Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Monday 13 July 2020
Former VA Pharmacist to Serve Time in Federal Prison for Stealing Controlled Drugs from Veterans' PrescriptionsRead the Press Release
SHREVEPORT, La. – United States Attorney David C. Joseph announced that Melissa W. Richardson, 44, of Shreveport, was sentenced today by U.S. District Judge Donald E. Walter to serve one year in federal prison, followed by one year of supervised release, for stealing controlled substances from mail-out prescriptions. Richardson was found guilty on January 17, 2020, by a federal jury in Shreveport, of 15 counts of acquiring a controlled substance by fraud, following a one-week trial.
According to evidence presented during trial, on June 9, 2017, Richardson, a licensed pharmacist, who was formerly employed with the Overton Brooks VA Medical Center (VAMC) in Shreveport, stole various quantities of Hydrocodone out of individual prescription bottles as she verified mail-out prescriptions meant for veterans. The prescriptions at issue had been prepared by a pharmacy technician and were awaiting a second count and verification from Richardson. Video surveillance from inside the VAMC controlled substances vault showed Richardson slipping the pills into her pocket as she counted the prescriptions. In multiple instances, she slipped pills into her pocket before the pills were counted. Video footage showed her then verify that the prescription was correct in the VAMC’s computer system, seal the bottle, place it in a sealed envelope, and drop it in a bin for mail-out. When federal agents confronted Richardson, she had 236 loose pills in her pocket.
“Combatting the opioid epidemic is one of our nation’s most critical law enforcement and public health initiatives,” said U.S. Attorney Joseph. “Pharmacists, such as the defendant here, are entrusted with the responsibility to ensure that opioids and other controlled substances are lawfully dispensed. Richardson abused this trust when she stole prescriptions for her own use. My office will continue to hold accountable those medical professionals who violate the law in dispensing controlled substances.”
The U.S. Department of Veterans Affairs, Office of Inspector General, conducted the investigation. Assistant U.S. Attorney Brian C. Flanagan and Supervisory Assistant U.S. Attorney Allison D. Bushnell prosecuted the case.
# # #
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.
Florida Man Sentenced for His Role in Counterfeiting SchemeRead the Press Release
Montgomery, Alabama – On Thursday, July 9, 2020, Morris Bryan Parmer, a 61-year-old man from Quincy, Florida, was sentenced to 18 months in prison for his part in a U.S. currency-counterfeiting scheme, announced United States Attorney Louis V. Franklin, Sr. Parmer was also ordered to serve two years of supervised release after he serves his prison sentence and to pay $400.00 in restitution to Home Depot.
According to court records, on August 4, 2018, the Dothan Police Department conducted a traffic stop on a vehicle occupied by Parmer and his co-defendant, Tyra Keisha Denise Jefferson, 24, from Tallahassee, Florida. During the stop, officers discovered approximately fifty-five counterfeit $100 bills and three counterfeit $20 bills in the vehicle, along with materials used to manufacture them. Further investigation revealed that the two had purchased merchandise from a Home Depot store in Lake City, Florida, on August 2, 2018, using at least four counterfeit $100 bills. On July 8, 2020, Jefferson pleaded guilty to her role in the conspiracy and will be sentenced in the next few months.
The United States Secret Service and the Dothan Police Department investigated this case. Assistant United States Attorneys Hollie Reed and Russell Duraski prosecuted the case.
Five-Time Drug Felon Sentenced to Federal PrisonRead the Press Release
A man with four prior drug-related felonies who trafficked methamphetamine in 2016 was sentenced today to more than 14 years in federal prison.
Andrew Sarchett, age 39, from Kailua Kona, Hawaii, and previously from Marion, Iowa, received the prison term after a January 22, 2020 guilty plea to one count of distribution of methamphetamine.
In a plea agreement, Sarchett admitted he was involved with the sale of methamphetamine in the Cedar Rapids area in 2016. The plea agreement also showed Sarchett was involved in the manufacture of methamphetamine at a Marion residence rented by Sarchett’s then-girlfriend. After the discovery of the methamphetamine laboratory, the landlord of the residence spent approximately $7,500 to clean up the residence. Sarchett had been convicted of four prior drug related felonies.
Sarchett was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Sarchett was sentenced to 176 months’ imprisonment and he was ordered to make $7,500 in restitution to the landlord for repair of the property. He must also serve a six-year term of supervised release after the prison term. There is no parole in the federal system. Sarchett is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Patrick J. Reinert and investigated by the Marion, Iowa, Police Department and the Iowa Division of Narcotics Enforcement.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-CR-00082. Follow us on Twitter @USAO_NDIA.
El Salvadoran National Involved in Bridgeport Shooting Death Sentenced for Immigration OffenseRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that DOUGLAS ALEXANDER RIVAS, 38, a citizen of El Salvador, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to six months of imprisonment for illegally reentering the U.S. Judge Underhill ordered Rivas to begin serving the prison term after he completes an unrelated state sentence connected to a Bridgeport homicide in 2016.
According to court documents and statements made in court, in March 2003, Rivas was convicted in Connecticut state court of misdemeanor offenses, including criminal trespass in the first degree, criminal mischief in the second degree, and reckless endangerment in the first degree. For these convictions, he received an 11-month suspended sentence and three years of probation. In March 2007, Rivas was removed to El Salvador.
Rivas subsequently illegally reentered the U.S.
On April 25, 2017, Rivas was arrested, in Florida, in connection with the shooting death of a 36-year old man at the El Paraiso Restaurant in Bridgeport on September 25, 2016. On November 8, 2019, Rivas pleaded guilty in state court to manslaughter in the first degree, and criminal possession of a firearm.
On January 6, 2020, Rivas pleaded guilty in federal court to one count of illegal reentry by a removed alien.
Rivas has been detained since April 25, 2017.
This matter was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement (ICE), Enforcement and Removal Operations. The case was prosecuted by Assistant U.S. Attorney Hal Chen.
Drug Felon Sentenced to 7 Years for Committing Drug and Gun Crimes while on Federal Supervised ReleaseRead the Press Release
PITTSBURGH - Nico Nixon was sentenced to 7 years (84 months) in prison for committing fentanyl and heroin trafficking and firearm crimes while on supervised release following a prior conviction for heroin trafficking, United States Attorney Scott W. Brady announced today.
Nixon, 29, of Pittsburgh, was sentenced by United States District Judge Arthur J. Schwab. Earlier this year, Nixon pled guilty to possessing with intent to distribute fentanyl and heroin, and possessing a firearm in furtherance of a drug trafficking crime, on August 3, 2019.
Nixon was previously convicted in federal court in 2012 for conspiring to distribute at least 100 grams of heroin. He was sentenced to 87 months in prison at that time. In 2015, his prison sentence was reduced by 16 months as a result of across-the-board retroactive reductions to the sentencing guideline ranges for drug trafficking crimes.
Nixon was on federal supervised release in 2019 when he committed the additional fentanyl and heroin trafficking and firearm crimes for which he was sentenced. Judge Schwab imposed a 12-month consecutive prison sentence for the violations of release conditions.
Assistant United States Attorney Craig W. Haller prosecuted this case on behalf of the United States.
The Pittsburgh Police Bureau of Police, the United States Marshals Service, and the Pennsylvania Office of Attorney General conducted the investigation leading to the convictions and sentences in this case. This case is being prosecuted as 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.
Denver Man Sentenced to Federal Prison for Conspiracy to Distribute and Possession with Intent to Distribute MethamphetamineRead the Press Release
DENVER – United States Attorney Jason R. Dunn announced that Luis Enrique Delgado-Arvizu, age 32, of Denver, was sentenced late last week to serve 150 months (over 12 years) in federal prison, followed by 5 years on supervised release for his role as an organizer-supervisor of a large methamphetamine distribution organization that shipped hundreds of pounds of methamphetamine to the Denver area. The Denver Division of the DEA joined in the announcement.
In July 2015, DEA OCDETF Strike Force Group-1 initiated an investigation into the drug trafficking activities of two methamphetamine trafficking organizations, the first led by convicted defendant Cesar Paul Cansino-Obeso and the second led by fugitive Isaias Campos-Rutiaga. Both organizations imported multi-pound quantities of methamphetamine from Mexico into the United States. The drugs were transported by drug trafficking organization couriers from California to three Denver-based distributors working for Campos-Rutiaga, one of whom was Delgado-Arvizu. On a monthly basis, Delgado-Arvizu received 60-to-100 pounds of methamphetamine from Campos-Rutiago, which Delgado-Arvizu then distributed to customers throughout the metro area.
Delgado-Arvizu was arrested in possession of 22 pounds of methamphetamine and $60,571.41 in currency. During the investigation, the strike force seized 126 pounds of methamphetamine (four of which were mixed with fentanyl), 4 guns and $120,000.
“The work in this case disrupted a major drug trafficking operation and took a significant dealer off Colorado’s streets,” said U.S. Attorney Jason Dunn. “Together with our law enforcement partners, we were able to stop a major supplier of methamphetamine from poisoning our communities further.”
“The specific mission of the DEA Denver Field Division’s StrikeForce Group is to target and dismantle trans-national drug trafficking organizations operating in the Rocky Mountain Region and beyond. Mr. Delgado-Arizu was a member of a drug trafficking organization responsible for the distribution of significant amounts of methamphetamine along the Front Range,” said DEA Special Agent in Charge Deanne Reuter. “This investigation is an example of DEA’s commitment to the protection our communities by working alongside our state, federal and local law enforcement partners to identify the most significant threats to the public safety.”
U.S. District Court Judge Raymond P. Moore sentenced Delgao-Arvizu, noting during the sentencing that although this was the defendant’s first offense of any kind, the amount of drugs distributed by the defendant warranted the twelve-year sentence.
Delgado-Arvizu was prosecuted by Assistant United States Attorney Stephanie Podolak as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program. The Colorado Attorney General’s Office assisted with this matter. The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking, weapons trafficking, and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the District of Colorado. Related court documents can be found on PACER by searching for Case Number 18-cr-192.
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.
Convicted Felon Sentenced to Federal Prison for Firearm PossessionRead the Press Release
MEMPHIS, TN – Antonio Buntyn, 45, has been sentenced to 37 months in federal prison for being a felon in possession of a firearm. D. Michael Dunavant, U.S. Attorney announced the sentence today.
According to the information presented in court, on April 6, 2019, at approximately 2:05 a.m. Memphis Police responded to a car crash. Buntyn’s car was inoperable, and ultimately had to be towed away. He then walked to the house of his girlfriend, who had an order of protection against him. At her house, he physically assaulted her and as they got into her car he continued the assault. She was able to escape from the car at a local gas station where she contacted law enforcement. Buntyn fled the scene.
Later, still in the early morning hours of April 6, at approximately 8:30 a.m., Memphis Police responded to yet another call involving Buntyn. Buntyn had returned to the girlfriend’s house, and was being chased off the property by her son. Law enforcement placed him in custody. The girlfriend told law enforcement that Buntyn was in possession of a firearm, which she was able to take away from him and placed in a storm drain. Assisted by the Memphis Fire Department, law enforcement was able to open the storm drain and recover the weapon.
Buntyn has one prior felony conviction for Aggravated Assault and one prior misdemeanor conviction for domestic assault. As a result of his prior conviction history, Buntyn is prohibited by federal law from possessing firearms or ammunition.
On July 10, 2020, U.S. District Court Judge Jon P. McCalla sentenced Buntyn to 37 months in federal prison followed by 2 years supervised release.
U.S. Attorney D. Michael Dunavant said: "Prohibited persons in possession of firearms such as convicted felons and persons with histories of domestic violence present a known and immediate risk of violence to their families and the community at large. In order to protect public safety, uphold the rule of law, and achieve justice for victims, must remove firearms from the hands of prohibited persons and remove dangerous felons from our streets. This sentence does just that.”
This case was investigated by the Memphis Police Department.
Special Assistant U.S. Attorney Samuel D. Winnig prosecuted this case on behalf of the government. SAUSA Winnig is currently assigned from the Shelby County District Attorney General’s Office for the purpose of prosecuting violent crimes and firearms offenses in federal court.
###
Bronx Resident Sentenced to 71 Months in Federal Prison for Trafficking HeroinRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that JOSE LUIS REYES, also known as "Roberto Camacho Figueroa,” “Joselito” and “Gordo,” 50, a citizen of the Dominican Republic last residing the Bronx, New York, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 71 months of imprisonment, followed by four years of supervised release, for trafficking heroin.
According to court documents and statements made in court, this matters stems from a DEA Hartford Task Force investigation of a heroin trafficking organization that was operating in Connecticut, Massachusetts, New York and the Dominican Republic. The investigation, which included court-authorized wiretaps, revealed that Reyes oversaw the drug trafficking organization’s drug distribution and cash collection activities when the organization’s leader was residing in the Dominican Republic. On multiple occasions in 2017, Reyes was observed traveling from New York to meet with associates at a suspected narcotics stash location on Wethersfield Avenue in Hartford.
Reyes has been detained since his arrest on related New York state charges on April 12, 2017. On that date, a search of his residence revealed more than 1.4 kilograms of heroin and more than 750 grams of cocaine.
On April 27, 2017, a federal grand jury in Connecticut returned an indictment charging Reyes and nine other individuals with various heroin trafficking offenses stemming from this investigation. On October 3, 2018, Reyes pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute one kilogram of heroin.
Reyes faces deportation proceedings when he completes his prison term.
The DEA’s Hartford Task Force includes personnel from the DEA Hartford Resident Office and the Bristol, Hartford, East Hartford, Manchester, New Britain, Rocky Hill, Wethersfield, Windsor Locks and Willimantic Police Departments.
This case is being prosecuted by Assistant U.S. Attorney Geoffrey M. Stone.
Attorney Sentenced for Tax OffensesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that WILLIAM S. PALMIERI, 56, of Bethany, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to three years of probation, the first six months of which Palmieri must serve in home confinement, for failing to pay all of the federal income taxes he owed over several years. Judge Underhill also ordered Palmieri to perform 150 hours of community service.
According to court documents and statements made in court, Palmieri is an attorney with a practice specializing in civil rights law. Between 2006 and 2014, Palmieri reported to the IRS, but did not pay, all the income taxes he owed, even though he had the ability to make substantially greater tax payments during that time. The investigation also revealed that Palmieri used his attorney IOLTA bank account to pay various personal expenses, including his home mortgage and private school tuition payments.
Palmieri is required to pay $141,474.53 in back taxes, and $86,234.47 in interest and penalties, totaling $227,709.
On December 19, 2019, Palmieri pleaded guilty to two counts of willful failure to pay income taxes.
This matter was investigated by the Internal Revenue Service – Criminal Investigation Division. The case was prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.
Alabama Orthopaedic Clinic, P.C. and Dr. Russell A. Hudgens to Pay the United States $74,000 in Civil PenaltiesRead the Press Release
United States Attorney Richard W. Moore, of the Southern District of Alabama, announces that Alabama Orthopaedic Clinic, P.C. (AOC) and Dr. Russell A. Hudgens, have agreed to pay $74,000 to settle civil allegations that they violated the Controlled Substances Act (CSA). AOC, an orthopaedic clinic located in Mobile, Alabama, also operated a Workers’ Compensation Pharmacy (Pharmacy), where Dr. Hudgens served as the registrant with the Drug Enforcement Administration (DEA).
Congress passed the CSA to combat the illegal distribution and abuse of highly addictive and dangerous controlled substances, and requires individuals and entities, such as Dr. Hudgens and AOC, who are registered with DEA, to maintain complete and accurate records of all controlled substances. The CSA is enforced by the DEA’s Diversion Control Division.
“Failure to maintain proper records of narcotics like oxycodone and hydrocodone contribute to the opioid crisis,” said U.S. Attorney Moore. “Our Office is committed to ensuring total compliance with the Controlled Substances Act, and we will vigorously enforce violations wherever we find them.”
The United States alleges that between January 1, 2019, and August 5, 2019, AOC and Dr. Hudgens violated the CSA by failing to make a complete and accurate record of all controlled substances on hand at the time the Pharmacy began dispensing and every two years thereafter, failing to maintain complete and accurate records of each controlled substance received, sold, delivered or otherwise disposed of, and failing to record dates and quantities of controlled substances as they were received.
“Today’s settlement highlights DEA efforts to ensure that our pharmaceutical drug supply system remains in compliance with the Controlled Substances Act,” said Clay Morris, DEA Assistant Special Agent In Charge for the Birmingham Field Office. “Securing our nation’s pharmaceutical drug supply is of critical importance in our fight against the opioid epidemic and drug addiction. Proper record keeping of controlled substances by DEA registrants is a major responsibility to ensure the safety of our communities. DEA’s Diversion Control Program is unwavering in their commitment to maintain a safe, secure and accountable drug supply system.”The investigation and settlement were conducted by the United States Attorney’s Office for the Southern District of Alabama and DEA’s Mobile Field Division. The United States recognizes the investigative cooperation of AOC and Dr. Hudgens, including the voluntary closure of AOC’s Pharmacy. The CSA claims settled are allegations only, and there has been no determination of liability.
27 Skilled Nursing Facilities Controlled by Longwood Management Corp. to Pay $16.7 Million to Resolve Allegations of Inflated Medicare BillsRead the Press Release
LOS ANGELES – Longwood Management Corporation and 27 affiliated skilled nursing facilities (Longwood) have agreed to resolve allegations that they violated the False Claims Act by submitting false claims to Medicare for rehabilitation therapy services that were not reasonable or necessary, the Department of Justice announced today. Longwood is headquartered in Los Angeles, and the 27 skilled nursing facilities are located in Southern California.
“Longwood’s business plan called for substantial revenue from Medicare, and it pressured therapists to provide additional, unnecessary services when targets were not met,” said United States Attorney Nick Hanna. “This case demonstrates the power of whistleblowers to shine a light on improper business practices and obtain significant recoveries on behalf of United States taxpayers.”
“This settlement reflects the Department’s continuing commitment to ensure that patients are receiving individualized healthcare services appropriate to their specific medical needs,” said Acting Assistant Attorney General Ethan P. Davis for the Department of Justice’s Civil Division. “When skilled nursing facilities provide rehabilitation therapy services based on maximizing revenue rather than the interests of their patients, we will hold them accountable.”
The settlement resolves allegations that Longwood submitted false claims for rehabilitation therapy by engaging in a systematic effort to increase Medicare billings. Medicare reimburses skilled nursing facilities at a daily rate that reflects the skilled therapy and nursing needs of qualifying patients. The greater the patient’s needs, the higher the level of Medicare reimbursement. The highest level of Medicare reimbursement for skilled nursing facilities is for “Ultra High” therapy patients, who require a minimum of 720 minutes of skilled therapy from two therapy disciplines (e.g., physical, occupational or speech therapy), one of which has to be provided five days a week.
Longwood allegedly knowingly submitted or caused the submission of false and fraudulent claims to Medicare for medically unreasonable and unnecessary Ultra High levels of rehabilitation therapy for Medicare Part A residents. Specifically, Longwood allegedly pressured therapists to increase the amount of therapy provided to patients to meet pre-planned targets for Medicare revenue. These targets were alleged to have been set without regard to patients’ individual therapy needs and could only be achieved by billing for a high percentage of patients at the Ultra High level.
The settlement covers conduct that occurred from May 1, 2008 through August 1, 2012 at six facilities: Alameda Care Center in Burbank, Burbank Rehabilitation Center, Magnolia Gardens Convalescent Hospital in Granada Hills, Montrose Healthcare Center, Sherman Oaks Health & Rehab Center, and West Hills Health & Rehab Center.
The settlement also covers conduct that occurred from January 1, 2006 through October 10, 2014 at 21 facilities: Burlington Convalescent Hospital in the Westlake District of Los Angeles, Chino Valley Rehabilitation Center LLC, Colonial Care Center in Long Beach, Covina Rehabilitation Center, Crenshaw Nursing Home, Green Acres Lodge in Rosemead, Imperial Care Center in Studio City, Imperial Crest Health Care Center in Hawthorne, Laurel Convalescent Hospital in Fontana, Live Oak Rehabilitation Center in San Gabriel, Longwood Manor Convalescent Hospital in the Mid-City District of Los Angeles, Monterey Care Center in Rosemead, Intercommunity Healthcare Center in Norwalk, Park Anaheim Healthcare Center, Pico Rivera Healthcare Center, San Gabriel Convalescent Center, Whittier Pacific Care Center, Studio City Rehabilitation Center, Sunnyview Care Center in the Pico Union District of Los Angeles, View Park Convalescent Center in Baldwin Hills, and Western Convalescent Hospital in the Jefferson Park District of Los Angeles.
Contemporaneous with the civil settlement, Longwood has entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG) that requires an independent review organization to annually assess the medical necessity and appropriateness of therapy services billed to Medicare.
“The government contended Longwood falsely claimed medically unreasonable and unnecessary levels of rehabilitation services at the expense of taxpayers,” said Timothy B. DeFrancesca, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “My agency’s compliance agreement is designed to monitor claims to Medicare and prevent submission of false claims in the future.”
The settlement partially resolves allegations brought in two lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act, which allows private parties to bring suit on behalf of the government and to share in any recovery. The whistleblowers – Judy Boyce, Benjamin Monsod and Keith Pennetti – will collectively receive $3,006,000 of the settlement proceeds.
The settlement was the result of a coordinated effort by the United States Attorney’s Office for the Central District of California (Assistant United States Attorney John Lee of the Civil Fraud Section), the Civil Division of the Department of Justice, the United States Attorney’s Office for the Northern District of Alabama, the U.S. Department of Health and Human Services Office of Inspector General, and the Defense Criminal Investigative Service.
The cases are captioned United States ex rel. Pennetti v. Longwood Management Corp., et al., CV14-4133 (C.D. Cal.), and United States ex rel. Boyce, Judy and Monsod, Benjamin v. Aegis Therapies, Inc., GGNSC Holdings LLC, and Longwood Management Corp., CV16-8050 (C.D. Cal.). The claims resolved by this agreement are allegations only and there has been no determination of liability.
Saturday 11 July 2020
Associated Pain Specialists, P.C. of Knoxville Enters into Settlement Resolving False Claims Act AllegationsRead the Press Release
KNOXVILLE, Tenn. – On June 26, Associated Pain Specialists, P.C., of Knoxville, a pain management based clinic, agreed to pay $400,000 to resolve allegations of violating the False Claims Act.
The settlement resolves allegations that from February 1, 2016 through August 10, 2018, Associated Pain Specialists, P.C. knowingly billed Medicare and Tennessee Medicaid (TennCare) for medically unnecessary screening tests at higher costs than appropriate, when less costly or alternative tests were available.
The government alleged that Associated Pain Specialists, P.C. performed tests on patients whose medical records did not support a medical diagnosis for the tests and the associated billing codes. The government also alleged the Vital System Assessment Tests (VSAT) did not benefit patients because the test results were not used in the treatment subsequently provided, and that, ultimately, Associated Pain Specialists, P.C. knowingly submitting false claims to federal health care programs for payment for VSATs that were not reasonable or medically necessary.
Allegations were brought in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims, and to receive a share of any recovery. The government may intervene and file its own complaint in such a lawsuit, as was done in this case.
“Medical providers have a duty to uphold ethical standards of care and to provide services when medically necessary in order to meet the professionally recognized standards of health care. Our office will continue to root out those who attempt to take advantage of government medical programs. Those who fail to comply with the law in order to increase profit will be pursued by the Department of Justice,” said U.S. Attorney J. Douglas Overbey.
“Patients benefit when they receive only medically necessary treatments – they deserve nothing less,” said Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services (HHS-OIG). “We will continue working with our Federal and State Law Enforcement partners to protect taxpayers and government health care beneficiaries.”
“This VSAT is one of many so-called medical devices that we are seeing across Tennessee and the nation that are fraudulently used with the sole purpose of generating revenue for a health care provider by conducting unnecessary and sometimes worthless tests,” said Tony Hullender, Deputy Attorney General of the Medicaid Fraud and Integrity Division.
As part of the settlement, Associated Pain Specialists, P.C., entered an Integrity Agreement (IA) with HHS-OIG which promotes its future compliance with the statutes, regulations, program requirements, and written directives of Medicare and all other federal health care programs. The IA focuses on the pain clinic’s continuing obligation to accurately bill and properly submit reimbursement claims to Medicare and TennCare.
This investigation resulted from a coordinated effort between the U.S. Attorneys’ Office for the Eastern District of Tennessee, HHS-OIG, and the Tennessee Attorney General’s Office, Medicaid Fraud and Integrity Division. Support was provided from HHS-OIG, the Tennessee Bureau of Investigation, and the Medicaid Fraud Control Division.
The case is docketed as United States and State of Tennessee ex rel. Cox. v. Associated Pain Specialist, P.C. and Smoky Mountain Ambulatory Surgery Center LLC., No. 3:18-cv-154.
Assistant U.S. Attorneys Jeremy Dykes and Margaret Harker represented the United States. Deputy Attorney General Tony Hullender represented the State of Tennessee.
The claim settled by this agreement are allegations only, and there has been no determination of liability.
###
Friday 10 July 2020
“SCO” Gang Member Sentenced to 70 Months ImprisonmentRead the Press Release
PITTSBURGH, PA -A former resident of Wilmerding, Pennsylvania, was sentenced in federal court on July 8, 2020 on his conviction of narcotics trafficking, United States Attorney Scott W. Brady announced today.
Senior United States District Judge Arthur J. Schwab imposed the sentence of 70 months imprisonment followed by four years of supervised release on Richard Coto-Wheat, 27.
According to information presented to the Court, the Greater Pittsburgh Safe Streets Task Force conducted a long-term investigation of drug trafficking occurring in and around the Braddock section of Pittsburgh. Wells and other individuals were identified as members or associates of a neighborhood based street gang, self-titled "SCO", which illegally distributed controlled substances in the Greater Pittsburgh Region.
In January of 2019, investigators obtained authorization to conduct a federal wire investigation, which continued through May of 2019. Wells, along with 32 others were indicted in June of 2019 by a federal grand jury in three separate, but related, Indictments.
As to Coto-Wheat, the Court was informed that intercepted communications confirmed that he was conspiring with others to possess with intent to distribute and distribute 100 to 400 grams of heroin between August 2018 and May 2019. Coto-Wheat admitted, in conjunction with his guilty plea, that he is a member of “SCO.” On June 12, 2019, law enforcement executed both a search and arrest warrant at the defendant’s residence in Braddock and seized numerous items indicative of drug trafficking, including: scales, stamps, stamp pads, masks, strainers, suspected controlled substances as well as $456.00 in U.S. Currency.
Assistant United States Attorney Rebecca L. Silinski prosecuted this case on behalf of the government.
United States Attorney Brady commended the multi-agency team, which was led by the Federal Bureau of Investigation, for the investigation leading to the successful prosecution of Wolford. Partners in this investigation included the Drug Enforcement Administration, Bureau of Alcohol Tobacco Firearms and Explosives, United States Marshals Fugitive Task Force, Allegheny County Sheriff’s Office, Allegheny County Police Department, Pennsylvania State Police, Pennsylvania Attorney General’s Office Bureau of Narcotics, and the Pittsburgh Bureau of Police. Other assisting agencies included the Monroeville Police Department, Penn Hills Police Department, Wilkinsburg Police Department, and Allegheny County Adult Probation.
The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
Wirt County Woman Pleads Guilty to Bank FraudRead the Press Release
CHARLESTON, W.Va. – A Wirt County woman pled guilty to a bank fraud charge today, announced United States Attorney Mike Stuart. Melissa Evans, 49, of Palestine, pled guilty to one count of bank fraud.
“Aren’t we all taught not to take things that don’t belong to us? Ms. Evans took her employer’s insurance checks like they were here own personal paychecks,” said United States Attorney Mike Stuart.
Evans worked as the financial coordinator for a dental practice in Parkersburg. Over the course of four years, Evans stole checks mailed to the dental practice from insurance groups and fraudulently deposited the stolen checks into her bank account, instead of the dental practice’s bank account. Throughout her scheme, Evans fraudulently appropriated more than 300 checks and embezzled more than $120,000.
She faces up to 30 years in prison when sentenced on November 18, 2020.
The United States Secret Service and the Parkersburg Police Department conducted the investigation. United States District Judge Irene Berger presided over the plea hearing. Assistant United States Attorney Kathleen Robeson is handling the prosecution.
Follow us on Twitter: SDWVNews and USAttyStuart
###
Virgin Islands U.S. Attorney’s Office and IRS-Criminal Investigation Remind Taxpayers to Remain Vigilant of ScamsTaxpayers of Upcoming Tax Filing Deadline and UrgeRead the Press Release
St. Thomas, USVI – U.S. Attorney Gretchen C.F. Shappert and Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office, made the announcement today in an effort to remind taxpayers of the July 15 filing and payment deadline and warned against an increase in tax and COVID-19 scams.
Due to COVID-19, the original filing deadline and tax payment due date for 2019 was postponed from April 15 to July 15. Taxpayers filing Form 1040 series returns must file Form 4868 by July 15 to obtain the automatic extension to October 15.
Although the extension provides additional time to file the tax return – it is not an extension to pay any taxes due. For people facing hardships who cannot pay in full, including those affected by COVID-19, the IRS has several options available to help. The IRS encourages taxpayers to visit IRS.gov as soon as possible to explore these options and avoid accruing interest and penalties after the July 15 deadline.As the filing deadline approaches, taxpayers should beware of tax and COVID-19 related scams. “Con artists and scammers use every opportunity to take advantage of innocent people. Everyone should take care to protect their personal information—especially during tax season— and to resist ‘to-good-to-be-true’ claims related to COVID-19 and Economic Payment scams,” said U.S. Attorney Gretchen C.F. Shappert. “We always encourage concerned citizens to contact local or federal law enforcement if they receive emails or phone calls which seem suspicious. If you see something, say something.”
“Taxpayers should remain vigilant in the handling of their personal and financial information as criminals use this as an opportunity to take advantage of vulnerabilities,” said Michael J. De Palma Special Agent in Charge of the IRS Criminal Investigation division in
Florida. “IRS-CI will continue to pursue these crimes and the perpetrators will be brought to justice.”
In the last few months, the IRS Criminal Investigation division (CI) has continued to see a tremendous increase in a variety of Economic Impact Payment scams and other financial schemes. CI continues to work with its law enforcement partners to put a stop to these schemes and bring criminals to justice.
Taxpayers can report COVID-19 scams to the National Center for Disaster Fraud. Taxpayers can also report fraud or theft of their Economic Impact Payments to the Treasury Inspector General for Tax Administration (TIGTA). Unsolicited (phishing) e-mails that appear to be from the IRS should be forwarded to [email protected].For the most up-to-date information about the tax filing deadline and IRS impersonation scams, taxpayers can visit IRS.gov.
Universal Health Services, Inc. to Pay $117 Million to Settle False Claims Act AllegationsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain today announced that Universal Health Services, Inc. and UHS of Delaware, Inc. (together, UHS) have agreed to pay $117 million to resolve alleged violations of the False Claims Act for billing for medically unnecessary inpatient behavioral health services and failing to provide adequate and appropriate services. UHS, which is headquartered in King of Prussia, Pennsylvania, owns and provides management and administrative services to nearly 200 acute care inpatient psychiatric hospitals and residential psychiatric and behavioral treatment facilities nationwide.
The resolution of these claims in the Eastern District of Pennsylvania is part of a comprehensive settlement between the Department of Justice and UHS, which arose out of UHS’s billing practices in multiple healthcare institutions across the United States. UHS will pay the United States and participating states a total of $117 million to resolve allegations that its hospitals and facilities knowingly submitted false claims for payment to the Medicare, Medicaid, TRICARE, Department of Veterans Affairs, and Federal Employee Health Benefit programs for inpatient behavioral health services that were not reasonable or medically necessary and/or failed to provide adequate and appropriate services for adults and children admitted to UHS facilities across the country.
The government alleged that between January 2006 and December 2018, UHS facilities admitted as patients federal healthcare beneficiaries who were not eligible for inpatient or residential treatment because their conditions did not require that level of care, while also failing to properly discharge appropriately admitted beneficiaries when they no longer required inpatient care. The government further alleged that UHS facilities billed for services not rendered, billed for improper and excessive lengths of stay, failed to provide adequate staffing, training, and/or supervision of staff, and improperly used physical and chemical restraints and seclusion. In addition, UHS facilities allegedly failed to develop and/or update individual assessments and treatment plans for patients, failed to provide adequate discharge planning, and failed to provide required individual and group therapy services in accordance with federal and state regulations.
Of the $117 million to be paid by UHS to resolve these claims, the federal government will receive a total of $88,124,761.27, and a total of $28,875,238.73 will be returned to individual states, which jointly fund state Medicaid programs.
“Quality mental health treatment is critical for the patients who place their trust in the hands of service providers,” said U.S. Attorney McSwain. “The allegations involved in this matter -- inappropriate billing and inadequate care – have no place in our health care system. Behavioral health service entities must have strong mechanisms in place, including appropriate supervision and oversight, to avoid fraud and abuse in order to ensure they provide the level of care that their patients deserve.”
The government’s investigation included 19 lawsuits filed under the whistleblower provision of the False Claims Act, which permits private citizens to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The global settlement with UHS involved 18 cases that are currently pending in the Eastern District of Pennsylvania, Western District of Michigan, the Eastern District of Michigan, and Northern District of Georgia. As part of the resolution with UHS, the whistleblowers will receive $15,862,457.03, from the federal share of the settlement.
“We sincerely thank the relators in these cases. Together with their lawyers, these citizens provided essential assistance to the government throughout this case. Without the willingness of relators to shed light on allegations of fraud, preserving government program funds would be far more challenging. Their efforts played a vital role in the resolution of these cases,” said U.S. Attorney McSwain.
“The Department of Justice is committed to protecting patients and taxpayers by ensuring that the treatment provided to federal healthcare beneficiaries is reasonable, necessary, and free from illegal inducements,” said Acting Assistant Attorney General Ethan P. Davis for the Department of Justice’s Civil Division. “The Department will continue to be especially vigilant when vulnerable patient populations are involved, like those served by behavioral healthcare providers.”
In connection with the settlements, UHS has entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General (OIG), which will remain in effect for five years. UHS must retain an independent monitor, selected by the OIG, which will assess UHS’s Behavioral Health Division’s patient care protections and report to the OIG. In addition, an independent review organization will perform annual reviews of UHS inpatient behavioral health claims to federal health care programs.
“Today’s settlement resolves allegations of failing to provide adequate and appropriate mental health services to beneficiaries of multiple federal health care programs, to include Medicare and Medicaid,” said Maureen R. Dixon, Special Agent in Charge of the Office of Inspector General, U.S. Department of Health and Human Services in Philadelphia. “We will continue to work with the U.S. Attorney’s Office to investigate violations of the False Claims Act and ensure the integrity of our federal health care programs.”
The settlement with UHS was the result of a collaborative effort among numerous federal and state agencies. The Commercial Litigation Branch of the Justice Department’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Pennsylvania handled the cases, with substantial assistance from the U.S. Attorney’s Offices for the Middle District of Florida, the Northern District of Georgia, the Eastern District of Michigan, the Western District of Michigan, the Middle District of Georgia, the Northern District of Illinois, the Middle District of North Carolina, the Western District of North Carolina, the District of Oregon, the Middle District of Pennsylvania, the Southern District of Texas, the District of Utah, the Eastern District of Virginia, the Western District of Virginia, the Northern District of Oklahoma, and the District of Wyoming, as well as the National Association of Medicaid Fraud Control Units (NAMFCU). The nationwide investigation was a coordinated effort among the DOJ Civil Frauds Division, NAMFCU, and the Office of Inspector General for the Department of Health and Human Services; the Department of Defense Criminal Investigative Service; the Department of Veterans Affairs, Office of Inspector General; the Office of Personnel Management, Office of Inspector General; and the Federal Bureau of Investigation.
The civil settlement with UHS involved the cases that are captioned: United States ex rel. Gardner v. Universal Health Services, Inc., 2:17-cv-03332-AB (E.D. Pa.); United States ex rel. Naylor v. Universal Health Services, Inc., 2:14-cv-06198-AB (E.D. Pa.); United States ex rel. Jain v. Universal Health Services, Inc., et al., No. 2:13-cv-06499-AB (E.D. Pa.); United States ex rel. Chisholm v. Universal Health Services, Inc., et al., 2:17-cv-01892-AB (E.D. Pa.); United States ex rel. Doe, et al. v. Universal Health Services, Inc., et al., No. 2:14-cv-00921 (E.D. Pa.); United States ex rel. Pate v. Behavioral Hospital of Bellaire, et al., 2:15-cv-00554-AB (E.D. Pa.); United States ex rel. Brinson, et al. v. Universal Health Services, Inc., et al., 2:14-cv-07275-AB (E.D. Pa.); United States ex rel. Mitchell v. Turning Point Care Center, Inc., et al., 2:15-cv-00259-AB (E.D. Pa.); United States ex rel. Peterson v. Universal Health Services, Inc., et al., 2:17-cv-01897-AB (E.D. Pa.); United States ex rel. Conaway, et al. v. Universal Health Services, Inc., et al., 2:17-cv-02233-AB (E.D. Pa.); United States ex rel. Eborall v. Universal Health Services, Inc., et al., 2:17-cv-03249-AB (E.D. Pa.); United States ex rel. Sachs, et al. v. Universal Health Services, Inc., et al., 2:17-cv-03604-AB (E.D. Pa.); United States ex rel. Klotz v. Universal Health Services, Inc., et al., 2:17-cv-05163-AB (E.D. Pa.); United States ex rel. Brockman, et al. v. Universal Health Services, Inc., et al., 2:17-cv-05350-AB (E.D. Pa.); United States ex rel. Glass v. Hughes Center, LLC., et al., 2:18-04018-AB (E.D. Pa.); United States ex rel. Parent-Leonard v. Forest View Psychiatric Hospital, et al., No. 1:18-cv-1426 (W.D. Mich.); United States ex rel. Russell, et al. v. Universal Healthcare Services, Inc., et al., No. 1:19-CV-0764 (N.D. Ga.); United States ex rel. McLauchlin, et al. v. Havenwyck Holdings, Inc., et al., No. 2:19-cv-10832 (E.D. Mich).
The claims resolved by these settlements are allegations only, and there has been no determination of liability.
Assistant United States Attorney Charlene Keller Fullmer, Deputy Chief for the Civil Division, Assistant United States Attorney Stacey L.B. Smith, and Auditor Dawn Wiggins handled the matters filed in the Eastern District of Pennsylvania, working jointly with the Civil Frauds Division of the Department of Justice.
Universal Health Services, Inc. and related entities to pay $122 million to settle False Claims Act allegations relating to medically unnecessary inpatient behavioral health services and illegal kickbacksRead the Press Release
ATLANTA - Universal Health Services, Inc., UHS of Delaware, Inc.(together, UHS), and Turning Point Care Center, LLC (Turning Point), a UHS facility located in Moultrie, Georgia, have agreed to pay a combined total of $122 million to resolve alleged violations of the False Claims Act for billing for medically unnecessary inpatient behavioral health services, failing to provide adequate and appropriate services, and paying illegal inducements to federal healthcare beneficiaries, the Department of Justice announced today. UHS owns and provides management and administrative services to nearly 200 acute care inpatient psychiatric hospitals and residential psychiatric and behavioral treatment facilities nationwide. UHS is headquartered in King of Prussia, Pennsylvania.
“Illegal inducements should never play a role in a patient’s decision regarding treatment, especially when a patient is seeking care for addiction and other behavioral health needs,” said Byung J. “BJay” Pak, U.S. Attorney for the Northern District of Georgia. “Our office remains committed to pursuing unlawful arrangements that undermine the integrity of federal healthcare programs.”
“The Department of Justice is committed to protecting patients and taxpayers by ensuring that the treatment provided to federal healthcare beneficiaries is reasonable, necessary, and free from illegal inducements,” said Acting Assistant Attorney General Ethan P. Davis for the Department of Justice’s Civil Division. “The Department will continue to be especially vigilant when vulnerable patient populations are involved, like those served by behavioral healthcare providers.”
“Providing top quality health care to service members and their beneficiaries is the primary mission of the Defense Health Agency. It's unfortunate a company tried to take advantage of a system that ensures health care for those men and women who are on the front lines every day protecting our nation," said Lt. Gen. Ronald Place, director, DHA. “We commend the Department of Justice and its partners for bringing justice to those responsible for knowingly defrauding TRICARE beneficiaries.”
“VA OIG continues to be vigilant in holding those accountable who defraud VA programs and ensure that tax payer dollars are appropriately utilized for the care of our nation’s veterans and their dependents. Also, we thank our law enforcement partners and the United States Attorney’s Office for their support,” said Acting Special Agent in Charge Jeffrey Stachowiak, Department of Veterans Affairs, Office of Inspector General.
“The OPM OIG does not tolerate predatory behavior that risks the health and safety of vulnerable patients,” said Thomas W. South, Deputy Inspector General for Investigations for the Office of Personnel Management. “We are grateful for the fine work of our investigators and Department of Justice partners. Today’s settlement demonstrates OPM-OIG’s unwavering commitment to investigating conduct that affects vulnerable FEHBP enrollees.”
“Protecting the health and safety of Medicare and Medicaid patients is one of our primary concerns. Our Corporate Integrity Agreement provides future protection for patients and federal health care programs through controls and monitoring designed to ensure that UHS’s behavioral health facilities provide quality services and medically necessary care to patients,” said Gregory E. Demske, Chief Counsel to the Inspector General for the United States Department of Health and Human Services. “This case demonstrates that the government will aggressively pursue allegations of substandard inpatient care.”
As part of a comprehensive civil settlement, UHS will pay the United States and participating states a total of $117 million to resolve allegations that its hospitals and facilities knowingly submitted false claims for payment to the Medicare, Medicaid, TRICARE, Department of Veterans Affairs, and Federal Employee Health Benefit programs for inpatient behavioral health services that were not reasonable or medically necessary and/or failed to provide adequate and appropriate services for adults and children admitted to UHS facilities across the country.
In a separate civil settlement, Turning Point will pay the United States and the State of Georgia $5 million to resolve allegations that it provided free or discounted transportation services to induce Medicare and Medicaid beneficiaries to seek treatment at Turning Point’s inpatient detoxification and rehabilitation program or intensive outpatient program.
The government alleged that, between January 2006, and December 2018, UHS’s facilities admitted federal healthcare beneficiaries who were not eligible for inpatient or residential treatment because their conditions did not require that level of care, while also failing to properly discharge appropriately admitted beneficiaries when they no longer required inpatient care. The government further alleged that UHS’s facilities billed for services not rendered, billed for improper and excessive lengths of stay, failed to provide adequate staffing, training, and/or supervision of staff, and improperly used physical and chemical restraints and seclusion. In addition, UHS’s facilities allegedly failed to develop and/or update individual assessments and treatment plans for patients, failed to provide adequate discharge planning, and failed to provide required individual and group therapy services in accordance with federal and state regulations.
Of the $117 million to be paid by UHS to resolve these claims, the federal government will receive a total of $88,124,761.27, and a total of $28,875,238.73 will be returned to individual states, which jointly fund state Medicaid programs.
With respect to Turning Point, the government alleged that, from January 2007 until May 1, 2019, the facility provided free or discounted transportation services to Medicare and Medicaid beneficiaries to induce them to seek detoxification and rehabilitation treatment at Turning Point’s inpatient or intensive outpatient programs.
The government’s settlement with UHS resolves 18 cases pending in the Eastern District of Pennsylvania, Western District of Michigan, the Eastern District of Michigan, and Northern District of Georgia under the qui tam, or whistleblower, provision of the False Claims Act, which permit private parties to file suit for false claims on behalf of the United States and to share in any recovery. The whistleblower share of the federal portion of the settlement will be $15,862,457.03. The settlement with Turning Point resolves an additional qui tam lawsuit filed in the Northern District of Georgia. The whistleblower in that suit will receive $861,853.64, from the federal share of the Turning Point settlement.
Contemporaneous with the civil settlements announced today, UHS, on behalf of its inpatient acute and residential behavioral health facilities, has entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General (OIG), which will remain in effect for five years. UHS must retain an independent monitor, selected by the OIG, which will assess UHS’s Behavioral Health Division’s patient care protections and report to the OIG. In addition, an independent review organization will perform annual reviews of UHS’s inpatient behavioral health claims to federal health care programs.
The settlement with UHS was the result of a collaborative effort among numerous federal and state agencies. The Commercial Litigation Branch of the Department of Justice’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Pennsylvania handled the cases, with substantial assistance from the U.S. Attorneys’ Offices for the Middle District of Florida, the Northern District of Georgia, the Eastern District of Michigan, the Western District of Michigan, the Middle District of Georgia, the Northern District of Illinois, the Middle District of North Carolina, the Western District of North Carolina, the District of Oregon, the Middle District of Pennsylvania, the Southern District of Texas, the District of Utah, the Eastern District of Virginia, the Western District of Virginia, the Northern District of Oklahoma, and the District of Wyoming, as well as the National Association of Medicaid Fraud Control Units (NAMFCU). The Civil Division and NAMFCU coordinated the nationwide investigation of UHS in partnership with the Office of Inspector General for the Department of Health and Human Services; the Department of Defense Criminal Investigative Service; the Department of Veterans Affairs, Office of Inspector General; the Office of Personnel Management, Office of Inspector General; and the Federal Bureau of Investigation. The Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Georgia handled the Turning Point matter with assistance from the Office of Attorney General of Georgia and the Office of Inspector General for the U.S. Department of Health and Human Services.
The civil settlement with UHS resolved the following captioned cases: United States ex rel. Gardner v. Universal Health Services, Inc., 2:17-cv-03332-AB (E.D. Pa.); United States ex rel. Naylor v. Universal Health Services, Inc., 2:14-cv-06198-AB (E.D. Pa.); United States ex rel. Jain v. Universal Health Services, Inc., et al., No. 2:13-cv-06499-AB (E.D. Pa.); United States ex rel. Chisholm v. Universal Health Services, Inc., et al., 2:17-cv-01892-AB (E.D. Pa.); United States ex rel. Doe, et al. v. Universal Health Services, Inc., et al., No. 2:14-cv-00921 (E.D. Pa.); United States ex rel. Pate v. Behavioral Hospital of Bellaire, et al., 2:15-cv-00554-AB (E.D. Pa.); United States ex rel. Brinson, et al. v. Universal Health Services, Inc., et al., 2:14-cv-07275-AB (E.D. Pa.); United States ex rel. Mitchell v. Turning Point Care Center, Inc., et al., 2:15-cv-00259-AB (E.D. Pa.); United States ex rel. Peterson v. Universal Health Services, Inc., et al., 2:17-cv-01897-AB (E.D. Pa.); United States ex rel. Conaway, et al. v. Universal Health Services, Inc., et al., 2:17-cv-02233-AB (E.D. Pa.); United States ex rel. Eborall v. Universal Health Services, Inc., et al., 2:17-cv-03249-AB (E.D. Pa.); United States ex rel. Sachs, et al. v. Universal Health Services, Inc., et al., 2:17-cv-03604-AB (E.D. Pa.); United States ex rel. Klotz v. Universal Health Services, Inc., et al., 2:17-cv-05163-AB (E.D. Pa.); United States ex rel. Brockman, et al. v. Universal Health Services, Inc., et al., 2:17-cv-05350-AB (E.D. Pa.); United States ex rel. Glass v. Hughes Center, LLC., et al., 2:18-04018-AB (E.D. Pa.); United States ex rel. Parent-Leonard v. Forest View Psychiatric Hospital, et al., No. 1:18-cv-1426 (W.D. Mich.); United States ex rel. Russell, et al. v. Universal Healthcare Services, Inc., et al., No. 1:19-CV-0764 (N.D. Ga.); United States ex rel. McLauchlin, et al. v. Havenwyck Holdings, Inc., et al., No. 2:19-cv-10832 (E.D. Mich.).
Assistant U.S. Attorney Mellori Lumpkin-Dawson represented the United States in the case captioned United States ex rel. Russell, et al. v. Universal Healthcare Services, Inc., et al., No. 1:19-CV-0764 (N.D. Ga.) .
The settlement with Turning Point resolved the case captioned United States ex rel. Heatley v Turning Point Care Center LLC, et al., 1:17-CV-3869-MLBAT (N.D. Ga.).
The claims resolved by the settlements are allegations only, and there has been no determination of liability.
This case was handled by Assistant U.S. Attorney Austin Hall for the Northern District of Georgia.
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.
Universal Health Services, Inc. and Related Entities to Pay $122 Million to Settle False Claims Act Allegations Relating to Medically Unnecessary Inpatient Behavioral Health Services and Illegal KickbacksRead the Press Release
WASHINGTON – Universal Health Services, Inc., UHS of Delaware, Inc. (together, UHS), and Turning Point Care Center, LLC (Turning Point), a UHS facility located in Moultrie, Georgia, have agreed to pay a combined total of $122 million to resolve alleged violations of the False Claims Act for billing for medically unnecessary inpatient behavioral health services, failing to provide adequate and appropriate services, and paying illegal inducements to federal healthcare beneficiaries, the Department of Justice announced today.
As part of a comprehensive civil settlement, UHS will pay the United States and participating states a total of $117 million to resolve allegations that its hospitals and facilities knowingly submitted false claims for payment to the Medicare, Medicaid, TRICARE, Department of Veterans Affairs, and Federal Employee Health Benefit programs for inpatient behavioral health services that were not reasonable or medically necessary and/or failed to provide adequate and appropriate services for adults and children admitted to UHS facilities across the country. UHS owns and provides management and administrative services to nearly 200 acute care inpatient psychiatric hospitals and residential psychiatric and behavioral treatment facilities nationwide. UHS is headquartered in King of Prussia, Pennsylvania.
“The Department of Justice is committed to protecting patients and taxpayers by ensuring that the treatment provided to federal healthcare beneficiaries is reasonable, necessary, and free from illegal inducements,” said Acting Assistant Attorney General Ethan P. Davis for the Department of Justice’s Civil Division. “The Department will continue to be especially vigilant when vulnerable patient populations are involved, like those served by behavioral healthcare providers.”
In a separate civil settlement, Turning Point will pay the United States and the State of Georgia $5 million to resolve allegations that it provided free or discounted transportation services to induce Medicare and Medicaid beneficiaries to seek treatment at Turning Point’s inpatient detoxification and rehabilitation program or intensive outpatient program.
The government alleged that, between January 2006, and December 2018, UHS’s facilities admitted federal healthcare beneficiaries who were not eligible for inpatient or residential treatment because their conditions did not require that level of care, while also failing to properly discharge appropriately admitted beneficiaries when they no longer required inpatient care. The government further alleged that UHS’s facilities billed for services not rendered, billed for improper and excessive lengths of stay, failed to provide adequate staffing, training, and/or supervision of staff, and improperly used physical and chemical restraints and seclusion. In addition, UHS’s facilities allegedly failed to develop and/or update individual assessments and treatment plans for patients, failed to provide adequate discharge planning, and failed to provide required individual and group therapy services in accordance with federal and state regulations.
Of the $117 million to be paid by UHS to resolve these claims, the federal government will receive a total of $88,124,761.27, and a total of $28,875,238.73 will be returned to individual states, which jointly fund state Medicaid programs.
With respect to Turning Point, the government alleged that, from January 2007 until May 1, 2019, the facility provided free or discounted transportation services to Medicare and Medicaid beneficiaries to induce them to seek detoxification and rehabilitation treatment at Turning Point’s inpatient or intensive outpatient programs.
“Health care fraud in the behavioral health arena endangers a particularly vulnerable patient population,” said U.S. Attorney Maria Chapa Lopez for the Middle District of Florida. “This settlement should deter those providers tempted to prioritize economic gain over a commitment to patient care. We thank our colleagues in other U.S. Attorneys Offices, the Department of Justice, and state Medicaid Fraud Control Units, as well as the investigative agencies who supported this effort, for their steadfast pursuit of this critically important investigation.”
“Providing top quality health care to service members and their beneficiaries is the primary mission of the Defense Health Agency. It's unfortunate a company tried to take advantage of a system that ensures health care for those men and women who are on the front lines every day protecting our nation," said Lt. Gen. Ronald Place, director, DHA. "We commend the Department of Justice and its partners for bringing justice to those responsible for knowingly defrauding TRICARE beneficiaries.”
“VA-OIG continues to be vigilant in holding those accountable who defraud VA programs and ensure that tax payer dollars are appropriately utilized for the care of our nation’s veterans and their dependents,” said Acting Special Agent in Charge Jeffrey Stachowiak, Department of Veterans Affairs, Office of Inspector General. “Also, we thank our law enforcement partners and the United States Attorney’s Office for their support.”
“The OPM OIG does not tolerate predatory behavior that risks the health and safety of vulnerable patients,” said Thomas W. South, Deputy Inspector General for Investigations for the Office of Personnel Management. “We are grateful for the fine work of our investigators and Department of Justice partners. Today’s settlement demonstrates OPM-OIG’s unwavering commitment to investigating conduct that affects vulnerable FEHBP enrollees.”
The government’s settlement with UHS resolves 18 cases pending in the Eastern District of Pennsylvania, Western District of Michigan, the Eastern District of Michigan, and Northern District of Georgia under the qui tam, or whistleblower, provision of the False Claims Act, which permit private parties to file suit for false claims on behalf of the United States and to share in any recovery. The whistleblower share of the federal portion of the settlement will be $15,862,457.03. The settlement with Turning Point resolves an additional qui tam lawsuit filed in the Northern District of Georgia. The whistleblower in that suit will receive $861,853.64, from the federal share of the Turning Point settlement.
Contemporaneous with the civil settlements announced today, UHS, on behalf of its inpatient acute and residential behavioral health facilities, has entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General (OIG), which will remain in effect for five years. UHS must retain an independent monitor, selected by the OIG, which will assess UHS’s Behavioral Health Division’s patient care protections and report to the OIG. In addition, an independent review organization will perform annual reviews of UHS’s inpatient behavioral health claims to federal health care programs.
“Protecting the health and safety of Medicare and Medicaid patients is one of our primary concerns. Our Corporate Integrity Agreement provides future protection for patients and federal health care programs through controls and monitoring designed to ensure that UHS’s behavioral health facilities provide quality services and medically necessary care to patients,” said Gregory E. Demske, Chief Counsel to the Inspector General for the U.S. Department of Health and Human Services. “This case demonstrates that the government will aggressively pursue allegations of substandard inpatient care.”
The settlement with UHS was the result of a collaborative effort among numerous federal and state agencies. The Commercial Litigation Branch of the Department of Justice’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Pennsylvania handled the cases, with substantial assistance from the U.S. Attorneys’ Offices for the Middle District of Florida, the Northern District of Georgia, the Eastern District of Michigan, the Western District of Michigan, the Middle District of Georgia, the Northern District of Illinois, the Middle District of North Carolina, the Western District of North Carolina, the District of Oregon, the Middle District of Pennsylvania, the Southern District of Texas, the District of Utah, the Eastern District of Virginia, the Western District of Virginia, the Northern District of Oklahoma, and the District of Wyoming, as well as the National Association of Medicaid Fraud Control Units (NAMFCU). The Civil Division and NAMFCU coordinated the nationwide investigation of UHS in partnership with the Office of Inspector General for the Department of Health and Human Services; the Department of Defense Criminal Investigative Service; the Department of Veterans Affairs, Office of Inspector General; the Office of Personnel Management, Office of Inspector General; and the Federal Bureau of Investigation. The Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Georgia handled the Turning Point matter with assistance from the Office of Attorney General of Georgia and the Office of Inspector General for the U.S. Department of Health and Human Services. The investigation in the Middle District of Florida was led by Civil Chief Randy Harwell and Assistant United States Attorney Katherine Ho, and by Trial Attorney Sarah Arni of the Civil Division’s Commercial Litigation Branch.
The civil settlement with UHS resolved the following captioned cases: United States ex rel. Gardner v. Universal Health Services, Inc., 2:17-cv-03332-AB (E.D. Pa.); United States ex rel. Naylor v. Universal Health Services, Inc., 2:14-cv-06198-AB (E.D. Pa.); United States ex rel. Jain v. Universal Health Services, Inc., et al., No. 2:13-cv-06499-AB (E.D. Pa.); United States ex rel. Chisholm v. Universal Health Services, Inc., et al., 2:17-cv-01892-AB (E.D. Pa.); United States ex rel. Doe, et al. v. Universal Health Services, Inc., et al., No. 2:14-cv-00921 (E.D. Pa.); United States ex rel. Pate v. Behavioral Hospital of Bellaire, et al., 2:15-cv-00554-AB (E.D. Pa.); United States ex rel. Brinson, et al. v. Universal Health Services, Inc., et al., 2:14-cv-07275-AB (E.D. Pa.); United States ex rel. Mitchell v. Turning Point Care Center, Inc., et al., 2:15-cv-00259-AB (E.D. Pa.); United States ex rel. Peterson v. Universal Health Services, Inc., et al., 2:17-cv-01897-AB (E.D. Pa.); United States ex rel. Conaway, et al. v. Universal Health Services, Inc., et al., 2:17-cv-02233-AB (E.D. Pa.); United States ex rel. Eborall v. Universal Health Services, Inc., et al., 2:17-cv-03249-AB (E.D. Pa.); United States ex rel. Sachs, et al. v. Universal Health Services, Inc., et al., 2:17-cv-03604-AB (E.D. Pa.); United States ex rel. Klotz v. Universal Health Services, Inc., et al., 2:17-cv-05163-AB (E.D. Pa.); United States ex rel. Brockman, et al. v. Universal Health Services, Inc., et al., 2:17-cv-05350-AB (E.D. Pa.); United States ex rel. Glass v. Hughes Center, LLC., et al., 2:18-04018-AB (E.D. Pa.); United States ex rel. Parent-Leonard v. Forest View Psychiatric Hospital, et al., No. 1:18-cv-1426 (W.D. Mich.); United States ex rel. Russell, et al. v. Universal Healthcare Services, Inc., et al., No. 1:19-CV-0764 (N.D. Ga.); United States ex rel. McLauchlin, et al. v. Havenwyck Holdings, Inc., et al., No. 2:19-cv-10832 (E.D. Mich.).
The settlement with Turning Point resolved the case captioned United States ex rel. Heatley v Turning Point Care Center LLC, et al., 1:17-cv-3869-AT (N.D. Ga.).
The claims resolved by the settlements are allegations only, and there has been no determination of liability.
Universal Health Services, Inc. and Related Entities to Pay $122 Million to Settle False Claims Act Allegations Relating to Medically Unnecessary Inpatient Behavioral Health Services and Illegal KickbacksRead the Press Release
Universal Health Services, Inc., UHS of Delaware, Inc.(together, UHS), and Turning Point Care Center, LLC (Turning Point), a UHS facility located in Moultrie, Georgia, have agreed to pay a combined total of $122 million to resolve alleged violations of the False Claims Act for billing for medically unnecessary inpatient behavioral health services, failing to provide adequate and appropriate services, and paying illegal inducements to federal healthcare beneficiaries, the Department of Justice announced today. UHS owns and provides management and administrative services to nearly 200 acute care inpatient psychiatric hospitals and residential psychiatric and behavioral treatment facilities nationwide. UHS is headquartered in King of Prussia, Pennsylvania.
As part of a comprehensive civil settlement, UHS will pay the United States and participating states a total of $117 million to resolve allegations that its hospitals and facilities knowingly submitted false claims for payment to the Medicare, Medicaid, TRICARE, Department of Veterans Affairs, and Federal Employee Health Benefit programs for inpatient behavioral health services that were not reasonable or medically necessary and/or failed to provide adequate and appropriate services for adults and children admitted to UHS facilities across the country.
In a separate civil settlement, Turning Point will pay the United States and the State of Georgia $5 million to resolve allegations that it provided free or discounted transportation services to induce Medicare and Medicaid beneficiaries to seek treatment at Turning Point’s inpatient detoxification and rehabilitation program or intensive outpatient program.
“The Department of Justice is committed to protecting patients and taxpayers by ensuring that the treatment provided to federal healthcare beneficiaries is reasonable, necessary, and free from illegal inducements,” said Acting Assistant Attorney General Ethan P. Davis for the Department of Justice’s Civil Division. “The Department will continue to be especially vigilant when vulnerable patient populations are involved, like those served by behavioral healthcare providers.”
The government alleged that, between January 2006, and December 2018, UHS’s facilities admitted federal healthcare beneficiaries who were not eligible for inpatient or residential treatment because their conditions did not require that level of care, while also failing to properly discharge appropriately admitted beneficiaries when they no longer required inpatient care. The government further alleged that UHS’s facilities billed for services not rendered, billed for improper and excessive lengths of stay, failed to provide adequate staffing, training, and/or supervision of staff, and improperly used physical and chemical restraints and seclusion. In addition, UHS’s facilities allegedly failed to develop and/or update individual assessments and treatment plans for patients, failed to provide adequate discharge planning, and failed to provide required individual and group therapy services in accordance with federal and state regulations.
Of the $117 million to be paid by UHS to resolve these claims, the federal government will receive a total of $88,124,761.27, and a total of $28,875,238.73 will be returned to individual states, which jointly fund state Medicaid programs.
“Quality mental health treatment is critical for the patients who place their trust in the hands of service providers,” said William M. McSwain, United States Attorney for the Eastern District of Pennsylvania. “The allegations involved in this matter -- inappropriate billing and inadequate care – have no place in our health care system. Behavioral health service entities must have strong mechanisms in place, including appropriate supervision and oversight, to avoid fraud and abuse in order to ensure they provide the level of care that their patients deserve.”
With respect to Turning Point, the government alleged that, from January 2007 until May 1, 2019, the facility provided free or discounted transportation services to Medicare and Medicaid beneficiaries to induce them to seek detoxification and rehabilitation treatment at Turning Point’s inpatient or intensive outpatient programs.
“Illegal inducements should never play a role in a patient’s decision regarding treatment, especially when a patient is seeking care for addiction and other behavioral health needs,” said Byung J. “BJay” Pak, U.S. Attorney for the Northern District of Georgia. “Our office remains committed to pursuing unlawful arrangements that undermine the integrity of federal healthcare programs.”
The government’s settlement with UHS resolves 18 cases pending in the Eastern District of Pennsylvania, Western District of Michigan, the Eastern District of Michigan, and Northern District of Georgia under the qui tam, or whistleblower, provision of the False Claims Act, which permit private parties to file suit for false claims on behalf of the United States and to share in any recovery. The whistleblower share of the federal portion of the settlement will be $15,862,457.03. The settlement with Turning Point resolves an additional qui tam lawsuit filed in the Northern District of Georgia. The whistleblower in that suit will receive $861,853.64, from the federal share of the Turning Point settlement.
“Providing top quality health care to service members and their beneficiaries is the primary mission of the Defense Health Agency. It's unfortunate a company tried to take advantage of a system that ensures health care for those men and women who are on the front lines every day protecting our nation," said Lt. Gen. Ronald Place, director, DHA. "We commend the Department of Justice and its partners for bringing justice to those responsible for knowingly defrauding TRICARE beneficiaries.”
“VA OIG continues to be vigilant in holding those accountable who defraud VA programs and ensure that tax payer dollars are appropriately utilized for the care of our nation’s veterans and their dependents. Also, we thank our law enforcement partners and the United States Attorney’s Office for their support,” said Acting Special Agent in Charge Jeffrey Stachowiak, Department of Veterans Affairs, Office of Inspector General.
“The OPM OIG does not tolerate predatory behavior that risks the health and safety of vulnerable patients,” said Thomas W. South, Deputy Inspector General for Investigations for the Office of Personnel Management. “We are grateful for the fine work of our investigators and Department of Justice partners. Today’s settlement demonstrates OPM-OIG’s unwavering commitment to investigating conduct that affects vulnerable FEHBP enrollees.”
Contemporaneous with the civil settlements announced today, UHS, on behalf of its inpatient acute and residential behavioral health facilities, has entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General (OIG), which will remain in effect for five years. UHS must retain an independent monitor, selected by the OIG, which will assess UHS’s Behavioral Health Division’s patient care protections and report to the OIG. In addition, an independent review organization will perform annual reviews of UHS’s inpatient behavioral health claims to federal health care programs.
“Protecting the health and safety of Medicare and Medicaid patients is one of our primary concerns. Our Corporate Integrity Agreement provides future protection for patients and federal health care programs through controls and monitoring designed to ensure that UHS’s behavioral health facilities provide quality services and medically necessary care to patients,” said Gregory E. Demske, Chief Counsel to the Inspector General for the United States Department of Health and Human Services. “This case demonstrates that the government will aggressively pursue allegations of substandard inpatient care.”
The settlement with UHS was the result of a collaborative effort among numerous federal and state agencies. The Commercial Litigation Branch of the Department of Justice’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Pennsylvania handled the cases, with substantial assistance from the U.S. Attorneys’ Offices for the Middle District of Florida, the Northern District of Georgia, the Eastern District of Michigan, the Western District of Michigan, the Middle District of Georgia, the Northern District of Illinois, the Middle District of North Carolina, the Western District of North Carolina, the District of Oregon, the Middle District of Pennsylvania, the Southern District of Texas, the District of Utah, the Eastern District of Virginia, the Western District of Virginia, the Northern District of Oklahoma, and the District of Wyoming, as well as the National Association of Medicaid Fraud Control Units (NAMFCU). The Civil Division and NAMFCU coordinated the nationwide investigation of UHS in partnership with the Office of Inspector General for the Department of Health and Human Services; the Department of Defense Criminal Investigative Service; the Department of Veterans Affairs, Office of Inspector General; the Office of Personnel Management, Office of Inspector General; and the Federal Bureau of Investigation. The Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Georgia handled the Turning Point matter with assistance from the Office of Attorney General of Georgia and the Office of Inspector General for the U.S. Department of Health and Human Services.
The civil settlement with UHS resolved the following captioned cases: United States ex rel. Gardner v. Universal Health Services, Inc., 2:17-cv-03332-AB (E.D. Pa.); United States ex rel. Naylor v. Universal Health Services, Inc., 2:14-cv-06198-AB (E.D. Pa.); United States ex rel. Jain v. Universal Health Services, Inc., et al., No. 2:13-cv-06499-AB (E.D. Pa.); United States ex rel. Chisholm v. Universal Health Services, Inc., et al., 2:17-cv-01892-AB (E.D. Pa.); United States ex rel. Doe, et al. v. Universal Health Services, Inc., et al., No. 2:14-cv-00921 (E.D. Pa.); United States ex rel. Pate v. Behavioral Hospital of Bellaire, et al., 2:15-cv-00554-AB (E.D. Pa.); United States ex rel. Brinson, et al. v. Universal Health Services, Inc., et al., 2:14-cv-07275-AB (E.D. Pa.); United States ex rel. Mitchell v. Turning Point Care Center, Inc., et al., 2:15-cv-00259-AB (E.D. Pa.); United States ex rel. Peterson v. Universal Health Services, Inc., et al., 2:17-cv-01897-AB (E.D. Pa.); United States ex rel. Conaway, et al. v. Universal Health Services, Inc., et al., 2:17-cv-02233-AB (E.D. Pa.); United States ex rel. Eborall v. Universal Health Services, Inc., et al., 2:17-cv-03249-AB (E.D. Pa.); United States ex rel. Sachs, et al. v. Universal Health Services, Inc., et al., 2:17-cv-03604-AB (E.D. Pa.); United States ex rel. Klotz v. Universal Health Services, Inc., et al., 2:17-cv-05163-AB (E.D. Pa.); United States ex rel. Brockman, et al. v. Universal Health Services, Inc., et al., 2:17-cv-05350-AB (E.D. Pa.); United States ex rel. Glass v. Hughes Center, LLC., et al., 2:18-04018-AB (E.D. Pa.); United States ex rel. Parent-Leonard v. Forest View Psychiatric Hospital, et al., No. 1:18-cv-1426 (W.D. Mich.); United States ex rel. Russell, et al. v. Universal Healthcare Services, Inc., et al., No. 1:19-CV-0764 (N.D. Ga.); United States ex rel. McLauchlin, et al. v. Havenwyck Holdings, Inc., et al., No. 2:19-cv-10832 (E.D. Mich.).
The settlement with Turning Point resolved the case captioned United States ex rel. Heatley v Turning Point Care Center LLC, et al., 1:17-cv-3869-AT (N.D. Ga.).
The claims resolved by the settlements are allegations only, and there has been no determination of liability.
U.S. Attorney and IRS Criminal Investigation Remind Taxpayers of Upcoming Tax Filing Deadline, Urge Taxpayers to be Aware of ScamsRead the Press Release
Portland, Maine: U.S. Attorney Halsey B. Frank and the Internal Revenue Service Criminal Investigation division (CI) today reminded taxpayers of the July 15 filing and payment deadline and warned against an increase in tax and COVID-19 scams.
Due to COVID-19, the original filing deadline and tax payment due date for 2019 was postponed from April 15 to July 15. Taxpayers filing Form 1040 series returns must file Form 4868 by July 15 to obtain the automatic extension to Oct. 15.
“Although the extension provides additional time to file the tax return, it is not an extension to pay any taxes due,” said Kristina O’Connell, Special Agent in Charge of IRS CI in New England. “For people facing hardships who cannot pay in full, including those affected by COVID-19, the IRS has several options available to help. The IRS encourages taxpayers to visit IRS.gov as soon as possible to explore these options and avoid accruing interest and penalties after the July 15 deadline.”
As the filing deadline approaches, taxpayers also should beware of tax and COVID-19-related scams. “Criminals use the tax filing deadline as an opportunity to steal personal and financial information,” said U.S. Attorney Frank. “Taxpayers should remain vigilant and know that the IRS will not initiate contact with them via phone, email or social media to request personal or financial information. I urge any Mainers who have been the target of these scams to contact law enforcement immediately.”
In the last few months, IRS CI has continued to see a tremendous increase in a variety of Economic Impact Payment scams and other financial schemes. CI continues to work with its law enforcement partners to put a stop to these schemes and bring criminals to justice.
Taxpayers can report COVID-19 scams to the National Center for Disaster Fraud. Taxpayers can also report fraud or theft of their Economic Impact Payments to the Treasury Inspector General for Tax Administration. Unsolicited (phishing) e-mails that appear to be from the IRS should be forwarded to [email protected].
For the most up-to-date information about the tax filing deadline and IRS impersonation scams, taxpayers can visit IRS.gov.
U.S. Attorney Jay E. Town Announces Departure from the U.S. Attorney’s OfficeRead the Press Release
BIRMINGHAM, Ala. – U.S. Attorney Jay E. Town announced today that he will resign from the Department of Justice, effective Wednesday, July 15, 2020, at midnight.
“After much thoughtful prayer and great personal consideration, I have made the decision to resign as the United States Attorney of the Northern District of Alabama. I have tendered my resignation to Attorney General William Barr. General Barr expressed his gratitude for my service to the Department of Justice and to the Northern District and, despite having hoped I would continue in my role, understood and respected my decision.
I am extremely grateful to President Trump, to whom I also tendered a letter, for his special trust and confidence in me to serve as the U.S. Attorney. It was an honor to be a part of this Administration with an unrivaled class of United States Attorneys from around the nation. I will forever remain thankful to those who supported my nomination and my tenure as the U.S. Attorney.
I have been humbled and honored to lead the dedicated men and women of this office that work tirelessly each day. I have also been so very fortunate to admire the brave men and women of law enforcement - local, state, and federal – who serve this District so honorably and truly are the very best among us. I believe our collective efforts have made the Northern District of Alabama safer.
This difficult and personal decision to move on is one that I have been wrangling with for many months. With that being said, I have accepted an incredible opportunity to work for a privately held defense contractor and cybersecurity solutions company located in Huntsville operating in both the government and commercial sectors. My role, which will begin later this year, will be significant but also has the virtue of allowing me to remain much closer to home. There will be an announcement by the company in a few weeks further explaining my position.
My service as the U.S. Attorney has been the highest honor of my legal career. I am saddened to depart, but it is undeniable that I leave behind an incredibly competent and talented team that will always fight for justice here in the great state of Alabama.
The Attorney General of the United States will announce my replacement in the coming days or weeks.”
-------------------
Under Town’s leadership, the Northern District played a major role in carrying out the priorities of the Department of Justice to reduce violent crime and aggressively address the opioid crisis. In 2019, the number of defendants charged with federal crimes in the Northern District and the percentage of those defendants sentenced to prison was the highest ever recorded.
In response to the Department of Justice’s renewal of Project Safe Neighborhood initiative, Town developed the Prosecutor-to Prosecutor Program (P3) which designates the combined efforts of state and federal prosecutors to collaborate on the prosecution of the worst offenders when federal sanction is significantly higher than the analogue state sanction. The P3 Program is now a nationally recognized PSN best practice.
Town also worked closely with federal, state and local law enforcement in Huntsville, Birmingham, Tuscaloosa, Anniston, Oxford and other cities, to establish violent crime reduction programs. Town created the Birmingham Public Safety Task Force and the Huntsville Public Safety Task Force, a strategic partnership between federal, state and local law enforcement to utilize enhanced crime intelligence to aggressively pursue the worst offenders in those communities. The Northern District had three cities – Birmingham, Anniston and Oxford – selected to join the National Public Safety Partnership (PSP) initiative. Through the creation of the task forces and participation in the PSP initiative there has been a reduction in violent crime in the Northern District.
During his tenure as U.S. Attorney, Town served as the Chair of the Attorney General’s Servicemembers and Veterans Rights Subcommittee and also served on the Cyber, Law Enforcement Relations, and Manpower, Performance, & Personnel Subcommittees for the Department. He was one of five United States Attorneys selected to serve on the Attorney General’s China Initiative Steering Committee. Town was one of three U.S. Attorneys to serve on the ATF’s National Crime Gun Intelligence Governance Board. He was also the lone U.S. Attorney member of the Attorney General’s Violent Crime Reduction Coordinating Committee. Town recently completed his primary duties as a Working Group Chair on President Trump’s Commission on Law Enforcement and the Administration of Justice.
Town, 46, was appointed by President Trump to the position of United States Attorney in August 2017, and was the second longest serving United States Attorney in the nation. Prior to his confirmation as United States Attorney, Town, is a former judge advocate in the U.S. Marine Corps and was a senior prosecutor in the Madison County District Attorney’s Office.
Attorney General William Barr offered the following statement:
“I offer my gratitude to Jay Town for his three years of service as United States Attorney for the Northern District of Alabama. Jay’s leadership in his District has been immense. His contributions to the Department of Justice have been extensive, especially his work on the China Initiative and most recently as a Working Group Chair on the President’s Commission on Law Enforcement and the Administration of Justice. I appreciate his service to our nation and to the Justice Department, and I wish him the very best.”
Two Men Charged with Illegally Possessing FirearmsRead the Press Release
United States Attorney Erica H. MacDonald today announced a criminal complaint charging JARVAE JOSIAH SOMERVILLE, 27, and RONALD DONTE FINLEY, JR., 25, with one count each of possession of a firearm by a felon. SOMERVILLE and FINLEY made their initial appearances earlier today before Magistrate Judge Katherine M. Menendez in U.S. District Court in Minneapolis, Minnesota. The defendants were ordered to remain in custody pending a formal detention hearing, which is scheduled for Tuesday, July 14, 2020.
According to the allegations in the criminal complaint and law enforcement affidavit, investigators with the Minneapolis Police Department (MPD) determined that SOMERVILLE and FINLEY were suspects in a shooting that occurred on May 19, 2020, in North Minneapolis. While conducting surveillance on SOMERVILLE, MPD officers observed SOMERVILLE and FINLEY at a restaurant on Lake Street in Minneapolis. SOMERVILLE was inside the restaurant and FINLEY was outside near an Infinity sedan that the men were driving. Officers moved in to make an arrest. When officers approached FINLEY, FINLEY ran from the Infinity sedan but was apprehended and arrested. Inside the Infiniti sedan, officers found a Sig Sauer 9mm semi-automatic pistol. When officers entered the restaurant and attempted to arrest SOMERVILLE, SOMERVILLE ran inside a private bathroom in the back of the restaurant. An officer chasing SOMERVILLE followed SOMERVILLE inside, and SOMERVILLE reached into his waistband. Concerned that SOMERVILLE was reaching for a firearm, the officer grabbed SOMERVILLE’s hand, and the two men struggled until other officers arrived to assist. After SOMERVILLE was handcuffed and taken into custody, officers recovered from the floor of the bathroom a Glock, .45 caliber semi-automatic handgun with an extended magazine.
According to the allegations in the criminal complaint and law enforcement affidavit, later that day, officers executed a search warrant at SOMERVILLE’s residence and found a box of .45 caliber ammunition and a gun cleaning kit. On July 9, 2020, investigators confirmed that FINLEY’s fingerprints were present on the magazine of the 9mm pistol found in the Infiniti sedan. Because SOMERVILLE has prior felony convictions in Hennepin County and FINLEY has prior felony convictions in Cook County, Illinois, 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 Thomas Calhoun-Lopez is prosecuting the case.
Defendant Information:
JARVAE JOSIAH SOMERVILLE, 27
White Bear Lake, Minn.
Charges:
- Felon in possession of a firearm, 1 count
RONALD DONTE FINLEY, JR., 25
Minneapolis, Minn.
Charges:
- Felon in possession of a firearm, 1 count
###
Additional news available on our website.
Follow us on Twitter and Facebook.
United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Two Members of Family-Run Heroin Trafficking Ring SentencedRead the Press Release
NORFOLK, Va. – Two Portsmouth men were sentenced this week to a combined 33 years in prison for their roles in a family-run heroin-trafficking organization that trafficked at least one kilogram of heroin throughout Hampton Roads and sold handguns, rifles, and shotguns with the drugs.
According to court documents, Corey Luther Jones, 50, and Malcolm Dominic Jones, Jr., 25, were members of the Jones DTO run by Malcolm Jones, Sr., Corey Jones’s brother and Malcolm Jones, Jr.’s father. The organization operated at least three drug premises, including the “Court,” a residence serving as the distribution point for Jones’s drugs—heroin, fentanyl, Acetyl fentanyl, crack, and powder cocaine. Since the beginning of 2017, the Court serviced 50 to 100 customers a day until authorities shut down the operation on Sept. 11, 2019. During that time, Corey and Malcolm Jr. lived at the court, managed drug-trafficking efforts there, and stockpiled firearms there to protect their drug trade. Corey Jones was involved in more than 20 controlled purchases of heroin, fentanyl, and Acetyl fentanyl and sold several firearms during some of those deals—two rifles, including an AR-style rifle, two shotguns, and three handguns.
Corey Jones was sentenced to 20 years, while Malcolm Jones was sentenced to 13 years.
This case is part of Operation High Tide, a proactive, large-scale narcotics trafficking and firearms investigation that focused on high-impact targets driving crime in some of the most hardest hit neighborhoods in Hampton Roads.
This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. Click here for more information about Project Guardian.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; Ashan M. Benedict, Special Agent in Charge of the ATF’s Washington Field Division; and Col. K.L. Wright, Chief of Chesapeake Police, made the announcement after sentencing by U.S. District Judge Raymond A. Jackson. Assistant U.S. Attorney William B. Jackson and Special Assistant U.S. Attorney Kristin Bird prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:19-cr-155.
Three First NBC Executives Indicted for Fraud against Failed $5 Billion BankRead the Press Release
NEW ORLEANS – The United States Attorney’s Office announced that a grand jury indicted ASHTON J. RYAN, age 72, of Kenner; WILLIAM BURNELL, age 70, of Kenner; ROBERT BRAD CALLOWAY, age 60, of Metairie; and FRANK J. ADOLPH, age 60, of Kenner, for defrauding First NBC Bank, the New Orleans-based bank that failed in April 2017.
According to the 46-count Indictment, from 2006 through April 2017, RYAN, BURNELL, CALLOWAY, and ADOLPH conspired to defraud First NBC Bank (the “Bank”) through a variety of schemes. RYAN was the President and CEO of the Bank for most of its existence. BURNELL was the Chief Credit Officer. CALLOWAY was an Executive Vice President. ADOLPH was a borrower at the Bank who was charged with conspiring with the three Bank executives to obtain loans based on false statements and forged documents.
The Indictment alleges that RYAN, BURNELL, CALLOWAY, ADOLPH, and others conspired to defraud First NBC Bank by disguising the true financial status of certain borrowers and their troubled loans, concealing the true financial condition of the Bank from the Board, auditors, and examiners. The borrowers included real estate developer Gary Gibbs, real estate developer Kenneth Charity, Bank general counsel Gregory St. Angelo, factoring business owner FRANK ADOLPH, hotel owner Arvind “Mike” Vira, contractor Warren Treme, and contractor Jeffrey Dunlap. CALLOWAY was Gibbs’s loan officer, and RYAN served as the loan officer or oversaw the loan officers for all of those borrowers. BURNELL approved the risk rating for all of these borrowers’ loans and was the gatekeeper tasked with protecting the safety and soundness of the Bank’s loan portfolio. Dunlap, Charity, and St. Angelo have previously been charged in individual Bills of Information with conspiracy to commit bank fraud, and all three have pled guilty. Vira, Gibbs, and Treme have been charged more recently, in their own individual Bills of Information, with conspiring to defraud First NBC Bank. All six of these borrowers are listed in the Indictment as members of the bank fraud conspiracy with RYAN, BURNELL, CALLOWAY, and ADOLPH.
During the course of the conspiracy, RYAN, BURNELL, and CALLOWAY repeatedly extended loans to borrowers who were unable to pay their loans without relying on loan payments to keep them current. To hide this practice, RYAN, BURNELL, and CALLOWAY made false statements in loan documents and elsewhere about the purposes of loans, the borrowers’ abilities to repay those loans, and the sources of funds used to pay those loans. When the borrowers were unable to pay those loans, RYAN, BURNELL, and CALLOWAY made new loans to these same borrowers and then used the proceeds from those new loans to pay the existing loans. This created the false impression that the borrowers were able to pay their loans, when in fact they would not have been able to pay their loans without going further into debt through new borrowing from the Bank. The new loans prevented these borrowers from appearing on lists that RYAN and BURNELL gave the Bank’s Board each month, which would have highlighted that the borrowers were unable to make loan payments or had cash flow problems. RYAN, BURNELL, and CALLOWAY also made false statements about the purpose of those loans, misrepresenting in Bank documents that the borrowers were able to pay loans with cash generated from the borrowers’ businesses, when in fact the borrowers were only able to pay those loans with proceeds from new Bank loans. The borrowers often spent the proceeds of these business loans on unrelated personal expenses, including by overdrawing their checking accounts at the Bank, and RYAN, BURNELL, and CALLOWAY paid these overdrafts by issuing new loans to the borrowers. This practice kept the borrowers off of month-end overdraft reports to the Board and hid the borrowers’ inability to pay their own expenses without new loan proceeds.
For certain loans, RYAN, BURNELL, and CALLOWAY included borrower documents in loan files despite knowing that the documents were false. For example, even after RYAN and BURNELL learned that ADOLPH was submitting falsified documents to the Bank to inflate his collateral, RYAN and BURNELL continued to submit loans for ADOLPH that included the false documents. Similarly, even though RYAN, BURNELL, and CALLOWAY knew that Gibbs could not pay his loans with cash generated from his businesses, they continued to submit loan documents that included false documents showing that Gibbs’s business earned enough cash to pay his loans at the Bank.
When members of the Board or the Bank’s outside auditors or examiners asked about loans to these borrowers, RYAN, BURNELL, and CALLOWAY made false statements about the borrowers and their loans, and left out the truth about the borrowers’ inability to pay their debts without getting new loans. As a result, the balance on these borrowers’ loans continued to grow. By the time regulators closed First NBC Bank in April of 2017, Gibbs owed the Bank $123 million; Charity owed $18 million; St. Angelo owed $46 million; ADOLPH owed $6 million; Vira owed $39 million; Treme owed $6 million; and Dunlap owed $22 million. The Bank’s failure cost the Federal Deposit Insurance Corporation deposit insurance fund just under $1 billion.
RYAN, BURNELL, and CALLOWAY each received millions of dollars in compensation from the Bank during the course of the conspiracy. RYAN also received personal benefits from three of the borrower relationships. Vira lent millions of dollars to RYAN at the same time Vira was a borrower at the Bank, and RYAN and Vira conspired to hide their business dealings from the Board, auditors, and examiners. Treme was RYAN’s partner in several businesses and real estate development projects, and RYAN used Treme’s borrowing from the Bank as a way to spend Bank loan proceeds on RYAN’s own projects. Even when parts of RYAN’s business dealings with Vira and Treme were revealed to regulators, RYAN continued to conceal from regulators that he exercised authority over loans to Vira and Treme. Dunlap was a contractor for a business that RYAN and Treme ran, and RYAN used loan proceeds from Dunlap’s business to benefit his own development project, Wadsworth Estates. RYAN never disclosed his business relationship with Dunlap to the Board, auditors, or examiners. BURNELL was aware of this business relationship and also never disclosed it to the Board, auditors, or examiners.
“Along with our partners, the FBI has dedicated significant time and resources toward investigating the failure of First NBC Bank, which resulted in nearly a billion dollar loss to the FDIC,” stated FBI New Orleans Special Agent in Charge Bryan Vorndran. “This should be a deterrent for others interested in participating in fraudulent schemes that affect our financial system.”
“Today’s indictment sends a clear message that bank executives who engage in fraud that impacts the safety and soundness of financial institutions will be held accountable for their actions,” said Stephen Donnelly, Acting Special Agent in Charge, Eastern Region, Office of Inspector General for the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection.
“This indictment is the product of a complex investigation involving multiple agencies over a long period,” said Laurie Younger, Special Agent in Charge, Dallas Region, Office of Inspector General for the Federal Deposit Insurance Corporation. “It sends an important message to those who would attempt to unlawfully manipulate the nation’s banking system.”
RYAN, BURNELL, CALLOWAY, and ADOLPH are each charged in Count 1 of the Indictment with conspiracy to commit bank fraud, in violation of Title 18, United States Code, Sections 1344 and 1349. RYAN, BURNELL, CALLOWAY, and ADOLPH are also charged with multiple instances of bank fraud, as listed in Counts 2 through 37, in violation of Title 18, United States Code, Section 1344. RYAN, BURNELL, and CALLOWAY are charged with making false entries in bank records, in violation of Title 18, United States Code, Section 1005, as listed in Counts 38 through 46. For each of the charged counts, the maximum penalties that may be imposed upon conviction are thirty years in prison; a fine of $1,000,000, or the greater of twice the gain to a defendant or twice the loss to any victim; up to five years of supervised release; and a $100 mandatory special assessment.
The United States Attorney’s Office stated that an Indictment is merely an accusation and that the guilt of the defendants must be proven beyond a reasonable doubt.
This case is being investigated by the Federal Bureau of Investigation; the Federal Deposit Insurance Corporation, Office of Inspector General; and the Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau, Office of Inspector General. Assistant U.S. Attorneys Sharan E. Lieberman, Matthew R. Payne, Nicholas D. Moses, and J. Ryan McLaren are in charge of the prosecution.
Three Charged in Drug Trafficking ConspiracyRead the Press Release
TALLAHASSEE, FLORIDA – A federal grand jury returned an indictment on July 7, 2020, charging three defendants with federal drug trafficking offenses. The indictment was announced by Lawrence Keefe, United States Attorney for the Northern District of Florida.
The defendants are:
- Kammra Witt, 52, Silver Springs, Florida;
- Rebecca Newmeyer, 55, Perry, Florida; and
- Connie Sullivan, 50, Perry, Florida
The indictment and arrests resulted from an ongoing Organized Crime Drug Enforcement Task Force (OCDETF) Operation which targeted a drug trafficking organization alleged to be responsible for the distribution of methamphetamine throughout northern Florida since the beginning of 2019.
The charged defendants face penalties ranging up to 40 years imprisonment and fines up to $10,000,000.
This case resulted from an investigation by the Drug Enforcement Administration Tallahassee Resident Office, Taylor County Sheriff’s Office, Marion County Sheriff’s Office, Baker County Sheriff’s Office, Williston Police Department, Madison County Sheriff’s Office, Perry Police Department and the Florida Department of Law Enforcement. Assistant United States Attorney Gary Milligan is prosecuting the case.
The prosecution, part of an extensive investigation by the OCDETF, is a joint federal, state, and local cooperative approach to combat drug trafficking. OCDETF is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations, and coordinating the necessary law enforcement entities and resources to take down criminal organizations and seize assets.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Press Release - WittTaxpayers Reminded to be Vigilant as Filing Deadline ApproachesRead the Press Release
PROVIDENCE — The Internal Revenue Service Criminal Investigation division and the U.S. Attorney’s Office for the District of Rhode Island reminded taxpayers of the July 15 filing and payment deadline and warned against an increase in tax and COVID-19 scams.
Due to COVID-19, the original filing deadline and tax payment due date for 2019 was postponed from April 15 to July 15. Taxpayers filing Form 1040 series returns must file Form 4868 by July 15 to obtain the automatic extension to Oct. 15.
“Although the extension provides additional time to file the tax return – it is not an extension to pay any taxes due”, said Kristina O’Connell, Special Agent in Charge of the IRS Criminal Investigation division in New England. “For people facing hardships who cannot pay in full, including those affected by COVID-19, the IRS has several options available to help. The IRS encourages taxpayers to visit IRS.gov as soon as possible to explore these options and avoid accruing interest and penalties after the July 15 deadline.”
“With the extended tax filing deadline now just days away, scammers are working overtime to steal your identity and your personal financial information,” noted United States Attorney Aaron L. Weisman. “Be vigilant. The IRS will not call you, email you, text you, or contact you on social media.”
In the last few months, the IRS Criminal Investigation division (CI) has continued to see a tremendous increase in a variety of Economic Impact Payment scams and other financial schemes. CI continues to work with its law enforcement partners to put a stop to these schemes and bring criminals to justice.
Taxpayers can report COVID-19 scams to the National Center for Disaster Fraud. Taxpayers can also report fraud or theft of their Economic Impact Payments to the Treasury Inspector General for Tax Administration (TIGTA). Unsolicited (phishing) e-mails that appear to be from the IRS should be forwarded to [email protected].
For the most up-to-date information about the tax filing deadline and IRS impersonation scams, taxpayers can visit IRS.gov.
####
Tampa Man Sentenced to Four Years in Federal Prison for Credit Card OffensesRead the Press Release
Tampa, Florida – U.S. District Judge Virginia M. Hernandez Covington today sentenced Yosvani Concepcion Izqueirdo (31, Tampa) to four years in federal prison for access device fraud and aggravated identity theft.
Izqueirdo had pleaded guilty on February 7, 2019.
According to court documents, Izquierdo and others conspired to commit credit card fraud. Specifically, they obtained breached and stolen credit card and debit card account information from skimming devices and then used the stolen account numbers and account information to manufacture counterfeit credit cards, which they then used at retailers in the Middle District of Florida and throughout the United States. Most commonly, working together and alone, the conspirators used the counterfeit credit cards to purchase gift cards, electronics, and other items at retailers such as Sam’s Club, Publix, and Walgreens.
This case was investigated by the United States Secret Service and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorney Jennifer L. Peresie.
St. Louis Man Sentenced to 76 Months in Prison for Dealing Drugs at the St. Louis Galleria MallRead the Press Release
St. Louis, Missouri – United States District Judge John A. Ross sentenced Emanuel Mays, 29, of St. Louis, to 76 months in prison for possession with intent to distribute one or more controlled substances and possession of a firearm in furtherance of a drug trafficking crime.
According to the plea agreement, on November 5, 2018, an undercover St. Louis County detective conducted a controlled buy of fentanyl from co-defendant Derrick George. Detectives conducting surveillance before the buy saw an Infiniti headed to the location of the buy, the St. Louis Galleria Mall in St. Louis County. Mays, along with co-defendants Derrick George and Larry Calloway, were in the car. Once at the Galleria Mall, George approached the undercover detective's car and gave him thirteen capsules of fentanyl. The detective then provided sixty dollars to George, who was subsequently arrested.
Mays and Calloway unsuccessfully attempted to flee in the Infiniti. Mays got out of the car and fled on foot. When Mays was finally apprehended after he ran into a dead end, detectives found the key fob for the Infiniti on his person, as well as a cell phone. Mays was arrested and the following items were found in the Infiniti:
• a 9mm Smith & Wesson pistol loaded with one live round in the chamber and fifteen
9mm rounds in the magazine found on the driver's side floorboard;
• .40 caliber Smith & Wesson pistol loaded with one round in the chamber and sixteen
rounds in the magazine found on the front passenger's side floorboard;
• a semi-automatic Zastava rifle loaded with one round in the chamber and four
rounds in the magazine found on the rear passenger floorboard;
• cigars and a plastic bag with marijuana;
• plastic bags with fentanyl and methamphetamine; and
• two face masks.
Co-defendants George and Calloway were sentenced to 16 and 76 months in prison, respectively.
The St. Louis County Police Department and Federal Bureau of Investigation investigated this case.
Springfield Man Charged with Racketeering Offenses Relating to ProstitutionRead the Press Release
BOSTON – A Springfield man was indicted yesterday with racketeering offenses relating to the promotion of commercial sex.
Kevin Smoot, 59, was indicted on one count of conspiracy to use a facility of interstate commerce to promote prostitution offenses and seven counts of use a facility of interstate commerce to promote prostitution offenses. On June 26, 2020, Smoot was arrested and charged by complaint and has been detained since his arrest.
According to the charging documents, between February 2019 and June 2020, Smoot conspired with others to promote commercial sex involving several women. Smoot promoted prostitution by transporting females to and from commercial sex appointments, recruiting and encouraging women to engage in commercial sex acts for money, and helping to procure illegal drugs for use by drug-addicted women engaged in commercial sex. It is further alleged that Smooth promoted prostitution by providing a residential location for commercial sex acts between female sex workers and male customers, taking actions to collect money from male customers, and benefiting from the proceeds of commercial sex acts performed by female sex workers.
The charging statutes provide for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Massachusetts Attorney General Maura Healey; Michael Shea, Acting Special Agent in Charge of Homeland Security Investigations in Boston; Hampden County Sheriff Nicholas Cocchi; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; and Springfield Police Commissioner Cheryl Clapprood made the announcement today. Assistant U.S. Attorney Alex J. Grant of Lelling’s Springfield Branch Office is prosecuting the case.
Members of the public who have questions, concerns, or information regarding this case should call 617-748-3274.
The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
South Bend Man Sentenced to 57 Months in PrisonRead the Press Release
SOUTH BEND – Jose Salazar, age 21, of South Bend, Indiana was sentenced today by United States District Court Judge Damon Leichty upon his guilty pleas to Hobbs Act Robbery and Attempted Hobbs Act Robbery, announced U.S. Attorney Kirsch.
Mr. Salazar was sentenced to 57 months in prison followed by 1 year of supervised release.
According to documents filed in this case, Mr. Salazar walked from his apartment to a gas station, displayed what appeared to be a handgun, racked the slide, and demanded money. The next morning he did virtually the same thing at another gas station. Both times he obtained cash. After the second robbery he attempted a third robbery at a tobacco store, but the employees refused to give him cash. Mr. Salazar was caught a short time after the third attempt and the weapon recovered turned out to be a BB gun that resembled a real firearm. He was charged by the State of Indiana, posted bond, and while on bond Mr. Salazar attempted to rob one of the gas stations by displaying a knife. Clerks at the gas station refused to give him money. Law enforcement arrested him and he confessed to his crimes.
This case was investigated by Federal Bureau of Investigation with the assistance of the South Bend Police Department. Assistant U.S. Attorney Joel Gabrielse prosecuted the case.
###
South Bend Man Sentenced to 10 Years in PrisonRead the Press Release
SOUTH BEND – Isaiah Whitmore, age 27, of South Bend, Indiana, was sentenced by United States District Court Chief Judge Jon E. DeGuilio upon his plea of guilty to conspiracy to distribute heroin, announced United States Attorney Thomas L. Kirsch II.
Mr. Whitemore was sentenced to 120 months in prison followed by 5 years of supervised release.
According to documents in this case, from March 2017 up to and including October 2017, Mr. Whitmore and other co-defendants knowingly and intentionally conspired to distribute a Schedule I controlled substance, heroin, in excess of 1 kilogram. The group shared at least one cell phone which was used to arrange heroin sales. Members of the group would receive the phone, along with multiple pre-packaged small baggies of heroin, from one of the other members of the group. Buyers would call, and whichever member of the group had the phone would arrange the transaction. The majority of the proceeds would be turned over to higher ranking members of the group.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; the Indiana State Police; the Mishawaka Police Department; St. Joseph County Drug Investigations Unit; the St. Joseph County Police Department; the St. Joseph County Prosecuting Attorney; and the United States Marshals Service. The above agencies were also supported by Project Disarm, a Bureau of Alcohol, Tobacco, Firearms and Explosives Task Force; the Drug Enforcement Administration Task Force; Elkhart Police ICE Unit; and the United States Marshals Service Fugitive Task Force. The case is being handled by Assistant U.S. Attorneys Joel Gabrielse and Molly Donnelly.
###
Sex Offender Sentenced to More Than 15 Years for Sexually Exploiting ChildrenRead the Press Release
Orlando, Florida – U.S. District Judge Carlos E. Mendoza has sentenced James Edward Groover, II (34, Antwerp, Ohio) to 15 years and 8 months in federal prison for transportation of child pornography. The court also ordered Groover to forfeit the electronic devices he used to commit the offense.
Groover had pleaded guilty on February 6, 2020.
According to court documents, on June 17, 2019, Groover returned to the United States from a three-day cruise to the Bahamas, carrying his cell phone and laptop computer. Upon his entry into Port Canaveral, Florida, law enforcement agents conducted a border search of his devices and located 4,638 images and 1,763 videos depicting the sexual abuse and exploitation of infants, toddlers and prepubescent children. The agents also found a digital manual that provided instructions for sexually molesting little girls.
Previously, in 2005, Canadian authorities located images of child sex abuse on a laptop that Groover had transported across the Canadian border. Groover was convicted of possession of child pornography in Canada.
“This repeat child predator did not learn his lesson the first time,” said HSI Orlando Assistant Special Agent in Charge David J. Pezzutti. “This sentencing is a message to this criminal and others, that HSI special agents and our law enforcement partners, like the Brevard County Sheriff’s Office, continue to fight to protect the most vulnerable in our communities.”
Sheriff Wayne Ivey stated, “I am so very proud of these agents who are devoted to protecting children. Through their outstanding efforts, an individual who participated in the exploitation of our children has been removed from our communities. I want to thank the US Attorney’s Office for prosecuting these cases and Homeland Security Investigations for all their support in fighting the exploitation of children.”
This case was investigated by Homeland Security Investigations and the Brevard County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Karen L. Gable.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Savannah man indicted for setting fire that damaged city's Code Enforcement OfficeRead the Press Release
SAVANNAH, GA: A Savannah man has been indicted for setting a May 3 fire that burned the city’s Code Enforcement Office.
Stephen Charles Setter, 18, of Savannah, was indicted on one count of Arson by a U.S. District Court grand jury, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. The charge carries a minimum possible sentence of five years in prison, up to 20 years, along with substantial financial fines and penalties and up to five years of supervised release after completion of any prison term. There is no parole in the federal system.
“Protection of life and property is paramount in our service to the community,” said U.S. Attorney Christine. “We are grateful that the exceptional efforts of the Savannah Fire Department safely secured the facility and surrounding structures from further harm, with no injuries to firefighters or other citizens.”
According to the indictment, on May 3, 2020, Setter is alleged to have “maliciously damaged and destroyed, by means of fire,” the City of Savannah Code Enforcement Office at 1700 Drayton Street.
“Through a collaborative effort with the ATF, we achieved a swift resolution to this devastating crime,” said Savannah Fire Department Chief Fire Investigator Fred Anderson.
Criminal indictments contain only charges; defendants are presumed innocent unless and until proven guilty.
The case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Savannah Fire Department Arson Unit, and prosecuted for the United States by Assistant U.S. Attorney Tania D. Groover.
Russian Man Found Guilty of Hacking into Three Bay Area Tech CompaniesRead the Press Release
SAN FRANCISCO – Yevgeniy Nikulin was convicted today by a federal jury for hacking into LinkedIn, DropBox, and the social networking company formerly known as Formspring, announced United States Attorney David L. Anderson and FBI Special Agent in Charge John L. Bennett.
The jury found that Nikulin hacked into computers belonging to LinkedIn, DropBox and Formspring, damaged computers belonging to LinkedIn and Formspring by installing malware on them, stole the usernames and passwords for employees at LinkedIn and Formspring, and sold and conspired with others to sell the data he stole as a result of his hacks.
Evidence at trial showed that Nikulin, 32, of Russia, was located in Moscow when he hacked into a computer belonging to a Bay Area-based LinkedIn employee and installed malicious software on it, allowing Nikulin to control the computer remotely. Nikulin then used that remote computer as a base to steal LinkedIn users’ login information. Evidence at trial showed that Nikulin was behind similar intrusions at DropBox and at Formspring. According to trial testimony, one of the ways that investigators were able to tie Nikulin to all three incidents was by tracing an IP address from one of the hacks back to his location in Moscow. Nikulin was arrested while traveling in the Czech Republic on October 5, 2016, and extradited to the United States to face trial.
The guilty verdict followed 6 days of trial testimony before the Honorable William H. Alsup, U.S. District Court Judge. The trial initially began in March, but proceedings were suspended after just two days in light of the COVID-19 pandemic and ensuing closure of the federal courthouse. When trial resumed on July 7, 2020, the defendant, the attorneys, and Judge Alsup wore masks, and witnesses testified from behind a glass panel to allow for social distancing requirements.
“Today’s guilty verdicts are the result of our first federal jury trial in San Francisco since the beginning of shelter in place. I am immensely grateful to Judge Alsup for getting this case to trial. Trial by jury is one of the defining features of the American justice system. We need jury trials to administer justice,” said U.S. Attorney Anderson. “Nikulin’s conviction is a warning to would-be hackers, wherever they may be. Computer hacking is not just a crime, it is a direct threat to the security and privacy of Americans. American law enforcement will respond to that threat regardless of where it originates.”
Nikulin, 32, of Moscow, Russia, was indicted by a federal grand jury on October 20, 2016. He was charged with multiple counts of computer hacking, fraud, and identity theft.
Nikulin has been in custody since his extradition from the Czech Republic.
Nikulin’s sentencing hearing is scheduled for September 29, 2020, before Judge Alsup in San Francisco. The maximum statutory penalty for each count of selling stolen usernames and passwords in violation of 18 U.S.C. § 1029(a)(2) and for each count of installing malware on protected computers in violation of 18 U.S.C. § 1030(a)(5) is 10 years, along with a fine of up to $250,000, plus restitution if appropriate. The maximum statutory penalty for each count of conspiracy in violation of 18 U.S.C. § 371 and computer hacking in violation of 18 U.S.C. § 1030(a)(2)(C) is five years, along with a fine of up to $250,000, plus restitution if appropriate. There is also a mandatory two year sentence for any conviction of aggravated identity theft, in violation of 18 U.S.C. § 1028A(1). However, any sentence will be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Michelle Kane and Katherine Wawrzyniak are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Helen Yee, Jessica Rodriguez Gonzalez, and Kim Richardson. The prosecution is the result of a four-year investigation by the Federal Bureau of Investigation, with the assistance of authorities in the Czech Republic and the U.S. Secret Service and the U.S. Department of Justice’s Criminal Division, Office of International Affairs.
Recent Northern Indiana Federal Prosecutions Serve as Reminder to File and Pay Your Taxes Accurately by July 15 and Remain Vigilant of ScamsRead the Press Release
With the July 15 federal income tax deadline rapidly approaching, the U.S. Attorney’s Office and IRS Criminal Investigation are reminding people that the tax filing and payment deadline is July 15, and to continue to be on the lookout for scam artists. Please know that the IRS will not contact you by phone, email, or social media to ask for your personal information.
Due to COVID-19, the original filing deadline and tax payment due date for 2019 personal income tax returns was postponed from April 15 to July 15. Taxpayers filing Form 1040 series returns must file Form 4868 by July 15 to obtain the automatic extension to Oct. 15.
In the last few months, the IRS Criminal Investigation division (CI) has continued to see a tremendous increase in a variety of Economic Impact Payment scams and other financial schemes. CI continues to work with its law enforcement partners to put a stop to these schemes and bring criminals to justice. Taxpayers can report COVID-19 scams to the National Center for Disaster Fraud. Taxpayers can also report fraud or theft of their Economic Impact Payments to the Treasury Inspector General for Tax Administration (TIGTA). Unsolicited (phishing) e-mails that appear to be from the IRS should be forwarded to [email protected].
For the most up-to-date information about the tax filing deadline and IRS impersonation scams, taxpayers can visit IRS.gov. For people facing hardships, including those affected by COVID-19, who cannot pay in full, the IRS has several options available on IRS.gov/payments.
The IRS encourages taxpayers to visit IRS.gov as soon as possible to explore these options and avoid accruing interest and penalties after the July 15 deadline.
“We work alongside the Internal Revenue Service to investigate and prosecute tax fraud,” said U.S. Attorney Thomas L. Kirsch II. “The integrity of the tax system is maintained through compliance by all of us. Those who wish to cheat the system will be aggressively investigated and prosecuted.”
“As the tax filing deadline quickly approaches, I am asking all citizens to file correct and accurate tax returns and to pay their share of taxes," states Kathy A. Enstrom, Special Agent-in-Charge of the IRS Criminal Investigation Division who oversees the state of Indiana. “We all pay when others cheat the government. IRS Criminal Investigation together with the U.S. Attorney’s Office works year-round to make certain that those who willfully defy the tax laws will be investigated and criminally prosecuted. Taxpayers are encouraged to visit the IRS.gov website for tips on filing a tax return accurately and searching for a reputable return preparer.”
As the tax filing season winds down next week, the U.S. Attorney’s Office and IRS Criminal Investigation are warning those who might consider preparing false tax returns to be aware of the serious consequences such as possible prison time and having to pay back all the taxes owed, plus steep penalties and interest. During the last nine months, the following court actions occurred in Indiana which serve as a reminder to taxpayers, to think before filing a false or fraudulent tax return and to be wary of any schemes that falsify your income or deductions.
In October 2019, mother and son, Tracie Lynn Ellis and Terrell Sir William Franklin were sentenced on charges of filing false claims and ordered to pay restitution to the IRS. Franklin filed a false trust tax return in the name of his mother, Tracie Lynn Ellis, falsely claiming a refund of $239,095.93.
In October 2019, Rosetta Buchanan was sentenced to fifteen months in prison for filing a false federal income tax return. Buchanan falsified her tax return by claiming she worked for a trucking company seeking a substantial tax refund when in fact she was in prison at the time.
###
Randolph Man Sentenced for Dealing FentanylRead the Press Release
BOSTON – A Randolph man was sentenced yesterday in federal court in Boston for distributing fentanyl.
Anthony Pena-Diaz, 25, was sentenced by U.S. District Court Chief Judge F. Dennis Saylor IV to five years in prison and four years of supervised release. In February 2020, Pena-Diaz pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 40 grams or more of fentanyl and three counts of distribution of and possession with intent to distribute fentanyl.
Between May 2, 2018, and Nov. 11, 2018, an undercover federal agent purchased fentanyl from Pena-Diaz and others on multiple occasions in Randolph, Canton and Foxboro. The investigation revealed that Pena-Diaz was a member of the No Fear Ones street gang in Randolph.
United States Attorney Andrew E. Lelling; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Division; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; Randolph Police Chief William Pace; Stoughton Police Chief Donna M. McNamara; and Foxboro Police Chief Michael A. Grace made the announcement today. Assistant U.S. Attorney Nicholas Soivilien of Lelling’s Organized Crime and Gang Unit prosecuted the case.
Puerto Rico U.S. Attorney’s Office and IRS-Criminal Investigation Remind Taxpayers of Upcoming Tax Filing Deadline; Urge Taxpayers to Remain Vigilant of ScamsRead the Press Release
SAN JUAN, PUERTO RICO – U.S. Attorney W. Stephen Muldrow and Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office, made the announcement today in an effort to remind taxpayers of the July 15 filing and payment deadline and warned against an increase in tax and COVID-19 scams.
Due to COVID-19, the original filing deadline and tax payment due date for 2019 was postponed from April 15 to July 15. Taxpayers filing Form 1040 series returns must file Form 4868 by July 15 to obtain the automatic extension to Oct. 15.
Although the extension provides additional time to file the tax return – it is not an extension to pay any taxes due. For people facing hardships who cannot pay in full, including those affected by COVID-19, the IRS has several options available to help. The IRS encourages taxpayers to visit IRS.gov as soon as possible to explore these options and avoid accruing interest and penalties after the July 15 deadline.
As the filing deadline approaches, taxpayers should beware of tax and COVID-19 related scams. “We continue to work with our law enforcement partners to investigate and bring to justice those who exploit the ongoing public health crisis in order to enrich themselves. I urge citizens to remain vigilant and to be skeptical of any telephone calls, e-mails, or websites that request personal information or banking information, while promising money or services that seem too good to be true,” said U.S. Attorney W. Stephen Muldrow.
“Taxpayers should remain vigilant in the handling of their personal and financial information as criminals use this as an opportunity to take advantage of vulnerabilities,” said Michael J. De Palma, Special Agent in Charge of the IRS Criminal Investigation division in Florida. “IRS-CI will continue to pursue these crimes and the perpetrators will be brought to justice.”
In the last few months, the IRS Criminal Investigation division (CI) has continued to see a tremendous increase in a variety of Economic Impact Payment scams and other financial schemes. CI continues to work with its law enforcement partners to put a stop to these schemes and bring criminals to justice.
Taxpayers can report COVID-19 scams to the National Center for Disaster Fraud. Taxpayers can also report fraud or theft of their Economic Impact Payments to the Treasury Inspector General for Tax Administration (TIGTA). Unsolicited (phishing) e-mails that appear to be from the IRS should be forwarded to [email protected].
For the most up-to-date information about the tax filing deadline and IRS impersonation scams, taxpayers can visit IRS.gov.
# # #
Postal Employee Charged with Stealing MailRead the Press Release
A federal grand jury for the Southern District of Illinois has returned on indictment charging
Brittany Freeman, 27, of Johnston City, Illinois (Williamson County), with four counts of theft of
mail by a postal service employee.Freeman worked as a mail carrier for the Goreville post office. The indictment charges that she
stole over $500 worth of rebate checks sent by Menards to customers along her mail routes in
February and March, 2020.The arraignment for Freeman will be held on July 27, 2020 at 1:30 p.m. at the federal courthouse in
Benton, Illinois. Each of the four felony counts is punishable by up to five years in prison and a
$250,000 fine.An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be
innocent of a charge until proven guilty beyond a reasonable doubt to the satisfaction of a jury.The charges resulted from a referral and investigation by the United States Postal Service, Office
of the Inspector General. The case is being prosecuted by Assistant United States Attorney
Peter T. Reed.Plains Township Man Sentenced to 10 Years’ Imprisonment for Firebombing Luzerne County Children and YouthRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Philip Finn, Jr., age 50, of Plains, Pennsylvania, was sentenced on July 9, 2020 to 10 years’ imprisonment followed by three years supervised release by United States District Court Judge Malachy E. Mannion, for use of fire to commit stalking.
According to United States Attorney David J. Freed, on March 6, 2017, Finn threw three Molotov cocktails to set fire to the Luzerne County Children and Youth Building to harass and intimidate two Children and Youth Employees. Finn also used Facebook, Google and his cell phone in harassing the employees.
Judge Mannion also ordered Finn to pay $398,756 in restitution for the fire and water damage to the building.
The case was investigated by the Federal Bureau of Investigation (FBI), the Wilkes-Barre City Police Department and the Luzerne County District Attorney’s Office. Assistant U.S. Attorney Jenny P. Roberts prosecuted the case.
# # #
Physician Assistant to Pay $25,000 to Resolve Allegations of Receiving Kickbacks from Pharmaceutical CompanyRead the Press Release
PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that physician assistant Sarah Malstrom will pay $25,000 to resolve allegations that she received kickbacks from the company formerly named Aqua Pharmaceuticals, in order to incentivize Malstrom to prescribe Aqua’s dermatology drugs.
The settlement resolves allegations that Malstrom knowingly solicited and received kickbacks from Aqua Pharmaceuticals. Malstrom allegedly received different forms of kickbacks from Aqua, through its sales representatives and executives, such as improper in-office and out-of-office meals and food items, gift cards, and gifts, and also entered into speaking engagements, advisory boards, and consulting services in exchange for compensation intended in part to induce Malstrom to prescribe Aqua drugs. This settlement follows the resolution with the pharmaceutical company, which called for a $3.5 million payment to resolve the kickback allegations.
“Our Office is committed to ensuring the integrity of the healthcare system by investigating and challenging improper arrangements between pharmaceutical companies and healthcare providers, especially when they distort prescribing decisions made by healthcare providers,” said First Assistant U.S. Attorney Williams. “That commitment to accountability extends not just to the pharmaceutical companies, but also to the individual providers. This resolution marks another important step in that commitment and our Office’s ongoing investigation.”
“We consider kickbacks offered to healthcare providers to be an area of serious concern,” said Maureen R. Dixon, Special Agent in Charge of the Office of Inspector General, U.S. Department of Health and Human Services in Philadelphia. “We will continue to work with the U.S. Attorney’s Office to hold companies and providers accountable for illegal kickback conduct and to root out fraud, waste and abuse in our federal health care programs.”
"I commend the Department of Justice and the U.S. Attorney’s Office for continuing to be vigilant in holding health care providers accountable to ensure taxpayer dollars are appropriately utilized,” said Lt. Gen. Ron Place, director of the Defense Health Agency. “The efforts of the Department of Justice strengthen the protection of health care benefits our service members, veterans and their families receive. The Defense Health Agency continues its commitment to work closely with the Justice Department, and other state and federal agencies to investigate all those who participate in fraudulent practices.”
This investigation was conducted with the Office of the Inspector General of the Department of Health and Human Services and the Defense Health Agency. For the United States Attorney’s Office, Assistant United States Attorney Anthony D. Scicchitano and Auditor Dawn Wiggins handled the investigation and settlement.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
Pennsylvania man sentenced to more than six years for drug and money laundering chargesRead the Press Release
CLARKSBURG, WEST VIRGINIA – Mark Edward Beatty, of Gans, Pennsylvania, was sentenced today to 78 months of incarceration for illegally distributing drugs and money laundering, U.S. Attorney Bill Powell announced.
Beatty, age 42, pled guilty to one count of “Conspiracy to Distribute Controlled Substances” and one count of “Money Laundering” in October 2019. Beatty admitted to distributing controlled substances in Monongalia County and elsewhere from 2014 to 2018. He also admitted to taking proceeds from drug sales and depositing that money into an account held by DB. Construction, knowing the money was illegally obtained and knowing the transaction was meant to conceal the source of the proceeds.
A money judgement was also made in the amount of $1,845,000.
Assistant U.S. Attorney Sarah E. Wagner prosecuted the case on behalf of the government. The Internal Revenue Service Criminal Investigative Division, the Drug Enforcement Administration Tactical Diversion Squad, the Morgantown Police Department, the Harrison County Sheriff’s Office and West Virginia State Police BCI 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.
U.S. District Judge Thomas S. Kleeh presided.
Operation Shutdown Corner: Nine Defendants Appear in Federal Court on Drug ChargesRead the Press Release
BECKLEY, W.Va. – Eight defendants were sentenced to federal prison and one defendant pled guilty this week for participating in a drug trafficking organization (DTO) operating between California and Raleigh County, announced United States Attorney Mike Stuart.
“As a result of Operation Shutdown Corner, 17 federal defendants now stand convicted and West Virginia families and communities are safer today,” said United States Attorney Mike Stuart. “I commend our law enforcement partners at the federal, state and local levels for their tremendous work.”
Jason Pafford, 38, of Beckley, was sentenced to 151 months in prison, to be followed by five years of supervised release, for conspiring to distribute 500 grams or more of methamphetamine and more than 100 grams of heroin. During a previous plea hearing, it was established that he participated in the DTO between June 2018 and September 17, 2019. Also at the previous hearing, it was established that during the course of the operations of the drug trafficking network, Pafford was supplied by other members of the DTO with approximately five pounds of methamphetamine that he redistributed in the Southern District of West Virginia. During this same time period, Pafford also was supplied with more than 100 grams of heroin that was redistributed in Raleigh County. During the course of the conspiracy, law enforcement officers, with the assistance of a confidential informant, were able to conduct at least two controlled drug buys from Pafford.
Nick Attilli, 38, of Beaver, was sentenced to 97 months in prison, to be followed by four years of supervised release, for conspiring to distribute 50 grams or more of a substance containing methamphetamine and a quantity of heroin. Attilli previously admitted that between June 2018 and September 17, 2019, he worked with other members of the DTO to distribute methamphetamine and heroin, and that during this time period he was supplied with methamphetamine and heroin from other members of the DTO. Attilli also admitted that he had telephone conversations that were intercepted by law enforcement and that it was clear the conversations involved drug activity. He further admitted that at times he was fronted with drugs, meaning the drugs were provided without making full payment for them, and then he would sell the drugs and with the proceeds pay back his suppliers.
Jonathon Zakresky, 35, of Beckley, was sentenced to 87 months in prison, to be followed by three years of supervised release, for conspiring to distribute 500 grams or more of a substance containing methamphetamine and more than 100 grams of heroin. Zakresky previously admitted that between June 2018 and September 17, 2019, he worked with other members of the DTO to distribute methamphetamine and heroin. During this time period, Zakresky admitted to obtaining approximately 11 pounds of methamphetamine and more than 100 grams of heroin for the purpose of redistributing the drugs in and around Raleigh County. He also admitted to supplying other members of the DTO with the drugs and to storing the drugs at or near his residence. Zakresky also admitted to assisting other members of the DTO in collecting money owed for the drugs that were being distributed, and to identifying delivery locations in West Virginia for the drugs from California. As part of his plea agreement, Zakresky agreed to abandon 14 firearms that were located at his residence at the time of his arrest on September 18, 2019. He knew that he was prohibited from possessing the firearms because he was a convicted felon.
Shaneka Black, 41, a California woman living in Princeton, was sentenced to 70 months in prison, to be followed by three years of supervised release, for conspiring to distribute a quantity of methamphetamine. Black previously admitted that between June 2018 and September 17, 2019, she participated in the drug trafficking network by assisting other members in collecting money owed for the drugs that were being distributed. Black also admitted to assisting another member of the DTO, who she knew was a convicted felon, in obtaining a firearm. Finally, Black admitted that in or around September 2019, she arranged for a package to be delivered to West Virginia from California that contained approximately two pounds of methamphetamine. She indicated that she knew the drugs were intended to be redistributed in the Southern District of West Virginia.
Timmy Lawson, 40, of Beckley, was sentenced to 30 months in prison, to be followed by three years of supervised release. He previously pled guilty to conspiracy to distribute 50 grams or more of a substance containing methamphetamine and a quantity of heroin. Lawson previously admitted that between June 2018 and September 17, 2019, he participated in the DTO by working with other organization members to distribute methamphetamine and heroin within the Southern District of West Virginia. During this time period, Lawson admitted to obtaining more than 50 grams of methamphetamine and a quantity of heroin from various suppliers within the drug trafficking network that he intended to redistribute and did redistribute.
Patricia Greer, 46, of Beckley, was sentenced to 27 months in prison, to be followed by three years of supervised release, for conspiring to distribute a quantity of methamphetamine and a quantity of heroin. Greer obtained methamphetamine and heroin from another member of the DTO and intended to redistribute it in and around Beckley. Between April 2019 and the time of her arrest on September 18, 2019, Greer distributed approximately two to three ounces of methamphetamine, and a small amount of heroin, a month.
Marika Davis, 38, of Bluefield, was sentenced to 21 months in prison, to be followed by three years of supervised release, for conspiring to distribute a quantity of methamphetamine. Davis previously admitted that between February 2019 and August 9, 2019, she participated in the DTO by allowing drugs to be shipped to her home address at the request of other members of the DTO. Davis admitted that she was paid to have packages delivered to her house. She also admitted that on August 9, 2019, she was transporting a package that had been delivered to her house in Bluefield and was delivering it to another member of the DTO in Beckley. She further admitted that after picking up the other member of the DTO, a police officer pulled her over for a traffic violation. During the traffic stop, officers found the package she was delivering and discovered that it contained approximately two pounds of methamphetamine. Through additional investigation, law enforcement officers were able to determine the package had been sent from California.
Timmy Lawson II, 19, of Beckley, was sentenced to 20 months in prison, followed by three years of supervised release. He previously pled guilty to conspiracy to distribute 50 grams or more of a substance containing methamphetamine and a quantity of heroin. He admitted that between June 2018 and September 17, 2019, he participated in the DTO by distributing more than 50 grams of methamphetamine and a quantity of heroin. At his plea hearing, Lawson II admitted that each week during a two-month period he obtained between one-quarter ounce to one-half ounce of methamphetamine and a quantity of heroin from other members of the DTO. He admitted that he then redistributed those drugs within the Southern District of West Virginia. He also admitted that at times the drugs were fronted to him, and that he would pay his supplier after the drugs were sold.
Victoria Hamilton, 35, of Beckley, entered a guilty plea for conspiracy to distribute more than 50 grams of methamphetamine and a quantity of heroin. Hamilton admitted that between June 2018 and September 17, 2019, she worked with other members of the DTO to distribute methamphetamine and heroin. During this time period, Hamilton admitted to receiving quantities of methamphetamine and heroin from other members of the DTO. She further admitted that the other members knew it was her plan and purpose to redistribute these drugs in the Southern District of West Virginia. More specifically, she admitted that during this time period, law enforcement agents intercepted telephone conversations and text messages involving drug activity between her and other members of the DTO. These conversations revealed that the defendant was obtaining drugs in quantities from a few grams to approximately one-half ounce at a time. These conversations also revealed it was her plan to redistribute these controlled substances to others in Raleigh County. Hamilton faces a mandatory minimum sentence of five years and up to 40 years in federal prison, and a fine of up to $5 million when she is sentenced on October 23, 2020.
The investigations were handled by the Federal Bureau of Investigation (FBI), the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the United States Postal Inspection Service (USPIS), the Beckley/Raleigh County Drug and Violent Crimes Task Force, the Raleigh County Sheriff’s Office, the Beckley Police Department and the West Virginia State Police. Assistant United States Attorneys Timothy D. Boggess and Andrew Tessman handled the prosecutions. United States District Judge Frank W. Volk imposed the sentences and presided over the plea hearing.
Follow us on Twitter: SDWVNews and USAttyStuart
###
Ocean Springs Woman Pleads Guilty to Knowingly Filing False Tax ReturnRead the Press Release
Gulfport, Miss – Lisa Gordon-Scruggs, 52, of Ocean Springs, Mississippi, pled guilty today before U.S. District Judge Sul Ozerden to filing a false tax return, announced U.S. Attorney Mike Hurst and James E. Dorsey, Special Agent in Charge of Internal Revenue Service Criminal Investigation.
Gordon-Scruggs was the Chief Operating Officer and office manager of Highside Chemicals, Inc. (“Highside”) in Gulfport, Mississippi during the investigative period: 2013 through 2018. Based on her position and access to the bank account of Highside, Gordon-Scruggs embezzled over $2 million dollars which she funneled into accounts owned by herself or to pay off credit cards in her name and a family member.
Gordon-Scruggs pled guilty to one count of knowingly filing a false income tax report for tax year 2014 in that she reported taxable income of $34,907 but did not include the $446,423 that she had embezzled from Highside that year.
Gordon-Scruggs will be sentenced on October 16, 2020 by Judge Ozerden, and faces maximum penalties of 3 years in prison and a $250,000 fine.
The case was investigated by Internal Revenue Service’s Criminal Investigation Division and prosecuted by Assistant U.S. Attorney John Meynardie.
Oakdale Man Sentenced for Unlawfully Possessing FirearmsRead the Press Release
United States Attorney Joe Kelly announced that Max Kerkman, 30, of Oakdale, Nebraska, was sentenced on July 10, 2020, in Lincoln, Nebraska, by Chief United States District Judge John M. Gerrard for being an unlawful user in possession of a firearm. Kerkman was sentenced to 24 months in prison and will also serve 3 years on supervised release. There is no parole in the federal system.
On June 20, 2018, agents with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) executed a search warrant at Kerkman’s residence and found several firearms and a silencer, along with small quantities of methamphetamine and paraphernalia consistent with the use of methamphetamine.
This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see https://www.justice.gov/projectguardian.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
New York Woman Sentenced for Selling Abortion-Inducing Pills Illegally Smuggled into USRead the Press Release
MADISON, WIS. – Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that Ursula Wing, 42, New York City, New York, was sentenced today by Chief U.S. District Judge James D. Peterson to a two-year term of probation, and fined $10,000, for supplying abortion-inducing pills without a prescription to customers in the United States, including Wisconsin, and throughout the world, and concealing her conduct from U.S. government regulatory and enforcement authorities.
On March 20, 2020, Wing pleaded guilty to Count 1 of an indictment that charged her with conspiracy to defraud various U.S. governmental agencies, including the FDA, U.S. Postal Service, and U.S. Customs. The indictment alleged that Wing operated a blog called “the Macrobiotic Stoner,” with a secret web page called “My Secret Bodega,” where she sold foreign-sourced versions of Mifepristone and Misoprostol from India, that were not approved by the FDA for use in the United States.
According to the indictment, these drugs are used to medically terminate an early pregnancy (up to 70 days or less). Mifepristone is a prescription drug, but is not available to the public through pharmacies; its distribution is restricted to specially qualified, licensed physicians, and the administration of Mifepristone is subject to an FDA Risk and Evaluation Mitigation Strategy (REMS). Among the REMS requirements are that Mifepristone may only be dispensed in clinics, medical offices, and hospitals by, or under the supervision of, a certified healthcare provider.
At her plea hearing, Wing admitted that she could not sell these prescription drugs because she was not licensed to do so. She also admitted that she illegally smuggled these misbranded drugs into the United States from an offshore pharmacy located in India. Wing admitted that she operated a fake jewelry business called Fatima’s Bead Basket to hide her illegal conduct from U.S. authorities. Wing admitted that she inserted a necklace or other item of jewelry into the shipping envelope to serve as the cover piece of merchandise being mailed to the customer. She then packaged the misbranded prescription drugs into a smaller packet that was in a hidden panel and taped to the inside of the shipping envelope. Wing also disguised the nature of the item being purchased by listing jewelry product names on the invoice.
Wing also admitted that she created a second fake online jewelry business called Morocco International and a fake merchant processing portal for use as a cover for selling the misbranded prescription drugs on her secret webpage. By creating this fake merchant processing portal, Wing allowed her Macrobiotic Stoner clients to pay for the misbranded drugs using their credit cards, with the sales showing up on the merchant account as jewelry, and not Mifepristone or Misoprostol.
At today’s sentencing, Judge Peterson noted that while Wing had the right to disagree with the legal requirements surrounding the distribution of Mifepristone and Misoprostol in the United States, she nonetheless committed a crime in selling these drugs, which she knowingly obtained from an offshore pharmacy in India, and which had not been approved by the FDA for use in the United States. Judge Peterson explained that such conduct created a danger to the public in two ways. First, it allowed people to obtain the drugs such as a Marathon County man who allegedly used them in an attempt to induce his girlfriend to abort her 120-day pregnancy without her knowledge or consent, which resulted in the man being charged in Marathon County Circuit Court with attempted first-degree intentional homicide of an unborn child. Second, Wing could not vouch for the safety of the product she was distributing, as evidenced by the fact that she had no testing protocols in place, and had to trust the pills she was smuggling into the United States from India were safe and effective.
Judge Peterson also ordered Wing to forfeit $61,753, which represented the cost of the Mifepristone and Misoprostol pills that Wing sold from 2016 to 2018.
“Prescription drugs that are obtained illegally from online sources and then sold online to consumers can cause serious harm,” said Special Agent in Charge Lynda M. Burdelik, FDA Office of Criminal Investigations Chicago Field Office. “We will continue to investigate and bring justice to those who place the public’s health at risk.”
The case against Wing is the result of an investigation conducted by the U.S. Food and Drug Administration - Office of Criminal Investigations, U.S. Postal Inspection Service, and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. The prosecution of this case is being handled by Assistant U.S. Attorney Daniel Graber.
New Haven Man Admits Illegal Possession of Two GunsRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, today announced that CARLOS BARNES, also known as “Buddha,” 29, of New Haven, pleaded guilty yesterday before U.S. District Judge Jeffrey A. Meyer in New Haven to possession of firearms by a previously convicted felon.
According to court documents and statements made in court, on October 12, 2019, Hamden Police arrested Barnes after they found him in possession of a Taurus Millennium G2 9mm handgun and a Springfield XD-40 .40 caliber handgun with an obliterated serial number. Prior to that date, Barnes was convicted in state court of carrying a pistol without a permit, sale of illegal drugs, and robbery in the first degree.
It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
Judge Meyer scheduled sentencing for October 5, 2020, at which time Barnes faces a maximum term of imprisonment of 10 years.
Barnes has been detained since his arrest.
This matter is being investigated by the Federal Bureau of Investigation and the Hamden Police Department. The case is being prosecuted by Assistant U.S. Attorney Margaret M. Donovan.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make neighborhoods safer for everyone.
NDTX Round-Up June 29 - July 6Read the Press Release
GUILITY PLEA – FLOYD ALLEN HAWKINS
On June, 30, Floyd Allen Hawkins, 30, pled guilty to production of child pornography. In March, 2019, Yahoo submitted cybertips to the National Center for Missing and Exploited Children concerning several images of child pornography uploaded by Hawkins. Dallas Police Department executed a search warrant on Hawkins’ home where he was questioned about the images. Hawkins admitted to producing multiple images of child pornography of a two-year-old girl. Hawkins faces up to 30 years in federal prison for his crimes. This case was investigated by Homeland Security Investigations and Dallas Police Department. Assistant U.S. Attorney Camille Sparks is prosecuting this case.
GUILTY PLEA – ERIC JACKSON
On June 30, Eric Jackson, 34, pled guilty to transportation of stolen goods or monies in interstate commerce. Jackson and his co-conspirators travelled around the United States to commit burglaries of cash safes. The group target grocery stores, check-cashing locations, and businesses with a significant amount of cash on hand. The safe crew received alarm codes from an insider at a national alarm company to aid in avoiding detection. Jackson and his co-conspirators caused losses between $250,000 and $1,500,000. Jackson faces up to 10 years in federal custody for his crimes. This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Ryan Raybould is prosecuting this case.
SENTENCING – RICKY CARDENAS
On June 30, Ricky Cardenas, 41, was sentenced to 165 months in federal prison for possession with the intent to distribute methamphetamine. Investigators with Parker County Sheriff’s Office received information that Cardenas was distributing methamphetamine at a local hotel in Weatherford, Texas. The same day, Cardenas left the hotel for a nearby gas station where he engaged in drug transaction with several individuals. After leaving the gas station, Cardenas was stopped by law enforcement and found with methamphetamine in his car. This case was investigated by the Drug Enforcement Administration and Parker County Sheriff’s Office. Assistant U.S. Attorney Nancy Larson is prosecuting this case.
GUILTY PLEA – KENNETH JERNARD NARGO
On June 30, Kenneth Jernard Nargo, 22, pled guilty two counts of interference with commerce by robbery and two counts of using, brandishing, and discharging a firearm in furtherance of crime of violence. Nargo and his c0-consrpators robbed multiple pawn shops in north Texas. Once inside the pawn shops, the group discharged a firearm to scare customers and employees so they would not interfere with the robberies. During two robberies in Duncanville, Texas and Dallas, Texas, Nargo admitted to jumping over the counter and stealing a cash register drawer and jewelry. This case was investigated by the Federal Bureau of Investigation, Dallas Police Department, DeSoto Police Department, and Duncanville Police Department. Assistant U.S. Attorney Walt Junker is prosecuting this case.
SETENCING – SHARROCCA BLOCKER
On July 6, Sharrocca Blocker, 41, was sentenced to 2 years in federal prison for aiding and assisting the preparation and presentation of a false and fraudulent return. Blocker prepared a tax return on behalf of another taxpayer in which she fraudulently claimed a net profit from running a call center business the taxpayer did not owned or operate. The false tax return made Blocker’s client eligible for the earned income tax credit. This case was investigated by the Internal Revenue Service – Criminal Investigations. Assistant U.S. Attorney Doug Allen is prosecuting this case.
Multi-State Drug Trafficker Pleads Guilty to Distributing Methamphetamine and Heroin and Illegal Reentry After DeportationRead the Press Release
DENVER – United States Attorney Jason R. Dunn announced that Arturo David Aguilera-Viveros, age 36, of Adams County, Colorado, pleaded guilty yesterday to Conspiracy to Distribute and Possess with Intent to Distribute 500 Grams or More of Methamphetamine and 100 Grams or More of Heroin, as well as Illegal Reentry After Deportation. The Denver Office of the FBI joined in this announcement.
Aguilera-Viveros was originally charged in U.S. District Court for the District of Colorado for his role in a conspiracy to distribute methamphetamine and heroin. He was subsequently charged in the U.S. District Court for the District of Wyoming for his role in a separate conspiracy which sent large quantities of methamphetamine from Colorado into Wyoming. As part of his plea agreement in the Colorado case, Aguilera-Viveros agreed to transfer his Wyoming case to Colorado to enter a plea of guilty and be sentenced.
According to the stipulated facts contained in his plea agreements, Aguilera-Viveros admitted he was a manager or supervisor of criminal activity which involved five or more participants. Law enforcement determined that his drug trafficking activities in the Colorado case involved approximately three kilograms of near-pure methamphetamine and 200 grams of black tar heroin. He also admitted that his drug trafficking activities in the Wyoming case involved approximately 20 pounds of methamphetamine.
Aguilera-Viveros is a citizen and national of Mexico. On February 20, 2014, he was convicted in the District Court of Arapahoe County, Colorado, of the offense of Possession of a Controlled Substance with the Intent to Distribute for which he was sentenced to 6 years in the Colorado Department of Corrections. Aguilera-Viveros was removed from the United States to Mexico on September 7, 2017. On April 4, 2019, at the conclusion of the investigation which uncovered his most recent drug trafficking activities, law enforcement officers arrested Aguilera-Viveros during a search of his residence in Aurora, Colorado. The defendant did not apply for admission or otherwise seek approval to reenter the United States before doing so.
This case was investigated by the FBI-led Organized Crime and Drug Enforcement Task Force (OCDETF), including the Internal Revenue Service (IRS), Homeland Security Investigations (HSI), Immigration and Customs Enforcement-Enforcement Removal Operations (ICE-ERO), and Douglas County Sheriff’s Office. Aguilera-Viveros was prosecuted by Assistant United States Attorney Peter McNeilly. The office of Wyoming U.S. Attorney Mark A. Klaassen participated in the investigation into Aguilera-Viveros and agreed to transfer the case to Colorado for resolution.
The guilty plea was presented to U.S. District Court Judge Raymond P. Moore. Aguilera-Viveros is scheduled to be sentenced by Judge Moore on September 24, 2020.
This case was prosecuted as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program. The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking, weapons trafficking, and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the District of Colorado. Related court documents can be found on PACER by searching for Case Numbers 19-cr-275 and 20-cr-105.
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.
Moss Point Mayor and Wife Indicted on Federal Fraud ChargesRead the Press Release
Gulfport, Miss. – Moss Point Mayor Mario King, 33, and his wife, Natasha R. King, 32, of Moss Point, Mississippi, appeared today before U.S. Magistrate Judge Robert H. Walker on fraud charges relating to the Mayor’s Gala held in 2019, announced U.S. Attorney Mike Hurst, Mississippi State Auditor Shad White, and Special Agent in Charge Michelle A. Sutphin of the Federal Bureau of Investigation in Mississippi.
The indictment alleges that defendants Mario King and Natasha R. King began soliciting funds in late 2018 for a Gala to be held on March 23, 2019, in Moss Point. The written solicitation stated that the “gala honors and supports organizations that are making a difference for the mental health community. Proceeds support the efforts of mental health in the City of Moss Point with a focus on the Moss Point School District, converting spaces into a therapeutic and innovative learning environment.”
According to the indictment, on March 4, 2019, defendants Mario King and Natasha R. King appeared together on WLOX television and described the event, stating that funds from the Gala were to be used to create safe spaces for mental health counseling in the Moss Point School District.
Pursuant to allegations in the indictment, it was the understanding of those contributing to the Gala, either in the form of tickets purchased or contributions, that the proceeds from the Gala would go to the Moss Point School District. Some of the funds were used to pay for the cost of the Gala, but the remaining proceeds did not go to the Moss Point School District. Instead, it is alleged that defendants Mario King and Natasha R. King used the proceeds for personal purchases, including the down payment on the purchase of a vehicle, cash withdrawals and the payment of credit card debts involving charges to complete the purchase of a personal pet.
The defendants appeared before U.S. Magistrate Judge Walker at 10:00 a.m. this morning for their initial appearance and arraignment. The case has been assigned to U.S. District Judge Sul Ozerden. If convicted, the defendants face up to five years on the conspiracy charge and up to twenty years on each of the thirteen wire fraud charges. Each of the fourteen counts carries a maximum fine of $250,000.
The case was investigated by the Mississippi State Auditor’s Office and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney John Meynardie.
The public is reminded that an indictment is merely a charge and should not be considered as evidence of guilt. Every defendant is presumed innocent until proven guilty in a court of law.
Merrillville Man Sentenced to 108 Months in PrisonRead the Press Release
HAMMOND- Tyrone Perry, 39, of Merrillville, Indiana, was sentenced before District Court Judge Philip P. Simon following his plea of guilty to distribution of heroin and cocaine base, announced U.S. Attorney Thomas L. Kirsch II.
Perry received a sentence of 108 months in prison followed by 3 years of supervised release.
According to documents filed in this case, on April 24, 2019, Perry distributed heroin and cocaine base to a confidential informant. Perry, who had prior felony convictions for Armed Robbery, Robbery, and Reckless Homicide, also forfeited three firearms that were located during the search of his Merrillville residence on June 13, 2019.
This case was investigated by the Federal Bureau of Investigation and Merrillville Police Department and was prosecuted by Assistant United States Attorney Thomas M. McGrath.
###