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Wednesday 1 July 2020
Previously convicted felon from Santa Ana Pueblo pleads guilty to illegally possessing firearm possession in Indian CountryRead the Press Release
ALBUQUERQUE, N.M. – Jose Rueben Garcia, 37, of Santa Ana Pueblo, New Mexico, pleaded guilty in federal court today to being a felon in possession of a firearm.
According to public court documents, Garcia committed the offense in Sandoval County on June 22, 2019. Garcia ran into his neighbor’s house carrying a firearm while appearing to be under the influence of drugs. Garcia was sweating and wearing no shirt or shoes. He claimed two assailants were pursuing him and needed to fire his weapon to ward them off. Garcia attempted to point out the assailants from a neighbor’s window but no one was there. Santa Ana Police responded to the scene and arrested Garcia, who could not lawfully possess any firearms due to a previous felony conviction for aggravated battery.
Garcia is currently in custody awaiting sentencing. He faces 10 years in prison.
The Pueblo of Santa Ana Police Department and the Bureau of Indian Affairs Office of Justice Services – Branch of Criminal Investigations investigated the case. Assistant U.S. Attorney Thomas J. Aliberti is prosecuting the case.
Novartis Pays over $642 Million to Settle Allegations of Improper Payments to Patients and PhysiciansRead the Press Release
Pharmaceutical company Novartis Pharmaceuticals Corporation (Novartis), based in East Hanover, New Jersey, has agreed to pay over $642 million in separate settlements resolving claims that it violated the False Claims Act (FCA). The first settlement pertains to the company’s alleged illegal use of three foundations as conduits to pay the copayments of Medicare patients taking Novartis’s drugs Gilenya and Afinitor. The second settlement resolves claims arising from the company’s alleged payments of kickbacks to doctors.
“Through this settlement and others, the government has demonstrated its commitment to ensuring that drug companies do not use kickbacks to influence the drugs prescribed by doctors or purchased by patients,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “We will continue to safeguard the Medicare program from kickbacks and their pernicious effects, including the undermining of important cost-control mechanisms instituted by Congress.”
The Anti-Kickback Statute prohibits anyone from offering or paying, directly or indirectly, any remuneration — which includes money or any other thing of value — to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs. This prohibition extends not only to improper payments to providers, but also to the improper payment of patients’ copay obligations.
In the first settlement, Novartis has agreed to pay $51.25 million to resolve allegations that it illegally paid the copay obligations for patients taking its drugs. When a Medicare beneficiary obtains a prescription drug covered by Medicare, the beneficiary may be required to make a partial payment, which may take the form of a copayment, coinsurance, or a deductible (collectively “copays”). Congress included copay requirements in the Medicare program, in part, to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs.
Novartis sells Gilenya, which is approved for treatment of relapsing forms of multiple sclerosis (MS). The government alleged that, in October 2012, Novartis learned from the contractor managing Novartis’s free drug program for Gilenya that over 300 patients who were receiving free drugs would be eligible for Medicare in 2013. Novartis and the contractor transitioned those patients to Medicare Part D so that, in the future, Novartis would obtain revenue from Medicare when those patients filled prescriptions for Gilenya. Knowing those patients could not afford the copay for Gilenya, Novartis developed a plan with a foundation so that Novartis could cover the copays for those patients. Specifically, at the same time Novartis made a payment to the foundation, Novartis arranged for the foundation to open its MS fund at 6:00 pm on a Friday and for the contractor to have personnel working overtime to submit applications for those patients who had been receiving free Gilenya. Novartis knew that this coordination would result in a disproportionate share of its funding going to Gilenya patients for 2013.
Novartis also sells Afinitor, which is a second-line treatment for advanced renal cell carcinoma (RCC) and a treatment for progressive neuroendocrine tumors of pancreatic origin (PNET). The government alleged that Novartis learned that, for the 2010 donation year, it would be the only donor to an RCC copay assistance fund operated by a charitable foundation. The government alleged that Novartis told the foundation that it would be willing to donate to the fund only if the eligibility definition was narrowed in a way that ensured that a greater amount of the copay assistance would support patients taking Afinitor. The government alleged that, as a result of narrowing the fund definition, the fund disproportionately assisted patients taking Afinitor compared to its overall usage rate among RCC drugs.
The government further alleged that, in 2012, Novartis asked another foundation to open a copay assistance fund to pay copays for PNET patients, which Novartis knew would be used only to pay the copays of Afinitor patients.
“According to the allegations in today’s settlement, Novartis coordinated with three co-pay foundations to funnel money through the foundations to patients taking Novartis’ own drugs,” said U.S. Attorney Andrew E. Lelling for the District of Massachusetts. “As a result, the Novartis’ conduct was not ‘charitable,’ but rather functioned as a kickback scheme that undermined the structure of the Medicare program and illegally subsidized the high costs of Novartis’s drugs at the expense of American taxpayers. At the same time, we recognize that Novartis’ current management has taken constructive steps to address the government’s concerns with the company’s prior relationships with co-pay foundations.”
In the second matter, Novartis will pay $591,442,008 to resolve FCA claims that it paid kickbacks to doctors to induce them to prescribe the Novartis drugs Lotrel, Valturna, Starlix, Tekturna, Tekturna HCT, Tekamlo, Diovan, Diovan HCT, Exforge, and Exforge HCT. In addition, Novartis will forfeit $38.4 million under the Civil Asset Forfeiture Statute. Novartis also made extensive factual admissions in the settlement and agreed to strict limitations on any future speaker programs, including reductions to the amount it may spend on such programs.
In a case pending in the Southern District of New York, the United States alleged that Novartis hosted tens of thousands of speaker programs and related events under the guise of providing educational content, when in fact the events served as nothing more than a means to provide bribes to doctors. Novartis paid physicians honoraria, purportedly as compensation for delivering a lecture regarding a Novartis medication, but, as Novartis knew, many of these programs were nothing more than social events held at expensive restaurants, with little or no discussion about the Novartis drugs. Indeed, some of the so-called speaker events never even took place; the speaker was simply paid a fee in order to induce the speaker to prescribe Novartis drugs.
“For more than a decade, Novartis spent hundreds of millions of dollars on so-called speaker programs, including speaking fees, exorbitant meals, and top-shelf alcohol that were nothing more than bribes to get doctors across the country to prescribe Novartis’s drugs,” said Acting U.S. Attorney Audrey Strauss for the Southern District of New York. “Giving these cash payments and other lavish goodies interferes with the duty of doctors to choose the best treatment for their patients and increase drug costs for everyone. This office will continue to be vigilant in cracking down on kickbacks, however they may be dressed up, throughout the pharmaceutical industry.”
The government’s complaint further alleged that Novartis sales representatives, on the instruction of their managers, selected high-volume prescribers to serve as the paid “speakers” at these events with the intent to induce them to write more — or keep writing many — Novartis prescriptions. The sales representatives then pressured the speakers to increase their prescriptions of Novartis drugs, and often dropped doctors from the speaker program if they failed to do so. Further, the government alleged that this widespread kickback scheme was the result of decisions made by top management at Novartis’s North American headquarters in New Jersey.
This settlement resolves a lawsuit captioned United States ex rel. Bilotta v. Novartis Pharmaceuticals Corp., No. 11-Civ.-0071-PGG (S.D.N.Y.) initially filed under the whistleblower provision of the FCA, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The FCA permits the United States to intervene in such a lawsuit, as it did in the whistleblower case filed against Novartis. The amount to be recovered by the private whistleblower, Oswald Bilotta, has not yet been determined. As part of the settlement, Novartis will also pay an additional $48,151,273 to resolve state Medicaid claims.
Contemporaneous with the settlement of the FCA claims in these matters, Novartis entered into a corporate integrity agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The five-year CIA addresses the conduct at issue in both matters. Among other things, the CIA requires Novartis to significantly reduce the number of paid speaker programs and the amounts spent on such programs. Under the CIA, Novartis speaker programs may only occur under limited circumstances and in a virtual format. In addition, the CIA requires Novartis to implement measures designed to promote independence from any patient assistance programs to which it contributes. The CIA also requires multi-faceted monitoring of Novartis’s operations and obligates company executives and Board members to certify about compliance.
“OIG will continue to work closely with the Department of Justice to investigate and pursue kickbacks regardless of the form they take,” said Gregory E. Demske, Chief Counsel to the Inspector General, HHS-OIG. “To address Novartis’s conduct and the widely-recognized compliance risks associated with paid speaker programs, the CIA requires Novartis to make fundamental changes to its speaker program practices. Under the CIA, Novartis must significantly reduce the number of programs and the number of paid physicians, and can no longer pay for inherently-risky in-person programs.”
The government’s resolution of these matters illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The copay investigation was conducted by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of Massachusetts, in conjunction with the Department of Health and Human Services, Office of Inspector General and the Federal Bureau of Investigation. The Bilotta matter was litigated by the Southern District of New York, with assistance from the Civil Division’s Commercial Litigation Branch, the Federal Bureau of Investigation, the Department of Health and Human Services, Office of Inspector General, and the Department of Defense, Office of Inspector General.
The claims resolved by the settlements are allegations only; there has been no determination of liability.
Novartis Agrees to Pay over $51 Million to Resolve Allegations that It Paid Kickbacks Through Co-Pay FoundationsRead the Press Release
BOSTON – Novartis Pharmaceuticals Corporation (Novartis) has agreed to pay $51.25 million to resolve allegations that it violated the False Claims Act by illegally paying the Medicare co-pays for its own drugs.
When a Medicare beneficiary obtains a prescription drug covered by Medicare Part B or Part D, the beneficiary may be required to make a partial payment, which may take the form of a co-payment, co-insurance, or deductible (collectively, co-pays). Congress included co-pay requirements in these programs, in part, to encourage market forces to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs. The Anti-Kickback Statute prohibits pharmaceutical companies from offering or paying, directly or indirectly, any remuneration – which includes money or any other thing of value – to induce Medicare patients to purchase the companies’ drugs.
“According to the allegations in today’s settlement, Novartis coordinated with three co-pay foundations to funnel money through the foundations to patients taking Novartis’ own drugs,” said United States Attorney Andrew E. Lelling. “As a result, the Novartis’ conduct was not ‘charitable,’ but rather functioned as a kickback scheme that undermined the structure of the Medicare program and illegally subsidized the high costs of Novartis’ drugs at the expense of American taxpayers. At the same time, we recognize that Novartis’ current management has taken constructive steps to address the government’s concerns with the company’s prior relationships with co-pay foundations.”
“Through this settlement and others, the government has demonstrated its commitment to ensuring that drug companies do not use kickbacks to influence the drugs prescribed by doctors or purchased by patients,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “We will continue to safeguard the Medicare program from kickbacks and their pernicious effects, including the undermining of important cost-control mechanisms instituted by Congress.”
“Improper coordination between pharmaceutical manufacturers and foundations operating patient assistance programs harms Medicare by increasing costs and distorting the prescription drug market,” said Gregory E. Demske, Chief Counsel to the Inspector General. “This CIA promotes independence in those relationships and accountability on the part of manufacturer Boards of Directors and senior management.”
“Novartis tried to game the system to boost its bottom line at the expense of sick patients facing economic hardship, and the hard-working taxpayers who fund the Medicare program,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Today’s settlement is a warning to all pharmaceutical companies that if they pay kickbacks, like Novartis did in this case, our health care fraud task force will do everything it can to make sure they are held accountable.”
The government’s allegations in the settlement announced today are as follows:
At certain intervals during the period from Jan. 1, 2010, through Dec. 31, 2014, Novartis used The Assistance Fund (TAF) as a conduit to pay kickbacks to Medicare patients taking Gilenya, a Novartis drug for multiple sclerosis (MS), and used the National Organization for Rare Disorders (NORD) and Chronic Disease Fund (CDF) as conduits to pay kickbacks to Medicare patients taking Afinitor, a Novartis drug for renal cell carcinoma (RCC) and progressive neuroendocrine tumors of pancreatic origin (PNET).
With respect to TAF, in October 2012, Novartis learned from Express Scripts, which then was managing Novartis’ free drug program for Gilenya, that Novartis was providing free Gilenya to 364 patients who would become eligible for Medicare the following year. Novartis and Express Scripts transitioned these patients to Medicare Part D so that, in the future, Novartis would obtain revenue from Medicare when the patients filled their prescriptions for Gilenya. Knowing that these patients could not afford co-pays for Gilenya, Novartis developed a plan for it to cover their co-pays through TAF, which operated a fund that, ostensibly, offered to cover co-pays for any MS patient who met TAF’s financial eligibility criteria, regardless of which MS drug the patient was taking. Specifically, just after it made a payment to TAF, Novartis arranged for TAF to open its MS fund at 6:00 p.m. on Friday, Dec. 14, 2012, and for Express Scripts to have personnel working overtime that night and the following morning submitting applications to TAF on behalf of patients who previously had been receiving free Gilenya from Novartis. Novartis knew that the timing of the opening of the fund and the readiness of Express Scripts to submit applications on behalf of Gilenya patients at that time would result in Gilenya patients receiving a disproportionate share of the grants from the fund while it was open. After the fund closed on Saturday, Dec. 15, 2012, Novartis confirmed that, during the brief period the fund had been open, TAF used Novartis’ money to provide 374 Gilenya patients with grants to cover their Medicare co-pays in 2013. Novartis subsequently made further payments to TAF, and TAF provided many of these same Gilenya patients with grants to cover their Medicare co-pays in 2014.
With respect to NORD, Novartis learned that, as of the 2010 donation year, no other manufacturer of RCC medications would be contributing to a pre-existing NORD RCC co-pay assistance fund. Novartis knew that Afinitor was approved for use as a second-line RCC treatment only, and only when certain first-line products had failed. Novartis also knew, therefore, that any co-pays NORD covered for initial RCC treatments would not be used to cover co-pays for Afinitor. Novartis informed NORD that it would be willing to donate to its RCC fund if NORD narrowed the fund’s eligibility definition so as not to cover co-pays for first line treatments. Novartis wanted the definition narrowed to ensure that a greater amount of its donations would subsidize its product, as opposed to others. NORD then created a new fund entitled “Advanced Renal Cell Carcinoma Second Line Co-Payment Assistance Program.” This fund excluded any patients seeking co-pay coverage for first-line RCC treatments and disproportionately funded patients taking Afinitor compared to its overall usage rate among all RCC drugs. Novartis financed this NORD fund through 2014.
With respect to CDF, in 2012, after Afinitor was approved to treat PNET, Novartis asked CDF to open a fund to cover Afinitor co-pays for PNET patients. At that time, Novartis knew that the FDA had approved a competing drug to treat PNET. Nonetheless, with Novartis’ knowledge, CDF launched a fund labeled “PNET” that covered co-pays only for Afinitor and did not cover co-pays for the other PNET drug. Novartis continued with this understanding as the sole financial backer of this supposed “PNET” fund through 2014.
Novartis entered into a five-year corporate integrity agreement (CIA) with OIG as part of this settlement and a simultaneous settlement being announced today by the United States Attorney’s Office for the Southern District of New York. The CIA requires Novartis to implement measures, controls, and monitoring designed to promote independence from any patient assistance programs that it finances. In addition, Novartis agreed to implement risk assessment programs and to obtain compliance-related certifications from company executives and Board members.
To date, the Department of Justice has collected over $900 million from ten pharmaceutical companies (United Therapeutics, Pfizer, Actelion, Jazz, Lundbeck, Alexion, Astellas, Amgen, Sanofi, and Novartis) that allegedly used third-party foundations as kickback vehicles. The Department also has reached settlements with four foundations (Patient Access Network Foundation, Chronic Disease Fund, The Assistance Fund, and Patient Services, Inc.) that allegedly conspired or coordinated with these pharmaceutical companies.
U.S. Attorney Lelling, Assistant Attorney General Hunt, HHS Chief Counsel to the Inspector General Demske, and FBI Boston SAC Bonavolonta made the announcement today. The U.S. Postal Inspection Service also assisted with the investigation. The matter was handled by Assistant U.S. Attorneys Gregg Shapiro and Abraham George, of Lelling’s Affirmative Civil Enforcement Unit, and by Trial Attorneys Sarah Arni and Augustine Ripa of the Justice Department’s Civil Division.
Next Step Recovery Owner Pleads to Distributing Heroin to His Rehab Clients and Preparing False Returns for Customers of His Tax FirmRead the Press Release
PITTSBURGH – David Francis of McKees Rocks, PA, pleaded guilty in federal court to a charge of conspiracy to distribute 100 grams or more of heroin. He also waived prosecution by indictment and entered a plea of guilty to a five-count Information charging him with assisting in the filing of fraudulent federal income tax returns, United States Attorney Scott W. Brady announced today.
Francis, 69, pleaded guilty to one drug count and five tax counts before United States District Judge Joy Flowers Conti.
In connection with the guilty plea, the court was advised that Francis was the owner and operator of Next Step Recovery Housing, LLC, a purported drug rehabilitation center, located in McKees Rocks, PA. While operating Next Step Recovery Housing, the defendant also conspired to distribute more than 100 grams of heroin with suppliers from New York City from November 2016 through February 2017. Francis redistributed the heroin that he obtained from the New York suppliers to his own customers, many of whom were current or former clients of Next Step Recovery Housing. During the same timeframe, Francis was also the owner and operator of All Personal Matters, an income tax return preparation business. Through All Personal Matters, Francis aided in the preparation and filing of fraudulent federal income tax returns on behalf of clients of All Personal Matters, resulting in a loss to the Internal Revenue Service of $1,681,607.54.
Judge Conti scheduled sentencing for November 4, 2020. For the drug charge, the law provides for a total sentence of not less than five years and not more than 40 years in prison, a fine of not more than $5,000,000, or both. For the tax charges, the law provides for a total sentence at each count of not more than three years in prison and a fine of not more than $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history of the defendant.
Pending sentencing, the court continued the defendant’s detention.
Assistant United States Attorney Tonya Sulia Goodman is prosecuting this case on behalf of the government.
The Drug Enforcement Administration, Internal Revenue Service – Criminal Investigation, Monroeville Police Department, Stowe Township Police Department, Ingram Borough Police Department, Pennsylvania State Police, and Monaca Police Department conducted the investigation that led to the prosecution of Francis.
New York Woman Admits Role in Counterfeit Check Bank Fraud SchemeRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that MEEM JANNAT, 24, of Brooklyn, New York, formerly of Waterbury, pleaded guilty today before U.S. Magistrate Judge William I. Garfinkel to one count of one count of conspiracy to commit bank fraud stemming from her role in a counterfeit check scheme.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the court proceeding occurred via videoconference.
According to court documents and statements made in court, between approximately December 2017 and January 2019, Jannat and her co-conspirators, including Jonell Bonilla, Tania Cruz and Lilibeth Perez, obtained access to bank accounts by recruiting individuals through social media and persuading the individuals to share their account information, including debit cards and associated PIN numbers. The account holders were paid for providing access to their bank accounts. Jannat and her co-conspirators misrepresented to the account holders that U.S. Postal Service money orders or authentic checks would be deposited into their accounts. After the co-conspirators had access to the accounts, they deposited counterfeit checks into those accounts, and withdrew money from the accounts before the banks discovered the checks to be counterfeit.
Through this scheme, the co-conspirators defrauded at least 12 banks of a total of approximately $240,000. In pleading guilty, Jannat agreed that the loss attributable to her role in the scheme is $50,389.05.
Jannat is scheduled to be sentenced by U.S. District Judge Vanessa L. Bryant on October 21, 2020, at which time she faces a maximum term of imprisonment of 30 years.
Jannat was arrested on January 14, 2019. She is released on a $100,000 bond pending sentencing.
Bonilla, Cruz and Perez previously pleaded guilty to related charges and await sentencing.
This matter is being investigated by the U.S. Postal Inspection Service and the U.S. Secret Service. The case is being prosecuted by Assistant U.S. Attorney John T. Pierpont, Jr.
New Jersey Residents Sentenced for Smuggling Portuguese CitizenRead the Press Release
UTICA, NEW YORK – Oscar Manuel Grego Costa, age 46, a Portuguese citizen living in Newark, New Jersey, was sentenced today to 36 months in prison, to be followed by a 3-year period of supervised release, for bringing an illegal alien into the United States from Canada and attempting to bring the alien to Newark. Maria Jose Carvalho, age 47, of Newark, was sentenced today to time served (4 days in jail), followed by 2 years of supervised release, for conspiring to transport an illegal alien within the United States.
The announcement was made by United States Attorney Grant C. Jaquith; Steven Bronson, Area Port Director, United States Custom and Border Protection (CBP); and Robert N. Garcia, Chief Patrol Agent, United States Border Patrol, Swanton Sector.
On November 17, 2018, Carvalho drove from Newark to Canada, where she met with and picked up Fabio De Soussa Barbosa. Barbosa was a citizen of Portugal, who had been a long-time resident of New Jersey. Barbosa was not authorized to enter the United States. After meeting Barbosa in Canada, Carvalho drove to a remote location on the Canadian side of the border during the early morning of November 18, 2018, and dropped off Barbosa, who then walked across the border into the United States. Barbosa entered the United States undetected and Carvalho then drove to the Champlain Port of Entry and attempted to return to the United States. Royal Canadian Mounted Police (RCMP) officers had observed Carvalho drop off someone near the border and RCMP, in turn, contacted Border Patrol.
Border Patrol responded and encountered a Chevrolet Tahoe, with a New Jersey license plate, registered to Maria Carvalho. The vehicle, which was near Mooers, New York, had four men inside. The driver was Christopher Boals and the three passengers were Daniel Costa, Antonio Nieves, and Fabio De Sousa Barbosa. Christopher Boals, Daniel Costa and Antonio Nieves had been hired by Oscar Manuel Grego Costa to meet with and pick up Barbosa on the United States side of the border, and then drive him away from the border so that Barbosa could be transported to Newark.
Oscar Manuel Grego Costa was found by Border Patrol at the Rouses Point train station later that morning and arrested. Immigration inspection of Oscar Manuel Grego Costa, including a check of his fingerprints, revealed that he had been removed from the United States to Portugal in 1994 and that he had not secured permission to return to the United States following the removal. Costa was also sentenced today to 12 months in prison for the offense of re-entry into the United States of a previously removed alien. The court directed that the 12-month sentence run concurrent to Costa’s 36-month sentence for alien smuggling.
Christopher Boals, age 41, of Newark, was sentenced on December 11, 2019 to 15 months in prison, to be followed by a 3-year period of supervised release, for bringing an illegal alien into the United States from Canada and attempting to bring the alien to Newark.
Antonio Nieves, age 46, of Newark, was sentenced on December 11, 2019 to 15 months in prison, to be followed by a 3-year period of supervised release, for bringing an illegal alien into the United States from Canada and attempting to bring the alien to Newark.
Daniel Costa, age 24, a citizen of Portugal residing in Newark, was sentenced on January 8, 2020 to time served (13 months in prison), for bringing an illegal alien into the United States from Canada and attempting to bring the alien to Newark.
Fabio De Soussa Barbosa, age 24, a citizen of Portugal residing in Newark, was convicted of the misdemeanor offense of entry without inspection by an alien, on December 18, 2018 and sentenced to time served (30 days in jail), and to pay a $5,000 fine.
This case was investigated by U.S. Customs and Border Protection (CBP) and Border Patrol, and was prosecuted by Assistant U.S. Attorneys Edward P. Grogan and Ashlyn Miranda.
Mexican man sentenced for role in smuggling attempt that led to rollover accidentRead the Press Release
LAREDO, Texas – A 30-year-old Mexican national has been ordered to federal prison for his involvement in a conspiracy to transport undocumented aliens, announced U.S. Attorney Ryan K. Patrick.
Ruben Ernesto Mendoza-Zapata pleaded guilty Jan. 7.
Today, U.S. District Judge Marina Garcia Marmolejo handed Mendoza-Zapata a 41-month term of imprisonment. Not a U.S. citizen, he is expected to face removal proceedings after serving his sentence.
On Oct. 7, 2019, authorities observed a group of individuals crossing from the Mexican side of Falcon Lake via boat and entering a red Ford Explorer in the United States. They located the SUV and attempted to get behind it. However, the driver - later identified as Mendoza-Zapata - fled the scene at a high rate of speed. During the pursuit, Mendoza-Zapata tried rounding a curve, but rolled the vehicle several times.
Law enforcement secured the scene and rescued the occupants, one of whom was pinned underneath the vehicle. At the time of the rollover, a 6-year-old boy was also in the SUV.
Mendoza-Zapata has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of Border Patrol. Assistant U.S. Attorney David Fawcett prosecuted the case.
Mexican Man Sentenced for Illegally Reentering the United States after DeportationRead the Press Release
A man who illegally re-entered the United States after being previously deported as a felon was sentenced March 5, 2020, to more than 1 year in federal prison.
Alejandro Garcia-Sanchez, age 38, from Mexico, received the prison term after a November 4, 2019, guilty plea to one count of re-entry of a removed alien after a felony.
In a plea agreement, Garcia-Sanchez admitted he had illegally entered the United States from Mexico on an unknown dated after previously being deported in February of 2019, following a conviction for re-entry of a removed alien in the United States District Court for the District of New Mexico.
Garcia-Sanchez was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Garcia-Sanchez was sentenced to 15 months’ imprisonment. He must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
Garcia-Sanchez 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 Kevin C. Fletcher and investigated by Enforcement and Removal Office of the Immigration and Customs Enforcement Bureau.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 10-CR-3041.
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Mexican Citizen Illegally in the United States Sentenced as Methamphetamine DistributorRead the Press Release
United States Attorney Joe Kelly announced that Daniel Chona-Romero, 34, was sentenced today by United States District Judge Robert F. Rossiter, Jr. to 60 months’ imprisonment for distributing methamphetamine. Chona-Romero was also sentenced to a 3-year term of supervised release following his release from the Bureau of Prisons. There is no parole in the federal prison system. Chona-Romero will be deported from the United States to Mexico after serving his prison term.
Chona-Romero sold methamphetamine to an FBI Confidential Human Source on two occasions, October 24, and November 1, 2018, yielding one ounce and two ounces, respectively. A forensic laboratory analysis showed the methamphetamine sold to be 95% pure. Chona-Romero was subsequently arrested by agents in Omaha.
This case was investigated primarily by the Federal Bureau of Investigation.
Mason City Woman to Prison for Federal Meth ConvictionRead the Press Release
A woman who conspired to distribute methamphetamine was sentenced June 30, 2020, to more than 5 years in federal prison.
Amanda Adams, age 30, from Mason City, Iowa, pled guilty on February 14, 2020, to one count of conspiracy to distribute methamphetamine and one count of possession with intent to distribute methamphetamine.
At the plea and sentencing hearings, evidence showed that from about May 2019 through October 2019, Adams and others conspired to distribute at least 35 grams of actual (pure) methamphetamine in Northwest Iowa. In June 2019, Adams and a co-conspirator sold “fake” methamphetamine to an individual cooperating with law enforcement. In October 2019, Adams and her co-conspirator agreed to sell more methamphetamine to the same cooperator and make good on the previous transaction. After a high speed vehicle pursuit, Adams and her co-conspirator were caught with two ounces of methamphetamine intended for the same cooperator. Officers also seized a sawed-off shotgun and an axe during a search of the vehicle.
Sentencing was held before United States District Court Chief Judge Leonard T. Strand. Adams was sentenced to 64 months’ imprisonment and must serve a term of 4 years of supervised release following the imprisonment. There is no parole in the federal system. Adams remains in custody of the United States Marshal Service until she can be transferred to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by the Iowa Department of Narcotics Enforcement, Dickinson County Sheriff’s Office, Arnold’s Park Police Department, and Iowa Division of Criminalistics Investigation.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-4079.
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Man Sentenced to Prison for $7 Million Options Trading SchemeRead the Press Release
RICHMOND, Va. – A Richmond man was sentenced today to over 10 years in prison for his execution of a $7 million investment fraud scheme he operated for nearly a decade.
According to court documents, Leonard J. Cipolla, 71, was the founder, owner, and operator of Tate Street Trading, Inc., in Richmond. Between 2009 and 2019, Cipolla solicited more than $7 million in investment funds from more than 40 individuals located in Virginia, New York, and Washington, D.C. Cipolla convinced these individuals to provide him with their savings by assuring the investors that he was a highly experienced, highly successful trader in commodity futures and options. Cipolla promised his investors that he could guarantee them significant fixed rates of return on their investments, and that Cipolla’s management fee would be drawn only from the profits that Cipolla made over and above each investor’s promised rate of return. He also assured investors that Cipolla was qualified to manage tax-deferred retirement accounts, and that he would roll the investor’s existing Individual Retirement Account (IRA) into a Tate Street-managed, tax-deferred IRA. As time passed, Cipolla provided many of his investors with account statements that purported to show the investor’s principal was safely intact, and growing at the promised rate of return.
In reality, Cipolla pooled his investors’ savings as soon as those individuals’ personal checks, IRA roll-overs, and wires were deposited into his bank accounts. Cipolla used only a fraction of those pooled investment funds to trade in the futures market, and he ultimately lost nearly the entire amount of investor funds that he actually invested. Cipolla further dissipated the remainder of his investors’ savings on unauthorized expenses, to include making payments to earlier investors, and paying his own personal expenses.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; David Archey, Special Agent in Charge of the FBI’s Richmond Field Office; and Peter R. Rendina, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement after sentencing by U.S. District Judge John A. Gibney, Jr. Assistant U.S. Attorneys Katherine Lee Martin and Thomas A. Garnett prosecuted the case.
As part of a parallel regulatory investigation, the Commodity Futures Trading Commission has filed a civil complaint alleging that Cipolla violated the Commodity Exchange Act (Case No. 3:19-cr-690).
Man Sentenced for Causing Opioid Overdose Resulting in DeathRead the Press Release
ALEXANDRIA, Va. – A former Northern Virginia resident was sentenced today to 20 years in prison for the distribution of heroin that resulted in the death of a Leesburg man in March 2016.
According to court documents, John Jacob Stapleton, 33, who most recently resided in Fort Pierce, Florida, regularly obtained illegal opioids from sources of supply that he and others distributed to customers within Loudoun County and the greater Washington, D.C. Metropolitan area. In March 2016, Stapleton distributed heroin that resulted in the death of E.L., a former Loudoun County resident. A forensic toxicologist determined that E.L.’s blood and vitreous humor each contained a combination of morphine and 6-acetylmorhpine, and a forensic pathologist determined that E.L. died of heroin poisoning. Further investigation by law enforcement officials revealed that E.L. overdosed on heroin that another individual obtained directly from Stapleton.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; James A. Dawson, Special Agent in Charge, Criminal Division, FBI Washington Field Office; Michael L. Chapman, Loudoun County Sheriff; and Gregory C. Brown, Leesburg Chief of Police, made the announcement after sentencing by U.S. District Judge Anthony J. Trenga. Assistant U.S. Attorneys David A. Peters and Raj Parekh prosecuted the case.
This matter was investigated by the FBI Washington Field Office’s Safe Streets/HIDTA Task Force which is composed of Agents and Task Force Officers from the Leesburg PD, the Loudoun County Sheriff’s Office, the Fairfax County Police, the Prince William County Police, the Alexandria City Police, the Vienna Police Department, the Herndon Police Department, the Fauquier County Sheriff’s Office, the Department of Homeland Security, and in cooperation with the DEA, ATF and USMS.
The task force’s mission is to effectively identify, disrupt and dismantle the most egregious gangs and criminal enterprises engaged in violence and narcotics distribution within Northern Virginia.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:19-cr-340.
Lutheran Pastor Arrested in Godfrey, Charged with Distributing Child PornographyRead the Press Release
A federal criminal complaint was filed late on Friday, June 19, against a Madison County pastor.
Steven P. Tibbetts, 61, was charged with one count of knowingly distributing child pornography in
December 2019. At the time the complaint was filed, Tibbetts was employed as the head pastor at
Resurrection Lutheran Church in Godfrey, Illinois. His attorney, Bill Lucco, told prosecutors this
afternoon that on account of the charge pending against him, Tibbetts has been “released of all
duties, pastoral or otherwise, at Resurrection Lutheran.”According to the complaint, the investigation of Tibbetts began in August 2019 when the
photo-sharing website, Tumblr, provided a cyber tip line report about one of its user accounts to
the National Center for Missing and Exploited Children (NCMEC). The account was searched by law
enforcement and allegedly found to contain images and videos of nude minors engaging in sexually
explicit conduct. The complaint alleges that NCMEC also received a tip from Twitter in February
2020 that one of its users had uploaded two images of suspected child pornography.Investigators were allegedly able to trace the Tumblr and Twitter accounts back to Tibbetts’ home,
where a federal search warrant was executed on June 18. An initial review of Tibbetts’ computer
allegedly revealed the presence of additional child pornography images and videos, and agents
subsequently arrested Tibbetts at his home without incident.This afternoon, Tibbetts made his initial appearance at the federal courthouse in East St. Louis.
After holding a preliminary hearing, United States Magistrate Judge Mark Beatty found probable
cause to support the complaint and ordered Tibbetts to be placed on electronic monitoring and
released on a $10,000 unsecured bond pending trial. A trial date has not been set.Distributing child pornography over the internet is a federal crime that as a first offense carries
a maximum punishment of 5-20 years in prison, a $250,000 fine, and a lifetime term of supervised
release.A complaint is merely 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.This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006
by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.
Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and
Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate,
apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue
victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For
more information about internet safety education, please visit www.usdoj.gov/psc and click on the
tab “resources.”The ongoing investigation is being conducted by the FBI. Significant assistance was provided in the
early stages of the investigation by the Peoria (I linois) Police Department.
Assistant U.S. Attorney Christopher R. Hoell is prosecuting the case.Justice Department Congratulates T-Mobile and Dish for Closing the Boost DivestitureRead the Press Release
T-Mobile US Inc. (T-Mobile) and Dish Network Corporation (Dish) announced today that they closed T-Mobile’s divestiture of Boost Network (Boost) to Dish. Boost was legacy Sprint Corporation’s prepaid wireless brand, and the transaction was completed pursuant to the remedies imposed by the Department of Justice and the Federal Communications Commission.
“I congratulate T-Mobile and Dish for closing the Boost divestiture as required under the Final Judgment,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “This deal is a significant milestone in realizing the Department of Justice’s remedy, which is designed to strengthen competition for high-quality 5G networks and benefit American consumers nationwide.”
The Antitrust Division filed a civil antitrust lawsuit on July 26, 2019, in the U.S. District Court for the District of Columbia along with the settlement that resolves the department’s competitive concerns. Judge Kelly entered final judgment in that matter on April 1, 2020. The attorneys general for the states of Arkansas, Colorado, Florida, Kansas, Louisiana, Nebraska, Ohio, Oklahoma, South Dakota, and Texas each joined in this settlement. Separately, Judge Marrero in the Southern District of New York denied the request of a minority group of states to enjoin the transaction nationwide. Judge Marrero’s opinion relied, in part, on the federal remedies designed to protect against the competitive harms that may otherwise have occurred.
The FCC also approved the transaction after a thorough examination, with certain commitments as a condition of approval.
T-Mobile US Inc. is a Delaware corporation headquartered in Bellevue, Washington. In 2019, T-Mobile posted revenues of $45 billion. Deutsche Telekom AG, a German corporation headquartered in Bonn, Germany, is the controlling shareholder of T-Mobile US Inc.
Judge Sentences New Jersey Drug Dealer to 15 Years in Federal PrisonRead the Press Release
JOHNSTOWN, Pa. – A resident of Camden, New Jersey, has been sentenced in federal court to 15 years in prison and four years’ supervised release on his conviction of violating federal narcotics laws, United States Attorney Scott W. Brady announced today.
United States District Judge Kim R. Gibson imposed the sentence on Jamel T. Brown, 38.
According to information presented to the court, on October 25, 2018, Brown and a co-conspirator distributed more than 28 grams of cocaine base, commonly known as "crack," and possessed with intent to distribute more than 50 grams of methamphetamine and a quantity of fentanyl.
Assistant United States Attorney Maureen Sheehan-Balchon prosecuted this case on behalf of the government.
Mr. Brady commended the Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Cambria County Drug Task Force for the investigation that led to the successful prosecution of Brown.
Jeffory Jaelyn Lee of Wilmington Receives 9 Years in Federal PrisonRead the Press Release
WILMINGTON, N.C. – A Wilmington man was sentenced to 108 months in prison for methamphetamine distribution and firearm charges.
According to court documents, Jeffory Jaelyn Lee, 31, was named in a Criminal Information filed on March 6, 2020 charging him with conspiracy to distribute and possess with the intent to distribute 500 grams or more of a mixture and substance containing a detectable amount of methamphetamine and a quantity of cocaine; possession with the intent to distribute 50 grams or more of actual methamphetamine, aiding and abetting; possession with the intent to distribute 50 grams or more of a mixture and substance containing a detectable amount of methamphetamine; and, possession of a firearm in furtherance of a drug trafficking crimes. On March 31, 2020, Lee pled guilty to all four counts of the Criminal Information.
According to the investigation, on August 28, 2019, a trooper with the North Carolina State Highway Patrol investigated a traffic accident on the shoulder of I-40 in Pender County, NC. Lee was a passenger in one of the vehicles involved in the accident. A search of Lee’s vehicle found a case containing approximately 74.63 grams of actual methamphetamine. On February 14, 2020, law enforcement officers in Wilmington searched Lee’s residence and found 205 grams of methamphetamine and other narcotics. In addition, a Glock .45 caliber firearm was found in close proximity to the narcotics.
This case is part of an extensive Organized Crime Drug Enforcement Task Force (OCDETF) investigation led by the Drug Enforcement Administration entitled “Operation Jellyfish.” This investigation is focused on a drug trafficking organization operating in Eastern North Carolina and including New Hanover County.
This case is part of the Take Back North Carolina Initiative of The United States Attorney’s Office for the Eastern District of North Carolina. This initiative emphasizes the regional assignment of federal prosecutors to work with law enforcement and District Attorney’s Offices on a sustained basis in those communities to reduce the violent crime rate, drug trafficking, and crimes against law enforcement.
Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge Richard E. Myers II. The Drug Enforcement Administration, New Hanover County Sheriff’s Office, Pender County Sheriff’s Office and North Carolina Highway Patrol investigated the case and Special Assistant U.S. Attorney Murphy Averitt prosecuted the case.
A copy of this press release is located on our website. Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 7:20-cr-00038-M.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Inmate Visitor Sentenced for Introducing Heroin and Buprenorphine to USP LeeRead the Press Release
ABINGDON, VIRGINIA – Shauntae Crummer, a visitor at United States Penitentiary [USP] Lee in Jonesville, Virginia was sentenced yesterday in U.S. District Court for introducing heroin and buprenorphine into the penitentiary. United States Attorney Thomas T. Cullen announced the sentence today.
Crummer, 29, of Lakeland, Florida, was sentenced to 36 months in prison. Crummer previously pleaded guilty to providing narcotics to an inmate at USP Lee and conspiracy to possess and possess with the intent to distribute heroin.
Co-defendant Tylan Lucas is scheduled to be sentenced July 15, 2020, for his role in the conspiracy.
The investigation of the case was conducted by the Federal Bureau of Prisons. Special Assistant United States Attorney Debbie Stevens prosecuted the case for the United States.
Indicted young Laredoan charged with federal firearms violationsRead the Press Release
LAREDO, Texas – A federal grand jury has returned an indictment against a 19-year-old Laredo resident for illegally possessing a firearm while under an active domestic violence protection order and possessing a firearm while under indictment, announced U.S. Attorney Ryan K. Patrick.
Mario Alberto Salazar is expected to appear for his arraignment next week before a U.S. magistrate judge in Laredo.
The criminal complaint originally filed in the case alleges Salazar was under an active protective order which prohibited him from possessing a firearm. However, he allegedly assaulted a woman March 31, 2020 – striking her in the left arm and hip with the firearm. The charges also allege he pointed a firearm at her feet while threatening to shoot her.
According to the allegations, authorities test fired the weapon and entered the casings into the National Integrated Ballistic Information Network (NIBIN) which led to a match to a shooting incident in Laredo on March 23. On that date, Salazar allegedly discharged a firearm at a vehicle as it was driving through an intersection. He was still subject to the domestic violence order at that time, according to the charges.
“NIBIN is the only national network that allows for the capture and comparison of ballistic evidence to aid in solving and preventing violent crimes involving firearms,” said Special Agent in Charge Fred Milanowski of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
The criminal complaint also alleges Salazar is under indictment in Webb County for engaging in organized criminal activity and unlawful restraint and is prohibited under federal law from possessing a firearm.
If convicted of either charge, Salazar faces up to 10 years in federal prison and a possible $250,000 maximum fine.
ATF conducted the investigation with the assistance of the Laredo Police Department. Assistant U.S. Attorney April Ayers-Perez is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Houston-area cardiologist settles allegationsRead the Press Release
HOUSTON – Advanced Cardiovascular Care Center P.A. and its owner and administrator have agreed to pay $400,000 to resolve allegations they violated the False Claims Act (FCA), announced U.S. Attorney Ryan K. Patrick.
Owner Dr. Annie T. Varughese, 57, and administrator Babu Varughese, 64, both of Spring, conducted business in three clinics located in Houston, Conroe and The Woodlands.
From June 4, 2013, through June 4, 2016, the company submitted claims to Medicare for cardiology services. These included cardiac external counterpulsation treatments, transthoracic echocardiography studies and duplex scans that were not reasonable and medically necessary. Therefore, they failed to meet the Medicare coverage and documentation requirements.
Further, patient files lacked documentation that Varughese directly supervised the cardiology services as Medicare requires. The company billed Medicare for services under Varughese’s provider number when she was not in the office and, at times, not even in the United States.
“Putting financial gain ahead of medical necessity undermines the integrity of the Medicare program,” said Special Agent in Charge Miranda Bennett of the Department of Health and Human Services – Office of Inspector General (DHHS-OIG). “We will continue investigate and hold accountable those who submit false claims to federal health care programs.”
“The largest area of fraud committed against the federal government today is by unethical healthcare providers who inflate or fabricate Medicare or Medicaid bills,” said Special Agent in Charge Perrye K. Turner of the FBI. “Billing Medicare for services that are not necessary and/or not provided constitutes fraud. American taxpayers are the ones who ultimately bear the financial burden created by this, as healthcare fraud translates into higher premiums and out-of-pocket expenses for consumers. We ask for the public's help in reporting and exposing dishonest healthcare providers."
The investigation began in 2016 after a former cardiologist filed a sealed lawsuit under the qui tam provisions of the FCA. It allows private citizens with knowledge of fraud to bring a lawsuit on behalf of the United States. They may be entitled to a share of the proceeds of the action or any settlement.
DHHS-OIG and FBI conducted the investigation. Assistant U.S. Attorney Julie Redlinger handled the matter.
The claims resolved by this agreement are allegations only, and there has been no determination of liability.
Hollygrove Man Sentenced to 36 Months for Selling NarcoticsRead the Press Release
NEW ORLEANS, LOUISIANA – United States District Judge Jane Triche Milazzo sentenced LANCE COLLINS, age 31, a resident of New Orleans, to 36 months in the Bureau of Prisons for conspiring to distribute and possess with the intent to distribute a quantity of heroin, in violation of Title 18, United States Code, Sections 841 and 846. COLLINS will be on four (4) years of Supervised Release following his release from prison.
COLLINS pleaded guilty on January 10, 2020, to conspiring to distribute heroin with members of a drug trafficking organization based in the Hollygrove neighborhood of New Orleans, Louisiana, that operated in and around a corner grocery store. COLLINS was intercepted on an FBI wiretap arranging to sell heroin to his co-conspirators.
This case was brought 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.
The U.S. Attorney’s Office praised the work of the Federal Bureau of Investigation’s New Orleans Gang Task Force. The prosecution is being handled by Assistant United States Attorneys Myles Ranier and Kathryn McHugh.
* * *
Georgia Man Pleads Guilty to Making False Threats against Schools in East Alabama and West GeorgiaRead the Press Release
Montgomery, Alabama – On Tuesday, June 30, 2020, Levi Calhoun, III, a 28-year-old man from Georgetown, Georgia, pleaded guilty to making threats against schools and conveying false information, announced United States Attorney Louis V. Franklin, Sr. and FBI Special Agent in Charge James Jewell.
According to court documents, on November 7, 2018, Calhoun created and used a fake Facebook account to spread several threats that someone would attack one or more Eufaula, Alabama and Quitman County, Georgia schools with firearms and explosive devices. When creating the fake social media account, Calhoun utilized images from another Facebook user causing him a great deal of distress when law enforcement contacted him to verify he was not actually making the threats. Fortunately, agents quickly traced the fake account back to Calhoun. On March 12, 2019, Calhoun was indicted by a federal grand jury on one count of making threats by mail or telephone and one count of conveying false information.
Following his guilty plea to both counts, Calhoun is facing up to ten years in prison. A sentencing date will be scheduled in the next few months.
“We will not tolerate domestic terrorism in any form, but especially when it is directed against our children,” stated U.S. Attorney Louis V. Franklin, Sr. “Students should be able to get an education without fear or the threat of violence. Mr. Calhoun’s actions were unacceptable, and I hope this prosecution sends the message that we will not abide any threats of violence against a school.”
"The FBI will continue to support our state and local partners in the realm of online threats to life and property,” stated FBI Special Agent in Charge James Jewell. “The safety and well-being of our students and teachers comes first and will always be a priority to the FBI."
The Federal Bureau of Investigation (FBI), the Eufaula Police Department, the Georgia Bureau of Investigation, the Georgetown Police Department, and the Enterprise Police Department investigated this case, with assistance from the Alabama Law Enforcement Agency (ALEA) and the Alabama Fusion Center. Assistant United States Attorney Eric M. Counts is prosecuting the case.
Fourteen Members of Methamphetamine Trafficking Ring Are Charged with Drug Conspiracy and Related ChargesRead the Press Release
CHARLOTTE, N.C. – Fourteen members of a methamphetamine trafficking ring have been charged with federal drug conspiracy and related drug and firearms offenses, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. The federal indictment was unsealed in court today.
Seven of those charged have been arrested by federal, state and local law enforcement, and the remaining seven defendants are currently incarcerated on unrelated charges. The arrests are the result of a multi-agency investigation targeting the trafficking of methamphetamine from Georgia into Western North Carolina.
“With methamphetamine trafficking on the rise, it is crucial that we continue to team up with our law enforcement counterparts to stem the flow of this dangerous drug, disrupt drug pipelines, and prosecute traffickers who plague our neighborhoods and imperil our communities,” said U.S. Attorney Murray.
“Methamphetamine poses a clear and present danger to the health and safety of communities,” said Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Field Division. “Because of the unified effort of all law enforcement agencies involved and the subsequent prosecution by the U.S. Attorney’s Office, we have dismantled this alleged drug conspiracy, and these defendants will no longer be able to distribute this toxic drug that destroys lives and communities.”
“The trafficking of methamphetamine into our country and its spread through our communities is a national crisis. Together, through our partnerships with the DEA and the United States Attorney’s Office, we are fighting this battle as a united front,” said Sheriff Donald G. Brown II, of the Catawba County Sheriff’s Office.
According to allegations contained in the criminal indictment unsealed today in federal court, from 2018 through April 2019, the 14 defendants were involved in a drug conspiracy that trafficked and distributed methamphetamine in Catawba, Lincoln, Caldwell, and Alexander Counties and elsewhere in Western North Carolina. Over the course of the investigation, law enforcement seized at least 23 firearms, and more than $250,000 in drug proceeds. The 14 defendants charged are:
- Thomas Dewayne Simmons, Jr., 34, of Snellville, Georgia.
- Ruth Marie Duggar, 36, of Claremont, N.C.
- Kimberly Deann Bumgarner, 55, of Claremont, N.C.
- Cynthia Roxanne Shook, 34, of Catawba, N.C.
- Lowell Thomas Messer, 32, of Sherrills Ford, N.C.
- Samantha Jean Taylor, 26, of Newton, N.C.
- Jason Keith Reichard, 38, of Newton, N.C.
- Aaron Douglas Goodson, 29, of Maiden, N.C. (in custody on state charges)
- Priscilla Chapman Lambert, 33, of Hickory, N.C. (in custody on state charges)
- Jonathan Corey Daniel, 31, currently incarcerated in the Georgia Department of Corrections.
- Tiffany Christmas Hirani, 33, currently incarcerated at the Clayton County Sheriff’s Office Detention Center in Jonesboro, Georgia.
- James Kristoffer Cantley, 38, currently incarcerated at the Robert A. Detention Center in Lovejoy, Georgia.
- Brian Duane Martz, 40, currently incarcerated in the Georgia Department of Corrections.
- Michael James Notheisen, 34, currently incarcerated in the North Carolina Department of Corrections.
All 14 defendants are charged with conspiracy to traffic methamphetamine, which carries a statutory minimum prison term of ten years and a maximum term of life in prison, and a $10 million fine. Some defendants face additional drug possession and distribution charges and/or related firearms offenses. (See chart below for a breakdown of federal charges and maximum penalties for each defendant).
The charges contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
In making today’s announcement U.S. Attorney Murray thanked the following agencies for their investigative efforts which led to federal charges: the DEA in Charlotte, Asheville, and Atlanta; the North Carolina State Bureau of Investigation; the North Carolina State Highway Patrol; the Catawba County Sheriff’s Office; the Newton Police Department; the Conover Police Department; the Maiden Police Department; the Hickory Police Department; the Longview Police Department; the Caldwell County Sheriff’s Office; the Granite Falls Police Department; the Lincoln County Sheriff’s Office; the Cleveland County Sheriff’s Office; the Huntersville Police Department; the Cornelius Police Department; the Mint Hill Police Department; the Pineville Police Department; the Charlotte Mecklenburg Police Department; the Monroe Police Department; the Taylorsville Police Department; the Gaston County Police Department; the Georgia Highway Patrol; the Franklin County Sheriff’s Office in Georgia; the Georgia Bureau of Investigation; the Georgia Department of Corrections; the Clayton County Sheriff’s Office in Georgia; and the Commerce Police Department in Georgia.
Assistant U.S. Attorney Christopher Hess, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.
DEFENDANT
COUNTS
CHARGE
STATUTORY PENALTIES
Jonathan Corey Daniel
a/k/a “Ambush”
a/k/a “Ambush Newage”
a/k/a “Orion Bls Newage”
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
23, 25
Distribution and Possess with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
Tiffany Christmas Hirani
a/k/a “Tiffany Christmas”
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
11
Distribution and Possess with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
James Kristoffer Cantley
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
2, 8, 14
Possess a Firearm in Furtherance of a Drug Trafficking Crime
5 years to life in prison, consecutive to a sentence imposed on a drug count, maximum fine of $250,000
3, 9, 15
Possess Firearms by Felon
0 to 10 years in prison, maximum fine of $250,000
6, 10
Possess with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
7
Possess with Intent to Distribute Heroin
0 to 20 years in prison, maximum fine of $1,000,000
13
Possess with Intent to Distribute Methamphetamine
5 to 40 years in prison, maximum fine of $5,000,000
Aaron Douglas Goodson
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
10, 11, 18
Possess with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
12, 19
Possess Firearms in Furtherance of a Drug Trafficking Crime
5 years to life in prison, consecutive to a sentence imposed on a drug count, maximum fine of $250,000
Cynthia Roxanne Shook
a/k/a “Roxi Johnson”
a/k/a “Roxi Shook
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
4
Distribution and Possess with Intent to Distribute Methamphetamine
0 to 20 years in prison, maximum fine of $1,000,000
5
Possession with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
Brian Duane Martz
a/k/a “B”
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
Priscilla Chapman Lambert
a/k/a “Priscilla Sweetp Chapman”
a/k/a “Sweet Pea”
a/k/a “Sweet P”
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
Thomas Dewayne Simmons, Jr
a/k/a “Tommy”
a/k/a “Tommy Simons”
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
23, 25
Distribution and Possess with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
Ruth Marie Duggar
a/k/a “White Girl”
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
24, 26
Possess with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
Kimberly Deann Bumgarner
a/k/a “Momma”
a/k/a “Momma Kim”
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
24, 26
Possess with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
Michael James Notheisen
a/k/a “Mike Bebollin”
a/k/a “BE BAllin”
a/k/a “B Ballin”
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
20, 28
Possess with Intent to Distribute Controlled Substances
5 to 40 years in prison, maximum fine of $5,000,000
21, 31
Possess with Intent to Distribute Heroin
0 to 20 years in prison, maximum fine of $1,000,000
22, 29, 32
Possess Firearms in Furtherance of a Drug Trafficking Crime
5 years to life in prison, consecutive to a sentence imposed on a drug count, maximum fine of $250,000
27
Possess with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
33
Possess Firearms by Felon
0 to 10 years in prison, maximum fine of $250,000
Lowell Thomas Messer, Jr.
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
16
Possess with Intent to Distribute Methamphetamine
5 to 40 years in prison, maximum fine of $5,000,000
17, 34
Possess with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
Samantha Jean Taylor
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
Jason Keith Reichard
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
30
Possess with Intent to Distribute Methamphetamine
5 to 40 years in prison, maximum fine of $5,000,000
Former Wheeler High School TeacherRead the Press Release
HAMMOND – Brian Kunze, age 31, of Valparaiso, Indiana, was charged by criminal Complaint with receiving child pornography, announced U.S. Attorney Thomas L. Kirsch II.
According to documents in the case, Mr. Kunze, a former Wheeler High School teacher, used his position of authority at the school to coax one of his minor students into taking and sending him sexually explicit photos of herself. Digital forensic examination of devices seized by federal law enforcement agents from Mr. Kunze’s home also revealed that he knowingly obtained sexually explicit photos of other minor girls who attended the school.
“Use of a position of authority to betray the trust placed in a teacher by his student is a very serious offense for which my office will hold all perpetrators accountable,” said U.S. Attorney Kirsch. “Individuals who seek out sexually explicit images of minor children, will be investigated and prosecuted by my office.”
The United States Attorney’s office emphasizes that a Complaint is merely an allegation and that the United States is required to prove the allegation before a defendant can be found liable.
If convicted, any specific sentence to be imposed will be determined by the Judge after consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
This case is being investigated by the Federal Bureau of Investigation with the assistance of the Porter County Sheriff’s Department and Michigan City Police Department. The case is being prosecuted by Assistant U.S. Attorney Jill Koster.
Anyone with information about Mr. Kunze or his alleged crime is encouraged to call the Merrillville office of the FBI’s GRIT Task Force at (219) 942-4900.
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Former Cooperstown Teacher Sentenced to 200 Months in Prison for Sexually Exploiting Three ChildrenRead the Press Release
BINGHAMTON, NEW YORK – Justin Hobbie, age 42, of Springfield Center, New York, was sentenced today to 200 months in prison for persuading three girls between the ages of 14 and 17 to engage in sexual activity and transmit live depictions of that activity to him.
The announcement was made by United States Attorney Grant C. Jaquith and Kevin Kelly, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI).
Hobbie was a gym and health teacher in Cooperstown, New York. In pleading guilty, he admitted that from 2015 to 2018, he persuaded three girls to engage in sexually explicit conduct and live-stream that conduct to him over the internet. These sexually explicit acts and images were recorded by Hobbie so that he could look at them again.
“While working as a teacher, Justin Hobbie preyed on teenage girls he met online by pretending to be a teenage boy and pressuring victims to make and send him sexually explicit video,” said United States Attorney Grant C. Jaquith. “Hobbie has now been held accountable for egregiously exploiting those children over a three year period.”
HSI Special Agent in Charge Kevin Kelly stated: “Child exploitation is an egregious crime especially when children are victimized by a teacher, or anyone in a position of trust. Today's sentencing hopefully begins the healing process and marks a final chapter in a painful period for those affected.”
Hobbie also admitted to amassing a large collection of child pornography using peer-to-peer file sharing software. The collection included videos depicting the rape of toddlers.
Senior United States District Judge Thomas J. McAvoy also imposed a 15-year term of supervised release, to begin after Hobbie is released from prison, and restitution in the amount of $9,999.99. Hobbie will also be required to register as a sex offender upon his release from prison.
This case was investigated by HSI Albany with assistance from the New York State Police Computer Crimes Unit, the Internet Crimes Against Children Task Force, and U.S. Customs and Border Protection, and was prosecuted by Assistant U.S. Attorney Geoffrey J. L. Brown.
This case was prosecuted as part of Project Safe Childhood. Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), and is designed to marshal federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
There are numerous Internet-based tools that assist parents and guardians in protecting children from online predators. More information is available at the iGuardians web site, operated by the U.S. Department of Homeland Security (https://www.ice.gov/topics/iGuardians), and the NetSmartzKids web site, operated by the National Center for Missing & Exploited Children (https://www.netsmartzkids.org/).
Dominican National Pleads Guilty to Fentanyl TraffickingRead the Press Release
BOSTON – A Dominican national who previously resided in Lawrence pleaded guilty today in connection with drug trafficking activities involving fentanyl.
Robinson Guzman, 38, pleaded guilty to three counts of distribution of and possession with intent to distribute fentanyl, one count of distribution of and possession with intent to distribute more than 40 grams of fentanyl, and one count of possession with intent to distribute more than 40 grams of fentanyl. U.S. Senior District Court Judge Mark L. Wolf scheduled sentencing for Sept. 23, 2020. Guzman has been in custody since he was arrested and charged by criminal complaint on March 19, 2019.
Between November 2018 and March 2019, prior to his arrest, Guzman allegedly engaged in 10 separate drug sales of fentanyl powder and pills to an undercover law enforcement agent.
The charges of distribution of and possession with intent to distribute fentanyl each provide for a sentence of up to 20 years in prison, a minimum of three years of supervised release and a fine of up to $1 million. The charges involving more than 40 grams of fentanyl carry a mandatory minimum sentence of five years and up to 40 years in prison, a minimum of four years of supervised release and a fine of up to $5 million. 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 and Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division made the announcement today. Valuable assistance was provided by the Methuen, Lawrence and Melrose Police Departments. Assistant U.S. Attorney Stephen W. Hassink of Lelling’s Narcotics and Money Laundering Unit is prosecuting the case.
Developer Charged with Conspiracy to Defraud First NBC Bank Out of over $123 MillionRead the Press Release
NEW ORLEANS – The United States Attorney’s Office announced that GARY R. GIBBS (“GIBBS”), age 66, a resident of Niceville, Florida, was charged today with conspiracy to defraud First NBC Bank, the New Orleans-based bank that failed in April 2017.
According to the Bill of Information, from in or around 2010 through April 2017, GIBBS had a banking relationship with First NBC Bank, individually and through various corporate entities he controlled. During that time, GIBBS and his entities were regularly unable to pay existing loans or overdrafts on First NBC Bank accounts. Bank President A, Bank Officer B, and Bank Officer C disguised GIBBS’s and his entities’ true financial condition by making new loans to pay GIBBS’s existing loans and to cover his overdrafts. They falsely stated in loan documents that GIBBS was able to pay his loans with cash generated by his businesses, and they hid from the First NBC Bank Board of Directors, auditors, and examiners that GIBBS was only making his existing loan payments by getting new loans from First NBC Bank. Bank President A, Bank Officer B, and Bank Officer C hid the fact that they actually made loans to GIBBS to keep him and his entities off of month-end reports to the Board, auditors, and examiners. These month-end reports listed borrowers who were not paying their loans or whose accounts were overdrawn. By keeping GIBBS and his entities off of those reports, Bank President A, Bank Officer B, and Bank Officer C were able to hide their scheme to keep lending to GIBBS despite his inability to pay his loans.
When GIBBS told Bank President A and Bank Officer C that he was considering filing bankruptcy or not paying his loans, Bank President A told GIBBS that First NBC Bank could not afford for GIBBS to default on the loans. After that, Bank President A and Bank Officer C continued to make false statements and material omissions in loan documents to hide from the Board, auditors, and examiners that the purpose of the new loans was to keep GIBBS and his entities from defaulting and that, in reality, GIBBS was not able to make his payments to the bank without receiving proceeds from new loans. Neither Bank President A nor Bank Officer C ever disclosed to the Board, auditors, or examiners that GIBBS was considering defaulting on his loans or filing bankruptcy, because that would have revealed that GIBBS did not generate enough cash to pay his loans.
To hide their scheme, Bank President A directed GIBBS to inflate certain financial statements that GIBBS provided to First NBC Bank, by falsely increasing the income of GIBBS’s entities to hide the amount of money these entities were losing. Bank President A did not tell the Board, auditors, or examiners that GIBBS inflated his financial statements at Bank President A’s direction. Bank Officer C also made false statements to First NBC Bank’s external auditors about GIBBS and the GIBBS loans. By the time First NBC Bank failed in April of 2017, GIBBS and his entities owed the bank over $123 million.
GIBBS is charged in the Bill of Information with one count of conspiracy to commit bank fraud, in violation of Title 18, United States Code, Sections 1344 and 1349. The maximum penalties that may be imposed upon conviction are thirty years in prison; a fine of $250,000, or the greater of twice the gain to GIBBS 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 a Bill of Information is merely an accusation and that the guilt of the defendant 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, Nicholas D. Moses, Matthew R. Payne, and J. Ryan McLaren are in charge of the prosecution.
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Crossett Man Sentenced to over 5 Years in Federal Prison for Being A Felon in Possession of A FirearmRead the Press Release
El Dorado, Arkansas – David Clay Fowlkes, Acting United States Attorney for the Western District of Arkansas, announced that Tracy Wright Jr., age 25, of Crossett, Arkansas, was sentenced on June 30, 2020 to 70 months in federal prison followed by three years of supervised release for one count of being a Felon In Possession of a Firearm. The Honorable Chief Judge Susan O. Hickey presided over the sentencing hearing in the United States District Court in El Dorado.
On or about July 27, 2019, deputies with the Ashley County Sheriff’s Department and officers with the Crossett Police Department encountered Wright, a convicted felon. Upon contact with law enforcement, Wright was immediately recognized by law enforcement, who were aware of an active warrant that had been issued for Wright’s arrest. After Wright was taken into custody, a search of his persons resulted in officer’s locating two handguns in his pants pocket.
Wright was indicted by a federal grand jury in October 2019, and entered a guilty plea in January of 2020.
This case was prosecuted as a part of the Department of Justice=s Project Safe Neighborhoods Initiative, which is aimed at reducing gun and gang violence, deterring illegal possession of firearms and improving the safety of residents in the Western District of Arkansas. Participants in the initiative include federal, state and local law enforcement agencies.
This case was investigated by the Ashley County Sheriff’s Office, the Crossett Police Department and the Bureau of Alcohol, Fire, Tobacco, and Explosives (ATF). Assistant United States Attorney Bryan Achorn prosecuted the case for the United States.
Convicted Sex Offender Sentenced to 10 Years in Federal Prison for Attempting to Entice A Minor to Engage in Sexual ActivityRead the Press Release
Tampa, Florida – U.S. District Judge Steven D. Merryday today sentenced Richard Stephen Terry (56) to 10 years in federal prison, followed by a lifetime of supervised release, for attempting to entice a child to engage in sexual activity. Terry also possessed child pornography and has agreed to pay restitution to the victims depicted. Terry had pleaded guilty on February 27, 2020.
According to court documents, Terry used the internet to entice adult women to allow him to engage in sexual activities with their minor children. Agents identified Terry in multiple online chat rooms designed for individuals who are interested in the sexual exploitation of children, and he used the chat rooms to meet and discuss their interests and tactics. Terry communicated online and via text message with multiple undercover law enforcement agents located in various parts of the country between 2015 and 2017.
Between November 2016 and April 2017, Terry communicated with a woman he believed to be a single mother of a 10-year-old girl. In reality, he was talking to an undercover officer from the Polk County Sheriff’s Office. In his conversations, Terry proposed meeting with the child and discussed, in graphic detail, the sex acts he wished to engage in with the child when they met. In order to add more credibility and persuade the undercover officer, Terry made up a story that he had been in an incestuous relationship with his two stepdaughters when they were minors and was looking to engage in a “fam life” sexual relationship with the single mom and her daughter. Terry stated that he ultimately did not travel to meet with the undercover officer because he was “scared it’s a set up.”
In June 2017, law enforcement agents executed a search warrant at Terry’s home and found him in possession of more than 400 images and videos of child sex abuse material depicting young children being subjected to sadistic abuse and bondage. To date, the National Center for Missing and Exploited Children has identified 54 victims depicted in the child sex abuse material.
“This predator tried to entice a minor to engage in sexual activity,” said HSI Tampa Assistant Special Agent in Charge Michael B. Cochran. “Thanks to the investigative work of HSI special agents and our law enforcement partners at the Polk County Sheriff’s Office, this criminal will now be behind bars.”
“Our top priority is protecting our children from those who would harm them,” said Polk County Sheriff Grady Judd. “The United States Attorney’s Office for the Middle District of Florida and Homeland Security share this priority. Mr. Terry is not going to hurt any children while in prison. We are proud to have been a part of this investigation.”
This case was investigated by Homeland Security Investigations and the Polk County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Lisa M. Thelwell.
It is another case 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 the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Convicted Felon Charged with Federal Drug and Firearms CrimesRead the Press Release
St. Louis – Gary Dewayne Willard, 48, of St. Louis, MO, was charged by a federal complaint on Tuesday. Willard was charged with possession with intent to distribute a controlled substance, felon in possession of one or more firearms, and possession of a firearm in furtherance of a drug trafficking crime.
According to the complaint, Willard was previously the subject of a federal investigation and was indicted on May 2, 2019, along with his co-Defendant Paul Garcia, for conspiracy to distribute over 50 grams of methamphetamine and possession of a firearm in furtherance of a drug trafficking crime. On March 3, 2020, Willard pleaded guilty to conspiracy to distribute methamphetamine in that case, and was allowed to remain on bond, subject to conditions of pretrial release. Willard’s sentencing in that case is currently set for July 9, 2020.
After learning that Willard was involved in the continued distribution of methamphetamine while on pre-trial release, on June 26, 2020, federal law enforcement officers obtained a search warrant for Willard’s residence.
On June 30, 2020, the officers executed the warrant at Willard’s residence where Willard was present, along with three (3) other individuals. Officers found and seized three (3) firearms, including an H&K 9mm semi-automatic handgun loaded with 12 live cartridges at the foot of Willard’s bed, a Taurus Judge .45 Long Colt/410 revolver loaded with five live cartridges within a large safe located at the foot of Willard’s bed, and an unloaded Davis Industries .380 caliber semi-automatic handgun bearing a defaced serial number, which was located within a small, open safe sitting on top of the larger safe. Officers also located over 500 rounds of miscellaneous ammunition on a shelf in the living room.
Also located within in the larger safe were clear plastic bags containing over 140 grams of suspected methamphetamine, as well as clear plastic bags containing various pills and powders also suspected to be controlled substances. The Officers also recovered a total of $72,003.00 in United States Currency in the bedroom. Throughout the living room and kitchen, Officers recovered materials commonly used in the manufacture and production of methamphetamine.
These current charges are being investigated by the Federal Bureau of Investigation, Jefferson County Sheriff’s Department and the St. Louis County Police Department.
A criminal complaint is merely an accusation. The defendant is presumed innocent until proven guilty in a court of law.
Connecticut Man Arrested, Charged, and Detained for Distributing Child Pornography Videos to Online GroupRead the Press Release
WASHINGTON – Edward Galpin was detained yesterday pending trial on charges of conspiracy to distribute and distribution of child pornography, announced Acting United States Attorney Michael R. Sherwin and Special Agent in Charge James A. Dawson of the Federal Bureau of Investigation (FBI) Washington Field Office’s Criminal Division. This case was investigated by special agents of the Federal Bureau of Investigation’s Washington Field Office and the Metropolitan Police Department's Child Exploitation and Human Trafficking Task Force with assistance from the Federal Bureau of Investigation’s New Haven Field Office.
Galpin, age 38, of Stratford, Connecticut, was arrested after he was charged in a criminal complaint filed in the District of Columbia last week. The complaint alleges that, in October of 2019, Galpin joined an online messaging group devoted to the exchange of child pornography and shared numerous sexually explicit videos of young children with the group. The complaint alleges that Galpin also had private conversations with an undercover officer working in the District of Columbia, sending the undercover officer a video of a female (under age 18) undressing. Galpin told the undercover that he had used a spy camera to make this recording.
The complaint further alleges that, in June, Galpin reached out to a different undercover officer, who was in a Connecticut-based teen chatroom. The undercover officer told Galpin s/he was a 14-year old female. Galpin set up a meeting with this purported 14-year old on June 25, 2020. When asked whether he had done this before, Galpin responded, “twice.” Galpin arrived at the arranged meeting place, went through a drive-through in the area, and then drove to a nearby store.
Galpin was arrested later that same day and made an initial appearance on the complaint in the District of Connecticut. At a hearing yesterday, United States Magistrate Judge Sarah A.L. Merriam detained Galpin pending trial. He has a preliminary hearing in the District of Connecticut set for July 9, 2020.
A criminal complaint is a formal accusation of criminal conduct for purposes of establishing probable cause, not evidence of guilt. A defendant is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law.
The case is being prosecuted by Assistant U.S. Attorney April Russo with paralegal contractor Kenny Nguyen and with assistance from the U.S. Attorney’s Office in the District of Connecticut.
Chief Operating Officer Sentenced for $25 Million Investment FraudRead the Press Release
NORFOLK, Va. – A Florida woman was sentenced today to 10 years in prison and ordered to pay over $25 million in restitution for engaging in an investment fraud conspiracy that victimized over 300 investors and caused approximately $25 million in losses.
“Raeann Gibson and her co-conspirators orchestrated and facilitated a massive scheme to defraud mostly elderly investors of approximately $25 million,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia. “In the end, Gibson and her co-conspirators left a wake of financial devastation that wiped out hundreds of vulnerable victims located throughout the country, including massive losses to victims located here in Hampton Roads.”
According to court documents, Gibson, 48, of Palm City, along with codefendant Daryl Bank and others, engaged in a conspiracy by which they operated an investment fraud scheme from approximately January 2012 through July 2017 in the Tidewater area and across the country. Gibson, who served as Chief Operating Officer of Dominion Investment Group, and her conspirators engaged in a nationwide fraudulent investment scheme that deceived hundreds of unsuspecting investors – most at or near retirement age – by convincing them to invest in companies owned and controlled by Daryl Bank. At Bank’s direction, Gibson then stole outright significant portions of investment funds to fund their criminal enterprise and Bank’s lavish lifestyle. For example, Bank caused numerous material misrepresentations and omissions to be made to several investors, including BC, who was blind and in his late 70s at the time he invested $20,000 of his retirement funds in an investment fraud called Prime Spectrum. Immediately upon receipt of BC’s funds, Bank and Gibson misappropriated 70 percent of the investment funds.
Gibson facilitated and supported this scheme in a variety of ways including creating numerous shell companies, laundering investment funds through multiple accounts, and speaking with, and often calming, uncomfortable investors who called with questions about their investments. At Bank’s direction, she stole millions of dollars from investors to pay herself and to support Bank’s lavish lifestyle. Gibson routinely wired funds to pay for Bank’s $100,000 monthly American Express bills and, in one instance, facilitated Bank’s purchase of an 8-carat diamond ring for Bank’s wife. This scheme was vast in its scope and defrauded over 300 investors and caused approximately $25 million in losses.
Combatting elder abuse and financial fraud targeted at seniors is a key priority of the Department of Justice. Elder abuse is an intentional or negligent act by any person that causes harm or a serious risk of harm to an older adult. It is a term used to describe five subtypes of elder abuse: physical abuse, financial fraud, scams and exploitation, caregiver neglect and abandonment, psychological abuse, and sexual abuse. Elder abuse is a serious crime against some of our nation’s most vulnerable citizens, affecting at least 10 percent of older Americans every year. Together with our federal, state, local and tribal partners, the Department of Justice is steadfastly committed to combatting all forms of elder abuse and financial exploitation through enforcement actions, training and resources, research, victim services, and public awareness. This holistic and robust response demonstrates the Department’s unwavering dedication to fighting for justice for older Americans.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; Martin Culbreth, Special Agent in Charge of the FBI’s Norfolk Field Office; Kelly R. Jackson, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI); and Peter R. Rendina, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement after sentencing by U.S. District Judge Raymond A. Jackson. Assistant U.S. Attorneys Melissa E. O’Boyle, Andrew C. Bosse, and Elizabeth M. Yusi 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. 2:17-cr-126.
Carthage Couple Pleads Guilty to Embezzling from Joplin BusinessesRead the Press Release
SPRINGFIELD, Mo. – A Carthage, Missouri, husband and wife have pleaded guilty in federal court to their involvement in a four-year-long scheme to embezzle from a Joplin, Missouri, business owner.
Jeanine A. Poe, 51, and William Poe, 57, pleaded guilty before U.S. Magistrate Judge David P. Rush on Tuesday, June 30, in separate but related cases. Jeanine Poe pleaded guilty to one count of wire fraud. William Poe pleaded guilty to one count of misprision of a felony.
Jeanine Poe was hired to manage two Doc Stop convenience stores in Joplin. The owner had little to do with the businesses, according to the plea agreements, except to invest his money into both to ensure their financial success. In 2015, Jeanine Poe told the owner the businesses weren’t doing well financially and asked him to invest even more money. The owner invested much of his salary to financially support the businesses.
In October 2019, after the businesses continued to lose money, the owner asked a friend to review the financial affairs of the businesses and learned that Jeanine Poe was embezzling money from his businesses. She had obtained at least seven credit cards in the name of the businesses, conducted transactions on the credit cards, and paid for such transactions with funds from the businesses. All of the credit cards opened by Jeanine Poe had reached their maximum allowable credit limit, and many times were used by Jeanine and William Poe for expenses that were entirely unrelated to the operation of the businesses (such as trips and personal expenses). One of the credit cards was in William Poe’s name. The owner also discovered that large amounts of cash were being fraudulently electronically transferred from his businesses’ bank account to Jeanine Poe’s personal bank account.
William Poe admitted that he was aware of his wife’s embezzlement. He concealed these thefts by convincing the owner his wife was not embezzling, when he knew she was stealing from him. His concealment allowed Jeanine Poe to continue to conduct fraudulent credit card transactions and withdrawals from the business accounts.
Under federal statutes, Jeanine Poe is subject to a sentence of up to 20 years in federal prison without parole. William Poe is subject to a sentence of up to three years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the FBI.
California man pleads guilty to threats during Ohio State football gameRead the Press Release
COLUMBUS, Ohio – Daniel Lee Rippy, 29, of Livermore, California pleaded guilty today to threatening a shooting at The Ohio State University and vowing to hurt football players. He sent the online threat during the 2018 football game between Ohio State and Michigan, which was played in Columbus.
According to court documents, Rippy sent a message over Facebook stating that the school was going to get shot up and “I’m seriously going to hurt the students and all the players from the football team.” He sent several other threats to injure or kill players, their family members and the head coach.
Law enforcement officials at the stadium were placed on high alert and re-allocated resources to investigate the threat, ultimately determining that Rippy was in California at the time he made the threat and did not pose an immediate danger.
“Graphic threats of violence against anyone, but especially threats during high-profile events, are taken seriously and will be prosecuted,” said David M. DeVillers, United States Attorney for the Southern District of Ohio.
“Threats of violence are very dangerous and can divert law enforcement resources from local emergencies,” stated FBI Cincinnati Special Agent in Charge Chris Hoffman. “I commend The Ohio State University Police Division, the Joint Terrorism Task Force, and our law enforcement partners who aggressively investigated this case and work each day to keep the community safe.”
FBI agents arrested Rippy in California in December 2019 and he was released on bond, but he was re-arrested and U.S. Marshals transported him to Columbus after he failed to appear for a scheduled appointment with the court. Rippy today pleaded guilty to one count of Threat in Interstate Communications, which carries a maximum statutory penalty of five years in prison and a $250,000 fine. The court will conduct a pre-sentence investigation and determine an appropriate sentence according to federal sentencing guidelines and the defendant’s acceptance of responsibility, among other factors. He remains in custody pending sentencing.
Joining Mr. DeVillers and SAC Hoffman in announcing the plea was Ohio State University Police Chief Kimberly Spears-McNatt. The plea was entered before U.S. Magistrate Judge Norah McCann King. Assistant U.S. Attorney Jessica Knight represented the United States in the case which was investigated by the FBI Joint Terrorism Task Force.
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California Woman Sentenced for Fraud Scheme Against ImmigrantsRead the Press Release
NORFOLK, Va. – A California woman was sentenced today to two years in prison for running a scheme to defraud Iranian nationals out of over $120,000 in exchange for guaranteed United States immigration benefits.
According to court documents, Helen Kennedy, 61, of Santa Ana, a naturalized United States citizen of Iranian descent, advertised her immigration business in Iranian publications, Iranian television, and in online advertisements. Kennedy’s ads were all placed in Farsi, the language of Iran, and she used her Iranian maiden name to advertise her business. Promising citizenship, green cards, and work authorization, Kennedy enticed Iranian nationals to become her clients in exchange for thousands of dollars in fees.
Court documents indicate that Kennedy also falsely indicated she was an immigration attorney. Kennedy was neither an attorney, nor did she have authorization to file any application on behalf of another person with the U.S. Citizenship and Immigration Service (USCIS). In fact, Kennedy never even attempted to file a single application with the USCIS for any of her clients. Instead, Kennedy strung her clients along promising them the benefits would soon be coming, all while continuing to collect fees from them.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Raymond Villanueva, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE), made the announcement after sentencing by Senior U.S. District Judge Rebecca Beach Smith. Assistant U.S. Attorney Joseph L. Kosky 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-158.
California Man Sentenced to 30 Years in Federal Prison for Child Pornography CrimesRead the Press Release
Ft. Lauderdale, FL. – U.S. District Judge James I. Cohn sentenced Adrian Fierros, 22, from California, to 30 years in federal prison, followed by a lifetime of supervised release, for coercing young girls into taking and sending him sexually explicit photographs and videos of themselves. Making good on a threat to one of his victims, Fierros shared nude photographs of the 11-year-old girl with six of her school friends, one of whom was nine-years-old.
Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida, and, George L. Piro, Special Agent in Charge, FBI, Miami Field Office, make the announcement.
According to court records, Fierros contacted his victims on social media. Most of the children were under 14-years-old. Fierros’ tactic with the young girls was to “friend” them on social media, tell them they were pretty, and have the girls send him suggestive photographs of themselves. Then, Fierros would extort the minors into taking and sending him nude photographs, in poses that he selected. Defendant threatened the minors with sharing their nude pictures with their family and friends if the minors stopped sending him increasingly explicit sexual images. When one of his 11-year-old victims stopped communicating with Fierros, he did just that. He sent nude pictures of the minor to her school friends, whom he identified through the victim’s social media contacts.
One of Fierros’ victims told her parents about Fierros’ demands. This prompted a South Florida law enforcement investigation. Officers located Fierros in California and arrested him. On January 8, 2020, Fierros pled guilty in South Florida federal court to producing child pornography, distributing child pornography, and on-line extortion.
U.S. Attorney Fajardo-Orshan commends the investigative efforts of FBI, and, in particular, FBI’s Child Exploitation and Human Trafficking Task Force who worked in partnership with the Coral Springs Police Department on the matter. The U.S. Attorney also thanks FBI Los Angeles, and FBI Headquarters, Operation Rescue Me for their assistance. Special Assistant United States Attorney M. Katherine Koontz prosecuted this case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
California Genetic Testing Company Agrees to Pay $8.25 Million to Resolve False Claims Allegations; Paducah, Ky, Area Hospital Also SettlesRead the Press Release
LOUISVILLE, Ky. – United States Attorney Russell Coleman today announced an $8.25 million settlement with Agendia, Inc., a molecular diagnostics testing company based in Irvine, California, for an alleged nationwide scheme to bill Medicare for Agendia’s flagship genetic test, MammaPrint. The MammaPrint test analyzes the activity of certain genes within a breast cancer tumor to predict the risk of breast cancer recurrence in patients.
“When all the legal jargon is stripped away, this was about delaying the submission of breast cancer screening tests at the expense of our vitally important Medicare program,” said U.S. Attorney Russell Coleman. “From our largest urban hospitals to medical facilities in the Purchase Region, this conduct will not be tolerated in the Western District of Kentucky.”
The allegations resolved by this settlement were first brought in a lawsuit filed by former employee of Lourdes Hospital, located in Paducah, Kentucky, 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 qui tam case is captioned United States ex rel. Flick v. Agendia, Inc. and Mercy Health Partners – Lourdes, Inc. (3:15-cv-050-JRW). The United States intervened in the Civil Action for purposes of settlement in May 2020.
The United States contends that Agendia conspired with hospitals to artificially delay ordering the MammaPrint genetic assay in order to circumvent Medicare’s 14-Day Rule (which establishes who may bill Medicare for certain lab service). During the time period covered by the settlement, Medicare’s 14-Day Rule prohibited laboratories from separately billing Medicare for tests performed on specimens if a physician ordered the test within 14 days of the patient’s discharge from a hospital, regardless as to whether the patient was in an outpatient or inpatient setting. However, if the test was performed 14 days after discharge, then Medicare’s 14-Day Rule permitted laboratories to bill Medicare directly for the test.
The United States alleges Agendia engaged in a nationwide scheme to circumvent Medicare’s 14-Day Rule so that it could inappropriately bill Medicare directly for its MammaPrint tests that were ordered within 14 days. The United States contends that Agendia perpetrated this scheme in one of two ways:
- One way involved Agendia frequently refusing to perform MammaPrint tests if a Medicare patient had been discharged less than 14 days earlier. Agendia would cancel the order and then ask a physician to resubmit the order after the 14-day period had lapsed.
- A second way used what Agendia employees coined a “Medicare hold” system, whereby Agendia automatically held orders for Medicare patients at the time they were received, refusing to test the specimens until 14 days after the patient’s discharge. For orders placed in this “Medicare hold,” Agendia personnel set calendar reminders for the fourteenth day after the patient had been discharged. Agendia personnel then contacted the doctor who had ordered testing, and asked the doctor to “confirm” the order. Agendia then used the “confirmed” date for purposes of billing Medicare instead of the date the test was originally ordered.
In a separate settlement, the United States contended that Mercy Health – Lourdes Hospital in Paducah, Kentucky, worked in concert with Agendia to circumvent the date of service rules. Following breast biopsy procedures, Lourdes Hospital held tissue specimens for 14 days or longer after patients were discharged before sending them to Agendia for testing. Despite knowing the specimen should be immediately sent to Agendia, Lourdes held the test orders for 14 days or longer in order to allow Agendia to separately bill Medicare for the test. This also meant that Lourdes avoided paying Agendia for the testing. In 2017, Lourdes Hospital paid the United States $211,039.28 to settle these false claims allegations.
The matter was handled by Assistant United States Attorneys Hannah C. Choate and Benjamin S. Schecter. The investigation was conducted by the Office of Inspector General Health and Human Services.
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Bourne Man Charged with Child Pornography OffensesRead the Press Release
BOSTON – A Bourne man was arrested today and charged with receipt and possession of child pornography.
Bryan C. Mileikis, 33, was charged in a criminal complaint with one count of receipt of child pornography and one count of possession of child pornography. Mileikis will make an initial appearance via videoconference in federal court in Boston this afternoon.
According to the charging documents, on June 11, 2019, law enforcement executed a search warrant at Mileikis’ home and seized an iPhone belonging to Mileikis. A forensic examination of the phone revealed images and videos depicting child pornography.
The charge of receipt of child pornography provides for a mandatory minimum sentence of five years and up to 20 years in prison, a mandatory minimum of five years and up to life of supervised release and a fine of $250,000. The charge of possession of child pornography provides for a sentence of up to 20 years in prison, a mandatory minimum of five years and up to life of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based on the United States Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Michael Shea, Acting Special Agent in Charge of the Homeland Security Investigations in Boston; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigations, Boston Field Division; and Bourne Chief of Police Dennis Woodside made the announcement today. Assistant U.S. Attorney Suzanne Sullivan Jacobus of Lelling’s Major Crimes Unit is prosecuting the case.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identity and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Bergen County Man Arrested in $1.5 Million Investment Fraud SchemeRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man was arrested today for his alleged role in an investment scheme that fraudulently obtained $1.525 million from at least three families from 2017 through 2019, U.S. Attorney Craig Carpenito announced.
Matthew Benjamin, 53, of Englewood, New Jersey, is charged by complaint with two counts of wire fraud and one count of securities fraud. He is scheduled to make his initial appearance today by videoconference before U.S. Magistrate Judge Cathy L. Waldor.
According to documents filed in this case and statements made in court:
From May 2017 through August 2019, Benjamin falsely represented to at least three families that his company, Clear Solutions Group LLC, had lucrative contracts to purchase closeout or excess cosmetic inventory from Company A, which he would then resell at a mark-up to Company B. Benjamin told the victims that he had access to these closeout goods through his contacts in the cosmetics and fragrance industry, which he purportedly made through his work at his family’s cosmetic wholesale and distribution business prior to starting Clear Solutions Group. Benjamin induced the victims to provide him with money to purchase the inventory from Company A and promised significant profits in return. Instead of investing the money as he promised, Benjamin misappropriated the investor’s money for his own use and benefit.
Benjamin provided the victims with falsified documents, including fake purchase orders, invoices, promissory notes and bank records showing inflated assets of Clear Solutions Group. To lull victims and induce them to continue investing, Benjamin provided them with documents that purported to detail the investors’ profits.
Benjamin misrepresented to certain investors that portions of their profits on the investment contracts were being reinvested in additional deals to purchase and sell cosmetics, which in turn would generate more profits. From time to time, Benjamin made payments to the investors that were purportedly their profits on certain cosmetics contracts.
In reality, Benjamin did not purchase or sell cosmetics with the money invested by the victims. Instead, Benjamin misappropriated the investors’ money by making payments to other investors in Clear Solutions Group, which were characterized as those investors’ profits from the nonexistent cosmetic contracts, thereby enabling Benjamin to continue to perpetuate his fraudulent scheme; and by funding Benjamin’s and his family’s lifestyle, including paying for car and house rental payments, food, international travel, legal fees, technology equipment, and summer camp tuition for his family members. The victims’ losses from the fraud perpetrated by Benjamin collectively totaled approximately $1 million.
The wire fraud counts are each punishable by a maximum of 20 years in prison and a fine of $250,000, or twice the gross amount of gain or loss from the offense, whichever is greater. The securities fraud count is punishable by a maximum of 20 years in prison and a fine of $5 million.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark, with the investigation leading to today’s charges. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Director Marc Berger, for its assistance. The U.S. Securities and Exchange Commission (SEC) also filed a civil complaint against Benjamin today based on the same conduct.
The government is represented by Assistant U.S. Attorney Jennifer Kozar of the Economic Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Baton Rouge Man Sentenced to 78 Months in Federal Prison for Gun and Drug ChargesRead the Press Release
United States Attorney Brandon J. Fremin announced that U.S. District Judge John W. deGravelles sentenced John Butler, age 31, of Baton Rouge, Louisiana, to 78 months in federal prison following his convictions for possession with the intent to distribute heroin and possession of a firearm in furtherance of a drug trafficking crime. The Court further sentenced Butler to serve three years of supervised release following his term of imprisonment and ordered that the firearm involved be forfeited.
According to admissions made as part of his guilty plea, on April 3, 2019, Baton Rouge Police Department conducted a traffic stop after observing a vehicle traveling well above the posted speed limit and having extremely dark window tint on the side and rear windows and a tinted cover on the license plate in violation of state and local traffic laws.
The BRPD officer smelled the strong odor of marijuana emanating from inside of the vehicle as the driver rolled down the window. The driver and Butler were removed from the vehicle at which time a small plastic baggie containing heroin in the front passenger door was observed in plain view. Upon further search of the vehicle, a loaded firearm was located on the front passenger-side floorboard near the center console.
U.S. Attorney Brandon Fremin stated, “This conviction and sentence reaffirms our commitment to investigating, arresting, and prosecuting convicted criminals who decide to illegally possess firearms and sell drugs. Great credit goes to our partnership with local authorities for this result. I want to thank our prosecutor, the ATF, and the Baton Rouge Police Department for their work on this case.”
“The sentence imposed today sends a message to individuals who are prohibited from possessing firearms that they will be held accountable for their actions,” said ATF New Orleans Field Division Special Agent in Charge Kurt Thielhorn. “ATF will remain focused on providing a safe environment to the communities and neighborhoods that are affected by crime.”
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Baton Rouge Police Department. It was prosecuted by Assistant United States Attorney Demetrius D. Sumner.
Arizona Man Sentenced to 10 Years in Prison for Facilitating Mexico to Pittsburgh Cocaine PipelineRead the Press Release
PITTSBURGH, PA – Krystian Zarate was sentenced to 10 years (120 months) in prison for conspiring to distribute five kilograms or more of cocaine, United States Attorney Scott W. Brady announced today.
Zarate, 28, of Rio Rico, Arizona, was sentenced by United States District Judge J. Nicholas Ranjan. Judge Ranjan ordered Zarate to serve five years of supervised release following his prison sentence.
Zarate was a member of an international drug trafficking conspiracy that extended from Mexico to Pittsburgh as well as to locations in the New York City area and New Jersey. He was a conduit between a Mexican supplier and American drug traffickers. Between August and October 2018 alone, he coordinated the supply of nearly 50 kilograms of cocaine to Western Pennsylvania and forwarded hundreds of thousands of dollars of drug trafficking proceeds to Mexico.
Assistant United States Attorney Craig W. Haller prosecuted this case on behalf of the United States.
The Drug Enforcement Administration, the Internal Revenue Service, the federal Bureau of Prisons, and the Pennsylvania Office of Attorney General led the multi-agency investigation that also included the United States Postal Inspection Service, the Beaver County District Attorney’s Office, the Department of Homeland Security/Homeland Security Investigations, the Pittsburgh Police Department, the United States Marshals Service, the Pennsylvania State Police, the Munhall Police Department, the Robinson Township Police Department, the McKees Rocks Police Department, the Stowe Township Police Department, the Etna Police Department, and the Erie County District Attorney’s Office.
This case is part of the Organized Crime Drug Enforcement Task Force program, known as OCDETF. OCDETF was established in 1982 to support comprehensive investigations and prosecutions of major drug trafficking and money laundering organizations. It is the keystone of the drug reduction strategy of the Department of Justice. By combining the resources and expertise of federal agencies and their state and local law enforcement partners, OCDETF identifies, disrupts, and dismantles the most serious drug trafficking, money laundering, and transnational criminal organizations.
Acting Manhattan U.S. Attorney Announces $678 Million Settlement of Fraud Lawsuit Against Novartis Pharmaceuticals for Operating Sham Speaker Programs Through Which It Paid over $100 Million to Doctors to Unlawfully Induce Them to Prescribe Novartis DrugsRead the Press Release
Audrey Strauss, the Acting United States Attorney for the Southern District of New York, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), Gregory E. Demske, Chief Counsel to the Inspector General of the United States Department of Health and Human Services, Office of the Inspector General (“HHS-OIG”), Scott J. Lampert, Special Agent in Charge of HHS-OIG’s New York Regional Office, Leigh-Alistair Barzey, Special Agent in Charge of the Northeast Field Office of the U.S. Department of Defense - Office of Inspector General’s Defense Criminal Investigative Service (“DCIS”), and Christopher Algieri, Special Agent in Charge the Department of Veterans Affairs, Office of Inspector General, Northeast Field Office (“VA OIG”), announced today that the United States has settled a civil fraud lawsuit against NOVARTIS PHARMACEUTICALS CORPORATION (“NOVARTIS”), part of Swiss drug manufacturer Novartis International AG, alleging that NOVARTIS violated the federal False Claims Act and Anti-Kickback Statute by providing doctors with cash payments, recreational outings, lavish meals, and expensive alcohol to induce them to prescribe NOVARTIS cardiovascular and diabetes drugs reimbursed by federal healthcare programs. Specifically, the Government alleged that NOVARTIS organized tens of thousands of sham educational events at high-end restaurants and other venues, paid exorbitant speaker fees to doctors who gave no meaningful presentations, and provided expensive meals and alcohol to doctor attendees and their guests. When those doctors then prescribed NOVARTIS’s cardiovascular and diabetes drugs, federal healthcare programs paid hundreds of millions of dollars in reimbursements for these tainted prescriptions. As part of the settlement, approved today by U.S. District Judge Paul G. Gardephe, NOVARTIS will pay the United States and various States a total of $678 million. NOVARTIS also made extensive factual admissions in the settlement and agreed to strict limitations on any future speaker programs, including reductions to the amount it may spend on such programs.
Acting U.S. Attorney Audrey Strauss said: “For more than a decade, Novartis spent hundreds of millions of dollars on so-called speaker programs, including speaking fees, exorbitant meals, and top-shelf alcohol that were nothing more than bribes to get doctors across the country to prescribe Novartis’s drugs. Giving these cash payments and other lavish goodies interferes with the duty of doctors to choose the best treatment for their patients and increases drug costs for everyone. This Office will continue to be vigilant in cracking down on kickbacks, however they may be dressed up, throughout the pharmaceutical industry.”
FBI Assistant Director-in-Charge said: “Not only did Novartis incentivize doctors to host these speaking events, reps bribed the doctors to write more prescriptions of the company’s drugs to give Novartis an advantage over competitors within their field. Greed replaced the responsibility the public expects from those who practice medicine, not to mention the potential for an erosion of trust in the pharmaceutical industry as a whole. This conduct was reprehensible and dishonest. Patients and consumers deserve better, and our office will continue to pursue any similar allegations of this kind.”
HHS-OIG Chief Counsel Gregory Demske said: “OIG will continue to work closely with the Department of Justice to investigate and pursue kickbacks regardless of the form they take. To address Novartis’s conduct and the widely-recognized compliance risks associated with paid speaker programs, the CIA requires Novartis to make fundamental changes to its speaker program practices. Under the CIA, Novartis must significantly reduce the number of programs and the number of paid physicians, and can no longer pay for inherently-risky in-person programs.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “The various kickback schemes employed by Novartis threatened the impartiality of medical decision-making and the financial integrity of Medicare and Medicaid. Greed must never play a part in patient care. Along with our law enforcement partners, HHS-OIG will continue to hold pharmaceutical companies accountable when they step over the line to maximize their market share at the expense of taxpayer-funded federal health care programs.”
DCIS Special Agent in Charge Leigh-Alistair Barzey said: “Protecting the integrity of TRICARE, the healthcare system for military members and their dependents, is a top priority for the DCIS. When pharmaceutical corporations offer kickbacks and engage in other fraudulent activity to induce medical professionals to prescribe their products, they undermine the integrity of TRICARE and other healthcare plans. The settlement agreement announced today is the result of a joint effort and demonstrates the DCIS’s ongoing commitment to work with its law enforcement partners and the U.S. Attorney’s Office, to investigate and prosecute companies that seek to profit by engaging in schemes such as those identified in this case.”
VA-OIG Special Agent in Charge Christopher Algieri said: “Kickback schemes undermine our federal healthcare programs, including healthcare benefits administered by the U.S. Department of Veterans Affairs. We will continue to work collaboratively with our law enforcement partners and the U.S. Attorney’s Office to protect the quality of veterans’ healthcare and integrity of VA’s programs.”
In its Complaint in this lawsuit, the Government alleged that between 2002 and 2011 (the “Relevant Period”), NOVARTIS hosted tens of thousands of speaker programs and related events under the guise of providing educational content, when in fact the events served as nothing more than a means to provide bribes to doctors. NOVARTIS paid physicians honoraria, purportedly as compensation for delivering a lecture regarding a NOVARTIS medication, but, as NOVARTIS knew, many of these programs were nothing more than social events held at expensive restaurants, with little or no discussion about the NOVARTIS drugs. Indeed, some of the so-called speaker events never even took place; the speaker was simply paid a fee in order to induce the speaker to prescribe NOVARTIS drugs.
The Government’s complaint further alleged that NOVARTIS sales representatives, on the instruction of their managers, selected high-volume prescribers to serve as the paid “speakers” at these events with the intent to induce them to write more – or keep writing many – NOVARTIS prescriptions. The sales representatives then pressured the speakers to increase their prescriptions of NOVARTIS drugs, and often dropped doctors from the program if they failed to do so. Further, the Government alleged that this widespread kickback scheme was the result of decisions made by top management at NOVARTIS’s North American headquarters in New Jersey.
As part of the settlement, NOVARTIS admitted and accepted responsibility for certain conduct alleged by the Government including the following:
- Some NOVARTIS sales representatives intended the honoraria paid to doctors to be an inducement to these doctors to prescribe more NOVARTIS drugs.
- NOVARTIS paid many high-prescribing doctors tens or hundreds of thousands of dollars in honoraria.
- In thousands of instances, NOVARTIS paid for the same group of doctors, often colleagues or friends, to have dinners together repeatedly. Doctors in these groups would sometimes rotate being the speaker and receiving the honorarium payment.
- NOVARTIS sales representatives hosted programs at some of the most expensive restaurants in the United States, intending to induce the doctors in attendance to continue to write NOVARTIS prescriptions. These restaurants included some of the most high-end restaurants in the country, such as Masa, Daniel, Gramercy Tavern, Il Mulino, Babbo, Peter Luger, Le Bernardin, and Eleven Madison Park in New York City; Charlie Palmer’s in Washington, D.C.; Morton’s Steakhouse and the Four Seasons in Chicago; Joe’s Stone Crab in Miami; Abacus, Nobu, and the Four Seasons in Dallas; Gary Danko in San Francisco; Patina and Matsuhisa in Los Angeles; Grill 225 in South Carolina; and Commander’s Palace in New Orleans.
- Throughout the Relevant Period, more than 12,000 speaker programs and roundtables had meal spends that were considerably in excess of the $125 per person limit set by NOVARTIS’s compliance policies.
- For example, in 2008, at a speaker program held at Ruth’s Chris Steakhouse in Pikesville, Maryland, NOVARTIS held an event with only one doctor in the audience for the speaker’s presentation, at which it spent $448 per person on food and alcohol, in addition to the $1,000 honorarium payment provided to the speaker.
- During the Relevant Period, some NOVARTIS sales representatives conducted programs at venues where the focus was on entertainment, including fishing trips, sporting events, wine tastings, and hibachi tables. NOVARTIS conducted hundreds of events at wineries and golf clubs.
- Sales representatives also conducted events at Hooters.
- At many of NOVARTIS’s speaker programs, the sales representative hosting the event did not require the speaker, who was being paid an honorarium, to deliver a presentation at all, or allowed the speaker to click through the power point presentation in a matter of minutes. In those instances, the majority of the time was spent socializing and enjoying dinner.
- NOVARTIS in a number of instances paid doctors honoraria for purportedly speaking at events that never took place.
- On Long Island, at least one NOVARTIS sales representative organized fraudulent speaker programs by arranging for a restaurant to create fake receipts to make it appear that a dinner had taken place, and then using the budgeted funds to purchase gift cards that were distributed to high-prescribing doctors. Doctors were then also paid honoraria for “speaking” at these sham events.
- NOVARTIS’s compliance training materials suggested that emails advocating illegal kickbacks were improper in part because they “reflect[] ignorance of the import of written communications, and put[] the Company at risk.” NOVARTIS’s Chief Compliance Officer also stated in training presentations: “If you don't have to write it, don’t. Consider using the phone.”
Under the settlement, NOVARTIS will pay a total of $678,000,000, of which (i) $591,442,008.92 will be paid to the United States as False Claims Act damages, (ii) $38,406,717.42 will be forfeited to the United States as proceeds of violations of the Anti-Kickback Statute; and (iii) $48,151,273.66 will be paid to various States.
The settlement also requires NOVARTIS to reform its business practices. Contemporaneously with this settlement, NOVARTIS has entered into a corporate integrity agreement (“CIA”) with HHS-OIG that will significantly curtail the company’s ability to conduct speaker programs going forward, and will dramatically reduce the amount of money that NOVARTIS may spend on such programs. Under the five-year CIA, NOVARTIS speaker programs are only permitted under limited circumstances and must be conducted in a virtual format such as a webinar. The CIA also requires multi-faceted monitoring of NOVARTIS’s operations and obligates company executives and Board members to certify compliance annually with the terms of the CIA. The strict limitations on speaker programs imposed by the CIA are also incorporated into the settlement. The settlement provides procedures for the Government to raise violations of these requirements with the district court.
This matter was initially brought to the Government’s attention by a whistleblower who filed a complaint pursuant to the False Claims Act.
Ms. Strauss praised the investigative work of the FBI, HHS-OIG, and DCIS. She also thanked the Commercial Litigation Branch of the U.S. Department of Justice’s Civil Division in Washington, D.C., and the Office of Counsel to the Inspector General of HHS for their critical assistance in this case.
The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Jeannette Vargas, Pierre Armand, Mónica Folch, Jacob Lillywhite, Jennifer Jude, and Jacob Bergman are in charge of the case, and Assistant U.S. Attorney Alex Wilson of the Money Laundering and Transnational Criminal Enterprises Unit is responsible for the forfeiture aspects of the case.
A Topeka City Employee Indicted on Federal Child Porn ChargesRead the Press Release
KANSAS CITY, KAN. – A man who works for the city of Topeka was indicted today on federal child pornography charges, U.S. Attorney Stephen McAllister said.
Travis Bronson, 39, Lawrence, Kan., was charged with one count of distributing child pornography and one count of possessing child pornography. Bronson works as a video producer for the city of Topeka.
The crimes are alleged to have occurred Nov. 15, 2017, and Feb. 1, 2018, in Douglas County, Kan.
In a separate case, another Kansas man was indicted today on child pornography charges.
Charles Shepherd, 76, Bonner Springs, Kan., was charged with one count of distributing child pornography and one count of possessing child pornography. The crimes are alleged to have occurred June 11, 2016, and Feb. 16, 2018, in Wyandotte County, Kan.
If convicted, both defendants could face a penalty of not less than five years and not more than 20 years in federal prison and a fine up to $250,000 on the distribution counts and up to 10 years and a fine up to $250,000 on the possession count.
The FBI investigated both cases. Assistant U.S. Attorney Kim Flannigan is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Tuesday 30 June 2020
West Hartford Pharmacy to Pay $150K to Settle Controlled Substances Act AllegationsRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, and Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration for New England, today announced that SUBURBAN PHARMACY LTC INC., (“Suburban Pharmacy”), a pharmacy located in West Hartford, Connecticut, has entered into a civil settlement with the federal government in which it will pay a penalty of $150,000 to resolve allegations that it violated civil provisions of the Controlled Substances Act.
The allegations against Suburban Pharmacy include claims that it failed to keep complete and accurate records regarding the receipt and dispensing of controlled substances, and that it failed to maintain effective controls against the diversion of controlled substances.
Suburban Pharmacy dispenses prescription drugs, including controlled substances, to approximately 200 long-term care centers, assisted living facilities, group homes, and other in-patient facilities. In October 2018, the DEA commenced an investigation of Suburban Pharmacy following a reported loss of more than 6,000 dosage units of alprazolam 2mg, a Schedule IV controlled substance. An internal investigation indicated that employee theft likely contributed to the loss. The DEA then conducted an audit of Suburban Pharmacy’s inventory of controlled substances, which revealed a total discrepancy of more than 22,000 doses of controlled substances. The government alleges that this discrepancy is due in part to lax controls against diversion, and the failure to maintain accurate inventories of the controlled substances Suburban Pharmacy received, sold, dispensed, or otherwise disposed of.
Congress passed the Controlled Substances Act (“CSA”) to combat the illegal distribution and abuse of controlled substances, including prescription medications. Under the CSA, entities registered with the DEA who purchase, distribute, dispense, transfer or sell controlled substances must comply with strict inventory and documentation requirements. Regulations promulgated under the CSA require that each DEA registrant, including pharmacies, maintain complete and accurate records of each substance manufactured, received, sold, delivered, dispensed or otherwise disposed of by the registrant for two years. These requirements play a vital role in ensuring the appropriate handling, accounting and distribution of controlled substances.
“It is no secret that there has been a tremendous amount of damage caused by prescription drug abuse in our state and across the country,” said U.S. Attorney Durham. “Pharmacies must keep accurate records and maintain strong controls when handling controlled substances. Those that fail to do so open the door to the potential for diversion of drugs by pharmacy employees, the illegal distribution and abuse of these drugs, and a federal investigation.”
“DEA registrants are responsible to handle controlled substances and ensure that complete and accurate records are being properly kept and accounted for in compliance with the Controlled Substances Act,” said DEA Special Agent in Charge Brian D. Boyle. “Failure to do so increases the potential for diversion and jeopardizes the public health and safety. Today’s settlement demonstrates DEA’s pledge to ensure that DEA registrants maintain the records required under the CSA and are able to account for all the controlled substances they purchase.”
This investigation was conducted by the Drug Enforcement Administration’s Office of Diversion Control and was prosecuted by Assistant U.S. Attorney Sara Kaczmarek.
University of Virginia Agrees to Settle Claims Associated with Federal GrantsRead the Press Release
ALEXANDRIA, Va. – The University of Virginia, located in Charlottesville, has agreed to pay $1 million to settle claims that it did not properly account for certain rebates and credits the university received on purchases it made in connection with federal grants and awards (Federal Awards).
Under applicable provisions, universities can use money from Federal Awards to purchase materials for use in meeting the obligations of the Federal Award. The United States alleged that some rebates and discounts obtained on certain purchases by the university during the 2009 to 2017 time frame were not accounted for in reducing charges against Federal Award funding.
The resolutions obtained in this matter were the result of a coordinated effort between the U.S. Attorney's Office for the Eastern District of Virginia; Health and Human Services Office of Inspector General; NASA Office of Inspector General; and Army Criminal Investigation Command. Support was provided by the National Science Foundation Office of Inspector General; Department of Education; Department of Commerce; and Department of Energy.
The matter was investigated by Assistant U.S. Attorneys Gerard Mene and Kristin Starr. The civil claims settled by this agreement are allegations only; there has been no determination of civil liability.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.
United States Attorney’s Office Indicts 6 Cases and 9 DefendantsRead the Press Release
SAN JUAN, Puerto Rico – A federal grand jury in the District of Puerto Rico returned six indictments charging nine defendants during the past week. The indictments include charges of drug trafficking, sexual exploitation of minors, firearms offenses, obstruction of justice, and carjacking, announced W. Stephen Muldrow, United States Attorney for the District of Puerto Rico.
The following defendants were indicted:
- Willmer Dimitri Escalona-Reid, Darwin Nemecio Britton-Humphries, and Richard Bernard were charged with conspiring to possess with intent to distribute five kilograms or more of cocaine aboard a vessel subject to U.S. jurisdiction. The three were on board a vessel identified and stopped in international waters between the Dominican Republic and Puerto Rico by a joint U.S. Coast Guard/Customs and Border Protection Office of Air and Marine team on June 9, 2020. In the early stage of the pursuit, officers reported seeing packages on the vessel’s deck; Coast Guard personnel subsequently recovered approximately 150 kilograms of a substance that field tested positive for cocaine from the waters nearby. Defendants could face up to life in prison. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) is in charge of the investigation of the case. Special Assistant United States Attorney Seth Tremble is in charge of the prosecution of the case.
This case is part of the Organized Crime Drug Enforcement Task Force (OCDETF) program and the Caribbean Corridor Strike Force (CCSF). The CCSF is a multi-agency OCDETF strike force comprised of federal and state law enforcement agencies, including the Drug Enforcement Administration (DEA), Department of Homeland Security, Immigration and Customs Enforcement (ICE), Federal Bureau of Investigation (FBI), United States Coast Guard, U.S. Marshals Service, Internal Revenue Service, and the Puerto Rico Department of Public Safety. - Isaac Lasalle Hernández was indicted and arrested for attempted coercion and enticement of a minor, attempted transfer of obscene material to a minor, distribution of child pornography, and possession of child pornography. The defendant attempted to engage in sexual activity with someone he believed to be a 13 year-old minor. If found guilty, Lasalle Hernández is facing a minimum of 10 years and up to life in prison. The FBI was in charge of the investigation of the case. Assistant U.S. Attorney Jenifer Y. Hernández-Vega is in charge of the prosecution of the case.
- Jeremi Martínez-León, a convicted felon serving a federal term of supervised release, was indicted on charges of being a felon in possession of a firearm. He was driving an All Terrain Vehicle in Cayey while carrying a loaded firearm. He faces a maximum penalty of 10 years and the revocation of his supervised release term. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) was in charge of the investigation. Assistant U.S. Attorney Jeanette Collazo is in charge of the prosecution of the case.
- Cristian Ortiz-De La Rosa and Modesto Espinal-Luis were charged with possession with intent to distribute controlled substances. Ortiz-De La Rosa and Espinal-Luis were driving a vehicle that was towing a boat. When officers stopped the vehicle for a traffic infraction they asked for permission to search the boat. During the search of the boat law enforcement discovered approximately 110 kilograms of cocaine. Both defendants are currently detained pending trial. The DEA was in charge of the investigation of the case. The defendants are facing a minimum of 10 years and up to life in prison. Assistant U.S. Attorney John Hutchins is in charge of the prosecution of the case.
- Wilfred Lozada-Chévere was indicted on charges of carjacking and use of a firearm during the commission of a violent crime. On December 26, 2019 the defendant committed a carjacking at La Placita in Santurce using a firearm. If found guilty Lozada-Chévere is facing a minimum of seven years and up to life imprisonment for the carjacking charge; and 15 years of imprisonment for the firearms violation. The FBI was in charge of the investigation of the case. Special Assistant U.S. Attorney Obdulio Meléndez is in charge of the prosecution of the case.
“The U.S. Attorney’s Office remains steadfastly committed to prosecuting those who violate federal law and affect our communities,” said U.S. Attorney Muldrow. “We look forward to continuing our work with state and federal law enforcement partners to ensure that we comply with our public safety mission, notwithstanding the current COVID-19 pandemic.”
Indictments contain only charges and are not evidence of guilt. Defendants are presumed to be innocent until and unless proven guilty beyond a reasonable doubt.
# # #
- Willmer Dimitri Escalona-Reid, Darwin Nemecio Britton-Humphries, and Richard Bernard were charged with conspiring to possess with intent to distribute five kilograms or more of cocaine aboard a vessel subject to U.S. jurisdiction. The three were on board a vessel identified and stopped in international waters between the Dominican Republic and Puerto Rico by a joint U.S. Coast Guard/Customs and Border Protection Office of Air and Marine team on June 9, 2020. In the early stage of the pursuit, officers reported seeing packages on the vessel’s deck; Coast Guard personnel subsequently recovered approximately 150 kilograms of a substance that field tested positive for cocaine from the waters nearby. Defendants could face up to life in prison. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) is in charge of the investigation of the case. Special Assistant United States Attorney Seth Tremble is in charge of the prosecution of the case.
U.S. Attorney Trent Shores’ Statement on the Death of Tulsa Police Sergeant Craig JohnsonRead the Press Release
TULSA, Okla— U.S. Attorney Shores has released the following statement:
“On behalf of the U.S. Attorney’s Office, I extend my most heartfelt condolences to the family of Tulsa Police Department Sergeant Craig Johnson. To his brothers and sisters in blue, I join you in mourning his loss and saluting his selfless service. Brave men and women like Sergeant Johnson and Officer Aurash Zarkeshan make up the thin blue line that stands between order and chaos. Sergeant Johnson’s death will not lessen our resolve, but rather reaffirm the collective duty of all those in law enforcement to serve and protect. May God bless Sergeant Johnson and all of our nation’s police officers.”
U.S. Attorney Matthew Schneider and UAW President Rory Gamble Meet to Discuss Reform of the UAWRead the Press Release
U.S. Attorney Matthew Schneider and UAW President Rory Gamble jointly announce that they had a productive and helpful first meeting to begin negotiations to further the cause of reform in the United Auto Workers union. U.S. Attorney Schneider welcomed the opportunity to sit down with the UAW’s President in order to work together toward improving the union for all its members. President Gamble appreciated the chance to meet with the Department of Justice so as to further his efforts at reforming the organization and to ensure integrity in the union’s leadership.
During the meeting, President Gamble and representatives of the UAW set forth in detail the reform measures that President Gamble and the International Executive Board have put in place for the union. President Gamble and U.S. Attorney Schneider also discussed the importance of democracy for the selection of the UAW’s leadership. The parties addressed the concept of an independent monitor who could provide further assurance to the membership of concrete changes to the union so as to reduce the possibility of a reoccurrence of corruption. In addition, they are considering whether third party oversight on any future agreement would be helpful. The parties agreed that there are a number of reform options that are on the table and that will be the subject of further negotiations when the parties meet again to consider them in further detail within the coming weeks.
“The Justice Department seeks genuine and sincere reform of the UAW so as to provide the best possible representation for its members,” said United States Attorney Matthew Schneider. “I look forward to working toward a mutually agreeable resolution that will protect the interests of the UAW’s members and their families.”
“Today’s discussion was productive and both the U.S. Attorney and I have the same goal for the UAW International Union. As we turn the page to a stronger, better and cleaner union, we continue to make critical decisions that will protect the sacred dues money of our members. I look forward to continued discussions in the near future that advance toward closing one dark chapter and opening new brighter chapters for members of the UAW,” stated President Rory Gamble.
Two Soledad Residents Sentenced for Conspiracy to Rob Chase Bank in ModestoRead the Press Release
FRESNO, Calif. — Two Soledad men were sentenced this week for conspiracy to rob the Chase Bank in Modesto, U.S. Attorney McGregor W. Scott announced. Robert Zavala, 24, was sentenced today to five years in prison, and Moises Misael Garcia DeLeon, 27, was sentenced to on Monday to four years and nine months in prison.
According to court documents, on Nov. 16, 2018, a deputy sheriff noticed a Nissan Altima that had been reported stolen from Salinas parked in a parking lot at an apartment complex in Modesto. Officers set up surveillance on the stolen Nissan and watched four cars carrying the five co-conspirators leave the apartment complex.
The cars traveled close to each other to a shopping area in Modesto that contained a Chase Bank. Zavala, who drove one of the cars, drove back and forth near the Chase Bank on surveillance.
The stolen Nissan, driven by co-defendant Victor Bravo, parked in a loading area behind the shopping center next to a car driven by Enrique Lopez. Lopez got out of his car and started loading items into the stolen Nissan. The stolen Nissan then left the loading area, drove through an alley, and parked in a parking lot near Chase Bank. Officers stopped the car and detained all four occupants. Inside the stolen Nissan, officers found two assault rifle-style firearms, a handgun, a revolver, masks, gloves, and a large duffel bag. DeLeon was sitting in the front passenger seat with an assault rifle next to him.
Three co-defendants have been sentenced. On June 2, Bravo and Lopez were each sentenced to five years in prison, and on June 15, Cesar Lemus was sentenced to four years and seven months in prison.
This case is the product of an investigation by the Federal Bureau of Investigation, the Stanislaus County Sheriff’s Department, the Modesto Police Department, the Monterey County Sheriff’s Department, San Mateo County Sheriff’s Department, Tulare County Sheriff’s Department, and Fresno County Sheriff’s Department. Assistant U.S. Attorney Ross Pearson is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see www.justice.gov/projectguardian.
Two Dayton men indicted, arrested for string of convenience store armed robberiesRead the Press Release
DAYTON – Kavonte Knolton, 21 and Jamaal Murphy, 19, both of Dayton, have been charged with committing a total of five armed robberies of convenience stores in the Miami Valley dating back to December 2019.
The charges were outlined in an 11-count indictment returned on June 23. Knolton and Murphy were arrested June 29 by Dayton Police and agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The indictment alleges that Murphy robbed the Wyoming Mini-Mart in December 2019 and that Knolton robbed a UDF on Woodman Avenue twice, once on January 25 and again on February 14. The indictment accuses both men of robbing a Circle K on Dorothy Lane on February 22 and the Wyoming Mini-Mart again on March 5. They are accused of using, carrying or brandishing firearms in each of the robberies.
A federal grand jury in Dayton indicted the men for violating the Hobbs Act, a federal law that punishes people who commit crimes involving businesses that operate in interstate commerce.
The indictment charges the men with one count of conspiracy and five counts of violating the Hobbs Act. Each count is punishable by up to 20 years in prison. The indictment also charges five counts of using, carrying or brandishing a firearm during a crime of violence. Each of those counts is punishable by a mandatory term of seven years in prison, which must be served consecutive to any sentence for the robberies.
David M. DeVillers, United States Attorney for the Southern District of Ohio; Jonathan McPherson, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Dayton Police Chief Rick Biehl in announcing the indictment. Assistant United States Attorney Brent Tabacchi and Deputy Criminal Chief Dominick Gerace are representing the United States in this case.
An indictment merely contains allegations. All defendants are presumed innocent unless proven guilty in a court of law.
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Two Arrested Pursuant to Grand Jury Indictment that Alleges Family-Run Narcotics Ring Trafficked Cocaine and FentanylRead the Press Release
LOS ANGELES – Federal authorities this morning arrested two defendants named in a federal grand jury indictment that alleges a family-run drug trafficking organization trafficked in kilogram quantities of cocaine, as well as fentanyl pills.
With one of the named defendants already in federal custody, authorities are continuing to search for the three remaining defendants, which includes the mother who allegedly oversaw the operation.
The eight-count indictment lists a series of drug deals, attempted narcotics transactions and money laundering activity starting in September 2018 and running through July 3, 2019.
The indictment charges six defendants:
- Maria Trinidad Gutierrez Mendoza, aka “Tia,” 54, of Downey, the alleged leader of the narcotics ring, who allegedly possessed 4.3 kilograms (about 9.5 pounds) of cocaine one year ago;
- Maria’s son, Jose Ceja Gutierrez, aka “Feo” and other aliases, 32, of South Gate, who is currently in federal prison on unrelated charges;
- Maria’s daughter, Karina Ceja Gutierrez, 35, of Los Angeles, who allegedly helped her mother obtain cocaine and was arrested today;
- Jose’s girlfriend, Esmerelda Rodriguez, aka “Barbara Moran,” 29, of Huntington Park, who allegedly helped obtain fentanyl pills;
- Primitivo Cisneros Cruz, aka “Primo,” 70, of Los Angeles, an alleged source of narcotics for the drug ring, who allegedly was found with a kilogram of cocaine in May 2019 and was arrested today; and
- Bridgett Coates, aka “Sharol,” “Janet” and “Yane,” 55, of Lawndale, an alleged customer of the organization.
Karina Gutierrez and Cruz are expected to be arraigned this afternoon in United States District Court in downtown Los Angeles.
All six defendants are charged with conspiracy to distribute and to possess with intent to distribute controlled substances, a charge that carries a mandatory minimum sentence of 10 years and a statutory maximum sentence of life.
The indictment further charges Gutierrez Mendoza with possessing 4.3 kilograms of cocaine one year ago. Jose Gutierrez and Rodriguez are charged with possession with intent to distribute controlled substances related to an April 2019 seizure of nearly 7,400 fentanyl pills falsely marked as oxycodone. Cruz is charged with possessing a kilogram of cocaine in May 2019.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The two-year investigation into the Gutierrez drug trafficking organization was conducted jointly by the Drug Enforcement Administration and Homeland Security Investigations. Substantial assistance was provided by the South Gate Police Department.
This case is being prosecuted by Assistant United States Attorney Kathy Yu of the International Narcotics, Money Laundering, and Racketeering Section.