes a mandatory minimum sentence of 15 years for offenses committed by means of force, threats of force, fraud or coercion. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement today. The Newton Police Department provided valuable assistance in the investigation. The case is being prosecuted by Lelling’s Civil Rights Enforcement Team.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Doctor Pleads Guilty in Manhattan Federal Court to Illegal Distribution of Oxycodone from Brooklyn ClinicRead the Press Release
Audrey Strauss, the Acting United States Attorney for the Southern District of New York, Raymond Donovan, the Special Agent-in-Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), Leigh-Alistair Barzey, Special Agent in Charge of the Northeast Field Office of the U.S. Department of Defense - Office of Inspector General’s Defense Criminal Investigative Service (“DCIS”), and Dermot Shea, Commissioner of the New York City Police Department (“NYPD”), announced that DMITRY DONSKY, a doctor who practiced in New York, pled guilty today to an Information charging him with conspiring to illegally distribute large quantities of oxycodone from a medical clinic in Brooklyn, New York. DONSKY pled guilty before U.S. District Judge Paul A. Crotty in Manhattan federal court.
Acting U.S. Attorney Audrey Strauss said: “As he admitted in court today, Dmitry Donsky violated the oath of his profession and broke the law by peddling more than half a million oxycodone pills to ‘patients’ he knew had no medical need for them. Now he awaits sentencing for his crime.”
DEA Special Agent-in-Charge Raymond Donovan said: “Dr. Donsky’s plea is evidence that he knows the difference between right and wrong. As a trusted medical professional he betrayed his patients, their loved ones, and his community. I commend our law enforcement partners, and the Southern District of New York, for their diligent efforts identifying, investigating, and prosecuting this case.”
DCIS Special Agent in Charge Leigh-Alistair Barzey said: “The risks created by the improper prescription of oxycodone are well documented and tragically real. Today’s guilty plea is the result of a joint effort and demonstrates the DCIS’s ongoing commitment to work with the U.S. Attorney’s Office, the DEA, and other law enforcement partners, to protect U.S. military members and their dependents from the dangers posed by medical professionals who illegally prescribe oxycodone.”
NYPD Commissioner Dermot Shea said: “Our work here stopped a doctor who betrayed his oath to victimize vulnerable New Yorkers. The case highlights the NYPD’s continuing fight, with our law enforcement partners, against this ongoing epidemic.”
According to the allegations contained in the Information and statements made during today’s plea proceeding:
DONSKY, a licensed physician, practiced at a medical clinic in Brooklyn. From 2014 to 2019, despite specializing in internal medicine and pediatrics, DONSKY illicitly prescribed over 500,000 oxycodone 30-milligram pills to individuals he knew had no legitimate medical need for the pills. DONSKY often performed little or no physical examination on purported patients receiving the illicit oxycodone prescriptions. Patients received as many as 360 oxycodone 30-milligram pills each month, and several patients even received duplicate monthly prescriptions of oxycodone from DONSKY.
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DONSKY, 60, of Marlboro, New Jersey, pled guilty to one count of narcotics distribution conspiracy, which carries a maximum sentence of 20 years in prison. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentence for the defendant will be determined by the judge.
DONSKY is scheduled to be sentenced by Judge Crotty on October 22, 2020.
Ms. Strauss praised the outstanding investigative work of DCIS and of the DEA’s New York Tactical Diversion Squad, which comprises agents and officers from the DEA, the NYPD, the New York State Police, New York State Department of Financial Services, New York National Guard, New York City Department of Investigation, and New York State Department of Health Bureau of Narcotics Enforcement. Ms. Strauss also thanked the U.S. Department of Health and Human Services - Office of Inspector General for its assistance.
This case is being handled by the Office’s Narcotics Unit. Assistant United States Attorney Juliana N. Murray is in charge of the prosecution.
Department of Justice Issues Business Review Letter to Monoclonal Antibody Manufacturers to Expedite and Increase the Production of Covid-19 Mab TreatmentsRead the Press Release
The United States Department of Justice announced today that it will not challenge proposed efforts by Eli Lilly and Company, AbCellera Biologics, Amgen, AstraZeneca, Genentech, and GlaxoSmithKline (together, the Requesting Parties) to share information about manufacturing facilities and other information that could enable them to expedite the production of monoclonal antibody treatments that are determined to be safe and effective to treat COVID-19.
As the letter explains, the demand for monoclonal antibodies targeting COVID-19 is likely to exceed what any one firm could produce on its own. Moreover, waiting until regulators approve specific treatments before scaling up manufacturing might delay access to these potentially life-saving medicines by many months, which adversely could affect the nation’s efforts to fight COVID-19. The Requesting Parties aim to address both problems by sharing information about their manufacturing facilities, capacity, raw materials and supplies that could be used to produce successful COVID-19 monoclonal antibody treatments subject to important safeguards and limits, so that facilities can be ready to manufacture treatments once they prove safe and effective. Among other competitive safeguards, they have committed that they will not exchange information related to the prices of those treatments or the costs of inputs for or production of those treatments. Their efforts likely will expedite and expand the overall production of monoclonal antibody treatments targeting COVID-19 in a way that is unlikely to lessen competition.
“This critical collaboration will help Americans get access to potentially life-saving therapeutics sooner than otherwise would be possible,” Assistant Attorney General Makan Delrahim said. “It also will help preserve Americans’ ability to benefit from the free market competition that drives innovation and access to drugs in the biotech and pharmaceutical industry.”
The Requesting Parties submitted their business review request pursuant to the expedited, temporary review procedure detailed in the Joint Antitrust Statement Regarding COVID-19 (the “Joint Statement”) issued on March 24 by both the Department and the Federal Trade Commission. According to the Joint Statement, the Department will aim to resolve COVID-19-related business review requests like this one within seven (7) calendar days of receiving all necessary information.
Copies of the business review request and the department’s response are available on the Antitrust Division’s website at https://www.justice.gov/atr/business-review-letters-and-request-letters, as well as in a file maintained by the Antitrust Documents Group of the Antitrust Division. After a 30-day waiting period, any documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the business review procedure. Supporting documents in the file will be maintained for a period of one year, and copies will be available upon request to the FOIA/Privacy Act Unit, Antitrust Documents Group at [email protected].
Council Bluffs Man Sentenced to Prison for Possession of a FirearmRead the Press Release
COUNCIL BLUFFS, Iowa – United States Attorney Marc Krickbaum announced on Tuesday, July 14, 2020, United States District Court Judge Rebecca Goodgame Ebinger sentenced Jimmy Joe Gappa, age 27, of Council Bluffs, to 63 months in prison for felon and drug user in possession of a firearm. Gappa was ordered to serve a period of supervised release of three years to follow his prison term and pay a $100 special assessment payable to the Crime Victims’ Fund. There is no parole in the federal system.
On June 8, 2019, Gappa and a friend were in Mills County driving when their vehicle broke down. As they walked away from the vehicle, a law enforcement officer stopped them. Gappa had an outstanding warrant and he was arrested. Gappa was in possession of a stolen pistol, ammunition, and methamphetamine.
This investigation was conducted by the Mills County Sheriff’s Office and the Southwest Iowa Narcotics Task Force. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Convicted sex offender pleads guilty to operating a child pornography chat groupRead the Press Release
GAINESVILLE, Ga. - Terence Dewayne Dixon has pleaded guilty to conspiracy to advertise child pornography. Dixon ran a Kik chat group that he named “House of 1000 Littles.” In 2018, the chat group involved more than 20 members from around the world who talked about and traded child pornography on a daily basis before the group was shut down in October 2018.
“Dixon and his chat group traded these disgusting files without regard for the lives they impacted,” said U.S. Attorney Byung J. “BJay” Pak. “Individuals who share images of the sexual abuse of children feed the horrific exploitation of children, creating ongoing trauma to these vulnerable young victims and their families each time their image is distributed.”
“It is detestable that this predator delighted in seeing images of children being victimized, but to make matters worse, he organized an online haven for others to discuss and traffic in this filth,” said acting Special Agent in Charge Robert Hammer, who oversees Homeland Security Investigations (HSI) operations in Georgia and Alabama. “HSI Atlanta and its state and local partners will continue to identify and arrest these predators that are victimizing and stealing the innocence of our youth.”
“For this defendant to take the images of innocent children and pass them around in order to exploit them and use them to arouse in a sexual nature is absolutely despicable. The GBI is committed to working with our partners to stop this criminal behavior and protect our young ones,” said Vic Reynolds, Director, Georgia Bureau of Investigation.
According to U.S. Attorney Pak, the charges and other information presented in court: As early as November 2017, Dixon created a chat group on the social media app, Kik, and named it “House of 1000 Littles.” Members of Dixon’s group discussed how they were sexually aroused by children and sent one another links to child pornography files on a daily basis until October 2018. Investigators identified most of the other members of the chat group, living all across the United States, including in Georgia, Michigan, Ohio, Illinois, New York, Louisiana, Tennessee, and California. On one day, in or about January 2018, Dixon shared 21 links. On another occasion, in February 2018, he bragged that his shared link contained 5,000 videos of child pornography.
Sentencing for Terence Dewayne Dixon, also known as “Devilman Crybaby”, 37, of Houston, Texas, has not been scheduled yet.
This case is being investigated by the Department of Homeland Security, Homeland Security Investigations, and the Georgia Bureau of Investigation.
Assistant U.S. Attorney Jennifer Keen is prosecuting the case.
This case is being brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Convicted Felon Admits Selling Semi-Automatic Rifle in TrentonRead the Press Release
TRENTON, N.J. – A Trenton man today admitted unlawfully possessing a semi-automatic rifle during the course of an attempted sale to another individual, U.S. Attorney Craig Carpenito announced.
Edwin Gaines, 59, pleaded guilty today by videoconference before U.S. District Judge Peter G. Sheridan to an information charging him with one count of possession of a firearm by a convicted felon.
According to documents filed in this case and statements made in court:
On Feb. 15, 2019, Gaines, who previously had been convicted of murder in New Jersey Superior Court and who has other felony convictions, arranged to sell to another individual a Ruger .22 semi-automatic rifle as well as an extended magazine. The purchaser, however, was acting at the direction and supervision of law enforcement. In a video- and audio-recorded transaction in the basement of a Trenton residence, the individual purchased the rifle and magazine from Gaines using money that law enforcement had provided.
The firearm charge to which Gaines pleaded guilty carries a statutory maximum term of 10 years in prison and a fine of $250,000. Gaines’s sentencing is scheduled for Nov. 24, 2020.
U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, Trenton Field Office, under the direction of Special Agent in Charge Charlie J. Patterson, and detectives from the New Jersey State Police, under the direction of Superintendent Col. Patrick J. Callahan, with the investigation leading to today’s guilty plea.
The government is represented by Special Assistant U.S. Attorney Marita Navarro of the U.S. Attorney’s Office’s Criminal Division in Trenton.
Connecticut Substance Abuse Treatment Provider Pays over 354K to Settle Improper Billing AllegationsRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, today announced that RECOVERY NETWORK OF PROGRAMS, INC. (“RNP”), a healthcare organization that provides substance abuse and mental health services in Fairfield County, has entered into a civil settlement agreement with the federal and state governments in which it will pay $354,367 to resolve allegations that it caused overpayments for urine drug testing services to be paid by the Connecticut Medicaid Program.
RNP entered into contracts with the State of Connecticut Department of Social Services ("DSS") to provide behavioral health and substance use disorder services to Medicaid beneficiaries. Medicaid reimburses methadone clinics, such as RNP, utilizing a weekly rate payment for each Medicaid patient provided methadone treatment. Regulations issued by the State of Connecticut in 2013 made it clear that the weekly payment was a “bundled” rate that included intake evaluation; initial physical examination; on-site drug abuse testing and monitoring; and individual, group and family counseling services.
On September 3, 2014, Medicaid issued a Provider Bulletin to all methadone clinics reminding them that the weekly rate payment included reimbursement for on-site drug abuse testing and monitoring.
On February 1, 2015, DSS published on its website an Audit Protocol for methadone clinics. The Audit Protocol stated that if a DSS audit found Medicaid paid another laboratory provider for drug testing within a week of the date a methadone clinic was paid for methadone treatment, Medicaid would reduce the methadone clinic's payment for the methadone treatment service by the cost of the laboratory service.
DSS conducted an audit of RNP and found that both RNP and an independent laboratory billed Medicaid for drug testing performed by the laboratory, contrary to DSS’ weekly rate payment regulation. In January 2016, DSS issued an Audit Report warning RNP that continued non-compliance with the weekly rate payment rule would result in financial disallowances in future audits.
The government alleges that, despite clear guidance from the Medicaid program and the audit finding indicating that on-site drug testing was part of the bundled rate, RNP routinely referred urine drug tests for RNP’s patients to an outside, independent laboratory. As a result, Medicaid paid for the claims twice, once to RNP pursuant to the bundled rate and a second time to the outside laboratory.
To resolve its liability, RNP will pay $354,367 to the federal and state governments for conduct occurring between March 1, 2017 and October 17, 2017.
“Overbilling of Medicaid and other government health insurance programs cannot be tolerated and providers who fail to follow the rules, especially after multiple warnings, face serious consequences,” stated U.S. Attorney Durham.
This matter was investigated by the Office of Inspector General for the Department of Health and Human Services. The case is being prosecuted by Assistant U.S. Attorney Richard M. Molot and by Assistant Attorneys General Michael Cole and Greggory O’Connell of the Connecticut Office of the Attorney General.
People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS or the Health Care Fraud Task Force at (203) 777-6311.
Carrizo Springs Man Arrested for Assisting Arsonists in Evading Capture in Connection with Demonstrations after George Floyd Death in MinneapolisRead the Press Release
In Del Rio today, a federal complaint was unsealed against 29-year-old Leeroy Felan for providing false information to federal agents and assisting arsonists in evading arrest, announced U.S. Attorney John F. Bash and U.S. Marshal Susan Pamerleau. Deputy U.S. Marshals arrested Felan in Carrizo Springs on July 21, 2020.
The complaint charges Felan with being an accessory after the fact. According to court records, Felan provided false statements to federal law enforcement officers in order to impede the investigation and arrest of his brother, Jose Felan, Jr., and his brother’s wife, Mena Yousif. Felan also assisted with the transportation of Jose Felan, Jr. and Mena Yousif in order to hinder and prevent both from being apprehended by law enforcement.
Jose Felan, Jr. and Mena Yousif are wanted in connection with a fire set at a Goodwill retail store in St. Paul, Minnesota, on May 28, 2020. The store was set ablaze after demonstrations across Minnesota, following the death of George Floyd in Minneapolis. Surveillance cameras show two suspects alleged to be involved in setting the fire to the Goodwill store’s back room. Those two suspects were later identified as Jose Felan, Jr. and Mena Yousif. ATF is offering two rewards of up to $10,000 each for information that leads to the apprehension and conviction of Jose Felan and Mena Yousif. Additional information regarding Jose Felan, Jr. and Mena Yousif can be found at this link: https://www.usmarshals.gov/news/chron/2020/062620.htm.
In 2015, Leeroy Felan was convicted of one count of conspiracy to transport illegal aliens; he was sentenced to 36 months of federal imprisonment. Felan is currently on federal supervised release stemming from the 2015 conviction. He is scheduled for a detention and preliminary hearing on this current case on July 31, 2020, before U.S. Magistrate Judge Collis White in Del Rio.
The U.S. Marshals Service in Del Rio is investigating this case. Assistant U.S. Attorney Jody Gilzene is prosecuting this case on behalf of the government.
A complaint 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.
Anyone with information on the whereabouts of Jose Felan, Jr. or Mena Yousif can report the information at www.usmarshals.gov/tips. Tipsters can also call 877-WANTED-2 (877-926-8332).
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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.
Buffalo Police Department Receives DOJ Grant to Implement A Shooting Review Process Targeting Unsolved Shootings and Improving Clearance RatesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr., Buffalo Police Commissioner Byron Lockwood, and Erie County District Attorney John J. Flynn announced today that the Department of Justice has awarded the Buffalo Police Department a 2020 Project Safe Neighborhood grant totaling $229,837. The funding will be used to implement a Shoot Review Process in the police department.
The Shoot Review Process is designed to address unsolved gun assaults and increase clearance rates in the City of Buffalo through the development of a case review process. By reviewing shootings in the city on a regular basis, the goal is to remove active shooters from the streets, strengthen the administration of justice, increase public safety in urban neighborhoods, and increase community confidence in the police.
The Shoot Review Process team is headed by Buffalo Deputy Police Commissioner Joseph Gramaglia, and includes the Buffalo Police Department’s Gun Violence Unit, crime analysts from the Erie Crime Analysis Center, and representatives from the District Attorney’s Office, probation, and parole, as well as the U.S. Attorney’s Office, the ATF, and the FBI.
The review process will be modeled after best practices nationally. In March 2020, Police Commissioner Lockwood, U.S. Attorney Kennedy, Erie County District Attorney John Flynn, ATF managers, and members of the various command staffs, traveled to Milwaukee, Wisconsin, to meet with members of the Milwaukee Police Department, the United States Attorney’s Office for the Eastern District of Wisconsin, and others who have successfully implemented a shooting review process. After implementing the process in 2018, the City of Milwaukee saw a 17% reduction in homicides and a 15% reduction in non-fatal shootings.
A successful shooting review process includes:
• A review of several months’ worth of previous shootings to identify trends in types of shootings, victims and suspects;
• Detailed reports on all cases, including shooting(s) date, location, victim information, and victim and suspect intelligence;
• Regular and consistent meetings to conduct shooting reviews; and
• Development of innovative strategies to reduce violence, improve case closure and improve case prosecution.“Simply put, violent crime is rising at a staggering rate and homicides are soaring across the country and right here in our own city, and many of these crimes involve a gun,” stated U.S. Attorney Kennedy. “Also, much of the violence is playing out in distressed and economically disadvantaged neighborhoods, leaving residents to live in fear of bloodshed and fear for their own lives. This shoot review process will target the most dangerous and violent offenders in our community who are committing gun assaults and murders. This review process will remove active shooters from the streets, strengthen the administration of justice, and increase public safety in urban neighborhoods. This program will bring increased accountability not only for the results achieved by the law enforcement agencies who have been under attack as of late but also for the criminals who are terrorizing our communities. Increased accountability across the board is a good thing—both for the law enforcement and for criminals.”
“I want to thank our many partners in this important initiative to reduce gun violence in our community,” stated Buffalo Police Commissioner Byron Lockwood. “Working together we can help solve some of these senseless crimes. I look forward to working with all of the agencies and I thank the U.S. Attorney's Office for the important funding they are providing for this critical collaborative effort.”
“We have seen a spike in shootings this summer, and we are working hard every day to bring justice to the victims. When I learned about this program that has proven successful in Milwaukee, I wanted to bring it to Buffalo immediately,” said Erie County District Attorney John J. Flynn. “I want to thank U.S. Attorney J.P. Kennedy for securing federal funding for this collaborative effort to end gun violence in our city. I also want to thank Captain Jeff Rinaldo and the Buffalo Police Department for inviting the District Attorney’s Office to be a part of this new initiative. I look forward to working together to uncover the perpetrators of these unsolved shootings. I hope that our efforts will also deter people from committing these senseless acts of violence in the future.”
“ATF’s highest priority is and will remain reducing violent crime and firearm-related violence,” stated ATF Special Agent-in-Charge John B. Devito. “We will be relentless in the pursuit of the criminal groups who are intent on violating federal law and those who represent the greatest threat to the safety of our communities. Through this Project Safe Neighborhood grant, strong law enforcement partnerships, and community involvement we will see a safer Buffalo.”
“Every time a gun slides into a conversation in front of a corner store, or in a community park, its impact is devastating,” said FBI Buffalo Special Agent-in-Charge Stephen Belongia. “Gun violence victims are not simply statistics. They are fathers, mothers, grandparents and neighbors. And, all too often, the victims of gun violence are innocent children. We are committed to making a difference by preventing the trauma caused by violent crime through leadership and partnership.”
“Shoot Review is about accountability,” said Mayor Byron W. Brown. “We share our community’s sense of urgency to curb the senseless gun violence that harms the quality of life in Buffalo, and this collaborative initiative will help us further reduce and prevent gun violence in our city. This intelligence led, data driven violence reduction strategy is the latest example of our City's commitment to interagency collaboration between local and federal law enforcement agencies. I thank United States Attorney for the Western District of New York James P. Kennedy, Jr. for securing the $229,000 federal grant to support this program that will further increase the solvability of shooting cases and reduce gun violence throughout neighborhoods citywide.”
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Brooklyn Man Sentenced to 126 Months for Cocaine PossessionRead the Press Release
ALBANY, NEW YORK – Tyshawn Warren, age 35, of Brooklyn, New York, was sentenced today to serve 126 months in federal prison for possessing cocaine with intent to distribute, announced United States Attorney Grant C. Jaquith and Kevin Kelly, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI).
Senior United States District Judge Thomas J. McAvoy also imposed a 6-year term of supervised release, to begin once Warren is released from prison.
On July 18, 2019, following a traffic stop in Potsdam, New York, Warren was found in possession of more than 37 grams of cocaine powder. At the time of his arrest, Warren had previously been convicted of two (2) felony controlled substance offenses.
This case was investigated by Homeland Security Investigations (HSI), the St. Lawrence County Sheriff’s Office, and the Village of Potsdam Police Department, and was prosecuted by Assistant U.S. Attorney Shira C. Hoffman.
Billings meth trafficker sentenced to more than 26 years in prisonRead the Press Release
BILLINGS— A Billings man convicted of bringing large quantities of methamphetamine to the community and of possessing firearms was sentenced today to 26 years and 10 months in prison and five years of supervised release, U.S. Attorney Kurt Alme said.
After a two-day trial in March, a jury found Maurice Joseph Fregia, 33, guilty of conspiracy to possess with intent to distribute meth, possession with intent to distribute meth and possessing a firearm in furtherance of a drug trafficking crime.
U.S. District Judge Susan P. Watters presided.
“Fregia's sentencing should put all meth dealers on notice that they face long prison terms if they plan to push this highly addictive drug into our communities and use firearms to further their trade. We will continue to prosecute dealers like Fregia and his co-conspirators to the full extent of the law,” U.S. Attorney Alme said.
The prosecution presented evidence at trial that Fregia, along with co-defendant Chad Beres, headed a large drug trafficking organization that brought large quantities of meth and other drugs into Montana from California. In April 2018, law enforcement officers with the Eastern Montana High Intensity Drug Trafficking Area Task Force served three search warrants on three Billings residences, including a house where Fregia and Beres lived. Both Fregia and Beres were present during the search. Officers found almost 700 grams of meth, which is about 1.5 pounds and about 5,600 doses, sticking out of a clothes dryer vent, $14,538 in currency, jewelry, including a Rolex watch in Beres’ room, other drugs and various firearms and ammunition. Beres pleaded guilty to charges and was sentenced to 15 years in prison.
During the search of a second residence, occupied by co-defendant Larry Barnett, agents found meth and a handgun. Barnett, who pleaded guilty and was sentenced to seven years in prison, admitted he had received multiple pounds of meth from Fregia and Beres and had seen both men with firearms.
Assistant U.S. Attorneys Colin Rubich and Julie Patten prosecuted the case, which was investigated by the Eastern Montana High Intensity Drug Trafficking Area Task Force, the FBI and the Billings Police Department.
This case is part of Project Guardian, the U.S. Department of Justice’s recent initiative to reduce gun violence and enforce federal firearms laws, and Project Safe Neighborhoods, the USDOJ’s initiative to reduce violent crime. According to the FBI’s Uniform Crime Reports, violent crime in Montana increased by 36% from 2013 through 2018. Through these initiatives, federal, tribal, state and local law enforcement partners in Montana focus on violent crime driven by methamphetamine trafficking, armed robbers, firearms offenses and violent offenders with outstanding warrants.
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Big Arm man admits making sexually explicit videos of minor girlRead the Press Release
MISSOULA – A Big Arm man accused of making child pornography videos and sending an image to an undercover agent today pleaded guilty to charges, U.S. Attorney Kurt Alme said.
Billy Dean Smith, 55, pleaded guilty to sexual exploitation of a child. Smith faces a minimum mandatory 15 years to 30 years in prison, a $250,000 fine and five years to life of supervised release.
U.S. District Judge Donald W. Molloy presided and set sentencing for Nov. 6. Smith was detained.
In court documents filed in the case, the prosecution said that in January, an undercover FBI agent was investigating a KIK chat group known to exchange child pornography. KIK is a mobile phone app that allows users to exchange instant messages over the internet. Smith exchanged messages with the undercover agent where he described sexually abusing a girl, who was under the age of 18. Smith sent a sexually explicit image of the girl to the undercover agent. Agents obtained a search warrant for Smith's cell phone, seized it and conducted a forensic analysis of its contents. The forensic examiner located the sexually explicit image of the girl that Smith had sent the agent. The examiner also located other videos and images of the girl. The images were created in January and February using the cell phone. The video contained child pornography of the girl. Smith admitted he had filmed the sexually explicit videos of the girl.
Assistant U.S. Attorney Cyndee Peterson is prosecuting the case, which was investigated by the FBI and the Internet Crimes Against Children Task Force.
This case was initiated under the Department of Justice’s Project Safe Childhood initiative, which was launched in 2006 to combat the proliferation of technology-facilitated crimes involving the sexual exploitation of children. Through a network of federal, state and local law enforcement agencies and advocacy organizations, Project Safe Childhood attempts to protect children by investigating and prosecuting offenders involved in child sexual exploitation. It is implemented through partnerships including the Montana Internet Crimes Against Children Task Force. The ICAC Task Force Program was created to assist state and local law enforcement agencies by enhancing their investigative response to technology facilitated crimes against children.
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Berkeley County residents facing drug chargesRead the Press Release
MARTINSBURG, WEST VIRGINIA – Two Berkeley County residents were indicted this week on drug charges, U.S. Attorney Bill Powell announced.
Arnel Hategekimana, also known as “Dominique Cash Robinson” and “Homie,” and Kristina Gilmore, also known as “Diamond,” were indicted on one count of “Conspiracy to Possess with Intent to Distribute and to Distribute Heroin, Fentanyl, and Cocaine Base,” one count of “Aiding and Abetting Distribution of Heroin and Fentanyl Mixture,” and one count of “Aiding and Abetting Distribution of Cocaine Base.” Hategekimana was also indicted on one count of “Possess with Intent to Distribute Forty Grams or More of a Fentanyl and Heroin Mixture,” one count of “Possess with Intent to Distribute Cocaine Base,” one count of “Possess with Intent to Distribute Cocaine Hydrochloride,” and one count of “Possessing a Firearm in Furtherance of a Drug Trafficking Crime.” Hategekimana, 21, of Harpers Ferry, West Virginia, and Gilmore, 25, of Martinsburg, West Virginia, are accused of working together to distribute heroin, fentanyl, and cocaine base in February 2020 in Berkeley County and elsewhere.
Hategekimana and Gilmore each face up to 20 years of incarceration and a fine of up to $1,000,000 for each of the first three counts. Hategekimana also faces up to 20 years of incarceration and a fine of up to $1,000,000 for each of the other three drug counts and no less than five years of incarceration for the firearms count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The government is also seeking the forfeiture of $4,348 in cash, a Glock pistol, and ammunition connected to this case.
Assistant U.S. Attorney Lara Omps-Botteicher is prosecuting the case on behalf of the government. The Bureau for Alcohol, Tobacco, Firearms & Explosives and the Eastern Panhandle Drug & Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
These charges are the result of investigations supported by the Organized Crime Drug Enforcement Task Force (OCDETF) under the Attorney General-led Synthetic Opioid Surge (SOS)/Special Operations Division (SOD) Project Clean Sweep. This initiative seeks to reduce the supply of synthetic opioids in “hot spot” areas previously identified by the Attorney General of the United States, thereby reducing drug overdoses and drug overdose deaths, and identify wholesale distribution networks and sources of supply operating nationally and internationally.
OCDETF was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations and is the keystone of the Department of Justice’s drug reduction strategy. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking organizations, transnational criminal organizations, and money laundering organizations that present a significant threat to the public safety, economic, or national security of the United States.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Baton Rouge Man Sentenced to 180 Months in Federal Prison on Gun and Drug ChargesRead the Press Release
United States Attorney Brandon J. Fremin announced that U.S. District Judge Brian A. Jackson sentenced Michael Brown, Jr., age 34, of Baton Rouge, Louisiana, to 180 months in federal prison following his convictions for conspiracy to distribute and possess with the intent to distribute controlled substances, distribution of heroin and methamphetamine, distribution of furanyl fentanyl, possession with the intent to distribute 500 grams or more of methamphetamine, possession of firearms in furtherance of drug-trafficking crimes, and unlawful use of communication facilities. The Court further sentenced Brown to serve five years of supervised release following his term of imprisonment and ordered that the firearms involved be forfeited.
According to admissions made as part of his guilty plea, Brown was a member of a drug trafficking organization based in Baton Rouge, engaged in distribution of various drugs, including manufacturing counterfeit controlled substance pharmaceutical pills.
Between October 19, 2016, and January 11, 2017, Brown distributed hundreds of counterfeit pills bearing the identifying mark and imprint of oxycodone in exchange for a total of $14,500. The counterfeit pills were submitted to the DEA Laboratory for chemical analysis and actually contained heroin and furanyl fentanyl. On June 29, 2017, law enforcement executed a search warrant at Brown’s apartment in Baton Rouge and recovered seven firearms, ammunition, ballistics vests, and drugs. Law enforcement officers recovered thousands of pills in Brown’s bedroom, which the DEA Lab found to contain methamphetamine.
U.S. Attorney Fremin stated, “This is yet another step in reaching our office’s goal of reducing crime and aggressively enforcing federal law. I applaud the excellent work of our prosecutors along with DEA and ATF.”
“The successful prosecution and sentencing of this member of a major local drug trafficking organization should be a warning to others who engage in this type of activity,” stated DEA Assistant Special Agent in Charge Michael R. Sader. “This case highlights the impact multiple agencies can have when they join forces. We will continue to work together and pursue those who threaten our communities through the smuggling and distribution of illegal and dangerous drugs and bring them to justice.”
This investigation is another effort by the OCDETF Program, which was established in 1982 to mount a comprehensive attack against organized drug traffickers. Today, the OCDETF Program is the centerpiece of the United States Attorney General’s drug strategy to reduce the availability of drugs by disrupting and dismantling major drug trafficking organizations, money laundering organizations, and related criminal enterprises. The OCDETF Program operates nationwide and combines the resources and unique expertise of numerous federal, state, and local agencies in a coordinated attack against major drug trafficking and money laundering organizations.
This OCDETF operation is being handled by the U.S. Attorney’s Office for the Middle District of Louisiana; the Baton Rouge District Office of the Drug Enforcement Administration; and the Baton Rouge Field Office of the Bureau of Alcohol, Tobacco, Firearms & Explosives. This matter is being prosecuted by Assistant United States Attorney Jennifer Kleinpeter, who also serves as a deputy criminal chief, and Assistant United States Attorney Demetrius D. Sumner.
Bank of America Settles Fair Housing Act Discrimination Claims and Agrees to Pay Damages to VictimsRead the Press Release
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and Eric S. Dreiband, Assistant Attorney General for Civil Rights, filed a civil complaint and proposed settlement agreement with Bank of America, N.A. (“Bank”) today to resolve claims that the Bank engaged in a pattern or practice of discrimination on the basis of disability, in violation of the Fair Housing Act. The Settlement Agreement is subject to being so ordered by the assigned district judge.
According to the civil complaint, the United States alleged that, between January 2010 and 2016, the Bank maintained a policy of denying mortgage loans and, between January 2010 and 2017, home equity loans, to adults with disabilities who were under legal guardianships or conservatorships.
“This settlement ensures that Bank of America will no longer discriminate against people with disabilities when issuing mortgage and home equity loans, and compensates the victims for their losses,” stated Acting United States Attorney DuCharme. “Our Office is committed to standing up for the rights of individuals with disabilities and taking action when necessary to vindicate those rights.”
“No one in this free country should be denied access to the American dream merely because of a disability. The unalienable right to pursue happiness extends to all people, including those with disabilities, and purchasing a home is one way many people exercise this right,” said Assistant Attorney General Dreiband of the Civil Rights Division. “The Fair Housing Act prohibits banks from denying mortgage loans and other housing-related credit to people because of their disabilities, and this Department will hold accountable those lenders who engage in such illegal conduct. Today’s settlement provides compensation to victims of unlawful discrimination and requires Bank of America to apply non-discriminatory policies in deciding which applicants will receive loans.”
The Bank has ended its practice of denying mortgage and home equity loans to adults with disabilities under guardianships or conservatorships. The terms of the settlement require the Bank to pay approximately $300,000 to compensate victims of its conduct. The settlement also requires the Bank to maintain the new, non-discriminatory loan underwriting policy and train its employees on the new policy. In addition, the Bank must monitor its loan processing and underwriting activities to ensure compliance with the Fair Housing Act. The Bank will report to the United States every six months for a two year period regarding its compliance with the terms of the settlement and on any complaints it has received regarding any instance in which a mortgage loan application was denied to an adult applicant represented by a legal guardian or conservator.
Bank of America cooperated with the United States’ investigation and agreed to settle this matter without contested litigation. By entering this Agreement, Bank of America does not admit, and expressly denies, any liability, wrongdoing, or non-compliance with the provisions of the FHA.
This case is being handled by Eastern District of New York Assistant U.S. Attorney Rachel G. Balaban and Deputy Chief Lucy G. Carlson and Trial Attorney Katherine A. Raimondo of the Civil Rights Division Housing and Civil Enforcement Section.
E.D.N.Y. Civil Docket No.: 20-CV-3306 (AMD)
Armed Drug Trafficker SentencedRead 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 Billy B. Sanders, 37, of Rochester, NY, who was convicted of being a felon in possession of ammunition, was sentenced to serve 71 months in prison by U.S. District Judge Charles J. Siragusa.
Assistant U.S. Attorney Charles Moynihan, who handled the case, stated that the defendant was arrested on May 2, 2019, after New York State Parole officers went to Sander’s residence on Saratoga Avenue in Rochester, for a compliance check. During that check, parole officers found a Polymer 80 semiautomatic pistol loaded with eight rounds of ammunition inside a backpack. The handgun did not have a serial number on it. During his plea, Sanders stated that he had the handgun and ammunition because he had been shot and needed the handgun for protection. The defendant admitted he also possessed a small amount of cocaine.
Sanders was previously convicted in April of 2004 in Federal Court of possessing with intent to distribute crack cocaine and carrying and brandishing a firearm during a drug trafficking crime, and was sentenced to serve 105 months in prison. In addition, the defendant was convicted in May of 2004 in Monroe County Court of Robbery in the First Degree, and received a 12 year prison sentence. As a result of those felony convictions, Sanders is legally prohibited from possessing firearms and ammunition.
The matter was brought by the United States Attorney’s Office as part of its Project Safe Neighborhoods (PSN) initiative. PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
The sentencing is the result of an investigation by the New York State Department of Corrections and Community Supervision, under the direction of Acting Commissioner Anthony J. Annucci; the Rochester Police Department, under the direction of Chief La’Ron Singletary; and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division.
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Anchorage Man and Woman Indicted on Federal Gun Charges in Connection with April 2020 Shooting DeathRead the Press Release
Anchorage, Alaska – U.S. Attorney Bryan Schroder announced today that Rachel Torey Danielle Epperson, 30, and Adam Alan Blodgett, 37, both of Anchorage, have been indicted on federal gun charges in connection with the April 4, 2020, shooting death of another individual.
Epperson and Blodgett have both been charged with conspiracy and acquiring a firearm by deception. Blodgett has also been charged with illegally possessing a firearm as a convicted felon. Epperson was arrested on April 4, 2020, and Blodgett was arrested on July 16, 2020.
According to federal charging documents, on March 17, 2020, Epperson is alleged to have straw-purchased a firearm from a licensed gun dealer on behalf of Blodgett, who, with six prior felony convictions, was unable to purchase one himself. At the direction of Blodgett, Epperson allegedly purchased a 9mm pistol for Blodgett, who had taken possession of the pistol thereafter.
The federal charges stem from an April 4, 2020, shooting that resulted in the death of another individual. Epperson and Blodgett are currently facing charges with the State of Alaska for Manslaughter in connection to the shooting death. Additionally, Epperson, along with Angelique Aurora Petty, 34, are also facing charges with the State of Alaska for Attempted Murder and Assault of Blodgett.
If convicted on the federal charges, Epperson and Blodgett face a maximum of 10 years in prison. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offense and the prior criminal history, if any, of the defendants.
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Anchorage Police Department (APD) conducted the investigation leading to the charges in this case. The federal case is being prosecuted by Assistant U.S. Attorney James Klugman of the U.S. Attorney’s Office for the District of Alaska.
This case was brought as part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
The charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Acting Manhattan U.S. Attorney Announces $49 Million Settlement with Biotech Testing Company for Fraudulent Billing and Kickback PracticesRead the Press Release
Audrey Strauss, the Acting United States Attorney for the Southern District of New York, Scott J. Lampert, Special Agent in Charge of the New York Regional Office of the U.S. Department of Health, Office of Inspector General (“HHS OIG”), Leigh-Alistair Barzey, Special Agent in Charge of the Northeast Field Office of the U.S. Department of Defense - Office of Inspector General’s Defense Criminal Investigative Service (“DCIS”), and Christopher Algieri, Special Agent in Charge of the Department of Veterans Affairs (“VA”), Office of Inspector General, Northeast Field Office (“VA OIG”), announced today a $49 million settlement with PROGENITY, INC. (“PROGENITY”), a San Diego-based biotechnology company that provides molecular and diagnostic tests. The settlement resolves claims that PROGENITY fraudulently billed federal healthcare programs for prenatal tests and provided kickbacks to physicians to induce to them to order PROGENITY tests for their patients. The Office’s lawsuit filed in Manhattan federal court alleges that PROGENITY overbilled Medicaid and the VA by fraudulently using a billing code that misrepresented the tests provided. The lawsuit further alleges that PROGENITY provided illegal kickbacks in the form of excessive “draw fees” to physicians, meals and happy hours for physicians and their staff, and the improper reduction or waiver of patient coinsurance and deductible payments.
Under the settlement approved today by U.S. District Judge Loretta A. Preska, PROGENITY will pay $19,449,316 to the United States to resolve the kickback claims and the Medicaid and VA fraudulent billing claims, and also makes extensive admissions regarding the company’s conduct. PROGENITY will also pay $13,150,684 to various states to resolve these claims. In addition, PROGENITY will pay $16.4 million to resolve similar fraudulent billing claims related to TRICARE and the Federal Employees Health Benefits Program through a separate civil settlement with the United States Attorney’s Office for the Southern District of California (“USAO SDCA”), and has entered into a Non-Prosecution Agreement with that office.
Acting U.S. Attorney Audrey Strauss said: “Progenity received millions of dollars from federal healthcare programs through its fraudulent billing and kickback schemes. The company misrepresented the tests it performed, and tried to get doctors to order Progenity tests by paying them excessive fees and providing meals and happy hours for them and their staff. Our Office will continue to hold healthcare providers accountable when they engage in fraud and other illegal conduct.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “Kickbacks and fraudulent billing schemes undermine the integrity of our healthcare system, compromise patient care, and increase the financial burden on taxpayers. Along with our law enforcement partners, HHS-OIG will continue to ensure that those billing federal health insurance programs do so in an honest manner.”
DCIS Special Agent in Charge Leigh-Alistair Barzey said: “Ensuring the integrity of TRICARE, the U.S. Defense Department's healthcare system for military members and their families, is top priority for the DCIS. This settlement agreement is the result of a joint effort and demonstrates the DCIS’s commitment to work with the USAO-SDNY and its law enforcement partners to investigate and prosecute kickbacks and other fraudulent schemes that impact TRICARE.”
VA-OIG Special Agent in Charge Christopher Algieri said: “VA OIG will vigorously pursue those who engage in unjust kickback and billing schemes, which generate profits at the expense of veterans and taxpayers. We appreciate the United States Attorney’s Office and our agency partners for this collaborative effort.”
As alleged in the Complaint filed in Manhattan federal court:
Fraudulent Billing
When submitting claims for payment, healthcare providers use Current Procedural Terminology (“CPT”) codes to identify the nature of the medical procedure or services rendered. Government healthcare payors rely on the CPT code to determine whether the procedure or service is covered, as well as the level of reimbursement. From March 2014 through April 2016, PROGENITY fraudulently used CPT code 88271 to seek reimbursement for noninvasive prenatal tests (“NIPTs”) that screen for genetic disorders and abnormalities when this code misrepresented the services PROGENITY actually provided. As a result, PROGENITY received payments for non-reimbursable tests, or received substantially higher payments than it was entitled to receive. PROGENITY knew that many patients did not meet the medical necessity criteria for NIPTs, and that it could circumvent those requirements by billing under the incorrect billing code.
Kickbacks
PROGENITY induced physicians to order PROGENITY tests by engaging in three kickback schemes. First, from January 2012 through March 2016, PROGENITY paid “draw fees” to physicians or physician offices for blood specimens collected for PROGENITY tests. These fees exceeded the fair market value of the services performed. The total draw fees paid to physicians depended on the volume of blood specimens collected, so physicians would receive more money if they ordered more PROGENITY tests.
Second, from 2012 through 2018, PROGENITY sales representatives provided food and alcohol to physicians and their staff at gatherings, including happy hours and birthday or holiday parties, that often involved little or no educational content. For the vast majority of the relevant period, PROGENITY did not limit or even monitor the total amount its sales representatives spent on a physician. One former sales representative spent $65,658 on meals and alcohol for physicians during a single year.
Third, from January 2012 through April 2018, to market its expensive tests, PROGENITY routinely reduced or waived coinsurance and deductible payments without making the required individualized determination of financial need or reasonable collection efforts. Sales representatives informed physicians and their staff, as well as patients, that PROGENITY would waive coinsurance and deductibles, or limit the patient’s payment to a certain maximum out-of-pocket amount. And PROGENITY had agreements with several physicians that it would not collect any payments from their patients.
As part of the settlement approved today by Judge Preska, PROGENITY admits, acknowledges, and accepts responsibility for the following conduct:
Miscoding:
- From March 2014 through April 2016, PROGENITY knowingly submitted false claims for payment to Medicaid and the VA by using CPT code 88271 to obtain reimbursement for NIPTs.
- PROGENITY improperly used CPT code 88271, which applies to fluorescence in situ hybridization (“FISH”) procedures, knowing that its genetic tests were cell-free DNA sequencing-based NIPTs that are not FISH procedures and that CPT code 88271 did not accurately represent the tests performed.
- As a result of fraudulently using CPT code 88721 and misrepresenting the type of test performed when submitting claims for payment to Medicaid and the VA for NIPTs, PROGENITY received payments for non-reimbursable tests, or received substantially higher payments than it was entitled to receive for the genetic testing services provided.
Kickbacks:
- From January 2012 through March 2016, PROGENITY knowingly made “draw fee” payments to physicians or physicians’ offices for the collection of blood specimens for PROGENITY tests performed on federal healthcare program beneficiaries. In total, PROGENITY paid over $1.7 million in draw fees during this period.
- The draw fees paid by PROGENITY exceeded the fair market value of the services performed when collecting blood specimens. PROGENITY frequently paid physicians $20 or more for each blood draw. PROGENITY paid dozens of physicians and physician offices thousands of dollars in above fair market draw fee payments during the relevant time period.
- From 2012 through 2018, PROGENITY knowingly provided meals and happy hours to physicians who ordered PROGENITY tests for federal healthcare program beneficiaries, as well to individuals who worked in physicians’ offices. The value of these meals and happy hours exceeded Stark Law limits. In total, PROGENITY expended millions of dollars on food and drinks for physicians and their staff during this period.
- During the vast majority of the relevant period, PROGENITY did not have effective systems in place to ensure that the company’s expenses for meals and happy hours for physicians and their employees complied with the Stark Law and the Anti-Kickback Statute. For example, PROGENITY did not (i) reliably track the amount it spent on meals and happy hours for physicians or their staff, (ii) maintain accurate sign-in sheets reflecting attendance at PROGENITY-sponsored gatherings, (iii) keep records of materials or topics that were discussed during PROGENITY-sponsored gatherings, and (iv) implement and enforce limits on the total nonmonetary compensation that could be provided to physicians.
- From January 2012 through April 2018, PROGENITY knowingly routinely reduced or waived federal healthcare program beneficiaries’ coinsurance and deductible payments without making the required individualized determinations of financial need or reasonable collection efforts. PROGENITY offered to reduce or waive coinsurance and deductible payments as part of its sales efforts.
In connection with the filing of the lawsuit and settlement, the Government joined a private whistleblower lawsuit that had previously been filed under seal pursuant to the False Claims Act, which alleged that PROGENITY engaged in illegal kickback schemes. PROGENITY has also entered into a Corporate Integrity Agreement (“CIA”) with HHS-OIG. The CIA promotes compliance with the statutes, regulations, program requirements, and written directives of federal healthcare programs. Among other things, the CIA requires that for the next five years PROGENITY must retain an Independent Review Organization to annually review the accuracy of the company’s claims for services furnished to federal healthcare program beneficiaries and monitor its arrangements with other individuals and entities.
Ms. Strauss thanked HHS-OIG, VA-OIG, DCIS, USAO SDCA, and the Medicaid Fraud Control Unit of the New York State Attorney General’s Office for their assistance with the case.
The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Jeffrey K. Powell and Kirti Vaidya Reddy are in charge of the case.
- From March 2014 through April 2016, PROGENITY knowingly submitted false claims for payment to Medicaid and the VA by using CPT code 88271 to obtain reimbursement for NIPTs.
25 charged in six-state drug conspiracy involving heroin, fentanyl, cocaineRead the Press Release
MARTINSBURG, WEST VIRGINIA – Residents of multiple states were arrested today in connection with four indictments for drug conspiracies that traveled across New Jersey, New York, Maryland, Pennsylvania, Virginia, and West Virginia, U.S. Attorney Bill Powell announced.
Those charged in a 20-count indictment involving a conspiracy to distribute 100 grams or more of heroin and 40 grams or more of fentanyl are:
• Sterling C. Davis, 42, of Camden, New Jersey
• Braheem R. Sallie, 40, of Camden, New Jersey
• Sanford Fayton Venable, 49, of Martinsburg, West Virginia
• Mary Margaret Renfro, 37, of Martinsburg, West Virginia
• Kaleah Scott, 39, of Winchester, Virginia
• Kyle Flack, 37, of Camden, New Jersey
• Paul Wayne Anders, Jr., 47, of Ranson, West VirginiaTwelve people are charged in a 44-count indictment involving a conspiracy to distribute 280 grams or more of cocaine base and 40 grams or more of fentanyl. They are:
• Aquilino Javier Lorenzo-Rivera, 36, of Blackwood, New Jersey
• Ana B. Lopez, 20, of Camden, New Jersey
• Shaquan Omar Richardson, also known as “Wave,” 24, of Harpers Ferry, West Virginia
• Braheem Jamal Gilbert, also known as “Slick,” 30, of Martinsburg, West Virginia
• Duane Curtis Jackson, also known as “Duke,” 28, of Shenandoah Junction, West Virginia
• Theodore Richardson, also known as “JR,” 56, of Martinsburg, West Virginia
• Lisa Richardson, 49, of Martinsburg, West Virginia
• Ashley Lynn Hess, 31, of Inwood, West Virginia
• Medo Hallack, 31, of Inwood, West Virginia
• Brandon Eugene Corbin, 34, of Inwood, West Virginia
• Dallas Marie Harris, 22, of Inwood, West Virginia
• Ashley Marie Seal, 31, of Bunker Hill, West VirginiaThose facing charges in a 17-count indictment involving a conspiracy to distribute 28 grams or more of cocaine base are:
• Sanford Fayton Venable, 49, of Martinsburg, West Virginia
• Mary Margaret Renfro, 37, of Martinsburg, West Virginia
• Wilton Paulino, also known as “Felix,” 42, of New York, New York
• Argelianka Garcia, 43, of New York, New York
• Pedro Garcia Rondon, 33, of New York, New York
• Wendy Paulino, 48, of New York, New York
• Terry Lee Shifflett, 46, of Martinsburg, West VirginiaThree are also facing charges in an indictment involving a conspiracy to distribute one kilogram or more of a mixture and substance containing phencyclidine (PCP). They are:
• Kevin Joseph Young, 54, of Baltimore, Maryland
• Shaquan Omar Richardson, also known as “Wave,”24, Harpers Ferry, West Virginia
• Ashley Lynn Hess, 31, of Inwood, West VirginiaThe government is seeking forfeiture of more than $130,000 in cash, multiple firearms, ammunition, multiple cell phones and other various items associated with the alleged crimes.
“These Indictments represent the culmination of lengthy investigations that were vigorously pursued through the pandemic. This Prosecution of drug and violent crimes cases have always been and will continue to be vigorously pursued by the dedicated prosecutors and law enforcement agencies in the Northern District of West Virginia,” said Powell.
"The safety and quality of life of our citizens is a top priority," said FBI Pittsburgh Special Agent in Charge Michael Christman. "Drug dealers who think they can make a living bringing dangerous drugs into our community need to know it won't be tolerated. The FBI and our trusted state, local and federal partners remain vigilant in pursuing drug investigations that are devastating our communities. This multi-agency, multi-state investigation shows there are no boundaries to getting dangerous criminals off the streets. I commend the work of the Eastern Panhandle Drug & Violent Crimes Task Force for their tremendous efforts in the Martinsburg area. They are making a substantial difference in that community and neighboring states."
These charges are the result of investigations supported by the Organized Crime Drug Enforcement Task Force (OCDETF) under the Attorney General-led Synthetic Opioid Surge (SOS)/Special Operations Division (SOD) Project Clean Sweep. This initiative seeks to reduce the supply of synthetic opioids in “hot spot” areas previously identified by the Attorney General of the United States, thereby reducing drug overdoses and drug overdose deaths, and identify wholesale distribution networks and sources of supply operating nationally and internationally.
OCDETF was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations and is the keystone of the Department of Justice’s drug reduction strategy. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking organizations, transnational criminal organizations, and money laundering organizations that present a significant threat to the public safety, economic, or national security of the United States.
Assistant U.S. Attorney Lara Omps-Botteicher and Special Assistant U.S. Attorney C. Lydia Lehman, also with the Berkeley County Prosecuting Attorney’s Office, are prosecuting the case on behalf of the government. The FBI; Homeland Security Investigations; the Bureau of Alcohol, Tobacco, Firearms & Explosives; and the Eastern Panhandle Drug and Violent Crimes Task Force, a HIDTA-funded initiative, investigated. The U.S. Marshal Service and the West Virginia Air National Guard assisted with the arrests.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Wednesday 22 July 2020
Yulee Man Pleads Guilty to Conspiracies to Commit Wire Fraud, Mail Fraud, and Money LaunderingRead the Press Release
Jacksonville, Florida – Richard Everett Camp, Jr. has pleaded guilty to one count of conspiracy to commit wire fraud, one count of conspiracy to commit mail fraud, and one count of conspiracy to commit money laundering. He faces a maximum penalty of 20 years in federal prison for the conspiracy to commit wire fraud offense and for the conspiracy to commit mail fraud offense. He faces up to 10 years’ imprisonment for the conspiracy to commit money laundering offense. A sentencing date has not yet been set. As part of the agreement, the court has ordered restitution to Swisher International, Inc., and the forfeiture of three pieces of real property, two vehicles, and more than $250,000.
According to the plea agreement, Camp and his co-conspirators stole approximately $5.7 million from Swisher International, Inc. and its sister company, E-Alternative Solutions (EAS), which are both headquartered in Jacksonville. Camp and his co-conspirators used two different schemes to acquire the funds. In a wire fraud scheme, the co-conspirators diverted to Camp’s personal bank accounts federal tobacco excise tax refunds that were owed to Swisher. In the mail fraud scheme, the conspirators caused fraudulent invoices to be submitted to Swisher and EAS for services that were never rendered. One of the co-conspirators was an employee of Swisher at the time and vouched for the accuracy of the invoices and payments to be made.
During the money laundering scheme, Camp and a co-conspirator engaged in monetary transactions of criminal proceeds from the mail fraud scheme. They deposited funds into accounts of one of the companies claiming to have rendered services, and then transferred the funds to Camp’s personal accounts from which he purchased real property and numerous other items, including vehicles and jewelry.
This case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, and the Special Prosecution Division, State Attorney’s Office, Fourth Judicial Circuit. It is being prosecuted by Assistant United States Attorneys Frank Talbot and Bonnie Glober.
Wisconsin Rapids Woman Sentenced to 30 Months for Stealing MailRead the Press Release
MADISON, WIS. – Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that Shelby Bottensek, 42, of Wisconsin Rapids, Wisconsin pleaded guilty today to wire fraud and identity theft, and was sentenced by Chief U.S. District Judge James D. Peterson to 30 months in federal prison. Judge Peterson also ordered Bottensek to pay restitution of $6,353.54 to the victims of her crimes.
Bottensek began stealing mail in August 2019 from residential mailboxes in 13 Wisconsin communities including, among others, Amherst, Wisconsin Rapids, Waupaca, Port Edwards, Nekoosa, Necedah, Plover, Portage, Wausau, Friendship, Janesville and Westfield. Bottensek opened and sorted through 361 pieces of stolen mail from 170 victims in an effort to locate items of value, including cash, uncashed checks, and credit cards.
Bottensek admitted at today’s plea hearing that she stole at least three different credit cards from the mail and made unauthorized charges, without the permission or knowledge of the cardholders. Bottensek agreed that her unlawful conduct created an intended loss amount of $133,609.22.
At today’s sentencing, Judge Peterson noted that Bottensek committed these crimes while suffering from a severe addiction to methamphetamine, and although perhaps mitigating, Bottensek still was responsible for her actions. Judge Peterson said that Bottensek had the ability and the duty to manage her addiction and her mental health for her sake, as well as the sake of the community, which she ultimately failed to do.
In imposing sentence, Judge Peterson stressed to Bottensek that a 30-month sentence was required to provide her with specific deterrence so that she will not repeat this criminal conduct. The judge explained to Bottensek that, “stealing the mail is not a minor crime. People really trust the U.S. mail system and for many it is an important avenue of communication to the rest of the world.” He added, “Stealing somebody’s mail creates a profound sense of violation of personal integrity – it’s like breaking into someone’s house and stealing their property.” Judge Peterson noted that Bottensek added to this sense of violation by stealing identities and violating people’s financial security through credit card fraud.
The case against Bottensek is the result of an investigation conducted by the U.S. Postal Inspection Service, Wood County Sheriff’s Department, Grand Rapids Police Department, and Plover Police Department. The prosecution of this case is being handled by Assistant U.S. Attorney Daniel Graber.
Wife of U.S. Army Soldier Sentenced to Prison for Obstruction of JusticeRead the Press Release
The wife of a U.S. Army soldier was sentenced today to three years in prison, to be followed by one year of supervised release, the maximum statutory sentenced allowed under the law for obstruction of justice, Acting Assistant Attorney General Brian Rabbitt of the Justice Department’s Criminal Division and U.S. Attorney Robert Higdon Jr. of the Eastern District of North Carolina announced.
Shanynn Kemp, 52, of Cameron, North Carolina, pleaded guilty on Dec. 11, 2019, to one count of obstruction of justice before U.S. District Court Chief Judge Terrence W. Boyle of the Eastern District of North Carolina, who sentenced Kemp earlier today and remanded her to the custody of the U.S. Marshals Service.
According to facts presented in the guilty plea hearing, Shanynn Kemp’s husband, Daniel Kemp Sr., was employed by the U.S. Army as an active duty member when he forcibly raped a minor victim. After an investigation into the aggravated sexual assault was underway, Shanynn Kemp intentionally harassed and dissuaded a witness from disclosing to law enforcement information about the sexual offense. Daniel Kemp Sr. was sentenced to life in prison on July 8.
The investigation of the case was conducted by U.S. Army Criminal Investigation Command and the FBI. This case is being prosecuted by Trial Attorney Kaylynn Foulon of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Charity Wilson of the U.S. Attorney’s Office in the Eastern District of North Carolina.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc.
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.
Wife of U.S. Army Soldier Sentenced to Prison for Obstruction of JusticeRead the Press Release
RALEIGH - The wife of a U.S. Army soldier was sentenced today to three years in prison, to be followed by one year of supervised release, for obstruction of justice, the maximum statutory sentence allowed under the law for obstruction of justice, Acting Assistant Attorney General Brian Rabbitt of the Justice Department’s Criminal Division and U.S. Attorney Robert J. Higdon, Jr. of the Eastern District of North Carolina announced.
Shanynn Kemp, 52, of Cameron, North Carolina, pleaded guilty on Dec. 11, 2019, to one count of obstruction of justice before U.S. District Court Chief Judge Terrence W. Boyle of the Eastern District of North Carolina, who sentenced Kemp earlier today and remanded her to the custody of the U.S. Marshals Service.
According to facts presented in the guilty plea hearing, Shanynn Kemp’s husband, Daniel Kemp Sr., was employed by the U.S. Army as an active duty member when he forcibly raped a minor victim. After an investigation into the aggravated sexual assault was underway, Shanynn Kemp intentionally harassed and dissuaded a witness from disclosing to law enforcement information about the sexual offense. Daniel Kemp Sr. was sentenced to life in prison on July 8.
The investigation of the case was conducted by U.S. Army Criminal Investigation Command and the FBI. This case is being prosecuted by Trial Attorney Kaylynn Foulon of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Charity Wilson of the U.S. Attorney’s Office in the Eastern District of North Carolina.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc.
A copy of this press release is located on our website. Related court documents and information are located on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:19-cr-00149-BO-1.
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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.
White Earth Man Charged with Robbery, Violent AssaultRead the Press Release
United States Attorney Erica H. MacDonald today announced a federal indictment charging WESLEY ROBERT WARREN, 22, with robbery and assault on the White Earth Indian Reservation. WARREN made his initial appearance earlier today before Magistrate Judge Jon T. Huseby in U.S. District Court in Bemidji, Minnesota.
According to allegations in the indictment, on June 3, 2020, on the White Earth Indian Reservation, WARREN robbed and assaulted a victim with a cinder block, resulting in serious bodily injury to the victim.
This case is the result of an investigation conducted by the White Earth Police Department, the Becker County Sheriff’s Office, the Minnesota Bureau of Criminal Apprehension, and the FBI Headwaters Safe Trails Task Force, with assistance from the Becker County Attorney’s Office.
Assistant U.S. Attorney Deidre Y. Aanstad is prosecuting the case.
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defendant Information:
WESLEY ROBERT WARREN, 22
Ponsford, Minn.
Charges:
- Assault with intent to commit murder, 1 count
- Assault with a dangerous weapon, 1 count
- Assault resulting in serious bodily injury, 1 count
- Robbery, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Washington, D.C. Dentist and Two Others Facing Federal Indictment in Maryland on Charges Related to a Scheme to Defraud MedicaidRead the Press Release
Greenbelt, Maryland – A federal grand jury in Maryland has indicted licensed dentist Edward T. Buford III, age 68, of Silver Spring, Maryland; his business partner Kasandra Vilchez-Duarte, age 44, of Fort Washington, Maryland; and Donnie Amis, age 63, of Washington, D.C. on the federal charges of conspiracy to violate the federal Anti-Kickback Statute and conspiracy to commit health care fraud and mail fraud. The indictment was returned on July 13, 2020, and unsealed today at the defendants’ initial appearance.
The indictment was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge James A. Dawson of the Federal Bureau of Investigation (FBI), Washington Field Office; Special Agent in Charge Maureen Dixon, Office of Investigations, Office of Inspector General of the Department of Health and Human Services (HHS OIG); Special Agent in Charge Michael McGill of the Social Security Administration - Office of Inspector General (SSA-OIG), Philadelphia Field Division; and Inspector General Daniel W. Lucas, District of Columbia, Office of the Inspector General (OIG).
According to the indictment, Buford was a licensed dentist in Washington, D.C., where he was the owner and chief executive officer of International Dental Associates, Inc. (IDA). Vilchez-Duarte was Buford’s business partner and manager of IDA. IDA was a provider with Medicaid from about July 2011 to the present and billed Medicaid for dental services purportedly provided to Medicaid beneficiaries. Buford was also enrolled as an individual Medicaid provider prior to April 10, 2015, when Medicaid suspended payments to Buford under his individual provider number. After that date, Buford and Vilchez-Duarte continued to submit claims to Medicaid through IDA’s Medicaid provider number. The indictment alleges that from January 2013 through May 2018, Buford and Vilchez-Duarte paid kickbacks to Amis to recruit Medicaid beneficiaries for which IDA billed, and received payment from, Medicaid.
Specifically, the indictment alleges that Buford and Vilchez-Duarte offered and paid kickbacks to Amis and others in exchange for referring Medicaid beneficiaries to IDA for dental services and even employed an individual to drive a van to transport recruited beneficiaries to IDA. Buford allegedly also sent text messages encouraging Amis and others to recruit Medicaid beneficiaries to refer to IDA for dental services, including dentures and extractions. Buford and Vilchez-Duarte paid Amis larger cash kickbacks, typically approximately $50 per beneficiary, for beneficiaries Amis recruited who agreed to be fitted for dentures than for beneficiaries who agreed to receive dental cleanings at IDA. Amis recruited Medicaid beneficiaries by offering cash bribes to induce them to visit and accept dental services, including dentures, from IDA. According to the indictment, Buford, Vilchez-Duarte, and Amis typically paid and caused to be paid approximately $20 to each recruited beneficiary who agreed to be fitted for dentures and approximately $10 to each recruited beneficiary who agreed to receive a cleaning from IDA. The beneficiaries typically only received the payment for the initial visit to be fitted for dentures, even though denture fittings require multiple visits and many beneficiaries never returned to IDA after receiving the cash payment. As a result, many beneficiaries never returned after the initial visit. On IDA’s premises, Buford, Vilchez-Duarte, and their co-conspirators stored hundreds of undelivered dentures, many of which had been billed to and paid for by Medicaid.
As detailed in the indictment, Buford, Vilchez-Duarte, and Amis submitted and caused to be submitted through IDA claims to Medicaid for dental services purportedly provided to the recruited beneficiaries. Medicaid then sent checks to a post office box in Silver Spring, Maryland, which Buford identified as IDA’s billing address, as payment for the dental services purportedly provided to the recruited beneficiaries. Further, the indictment alleges that in approximately April 2016, Buford and Vilchez-Duarte re-enrolled IDA in Medicaid. In the application, in response to the question, “Have you ever been suspended from the Medicare or Medicaid program, or has your participation status ever been modified (terminated, suspended, restricted, revoked, limited, cancelled),” Buford and Vilchez-Duarte failed to disclose Buford’s suspension from Medicaid.
According to the indictment, from January 2013 to February 2015, Buford and Vilchez-Duarte caused to be submitted to Medicaid under Buford’s individual provider number claims totaling $5.2 million and Medicaid paid approximately $2.7 million of those claims, including approximately $2 million in claims for dentures. From February 2014 to May 2018, Buford, Vilchez-Duarte, and Amis caused to be submitted to Medicaid through IDA claims totaling $12 million and Medicaid paid approximately $6.4 million of those claims, including approximately $4.5 million in claims for dentures.
If convicted, the defendants each face a maximum sentence of five years in federal prison for conspiracy to violate the federal Anti-Kickback Statute and a maximum of 20 years in federal prison for conspiracy to commit health care fraud and mail fraud. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors. The defendants had an initial appearance before U.S. Magistrate Judge Timothy J. Sullivan in U.S. District Court in Greenbelt today. The defendants were released pending trial.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Robert K. Hur commended the FBI, HHS OIG, SSA OIG, and the District of Columbia OIG’s Medicaid Fraud Control Unit for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Gregory Bernstein and Jessica Collins, who are prosecuting the case.
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USAO employee indicted for conspiring to obstruct justiceRead the Press Release
HOUSTON – A federal grand jury sitting in Austin has returned a six-count indictment against a 31-year-old paralegal specialist with the U.S. Attorney’s Office (USAO) for the Western District of Texas, announced U.S. Attorney Ryan K. Patrick of the Southern District of Texas.
Jennifer Loya is charged with drug trafficking crimes, conspiring to obstruct justice and making a false statement to federal law enforcement officers. Also charged are Roland Gustamante, 30, his wife Kimberly Loya, 27, and Nathan Lopez, 27. All are from San Antonio.
Gustamante allegedly imported drugs from Mexico, sold them in the San Antonio area and transported proceeds back to suppliers in Mexico. Kimberly Loya served as a courier for Gustamante’s drug trafficking organization, according to the indictment, while Lopez was an associate of the Gustamante drug trafficking organization. Jennifer Loya is Kimberly’s sister.
Gustamante, Lopez and Kimberly Loya are charged with conspiring to distribute heroin and meth. Gustamante is also charged with possessing with the intent to distribute meth and with engaging in an international money laundering conspiracy with Kimberly Loya.
According to the indictment, Jennifer Loya worked in the San Antonio USAO. There, she allegedly learned confidential law enforcement information related to federal drug trafficking investigations including the identity of investigation targets, cooperating witnesses and defendants as well as planned dates for charging and arresting defendants. The indictment alleges she shared this information with her sister who then relayed it to her husband. Gustamante used the information to evade law enforcement and to warn his fellow drug traffickers about impending law enforcement actions, according to the charges,
Federal authorities allegedly confronted Jennifer Loya about her activities, at which time she allegedly concealed that she had previously revealed to her sister that Gustamante was under federal investigation for drug trafficking.
All had previously been charged by criminal complaint. Gustamante was ordered into custody, while the Loya sisters were premitted release upon posting bond. They are all expected to appear again before a U.S. magistrate judge in San Abntonio the near future.
If convicted, all four face a minimum of 10 years and up to life in prison for the drug trafficking charges. In addition, Gustamante and Kimberly Loya face up to 20 years for the international money laundering conspiracy. Jennifer Loya faces up to five years for the conspiracy to obstruct justice and for the false statement charge.
The FBI, Drug Enforcement Administration and Department of Justice - Office of Inspector General conducted the investigation. Assistant U.S. Attorney Robert S. Johnson is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.U.S. Attorney Brady Announces Coalition Dedicated to Ending Human TraffickingRead the Press Release
PITTSBURGH - U.S. Attorney Scott W. Brady today announced the creation of a new anti-human trafficking coalition, Operation T.E.N. (Trafficking Ends Now), comprised of federal, state, and local law enforcement agencies as well as non-governmental organizations.
Operation T.E.N. serves as an umbrella coalition for the 25 counties in the Western District of Pennsylvania, and is a coordinated effort aimed at ending human trafficking through education, improving cooperation among local, state, and federal law enforcement agencies, and will enhance our ability to empower victims of human trafficking to become thriving survivors.
"Human trafficking is an affront to human dignity," said U.S. Attorney Brady. "It is a form of modern-day slavery that knows no race, gender, age or border. Operation T.E.N.’s collaborative approach will tighten the net around human traffickers by providing a truly intergovernmental, coordinated approach to investigating and prosecuting these predators and their networks. Equally important, it will also ensure that survivors can more easily and directly access the services they need for a healthy, safe recovery."
"The FBI depends on our partnerships to help us protect communities," said FBI Pittsburgh Special Agent in Charge Michael Christman. "We will work with our partners at every level to take those responsible for this heinous crime off our streets. It’s our priority to identify and recover child victims of human trafficking. They are some of the most vulnerable members of our community who have been physically and emotionally abused and don’t see a way out. We want them to know there is a way to start rebuilding their lives and human trafficking will not be tolerated."
"Human trafficking is a corrosive and degrading practice that goes against both the rule of law and the most basic standards of human dignity. Homeland Security Investigations is excited about the formation of the newly formed Operation T.E.N. Coalition, dedicated to ending human trafficking, and we look forward to expanding our role in the community by promoting partnerships with private and public entities," said David Abbate, Assistant Special Agent in Charge for HSI Pittsburgh. "We are confident that we can affect change with our victim-centric approach to investigations, where equal value is placed on the identification and stabilization of victims, as well as the investigation and prosecution of suspects."
Combatting human trafficking is currently one of the Department of Justice’s highest priorities nationally and in our community. As part of the strategy, Assistant U.S. Attorney Rebecca L. Silinski, who is an experienced prosecutor and serves as the Human Trafficking Coordinator for the U.S. Attorney’s office, will oversee Operation T.E.N. and community outreach, serving as a resource that members of our community can utilize to directly access the United States Attorney’s Office regarding human trafficking.
Two Minneapolis Men Charged with Illegally Possessing A FirearmRead the Press Release
United States Attorney Erica H. MacDonald today announced the unsealing of a federal indictment charging TRAVON LAVELLE BLACKMAN, 23, and MICHAEL EUGENE HUNTER, 21, with one count of possession of a firearm by a felon. BLACKMAN made his initial appearance on July 17, 2020, and HUNTER made his initial appearance earlier today before Magistrate Judge Katherine M. Menendez in U.S. District Court in Minneapolis, Minnesota.
According to allegations in the indictment, between April 30, 2020 and May 5, 2020, BLACKMAN and HUNTER were in possession of a Glock, model 22, .40-caliber semiautomatic pistol, with an attached 50-round drum magazine. Because BLACKMAN and HUNTER both have prior felony convictions, they are prohibited under federal law from possessing firearms or ammunition at any time.
This case is the result of an investigation conducted by the Minneapolis Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was brought as part of the Twin Cities Violent Crime Task Force, a multi-agency effort that brings together additional federal and state resources to assist local law enforcement to investigate, arrest, and prosecute individuals responsible for gun violence in the Twin Cities. For more information about the Twin Cities Violent Crime Task Force, please visit https://www.justice.gov/usao-mn/pr/united-states-attorney-announces-new-twin-cities-violent-crime-task-force.
Assistant U.S. Attorney Benjamin Bejar is prosecuting the case.
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Defendant Information:
TRAVON LAVELLE BLACKMAN, a/k/a “Ruger,” a/k/a “Ruger Moe,” a/k/a “Gargy,” 23
Minneapolis, Minn.
Charges:
- Felon in possession of a firearm, 1 count
MICHAEL EUGENE HUNTER, a/k/a “Mike Moe,” 21
Minneapolis, Minn.
Charges:
- Felon in possession of a firearm, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Two MS-13 Members Plead Guilty to RICO Conspiracy and July 2018 Murder of Teenager in LynnRead the Press Release
BOSTON – Two members of the violent transnational criminal gang known as “La Mara Salvatrucha” or “MS-13” pleaded guilty in federal court yesterday to RICO conspiracy and admitted to their participation in the July 2018 murder of a teenage boy in Lynn.
Erick Lopez Flores, a/k/a “Mayimbu,” 31, of Lynn, and Marlos Reyes, a/k/a “Silencio,” 20, of Chelsea, pleaded guilty in separate proceedings before Senior U.S. District Court Judge Mark L. Wolf to one count of conspiracy to conduct enterprise affairs through a pattern of racketeering activity, also known as RICO conspiracy, on behalf of the MS-13 gang. As part of their plea, the defendants admitted that on July 30, 2018, they participated in the murder of a teenage boy who was murdered with extreme atrocity and cruelty, and with deliberate premeditation, in violation of Massachusetts law. Sentencing is scheduled for Oct. 14, 2020
According to court documents, MS-13 is a violent transnational criminal organization whose branches or “cliques” operate throughout the United States, including Massachusetts. MS-13 members often commit acts of violence against rival gang members, those suspected of cooperating with law enforcement, and others. In recent years, dozens of MS-13 members have been convicted of RICO conspiracy and other serious felonies in the District of Massachusetts.
Both Lopez Flores and Reyes belonged to the “Sykos Locos Salvatrucha” clique of MS-13, which operated in Lynn, Chelsea and other parts of Massachusetts. Lopez Flores was one of the leaders of the Sykos clique. Both defendants admitted that their racketeering activity on behalf of MS-13 included acts involving murder.
Specifically, Lopez Flores and Reyes admitted that they participated in the July 30, 2018 murder of a teenage boy, whose body was found in a wooded area in Lynn on Aug. 2, 2018. The victim was found dead with dozens of sharp force trauma wounds consistent with being stabbed numerous times. The investigation revealed that Lopez and others had lured the victim to the wooded park a few days prior, where they murdered him because they did not believe he was sufficiently loyal to the group.
Lopez Flores and Reyes are two of six alleged MS-13 members arrested in October 2018.
The charge of RICO conspiracy involving murder provides for a sentence of up to life in prison, five years of supervised release, a fine up to $250,000 and restitution. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Essex County District Attorney Jonathan Blodgett; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigations, Boston Field Division; Michael Shea, Acting Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; and Lynn Police Chief Michael Mageary made the announcement . The Boston, Chelsea, and Peabody Police Departments, as well as the Massachusetts Department of Corrections, provided valuable assistance with the investigation.
The case was investigated by a multi-agency task force through the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply. More information on the OCDETF program is available here: https://www.justice.gov/ocdetf/about-ocdetf.
The details contained in the charging documents are merely allegations. The remaining defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Two Indicted on Conspiracy to Commit Marriage Fraud, Marriage Fraud, Aiding and Abetting, Visa Fraud, False Statement in an Immigration Proceeding and Preventing Testimony of a Person in an Official Proceeding ChargesRead the Press Release
RALEIGH, N.C. – A federal grand jury returned an indictment today charging both a citizen of Ghana, as well as a naturalized citizen of the U.S., born in Ghana who is also an active member of the U.S, Army, with conspiracy to commit marriage fraud, marriage fraud, aiding and abetting, visa fraud, false statement in an immigration proceeding and preventing testimony of a person in an official proceeding.
According to the indictment, JOSHUA KWAME ASANE and LAWRENCE OPPONG KYEKYEKU knowingly induced U. S. citizens to enter into sham marriages with foreign-born nationals for the purpose of evading United States immigration laws and obtaining lawful permanent residence status for otherwise inadmissible foreign-born nationals.
If convicted of conspiracy to commit marriage fraud, marriage fraud, visa fraud, false statement in an immigration proceeding and preventing testimony of a person in an official proceeding, ASANE, age 45, and a foreign student residing in Norfolk, Virginia, faces a maximum imprisonment term of 50 years, a $1,250,000 fine, a term of supervised release following any term of imprisonment.
If convicted of conspiracy to commit marriage fraud, marriage fraud, and aiding and abetting, OPPONG KYEKYEKU, age 28, of Cumberland County, faces a maximum imprisonment term of 10 years, a $500,000 fine, and a term of supervised release following any term of imprisonment.
Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement. The case was investigated by the U.S. Army Criminal Investigation Division and the Document and Benefit Fraud Task Force (DBFTF) in the Eastern District of North Carolina lead by Homeland Security Investigations.
A copy of this press release is located on our website.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Twice Convicted Child Sex Offender Indicted for Receipt and Possession of Child PornographyRead the Press Release
United States Attorney Matthew D. Krueger of the Eastern District of Wisconsin, announced that on July 21, 2020, a federal grand jury returned a two-count indictment against Darrin S. McElhatton (age: 40) of Appleton, Wisconsin.
McElhatton faces charges alleging he received child pornography contrary to Title 18, United States Code, Section 2252A(a)(2)(A) and that he possessed child pornography in violation of Title 18, United States Code, Section 2252A(a)(5)(B). The indictment alleges that McElhatton received and possessed digital videos and images of prepubescent boys in the act of being sexually abused.
In 2011, McElhatton was convicted of sexual exploitation of a child in Green Lake County Circuit Court. Following a prison sentence, he was convicted again in 2014 in Outagamie Circuit Court for the possession of child pornography. He is required to register as a sexual offender under the laws of the State of Wisconsin. Based on his prior record, McElhatton faces a mandatory 15 years’ imprisonment and up to 40 years imprisonment if convicted of the charges.
This case was investigated by the Grand Chute Police Department and the Wisconsin Department of Community Corrections. It will be prosecuted by Assistant United States Attorney Daniel R. Humble.
An indictment is only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government must prove him guilty beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006, by the U.S. Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
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For further information contact:
Public Information Officer Kenneth Gales,
(414) 297-1700
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Supplier, Dealer Plead Guilty in Significant South Georgia Cocaine Trafficking OperationRead the Press Release
VALDOSTA, Ga. – Two men involved in distributing many kilos of cocaine in South Georgia have entered guilty pleas for their crime, said Charlie Peeler, the United States Attorney for the Middle District of Georgia.
Kendrick Deshaun Bradley, 41, of Valdosta, pleaded guilty before U.S. District Judge Louis Sands on Monday, July 20 to one count possession with intent to distribute cocaine base. Co-defendant Hector J. Becerra, 45, of Edinburg, Texas, pleaded guilty before Judge Sands on Tuesday, June 23 to one count possession with intent to distribute cocaine. Becerra and Bradley face maximum sentences of 20 years in prison, a $1,000,000 fine and three years supervised release. A sentencing date has not been scheduled.
Agents with the Special Operations Division of the Lowndes County Sheriff’s Office received a tip in December 2018 that Bradley was trafficking cocaine in the region, and was supplied from Becerra. On February 21, 2019, agents observed Bradley and Becerra together in Valdosta, entering an apartment on Greenlee Street. Bradley was detained later that day, and agents conducting a legal search at the apartment found an intact “cookie” of crack cocaine, a jar containing 11 one-ounce bags of powder cocaine, and three kilograms of cocaine along with a number of drug trafficking related items including a currency counter, a bag containing a number of Ziploc bags, whisks, steel measuring cups (some with cocaine residue), digital scales, a crack cocaine cutting agent, flip phones and blue tin cups with cocaine residue. Two days later, on February 23, agents found another three kilograms of cocaine inside the vehicle Becerra was driving, and he was taken into custody. Becerra admitted he attempted to distribute six kilograms of cocaine and was, at times, the supplier for Bradley. Bradley admitted to trafficking crack and cocaine and will be sentenced based on attempting to distribute all of the drugs found in the Greenlee Street apartment.
“Law enforcement shut down a significant drug trafficking operation supplying large amounts of cocaine and crack cocaine across theValdosta area. The defendants undoubtedly ruined lives as they reaped their illegal gains. They will pay a price for their crimes,” said U.S. Attorney Charlie Peeler. “I want to thank the Lowndes County Sheriff’s Office and the FBI for their excellent work investigating this case.”
The case was investigated by the Lowndes County Sheriff’s Office and the FBI. Assistant U.S. Attorney Robert McCullers is prosecuting the case for the Government. Questions can be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603 or Melissa Hodges, Public Affairs Director (Contractor), United States Attorney’s Office, at (478) 765-2362.
State Department Contractor Agrees to Pay Civil Penalties Under the Procurement Integrity ActRead the Press Release
ALEXANDRIA, Va. – Bernhardt Furniture Company, located in Lenoir, North Carolina, has agreed to pay $172,000 in civil penalties to settle allegations involving violations of the Procurement Integrity Act relating to the company’s receipt of competitor bid information and providing of gratuities to State Department employees in connection with a State Department contract.
The settlement resolves civil penalty claims against Bernhardt relating to criminal pleas entered by Bernhardt Vice President of Sales Steven Anstine, and State Department procurement officials Patricia DeLaughter and Davina Foster. From December 2016 to March 2017, in connection with a contract for the construction of the new Jakarta Embassy, Bernhardt received competitor bid information, including confidential bid prices and competitor’s design plans, on at least three separate occasions. In return, Bernhardt’s Anstine provided DeLaughter and Foster with meals and tickets to concerts and sporting events. Bernhardt, through its use of competitor’s confidential bid information, won the contract to provide furniture for the Jakarta Embassy; however, the conduct was discovered and the award was canceled before Bernhardt received any funds.
The resolutions obtained in this matter were the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of Virginia and the Office of Inspector General for the Department of State.
The matter was investigated by Assistant U.S. Attorney Kristin S. Starr. The civil claims settled by this settlement are allegations only; there has been no determination of civil liability.
Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Criminal Case No. 1:19-cr-205 (United States v. Patricia DeLaughter) and 1:19-cr-256 (United States v. Davina Foster) and on the website of the District of South Carolina or on PACER by searching for Criminal Case No. Case No. 2:19:cr-404 (D.S.C.) (United States v. Steven Anstine).
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.
Shawnee Man Charged with Robbing BancFirst Branch in Paden, OklahomaRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that the federal grand jury has issued an Indictment charging Bobby Ray Scott III, age 42, of Shawnee, Oklahoma, with Bank Robbery in violation of Title 18, United States Code, Sections 2113(a) and 2113(d). Bank Robbery is punishable by not more than life imprisonment, up to a $250,000.00 fine, or both.
The Indictment alleges that on or about June 12, 2020, in the Eastern District of Oklahoma, the defendant, by force, violence and intimidation did take from the person and presence of another, money belonging to and in the care, custody, control, management and possession of BancFirst located in Paden, Oklahoma, the deposits of which were then insured by the Federal Deposit Insurance Corporation, and in committing such offense, the defendant, Bobby Ray Scott III, did assault and put in jeopardy the life of another person by the use of a dangerous weapon, that is a firearm.
The charges arose from an investigation by the Okfuskee County Sheriff’s Office, the Homeland Security Investigations Task Force, and the Federal Bureau of Investigation Safe Trails Task Force. The Oklahoma Safe Trails Task Force is comprised of the FBI and nine partner agencies including: Muscogee Creek Nation Lighthorse Police, Okmulgee Police Department, Okmulgee Sheriff’s Office, Oklahoma Bureau of Narcotics, District 25 District Attorney’s Investigators, Cherokee Nation Police, Tahlequah Police Department, and Wagoner Police Department. Assistant United States Attorney Dean Burris represents the United States.
The above named individual has been charged with a federal crime or crimes by the return of an indictment by the Grand Jury. A grand jury Indictment does not constitute evidence of guilt. A grand jury Indictment is a method of bringing formal charges against the defendant. A defendant is presumed innocent of the charges and may not be found guilty unless evidence establishes guilt beyond a reasonable doubt.
San Diego Business Leader Pleads Guilty to Masterminding a $400 Million Ponzi SchemeRead the Press Release
Assistant U. S. Attorneys Aaron P. Arnzen (619) 546-8384
and Andrew J. Galvin (619) 546-9721SAN DIEGO – Gina Champion-Cain, a long-time San Diego business leader, restauranteur and real estate magnate, pleaded guilty in federal court today, admitting that she committed securities fraud by masterminding a massive, years-long Ponzi scheme with hundreds of victims throughout California and the United States.
Champion-Cain also admitted that she lied and forged documents to hide her scheme, obstructed justice by attempting to destroy evidence in the course of an investigation by the U.S. Securities and Exchange Commission, and conspired with employees of her own company and the local branch of a national title company to both commit the fraud and cover it up. The fraud was committed through her companies American National Investments, Inc., and ANI Development, LLC.
Crispin Torres, the former Chief Financial Officer of American National Investments, also pleaded guilty today to conspiring in the scheme by using funds received from investors to prop up Champion-Cain’s other businesses, some of which were failing.
“This is by far the largest Ponzi scheme discovered in this district,” said U.S. Attorney Robert Brewer. “Gina Champion-Cain constructed and maintained a house of cards that has come crashing down around her and all her victims. The scheme deprived many investors of their retirement savings, and cost at least one investor tens of millions of dollars and forced him into bankruptcy. And now it will cost the defendant her freedom. We will continue our aggressive efforts to root out corporate fraud and hold greedy criminals accountable.”
Brewer commended the great work of prosecutors Aaron Arnzen and Andrew Galvin as well as FBI agents and the Securities and Exchange Commission for unraveling this complicated, document-intensive fraud.
“This federal investigation revealed a $400 million-dollar fraudulent investment scheme by Gina Champion-Cain, a purported San Diego business magnate who was trusted by hundreds of investors,” said Acting FBI Special Agent in Charge Omer Meisel. “The FBI is committed to investigating those who engage in criminal conduct that corrupts the financial markets and defrauds the public. Furthermore, fraudsters will not escape justice by covering up or destroying evidence of their own wrongdoing. Obstructing a federal investigation is a serious criminal violation that the FBI will vigorously pursue and prosecute.”
As Champion-Cain admitted in her plea agreement, she raised money from investors by promising to use their money to make loans to business owners who were attempting to acquire California liquor licenses. Since 2012, Champion-Cain drew in approximately $400 million from investors based on promises that she would use their money to fund those loans, the investors’ money would be safe in an escrow holding account, and the invested funds would and could only be returned to the specific investor who deposited the funds or his/her intermediary.
Champion-Cain admitted today that these promises were all false. She never used the funds to make liquor license loans. Instead, she and her co-conspirators simply used investor funds to pay back other (usually earlier) investors, and embezzled funds to support Champion-Cain’s unrelated businesses and her lifestyle. For example, Champion-Cain admitted that she used at least $60 million in investor funds to meet payroll and other expenses incurred by several businesses she owned, including the Patio restaurant chain, vacation rentals, a juice bar, and the now-defunct Mission Beach surf-themed clothing store Luv Surf Boutique. She also spent investor funds to pay herself over $2 million in cumulative salary since 2012, and spent over $640,000 for box seats at San Diego Padres games, over $200,000 for box seats at San Diego Charges games, at least $745,000 to pay off her credit card bills, and hundreds of thousands of dollars for automobiles, jewelry, and similar personal luxuries.
The plea agreement also details how Champion-Cain and her co-conspirators succeeded in defrauding investors by hiding the truth. They fabricated documents, forged signatures, and told investors lies through fake email accounts so that when investors attempted to double-check on their investments with people they thought were independent third parties, the investors were often really communicating with Champion-Cain or her employees. For example, Champion-Cain emailed an escrow company employee when investors tried to ask questions: “I told them NEVER to call and bother you ladies,” and “if they call asking about escrow agreements and alcohol licenses, blah, blah, blah … just say ‘SURE WHATEVER NOW SHOW ME THE MONEY … HAHAHAHA.’” The cover-up continued even after Champion-Cain and her co-conspirators learned of a government investigation into her scheme—in response to which they attempted to destroy evidence they knew was incriminating, including stacks of documents, emails, video surveillance footage, and accounting records.
Crispin Torres, who also pleaded guilty today, had been an accountant at American National Investments for years. As Chief Financial Officer, Torres knew that Champion-Cain’s other businesses were strapped for cash, and requested that Champion-Cain transfer at least $60 million of investor funds from escrow accounts so that Champion-Cain could keep these businesses afloat. Torres also established a bank account under a name that was similar to the national escrow company’s name, and knew that Champion-Cain tricked certain investors into depositing their funds into this account believing the money would be safe. When those deposits arrived, Torres, at Champion-Cain’s instruction, fabricated receipts from the escrow company to send to investors. The purpose was clear – to convince investors that a reliable national escrow company administered their funds. In fact, the escrow company had no connection with this particular bank account. Champion-Cain and Torres had unfettered access to these investor funds and simply stole the money to further the Ponzi scheme.
Champion-Cain and Torres are scheduled to appear for sentencing before U.S. District Judge Anthony Battaglia on October 13 at 9 a.m.
CLICK HERE - Slides presented at press conference
CLICK HERE - Champion-Cain Plea Agreement
CLICK HERE - Torres Plea AgreementDEFENDANTS
Gina Champion-Cain Case Number 20CR2115 Age: 55 San Diego, CA
Crispin Torres Case Number 20CR2114 Age: 53 National City, CA
SUMMARY OF CHARGES
Securities Fraud, Title 15, U.S.C. Sections 77q and 77x (Champion-Cain)
Maximum Penalty: Five years in prison
Obstruction of Justice, Title 18, U.S.C. Section 1505 (Champion-Cain)
Maximum Penalty: Five years in prison
Conspiracy, Title 18, U.S.C. Section 371 (Champion-Cain and Torres)
Maximum Penalty: Five years in prison
AGENCY
Federal Bureau of Investigation
Raleigh Man Indicted for Setting Multiple Fires to Raleigh Businesses During RiotsRead the Press Release
RALEIGH, N.C. – A Raleigh man was indicted for setting fires inside two Raleigh businesses after a demonstration over the death of George Floyd in Minneapolis, Minnesota, Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina announced.
Richard Rubalcava, of Raleigh, North Carolina, was arrested on June 18, 2020, by special agents of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) and is charged by indictment with two counts of maliciously damaging or destroying, or attempting to damage or destroy, by means of fire or an explosive, any building or other real or personal property affecting interstate or foreign commerce.
According to the complaint, on May 30, 2020, at approximately 12:13 a.m., a fire was discovered at the Dollar General Express located at 149 East Davie Street, Raleigh, after it had been looted by rioters. Video surveillance was obtained from the Dollar General Express. The video shows Rubalcava enter the business and place numerous items in a Dollar General Bag. Rubalcava leaves and re-enters the business numerous times. Each time Rubalcava enters the business, he would steal items from the store. Further video surveillance captured Rubalcava inside the Dollar General Express setting fire to miscellaneous items located on an aisle endcap. Rubalcava appears to exit the store after setting the fire.
Additionally on May 30, 2020, video surveillance from Budacai Restaurant located at 120 East Martin Street, Raleigh, was given to the Raleigh Police Department (RPD) in regards to the restaurant being looted and a fire being set inside. After reviewing the video surveillance, RPD identified one of the subjects that entered the business as Rubalcava. The video surveillance showed Rubalcava entering the restaurant three times. The second time Rubalcava entered he stole the cash register. The third time Rubalcava entered he attempted to set a plant on fire inside the restaurant. After the plant would not ignite, Rubalcava ignited a towel and places the burning towel on a countertop. Surveillance video from both fires shows Rubalcava wearing the same clothing. Rubalcava admitted to RPD officers that he set the fire inside of Budacai Restaurant.
The counts charged in the indictment carry a statutory mandatory minimum term of imprisonment of five years, a maximum potential penalty of 20 years in prison, and a maximum fine of $250,000.
Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina credited the Bureau of Alcohol, Tobacco, Firearms & Explosives, and the Raleigh Police Department (RPD) with the investigation leading to Rubalcava’s arrest and indictment. The government is represented by Assistant U.S. Attorney Daniel W. Smith of the of the U.S. Attorney's Office’s Criminal Division.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Related court documents and information are located on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:20-mj-01642-JG.
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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.
Penfield Man Charged with Bilking Investors Out of Hundreds of Thousands of DollarsRead 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 Brian L. Schumacher, 55, of Penfield, NY, was charged by complaint with wire fraud and wire fraud conspiracy. The charges carry a maximum penalty of 20 years in prison and a fine of $250,000.
Assistant U.S. Attorney Charles M. Kruly, who is handling the case, stated that according to the complaint, between April 2016, and January 2017, the defendant conspired with others to defraud two investors out of hundreds of thousands of dollars. The actions of Schumacher and others led investors, located in Massachusetts and California, to wire significant amounts of funding to Schumacher’s company, Integra Diamonds, located in Rochester, NY, to enable Integra Diamonds to purchase diamonds in Africa.
The Massachusetts victim (Victim 1) was contacted by a co-conspirator of the defendant, who initially indicated that an investment of $100,000.00 would yield a minimum profit of $60,000.00 in one year. Skeptical because of the generous return that was promised, Victim 1 sought assurances that he was not the initial or sole investor in Integra Diamonds. Subsequently, Victim 1 received documents that falsely suggested that Integra Diamonds had other investors, and which also falsely claimed that Integra Diamonds had agreements with a logistics vendor and U.S.-based diamond purchasers. On June 16, 2016, Victim 1 wire transferred $100,000.00 from his bank account to an account in the name of Integra Diamonds. During the course of the conspiracy, $30,000 was returned to Victim 1, but not the remaining $70,000 of his $100,000.00 investment or any of the promised return. According to the complaint, $44,000 of Victim 1’s funds were attempted to be wired to Schumacher while he was in Sierra Leone to purchase diamonds. When that wire was unsuccessful, $44,500 was returned to a co-conspirator’s personal bank account.
Victim 2, a resident of California, also invested $100,000.00 in Integra Diamonds, after receiving a promise for a significant return. On December 2, 2016, Victim 2 wire transferred $100,000.00 from his bank account to an Integra Diamonds bank account. According to the complaint, Schumacher then withdrew $90,000 in cash from Victim 2’s investment, which he spent on expenses associated with another trip to Sierra Leone to purchase diamonds. Schumacher used Victim 2’s money to purchase, among other things, 1,211.85 carats of industrial diamonds for $30,296.25. Schumacher then allegedly resold those diamonds to a U.S. diamond broker for $11,514, none of which was returned to Victim 2. Over the course of the next year, Victim 2 requested status updates and return of his funds multiple times. Schumacher allegedly provided a number of excuses for the failure of Victim 2's investment, including that the diamond purchase was simply taking longer than expected and that the original diamond purchase fell through. Victim 2 was also informed that Schumacher was trying to secure another deal. Ultimately, Integra Diamonds did not repay Victim 2 any portion of the $100,000 loan principle, or any interest.
Schumacher will make an initial appearance today at 3:00 p.m. before U.S. Magistrate Judge Jeremiah J. McCarthy.
The complaint is the result of an investigation by the U.S. Postal Inspection Service, under the direction of Boston Division Inspector-in-Charge Joseph W. Cronin, and the Internal Revenue Service, Criminal Investigations Division, under the direction of Jonathan D. Larsen, Special Agent-in-Charge.
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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Payza and Patel Brothers Plead Guilty to Conspiring to Launder Money and Operating an Unlicensed Money Service BusinessRead the Press Release
WASHINGTON – Firoz Patel and his brother, Ferhan Patel, the founders and operators of Payza.com, AlertPay.com and Egopay.com, and the company MH Pillars doing business as Payza pled guilty to conspiring to launder money and operating an Internet-based unlicensed money service business that processed more than $250 million in illicit transactions. Firoz Patel also pled guilty to one count of conspiring to launder monetary instruments for charges related to a case out of the Middle District of Tennessee.
The plea, which took place July 17, 2020, in the United States District Court for the District of Columbia, was announced by Acting U.S. Attorney Michael R. Sherwin and Raymond Villanueva, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Washington, D.C.
Firoz Patel, 46, and Ferhan Patel, 39, are Canadian citizens, who operated Payza from offices in Canada. Payza was a money transmitting business, which transferred funds for a fee on behalf of customers across the globe to people within the United States and locations abroad.
As part of the plea, the Patel brothers and MH Pillars, Ltd., agreed to forfeit more than $12.5 million. Firoz Patel admitted to operating a prior money service business, AlertPay, which ignored repeated warnings from state regulators about its unlicensed activities. Firoz Patel transitioned AlertPay into Payza after Firoz Patel was the subject of a Tennessee indictment for laundering narcotics proceeds through AlertPay. The defendants admitted that no substantive changes took place during this rebrand.
Payza had numerous merchants that were “Cyclers” and “MLMs” which the defendants knew to be Ponzi/pyramid schemes. The defendants admitted to sanitizing Payza’s customers list by removing known illegal merchants, before producing that information to third parties requesting customer information. For example, a co-conspirator informed Ferhan Patel in a series of emails that he was looking through the merchant list to remove “any merchants who have gross violations such as adult, gambling, drugs, violence ect. [sic]. And what I think is the tricky part: Identify MLM’s that are set up as obvious illegal Pyramid schemes.” Payza failed to follow its own “Merchant Risk Guideline,” as internal documents revealed specific failures in relation to preventing the taking on/servicing of pyramid and Ponzi schemes.
The defendants further admitted that Payza struggled to maintain relationship with financial institutions, because Payza so frequently was found to have customers engaged in illegal activity. Firoz Patel’s solution to this was to create a new company, Egopay, which took on all of Payza’s high risk customers. Firoz Patel and Ferhan Patel caused an email to be sent to high-risk Payza customers directing them to migrate their accounts to Egopay. Ferhan Patel told Firoz Patel that Egopay was a problem in the U.S. because Egopay collected no customer due diligence data which created “obvious money laundering concerns.” Ferhan Patel further admitted to Firoz Patel that Egopay was classified as a money service business and that it had no know your customer checks in place. In spite of these known money laundering problems, Firoz Patel continued to allow Egopay to operate freely via the Payza platform. Ultimately Egopay was shut down by regulators in Belize, after which Payza began again directly servicing many of Egopay’s customers.
The defendants each admitted that their scheme caused over $250,000,000 to be illegally transmitted and to failing to conduct proper due diligence of their customers. The defendant lastly acknowledged that their actions were done willfully, knowingly, and with the specific intent to violate the law.
The Honorable Ketanji B. Jackson scheduled the sentencing for November 10, 2020.
Further information for victims is available at https://www.justice.gov/usao-dc/victim-witness-assistance/obopay-payza.
This case was investigated by Department of Homeland Security, Immigration and Customs Enforcement, Washington Field Office, with assistance from the D.C. Financial Crimes Task Force. The case was prosecuted by Assistant U.S. Attorneys Zia Faruqui and Arvind Lal and former Assistant U.S. Attorneys Kate Connelly and John Marston, with assistance from Paralegal Specialist C. Rosalind Pressley and former Paralegal Specialist Toni Donato; Victim/Witness Advocates Yvonne Bryant and Tonya Jones; Document Management Analyst Basizette Stribling; Legal Assistant Jessica McCormick; and Thomas Royal and Joshua Ellen from the Litigation Support Section.
Passaic County Man Admits Participating in Heroin ConspiracyRead the Press Release
NEWARK, N.J. – A Passaic County, New Jersey, man today admitted conspiring to distribute 100 grams or more of heroin, and to distributing a quantity of heroin, U.S. Attorney Craig Carpenito announced.
Tyson Jacobs, 21, of Paterson, New Jersey, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to one count of conspiracy to distribute and possess with the intent to distribute 100 grams or more of heroin and one count of knowingly and intentionally distributing heroin. Jacobs was previously charged by complaint.
According to documents filed in this case and statements made in court:
The defendant and his conspirators are all members and associates of the 230 Boys street gang, which operates primarily around Rosa Parks Boulevard and Godwin Avenue in Paterson. Through investigative techniques, including numerous controlled purchases of narcotics, consensually recorded telephone calls and text messages, physical surveillance, and the analysis of telephone call detail records, law enforcement determined that from at least September 2018 through Oct. 1, 2019, the defendant and his conspirators conspired to distribute narcotics, including heroin and fentanyl.
The count of conspiracy to distribute at least 100 grams of heroin carries a mandatory minimum penalty of five years in prison and a maximum penalty of 40 years in prison and a fine of $5 million. The count of distribution of heroin carries a maximum of 20 years in prison and a fine of $1 million. Sentencing is scheduled for Nov. 23, 2020.
This case is being conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
U.S. Attorney Carpenito credited special agents and task force officers with the ATF, Newark Division, under the direction of Special Agent in Charge Charlie J. Patterson; special agents of the DEA, under the direction of Special Agent in Charge Susan A. Gibson in Newark; officers of the N.J. State Police, under the direction of Col. Patrick J. Callahan; officers of the Paterson Police Department, under the direction of Director Jerry Speziale and Police Chief Ibrahim Baycora; and detectives of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia Valdes, with the investigation leading to the charges. He also thanked the U.S. Marshals Service, the Bergen County Sheriff's Office and the Belleville and Livingston police departments for their assistance with the case.
The government is represented by Assistant U.S. Attorney Francesca Liquori, of the OCDETF/Narcotics unit.
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Operation Mountaineer Highway Update: Fayette County Man 12th Defendant to be Sentenced for Federal Drug CrimeRead the Press Release
CHARLESTON, W.Va. – A Fayette County man was sentenced to federal prison for his participation in a drug trafficking operation in Fayette County, announced United States Attorney Mike Stuart. Bobby Mack, Jr., 40, was sentenced to 72 months in prison and four years of supervised release. Mack had previously entered a guilty plea to conspiracy to distribute more than 100 grams of heroin. He is the 12th defendant to be convicted and sentenced as a result of the extensive investigation into drug trafficking in the Fayette County area.
“Operation Mountaineer Highway was a hugely successful effort in keeping a smorgasbord of illegal drugs out of our central and southern West Virginia communities,” said United States Attorney Mike Stuart. “The operation took down dozens of dealers. Many lives were saved as a result of this operation. Awesome work by the incredible team that worked this matter.”
Mack previously admitted that he participated in the drug trafficking organization by supplying heroin to a co-conspirator. More specifically, Mack admitted that on July 16, 2018, he distributed 182 grams of heroin to the co-conspirator. After Mack distributed the heroin, the co-conspirator was stopped by law enforcement officers and admitted that he had obtained the heroin from Mack at Mack’s residence in Scarbro. Based on this information, officers obtained a search warrant for Mack’s residence. While conducting the search, officers located items commonly used in drug distribution, three firearms, and approximately $343,097 dollars in cash. As part of the plea agreement, Mack agreed to forfeit to the United States the firearms which he was prohibited from possessing due to a prior felony conviction, as well as the $343,097.
The investigation was conducted by the Drug Enforcement Administration (DEA) and the Central West Virginia Drug Task Force, with the support of the West Virginia State Police, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Fayette County Sheriff’s Department, the Beckley/Raleigh County Drug Task Force, the Southern Regional Drug and Violent Crime Task Force, the Fayetteville Police Department and the Oak Hill Police Department. Assistant United States Attorneys Timothy D. Boggess and Andrew J. Tessman handled the prosecution. United States District Judge Joseph R. Goodwin imposed the sentence.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:18-cr-00200.
Follow us on Twitter: SDWVNews and USAttyStuart
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O.C. Man Admits Operating Unlicensed ATM Network that Laundered Millions of Dollars of Bitcoin and Cash for Criminals’ BenefitRead the Press Release
LOS ANGELES – A Yorba Linda man has agreed to plead guilty to federal criminal charges that he operated an illegal virtual-currency money services business that exchanged up to $25 million – including on behalf of criminals – through in-person transactions and a network of Bitcoin ATM-type kiosks.
Kais Mohammad, 36, a.k.a. “Superman29,” was charged in a three-count criminal information filed today in United States District Court. In a plea agreement also filed today, Mohammad agreed to plead guilty to one count of operating an unlicensed money transmitting business, one count of money laundering, and one count of failure to maintain an effective anti-money laundering program.
According to his plea agreement, from December 2014 to November 2019, Mohammad owned and operated Herocoin, an illegal virtual-currency money services business. As part of his business, Mohammad offered Bitcoin-cash exchange services, charging commissions of up to 25 percent – significantly above the prevailing market rate – for doing so.
Using the moniker “Superman29,” Mohammad advertised his business online to buy and sell Bitcoin throughout Southern California, in transactions up to $25,000. In a typical transaction, he met clients at a public location and exchanged currency for them. Mohammad generally did not inquire as to the source of the clients’ funds and on many occasions he knew the funds were the proceeds of criminal activity. Mohammad admitted that he knew at least one Herocoin client was engaged in illegal activity on the dark web.
Mohammad later purchased and advertised on the internet a network of Bitcoin ATM-type kiosks, which were located in malls, gas stations and convenience stores in Los Angeles, Orange, Riverside and San Bernardino counties. These kiosks allowed customers to use cash to buy Bitcoin, an Internet-based cryptocurrency, or sell Bitcoin in exchange for cash that is dispensed onsite.
Mohammad processed cryptocurrency deposited into the machines, supplied the machines with cash that customers would withdraw, and maintained the server software that operated the machines. Mohammad was able to monitor transactions on the machines and identify each transaction that occurred on them.
During the time of Herocoin’s operation, Mohammad, a former bank employee, intentionally failed to register his company with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). Mohammad admitted he was aware that he was required to – but chose not to – develop and maintain an effective anti-money laundering program, file currency transaction reports for exchanges of currency in excess of $10,000, conduct due diligence on customers, and file suspicious activity reports for transactions over $2,000 involving customers he had reason to suspect were involved in criminal activity. With respect to his Bitcoin ATM network, Mohammad further admitted that he did not have a program in place that would have allowed him to obtain identifications for customers conducting multiple transactions of up to $3,000 or verify that any identification provided was the person conducting the transaction.
After FinCEN contacted Mohammad in July 2018 about his need to register his company, Mohammad did so, but he continued to fail to comply fully with federal law concerning money laundering, conducting due diligence and reporting suspicious customers.
During the course of its investigation, law enforcement conducted multiple transactions with Mohammad, including three successive purchases of Bitcoin totaling $14,500 by the same undercover agent from an ATM kiosk in Lakewood on September 12, 2018, for which Mohammad did not file a currency transaction report as required.
From February 2019 to August 2019, Mohammad also conducted multiple in-person transactions with undercover agents who represented they worked at a “karaoke bar” that employed women from Korea who entertained men in various ways, including engaging in sexual activity, according to the plea agreement. On August 28, 2019, Mohammad met with an agent and exchanged $16,000 in cash, which the agent represented were the proceeds from illegal activity, for 1.58592 Bitcoin. Mohammad never filed a currency transaction report or suspicious activity report for these transactions.
In total, Mohammad admitted that he exchanged between $15 million and $25 million from in-person exchanges and transactions occurring at his Bitcoin kiosks.
Mohammad is expected to plead guilty to the charges at a hearing in the coming weeks. Upon pleading guilty, Mohammad will face a statutory maximum sentence of 30 years in federal prison. As part of the plea agreement, Mohammad has agreed to forfeit cash, cryptocurrency, and 17 Bitcoin ATMs that he operated as part of his business.
This matter was investigated by IRS Criminal Investigation, Homeland Security Investigations, and the Los Angeles County Sheriff’s Department. This investigation was conducted with the support of the Organized Crime Drug Enforcement Task Force (OCDETF).
This case is being prosecuted by Assistant United States Attorney Puneet V. Kakkar of the International Narcotics, Money Laundering, and Racketeering Section.
Nampa Man Sentenced to 10 Years for Methamphetamine TraffickingRead the Press Release
BOISE - Roberto Nieto Rangel, 41, of Nampa, was sentenced in U.S. District Court to 120 months in prison for possession with intent to distribute methamphetamine, U.S. Attorney Bart M. Davis announced today. Chief U.S. District Judge David C. Nye also ordered Rangel serve 5 years of supervised release following his prison sentence. A federal grand jury indicted Rangel on February 13, 2019. Rangel pleaded guilty to the charge on December 11, 2019.
According to court records, Rangel possessed nearly a pound of methamphetamine as well as a handgun with a scratched-off serial number. Rangel is prohibited from possessing firearms due to prior convictions for domestic assault and because he is in the United States unlawfully. Rangel has been convicted twice of illegally re-entering the United States.
This case was investigated by the Nampa Police Department and Treasure Valley Metro Violent Crimes Task Force. The Task Force is comprised of federal, state, and local agencies. These agencies include the Federal Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; Department of Homeland Security; Ada County Sheriff’s Office; Boise Police Department; Caldwell Police Department; Canyon County Sheriff’s Office; Meridian Police Department; Nampa Police Department; and Idaho Department of Correction, Bureau of Probation and Parole.
This indictment was the result of a joint investigation by the Organized Crime and Drug Enforcement Task Force (OCDETF). The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply. Program participants include Federal Bureau of Investigation; Drug Enforcement Administration; Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Internal Revenue Service-Criminal Investigation; and U.S. Marshals Service.
This case was prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership and the State of Idaho to address gang crimes. The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth. For more information, visit www.treasurevalleypartners.org.
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Medina Husband and Wife Plead Guilty to Drug Related ChargesRead 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 Anthony Allee, 29, of Medina, NY, pleaded guilty before U.S. District Judge John J. Sinatra, Jr. to possessing with intent to distribute, and distributing, cocaine, and unlawful possession of a short-barreled shotgun in furtherance of drug trafficking. The charges carry a mandatory minimum penalty of 10 years in prison, a maximum of 20 years, and a $1,000,000 fine. In addition, Allee’s wife Tashira, 37, pleaded guilty to maintaining a drug-involved premises, and also faces a maximum penalty of 20 years in prison and a $500,000 fine.
Assistant U.S. Attorney Justin G. Bish, who is handling the case, stated that between April 2019 and July 22, 2019, the defendants used their Ridge Road residence in Medina, to store, sell, and use marijuana, hydrocodone, and cocaine. Anthony Allee also possessed various firearms in furtherance of his drug trafficking in order to protect himself, his drugs, and his drug proceeds.
On July 22, 2019, a state search warrant was executed at the residence. Investigators seized multiple firearms, ammunition, numerous articles of stolen property, approximately 73 grams of marijuana, 247 hydrocodone pills, cocaine residue located on a working digital scale with a razor blade, two additional digital scales, a vacuum sealer with bags, and knotted baggies.
The pleas are the result of an investigation by the Orleans County Sheriff’s Office, under the direction of Sheriff Randy Bower; Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly; the Niagara County Drug Task Force, under the direction of Acting Sheriff Michael Filicetti; the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge James B. Devito; the New York State Police, under the direction of Major James Hall; and the Orleans County District Attorney’s Office, under the direction of District Attorney Joseph Cardone.
Tashira Allee is scheduled to be sentenced on November 12, 2020, and Anthony Allee is scheduled to be sentenced on November 18, 2020. Both sentencings will be before Judge Sinatra.
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Massachusetts Man Sentenced for Illegally Retaining Classified National Defense Information Regarding U.S. Military ProgramsRead the Press Release
BOSTON – A former Raytheon systems engineer was sentenced today for illegally retaining national defense information. The defendant retained 31,000 pages of information that was marked as classified, some of which pertained to U.S. missile defense and was classified at the SECRET level, and altered or obliterated the classification markings on documents.
Ahmedelhadi Yassin Serageldin, 67, of Sharon, was sentenced by U.S. District Court Judge Patti B. Saris to 18 months in prison, one year of supervised release and ordered to pay a fine of $10,000. In December 2019, Serageldin pleaded guilty to one count of willfully retaining national defense information.
Serageldin was a systems engineer at Raytheon Technologies in Massachusetts from August 1997 until he was terminated in May 2017. Serageldin had a SECRET level security clearance in order to complete his assignments on several defense contracts for the U.S. government involving military radar technology.
After Raytheon raised suspicions to federal authorities about whether Serageldin was being candid during an internal investigation of his computer usage, agents followed Serageldin to a local library where they discovered that he was researching how to delete files from his computer. During the execution of search warrants, over 3,100 electronic files and over 110 paper documents belonging to Raytheon or the Department of Defense, over 570 of which were marked as containing classified information, were recovered. The documents marked as containing classified information totaled approximately 31,000 pages in length. Court documents list five specific documents, all of which pertain to U.S. military programs involving missile defense and are classified at the SECRET level. It was also determined that Serageldin had altered or obliterated the classification markings on approximately 50 documents.
United States Attorney Andrew E. Lelling; Assistant Attorney General John C. Demers of the Justice Department’s National Security Division; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Michael Wiest, Special Agent in Charge of the Naval Criminal Investigative Service, Northeast Field Office made the announcement today. Assistance with the investigation was provided by the Air Force Office of Special Investigations and the Internal Revenue Service’s Criminal Investigations in Boston. Raytheon Technologies has cooperated with the investigation, which was launched after they notified federal authorities about the suspicious conduct. Assistant U.S. Attorney Scott L. Garland, Deputy Chief of Lelling’s National Security Unit, prosecuted the case with assistance from Trial Attorney Scott Claffee of the Justice Department’s National Security Division.
Manitowoc Man Indicted on Methamphetamine ChargeRead the Press Release
United States Attorney Matthew D. Krueger of the Eastern District of Wisconsin, announced that on July 21, 2020, a federal grand jury indictment was issued against Keynan J. Juul (age: 23) of Manitowoc, Wisconsin.
The indictment alleges that Juul possessed in excess of 50 grams of actual methamphetamine with the intent to distribute it to others in violation of Title 21, United States Code, Sections 841(a) and 841(b)(1)(A). “Actual” methamphetamine possesses a high level of purity and is also known as “crystal” methamphetamine or “ice.” If convicted of that charge, Juul faces a mandatory minimum of 10 years’ imprisonment and up to a life sentence. He faces a fine of up to $10,000,000 and from five years to a lifetime on supervised release.
This case was investigated by the City of Two Rivers Police Department and the Manitowoc County Metropolitan Drug Enforcement Group. It will be prosecuted by Assistant United States Attorney Daniel R. Humble.
An indictment is only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government must prove him guilty beyond a reasonable doubt.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
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For further information contact:
Public Information Officer Kenneth Gales, (414) 297-1700
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Man Pleads Guilty to Armed Robbery and CarjackingRead the Press Release
ALEXANDRIA, Va. – A Washington, D.C. man pleaded guilty today to his role in an armed robbery and carjacking that led to a high-speed police chase and resulted in injuries to two police officers.
According to court documents, Jovan Doir Johnson, 30, together with another individual, obtained a stolen vehicle at gunpoint in Arlington and then used it to rob a 7-Eleven in Lorton. On Aug. 28, 2019, both men fled the 7-Eleven traveling north on Interstate 95 before taking Interstate 495 toward the Wilson Bridge, where several Virginia State Police cruisers attempted to stop the stolen Prius as it approached the bridge. When one cruiser attempted to stop the stolen vehicle, the vehicle drove into the rear corner of the cruiser forcing it into the concrete medium barrier at a high rate of speed. The first cruiser’s air bag deployed and the trooper was taken to the hospital with injuries as a result of the impact. A second cruiser subsequently advanced and pushed the stolen vehicle into the concrete medium just before reaching the bridge. The resulting impact also caused the second cruiser’s driver airbag to deploy. The trooper driving that second cruiser was also taken to the hospital. The Fairfax County Police Helicopter assisted in the stop.
Johnson pleaded guilty to armed robbery and brandishing a firearm during two crimes of violence, and carjacking. He faces a mandatory minimum sentence of 14 years, and a maximum possible sentence of life in prison when sentenced on November 4. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
This case is part of Project Safe Neighborhoods (PSN), which is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; James A. Dawson, Special Agent in Charge, Criminal Division, FBI Washington Field Office; Colonel Edwin C. Roessler Jr., Fairfax County Chief of Police; M. Jay Farr, Arlington County Chief of Police; and Colonel Gary T. Settle, Virginia State Police Superintendent, made the announcement after U.S. District Judge Rossie D. Alston, Jr. accepted the plea. Assistant U.S. Attorney Ronald L. Walutes, Jr. is prosecuting the case.
This matter was investigated by the FBI Washington Field Office’s Safe Streets Violent Crime Task Force which is composed of Special Agents and detectives from law enforcement agencies within Northern Virginia and the District of Columbia. The task force concentrates on investigating violent crimes and criminal threats within the Capital Region.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:19-cr-351.
Man Indicted on Charges Related to Shooting of the Embassy of CubaRead the Press Release
WASHINGTON – Alexander Alazo, 42, of Middletown, Pennsylvania, and Aubrey, Texas, was indicted today by a federal grand jury, which charged him with multiple offenses related to his shooting of the Embassy of Cuba in Washington, D.C., announced Acting U.S. Attorney Michael R. Sherwin; Special Agent in Charge of the Washington Field Division of the U.S. Secret Service Matthew Miller; Todd J. Brown Director of the U.S. Diplomatic Security Service; and Peter Newsham, Chief of the Metropolitan Police Department.
Alazo was arrested on April 30, 2020, and was charged by criminal complaint with a violent attack on a foreign official or official premises using a deadly weapon (18 U.S.C. § 112(a)), willfully injuring or damaging property belonging to or occupied by a foreign government in the United States (18 U.S.C. § 970(a)), and interstate transportation of a firearm and ammunition with intent to commit a felony (18 U.S.C. § 924(b)). On May 1, 2020, U.S. Magistrate Judge G. Michael Harvey detained Alazo without bond pending trial. Today, a federal grand jury returned an Indictment against Alazo charging him with four federal offenses, the three for which he was charged by criminal complaint, and an additional charge for using, carrying, brandishing and discharging a firearm during a crime of violence (18 U.S.C. § 924(c)).
The criminal complaint and Indictment stem from an incident in the early hours of April 30, 2020, when Alazo fired approximately 32 rounds of an assault-style weapon at the Embassy of Cuba in Washington, D.C., which was occupied at the time of the offense. Although the Embassy of Cuba suffered both exterior and interior damage, no one was injured in the attack. Alazo was immediately apprehended by the Metropolitan Police Department (MPD) without incident, and the weapon used in the shooting was recovered, as was an accelerant-soaked Cuban flag.
Both the criminal complaint and the Indictment are formal accusations of criminal conduct, not evidence of guilt. A defendant is presumed innocent unless proven guilty. If convicted, Alazo faces a mandatory sentence of at least ten years in prison for the charge of discharging a firearm during a crime of violence. The crime of a violent attack on a foreign official or official premises using a deadly weapon and the crime of willfully injuring or damaging property belonging to or occupied by a foreign government in the United States both carry a maximum sentence of 10 years in prison, a fine of up to $250,000, and not more than three years of supervised release. The crime of interstate transportation of a firearm and ammunition with intent to commit a felony carries a maximum sentence of five years in prison a fine of up to $250,000, and not more than one year of supervised release.
“We commend the efforts of local and federal law enforcement who intervened quickly to protect lives and reduce damage to the property of a foreign government present in the United States,” said Acting U.S. Attorney Sherwin. “This investigation and prosecution is a testament to the commitment of American law enforcement to thwart the efforts of any individual who would target with violence any foreign embassy in the United States.”
“The Diplomatic Security Service is firmly committed to ensuring the safety and security of foreign missions in the United States,” said Director Brown. “We take our responsibilities outlined in the Vienna Convention seriously.”
“Our city has experienced far too many tragic outcomes when someone fires a weapon indiscriminately in our community,” said Metropolitan Police Department Chief Peter Newsham. “With this indictment, it is our hope that the criminal justice system holds this individual accountable.”
In announcing the Indictment, Acting U.S. Attorney Sherwin, Special Agent in Charge Miller, and DSS Director Brown commended the work of those who investigated the case from the Secret Service, the Diplomatic Security Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the MPD. Finally, they cited the efforts of those who worked on the case from the U.S. Attorney’s Office for the District of Columbia, including Assistant U.S. Attorneys Jason McCullough and Stuart Allen, Special Assistant U.S. Attorney Nicole Hutchinson, and Paralegal Specialist Bria Cunningham.
Luzerne County Man Charged with Drug Trafficking and Firearms OffensesRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Michael Marchese, age 28, of Swoyersville, Pennsylvania, was indicted on July 21, 2020, by a federal grand jury for drug trafficking and firearms offenses.
According to United States Attorney David J. Freed, the indictment alleges that between April and May 2020 within the Middle District of Pennsylvania, Marchese conspired to distribute in excess of 50 grams of methamphetamine, distributed methamphetamine, and was in possession of a Ruger LCP .380 handgun and ammunition as a convicted felon.
The investigation was conducted by the Luzerne County Drug Task Force, the Kingston Police Department and the Bureau of Alcohol, Tobacco and Firearms (ATF). Assistant United States Attorney Robert J. O’Hara is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local and tribal enforcement and the local community to develop effective, locally-based strategies to reduce crime.
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.
Under federal law, the drug trafficking offense carries a mandatory minimum sentence of five years in prison, up to a maximum sentence of forty years in prison, a term of supervised release following imprisonment, and a fine. The charge of felon in possession of a firearm carries a maximum sentence of ten years in prison. 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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Longtime Leader of South Los Angeles Street Gang Arrested in RICO Conspiracy Case Alleging Two Previously Unsolved MurdersRead the Press Release
LOS ANGELES – A long-time senior leader of the South Los Angeles-based East Coast Crips (ECC) was arrested today on a federal grand jury indictment alleging he engaged in a decades-long conspiracy to murder rivals, extort local business and distribute narcotics.
Paul Gary Wallace, 54, also known as “Doc” and “Uncle Bill,” of South Los Angeles, was taken into federal custody today by the FBI and Los Angeles Police Department. He is scheduled to be arraigned on the indictment this afternoon in United States District Court.
Wallace is charged with one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act and one count of using a firearm in furtherance of a violent crime resulting in death.
According to the indictment, Wallace was a member of the ECC for more than 30 years and rose to become the leader and most influential member of the gang’s “6-Pacc” set, a series of cliques of the gang responsible for control over territory in South Los Angeles. The indictment describes how Wallace maintained his control over the gang through violence and intimidation. Wallace allegedly murdered and conspired to commit murder to enhance the gang’s violent reputation, to enhance his status within the gang, to retaliate against rivals, and to enforce discipline within the gang.
The indictment specifically alleges Wallace’s involvement in two murders. On February 9, 2003, Wallace allegedly repeatedly shot and killed a fellow ECC gang member who had publicly disrespected Wallace. On November 13, 2014, Wallace ordered the murder of a rival gang member, drove co-conspirators to the victim’s house, and personally handed a co-conspirator a firearm, which the co-conspirator used to murder the victim, the indictment alleges. The murder weapon, an AK-47-style assault rifle, was later found in Wallace’s van.
As a leader of the ECC, Wallace’s other criminal conduct included selling drugs in ECC territory, extorting local businesses, presiding over robberies, and engaging in other acts of violence, including intimidation, assaults and shootings against the gang’s rivals, according to the indictment.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If convicted of all charges, Wallace would face a statutory maximum sentence of life in federal prison and is death-penalty eligible.
This matter was investigated by the FBI and the Los Angeles Police Department.
This case is being prosecuted by Assistant United States Attorneys Joseph D. Axelrad and Jeffrey M. Chemerinsky of the Violent and Organized Crime Section.
Local Businessman Pleads Guilty to Bank Fraud and Tax Evasion ChargesRead the Press Release
Assistant U. S. Attorney Oleksandra Johnson (619) 546-9769
NEWS RELEASE SUMMARY – July 22, 2020
SAN DIEGO – A local business owner pleaded guilty in federal court today to bank fraud and tax evasion charges, admitting that over the course of several years he evaded taxes by failing to report $498,612 of income to the IRS, and also orchestrated an illegal scheme to fraudulently obtain a mortgage for his $1.8 million residence using a third party.
As part of his plea agreement, David Daughtrey also agreed to pay over $1 million in restitution to the Internal Revenue Service. He is scheduled to be sentenced on November 16, 2020, before U.S. District Judge Larry A. Burns.
“People who cheat on their taxes are cheating all other law-abiding tax payers,” said U.S. Attorney Robert Brewer. “Mr. Daughtrey blatantly disregarded his tax obligations for years. The defendant not only abused the tax system for his own financial benefit, but conspired to commit bank fraud in order to maintain this lifestyle.” Brewer commended the excellent work of prosecutor Oleksandra Johnson and FBI and IRS agents.
“The FBI is dedicated to ensuring that white collar crimes are uncovered and prosecuted,” stated FBI Acting Special Agent in Charge Omer Meisel. “Today, David Daughtrey has admitted to mortgage fraud and tax evasion. This case illustrates that the FBI will continue to investigate those individuals that engage in fraudulent financial schemes that cause harm to our banking industry and defraud the government of tax revenue.”
“Our Nation’s tax system funds critical infrastructures and vital programs, including supporting our citizens and small businesses during the ongoing pandemic,” Ryan L. Korner, Special Agent in Charge, IRS Criminal Investigation. “Honest Americans’ compliance with the tax laws is imperative. Rather than pay his fair share, David Daughtrey chose to live lavishly, while intentionally failing to report his true income and evading the payment of over $400,000 in taxes. Today’s guilty plea demonstrates that the IRS will diligently continue our important enforcement efforts despite the ongoing challenges posed by Covid-19. We will work alongside our law enforcement partners in a collective effort to enforce the law and ensure the public trust.”
Daughtrey admitted that from July 2006 until April 2016, he conspired with others to commit bank fraud and tax evasion. As part of the bank fraud scheme, Daughtrey directed another individual to submit a mortgage application to Wells Fargo to purchase a $1.8 million five-bedroom residence, and to falsely claim that the funds used as down payment belonged to the third party and the residence would be used by the third party. In reality, Daughtrey provided the funds, and the home was intended to be Daughtrey’s primary residence. Daughtrey made monthly mortgage payments of approximately $8,000 for his residence, but continued to represent to the bank that the third party owned the house. Daughtrey later submitted a false hardship letter on behalf of the third party in an effort to get the bank to modify the terms of the loan on the home. As part of the plea agreement, Daughtrey admitted he was the true owner of the residence at all relevant times, and promised to make a good faith effort to transfer the legal ownership of the home into his own name.
Daughtrey also admitted as part his plea that over several years, he and his spouse (who is not charged in the case) conspired to commit tax evasion by filing tax returns listing substantially less income than Daughtrey actually earned. Daughtrey’s tax return for the year 2012 omitted at least $498,612 in income. Daughtrey failed to report his total income in tax years 2013, 2014, and 2015, and did not file timely tax returns for subsequent years. According to the plea agreement, the resulting tax loss to the IRS for the years 2012-2014 was $456,536. Daughtrey agreed to pay $1,016,457.91 in restitution to the IRS, which includes the total tax loss plus penalties and interest.
DEFENDANTS Case Number 20cr2113-LAB
David Daughtrey Age: 60 El Cajon, CA
SUMMARY OF CHARGES
Conspiracy to Commit Bank Fraud and Tax Evasion, 18 U.S.C. § 371 (count 1); and
Making a False Tax Return, 26 U.S.C. § 7206(1) (count 2).
Maximum penalty:
Five years’ imprisonment and $250,000 fine (count 1)
Three years’ imprisonment and a maximum fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greatest (count 2)
AGENCY
Federal Bureau of Investigation
Internal Revenue Service