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24 July 2020
Michigan Man Charged for 2019 Threat to Green Mountain Union High SchoolRead the Press Release
The Office of the United States Attorney for the District of Vermont announced today that a federal grand jury, sitting in Burlington, Vermont, returned an indictment charging Jason Graham, 24, of Michigan, for his role in causing a threat to Green Mountain Union High School. On February 7, 2019, an anonymous caller claimed there was a bomb in the school building and indicated that students would be shot if evacuated. The incident caused a massive law enforcement response and terrified the community. Investigation later revealed that Graham had threatened to “shoot up” the school only days before the incident, and had arranged for the anonymous call.
"It is important to know that you are never truly anonymous in this day and age,” said Chester Police Detective Adam Woodell, one of the first investigators in the case. “This type of behavior will not be tolerated and perpetrators will be identified and brought forth for prosecution.” U.S. Attorney Christina E. Nolan agreed. “Nothing could be more serious than threats to our schools and our students,” Nolan said. “We will show zero tolerance for conduct that makes students feel unsafe in their place of learning. The U.S. Attorney’s Office and the law enforcement community in Vermont will vigorously pursue any threats to the safety of our children. Those who instill fear in children and school communities will not be allowed to hide behind their computer screens. We will find them and bring them to federal court to face serious consequences.”
Nolan thanked the Chester Police Department, the Vermont State Police, the Vermont Intelligence Center, and the Federal Bureau of Investigation’s Joint Terrorism Task Force for their collective work in investigating the threats.
Graham is charged with violations of 18 U.S.C. §§ 875(c) and 2 for threatening to “shoot up” the school in a February 4, 2019 Facebook group chat, and aiding and abetting the February 7, 2019 phone threat. If convicted, Graham faces up to five years in prison and up to a $250,000 fine on each count. The current indictment is an accusation only. Graham is presumed innocent until proven guilty.
The United States will be represented in the case by Criminal Chief Eugenia A. P. Cowles. Counsel for the defendant will be appointed at the time of Graham’s initial appearance.
Maple Heights man charged with elder fraudRead the Press Release
United States Attorney Justin Herdman announced today that a federal grand jury sitting in Cleveland has returned a six-count indictment charging Andrew V. Thomas, age 34, of Maple Heights with three counts of wire fraud and three counts of aggravated identity theft.
“The defendant is alleged to have used his position to access the sensitive financial information of his elderly victims,” said U.S. Attorney Justin Herman, “Robbing our community’s elderly members of their hard-earned life savings ruins trust and lives. The Department of Justice takes allegations and cases of elder fraud very seriously and will prosecute them to their fullest extent.”
According to the indictment, from November 2018 to November 2019, the defendant was employed as a Call Center Representative for an insurance company in Cleveland, Ohio. The defendant’s responsibilities included speaking with clients and their agents about annuities, updating client bank account information, and processing withdrawal transactions.
During this time, the defendant allegedly devised a scam to defraud three elderly victims by transferring money from his victim’s annuities into personal bank accounts. Court documents state that Victim 1 is an 84-year-old woman in Avon, Connecticut; Victim 2, an 83-year woman with dementia in Philadelphia, Pennsylvania; and Victim 3, a 96-year-old woman and a resident of Metairie, Louisiana were all part of the defendant’s fraud. Victim 1, Victim 2’s power of attorney, and Victim 3 all called the defendant to inquire about a policy-related matter. The defendant spoke to all of the victims and had access to their accounts.
The defendant would then use the company’s computer system to make unauthorized transfers from the annuities of Victim 1, Victim 2, and Victim 3 into the defendant’s personal bank accounts. As a result of the unauthorized transfers, Victim 1, Victim 2, and Victim 3 suffered a total loss of approximately $62,600.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The investigation preceding the complaint was conducted by the Federal Bureau of Investigation, Cleveland Division. The case is being prosecuted by Assistant U.S. Attorney Brian McDonough.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. In particular, in March 2020, the department announced the largest elder fraud enforcement action in American history, charging more than 400 defendants in a nationwide elder fraud sweep. The department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act. For more information about the Elder Justice Initiative, please visit https://www.justice.gov/elderjustice.
If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed 7 days a week from 6:00 a.m. to 11:00 p.m. eastern time. English, Spanish and other languages are available.
Man Sentenced to Federal Prison for Sex Offense Involving a MinorRead the Press Release
BECKLEY, W.Va. – An Eagle Rock, Virginia man was sentenced today for a sex offense involving a minor, according to United States Attorney Mike Stuart. Joshua T. Haynes, 42, was sentenced to 10 years in prison, to be followed by 15 years of supervised release, for attempted sex trafficking of a minor. He also will be required to register as a sex offender.
“Child exploitation is a tragic pandemic around the world,” said United States Attorney Mike Stuart. “My office has prosecuted so many cases like this but every single one is unique and every single one is tragic by its own facts and circumstances. The mere idea that someone would attempt to knowingly purchase sex with a child, well, I’m not sure there are words that adequately describe the full nature of the crime. It is criminal on every conceivable level. Our kids - our precious kids - must be our priority and we must do everything in our power to protect them.”
Haynes previously admitted that between October 31, 2019 and November 2, 2019, he communicated with a man who stated he could provide a 14- or 15-year-old female to Haynes. Haynes agreed to pay the man money in exchange for sexual activity with the purported minor female. On November 2, 2019, Haynes met with the man in Sam Black Church and paid him the agreed upon sum in order to have sex with the minor, at which time Haynes was placed under arrest.
The investigation was conducted by the Federal Bureau of Investigation’s West Virginia Child Exploitation and Human Trafficking Task Force, which includes task force officers from the West Virginia State Police, the Kanawha County Sheriff’s Office and the Ashland (Kentucky) Police Department, with additional assistance from the Greenbrier County Sheriff’s Office. Assistant United States Attorney Jennifer Rada Herrald handled the prosecution. United States District Judge Frank W. Volk imposed the sentencing.
The case was prosecuted as part of Project Safe Childhood, a nationwide initiative of the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 5:19-cr-00292.
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Man Indicted for Threatening a Government OfficialRead the Press Release
NEW ORLEANS, LOUISIANA – BRYANT LAMONT HARRIS, age 46, a resident of Monticello, Mississippi, was indicted for threatening a federal judge in violation of Title 18, United States Code, Section 115(a)(1)(B), announced U.S. Attorney Peter G. Strasser. If convicted, the defendant faces a maximum sentence of six years imprisonment, a $250,000 fine, three years of supervised release, and a $100 special assessment.
According to court records, on or about February 13, 2020, HARRIS called the chambers of a federal judge, and asked how many security officers were assigned to the court because “[he] needed to know how many people [he] need[ed] to take out to get to the Judge.” Prior to this, HARRIS had placed other calls to chambers, and claimed that he was an expertly trained military marksman, and that he “was going to take things into his own hands, watch CNN.”
United States Attorney Strasser reiterated that the indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Strasser praised the work of the Federal Bureau of Investigation in investigating this matter. The prosecution of this case is being handled by Assistant U. S. Attorney G. Dall Kammer, Supervisor of the General Crimes Unit.
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Lockport Woman Sentenced on Wire Fraud Charge for Her Role in Debt Collection SchemeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Shauniqua Rodriguez, 41, of Lockport, NY, who was convicted of conspiracy to commit wire fraud, was sentenced to serve 12 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Laura A. Higgins, who handled the case, stated that between January 2014 and February 2017, Rodriguez conspired with others in a debt collection scheme that was spearheaded by co-defendant Joseph Ciffa. Specifically, defendant was an intermittent employee of the debt collection agency, which operated under various names, including Lakeside Mediations, Lincoln Mediation, Valentine Legal Mediation, First Point Mediation, State Filing and Legal Services, and Elite Services. Rodriguez placed telephone calls to “debtors” throughout the United States, using various fraudulent tactics and misrepresentations, including false representing her identity, false threating arrest, and fabricating criminal charges against the “debtors” in order to induce them to make payments. The “debtors” were often directed to other employees posing as attorneys and were provided with payment instructions, supposedly to settle their outstanding debts. In addition to making collection calls, defendant also served as an informal trainer for other, less experienced employees.
Rodriguez and the employees she worked with and trained routinely collected on debts which they knew had already been satisfied, and collected money from “debtors” from whom they had already collected payment, who were deemed to be “easy targets.” “Debtors” were instructed to make payment to the various debt collection businesses through various means, including MoneyGram payments, bank wire transfers, and debit/credit card payments. Between 2015 and 2016, the debt collection scheme brought in more than $3,000,000.Rodriguez is one of five defendants to be convicted in this case, and the third to be sentenced.
Today’s sentencing is the result of an investigation by Homeland Security Investigations, under the direction of Special-Agent-in-Charge Kevin Kelly; the Internal Revenue Service, Criminal Investigation Division, under the direction of Jonathan D. Larsen, Special Agent-in-Charge, New York Field Office; and the U.S. Postal Inspection Service, under the direction of Boston Division Inspector-in-Charge Joseph W. Cronin.
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Local man in custody for bomb threatRead the Press Release
BROWNSVILLE, Texas – A 73-year-old resident of La Feria has been charged with making a threat to bomb the Veteran’s Administration (VA) Hospital in Harlingen, announced U.S. Attorney Ryan K. Patrick.
Dennis Deane Dailey will appear for his detention hearing Aug. 11 before U.S. Magistrate Judge Ronald Morgan.
On July 20, Dailey allegedly called the VA suicide prevention hotline expressing he was having suicidal thoughts. He claimed to be angry and that he planned to shoot employees at the VA hospital in Harlingen, according to the charges. Dailey also allegedly stated he planned to kill people between the ages of 18 and 30 because they are spreading COVID-19. The criminal complaint further alleges Dailey claimed to have “many guns and bombs” and would blow up the VA and kill whoever needed to be killed.
Federal authorities arrested Dailey July 22. He made his initial appearance the following day, at which time he was ordered into custody pending further criminal proceedings.
If convicted, Dailey faces up to 10 years in federal prison and a possible $250,000 maximum fine.
The FBI conducted the investigation. Assistant U.S. Attorney Oscar Ponce is prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Local Hospital Nurse Charged with Distribution and Possession of Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that a federal grand jury has returned an indictment charging Craig Marranca, 32, of Buffalo, NY, with distribution and possession of child pornography. The charges carry a mandatory minimum penalty of five years in prison, a maximum of 20 years, and a $250,000.
Assistant U.S. Attorney Laura A. Higgins, who is handling the case, stated that according to the indictment, on September 18, 2017, the defendant distributed child pornography. In addition, on October 27, 2017, Marranca possessed images of child pornography on a laptop computer and a hard drive. Some of the images depicted a prepubescent minor and a minor younger than 12 years old.
The defendant was arraigned this afternoon before U.S. Magistrate Judge Michael J. Roemer and released on conditions. The indictment is are the result of an investigation by Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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KC Man Who ‘Terrorized His Neighborhood’ Charged with Illegally Possessing FirearmRead the Press Release
This Glock .40-caliber handgun attached to an extended drum magazine was seized by law enforcement officers at the time of Dorsey's arrest.KANSAS CITY, Mo. – A Kansas City, Missouri, man who was arrested after he allegedly shot three victims in an incident this week has been charged in federal court with illegally possessing a firearm during an earlier firearm incident.
“Court documents cite a long history of gun violence and drug trafficking by this defendant who terrorized his neighborhood, allegedly shooting several victims this week,” Garrison said. “This is his second federal charge for illegally possessing firearms. Operation LeGend is successfully taking armed, violent criminals like this off the street to make our neighborhoods safer.”
Leamandreal Dorsey, 40, was charged with being a felon in possession of a firearm in a complaint filed under seal in the U.S. District Court in Kansas City, Mo. That complaint was unsealed and made public today following Dorsey’s arrest and initial court appearance.
Today’s federal criminal complaint charges Dorsey with illegally possessing a firearm following a threat to shoot event that occurred on April 1, 2020. Dorsey is charged with possessing a Glock .40-caliber handgun attached to an extended drum magazine that contained 40 live rounds of ammunition.
On April 1, 2020, Kansas City, police officers responded to a reported weapons disturbance in the 2500 block of East 68th Terrace. One of Dorsey’s neighbors told officers that Dorsey pointed a gun at him and threatened him. Officers contacted Dorsey at Dorsey’s residence, sitting on the roof of a black Mercedes-Benz C300. According to the affidavit, Dorsey jumped into the driver’s seat when officers approached. Dorsey was removed from his vehicle and taken into custody. The owner of the vehicle provided consent for the officers to search the car, and they found a backpack in the passenger’s seat that contained the Glock .40-caliber handgun attached to an extended drum magazine, as well as a spare magazine.
Although this incident occurred on April 1, Dorsey was arrested following a separate shooting incident that occurred this week in which three individuals were wounded by gunfire.
According to an affidavit filed in support of the federal criminal complaint, Kansas City, Missouri, police officers were dispatched to the 2500 block of E. 68th Terrace at about 1 a.m. on Wednesday, July 22, concerning a shooting. Six individuals were on the front porch of a residence, the affidavit says, when an individual later identified as Dorsey started shooting at them. According to the victims, Dorsey walked away, but returned minutes later and began shooting again, then fled on foot. Three of the individuals were struck by gunfire and transported to Research Medical Center. Investigators found 31 spent shell casings at the scene.
Later the same day, investigators received a Crime Stoppers tip that identified Dorsey as the shooter.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Dorsey has a prior felony conviction for being a felon in possession of a firearm, for which he served three years in federal prison. He also has two prior felony convictions for unlawful use of a weapon, two prior felony convictions for possession of a controlled substance, and a prior felony conviction for drug trafficking.
Today’s affidavit also cites four previous instances in which Dorsey pointed firearms at people and threatened them. Among those incidents, the affidavit says, Dorsey shot a man in the hip who was running from Dorsey’s residence following a disagreement.
The charge contained in this complaint is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Bruce Rhoades. It was investigated by the Kansas City, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Operation LeGend
Operation LeGend is a federal partnership with local law enforcement to address the increase in homicides and violent crime in Kansas City, Mo., in 2020. The operation honors the memory of four-year-old LeGend Taliferro, one of the youngest fatalities during a record-breaking year of homicides and shootings. Additional federal agents were assigned to the operation from the FBI, Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the U.S. Marshals Service.KC Man Charged with Meth Trafficking, Illegal FirearmsRead the Press Release
KANSAS CITY, Mo. – A Kansas City, Missouri, man was charged in federal court today with illegally possessing methamphetamine to distribute and two firearms.
Law enforcement officer seized this Bushmaster .223/5.56-caliber rifle while executing a search warrant at Younce's residence.Steven L. Younce, 38, was charged with one count of possessing methamphetamine to distribute, one count of possessing firearms in furtherance of a drug-trafficking crime, and one count of being a felon in possession of firearms.
According to an affidavit filed in support of today’s criminal complaint, deputies with the U.S. Marshals Service arrested Younce, who had outstanding municipal warrants, at his residence on Thursday, July 23.
Law enforcement officers seized this Glock 9mm handgun while executing a search warrant at Younce's residence.Detectives from the Independence, Mo., Police Department and the Kansas City, Mo., Police Department and deputies from the U.S. Marshals Service executed a search warrant at Younce’s residence on the same day. In Younce’s bedroom, they found 696 grams of methamphetamine on top of the bed, 39 grams of methamphetamine in a dresser drawer, a loaded Bushmaster .223/5.56-caliber rifle, and a loaded Glock 9mm handgun. Additional ammunition, several glass smoking pipes, and drug paraphernalia were found throughout the residence.
Law enforcement officers also seized a stolen 2019 Harley Davidson motorcycle and a stolen Suzuki motorcycle.
Under federal law, it is illegal for anyone who is convicted of a felony to be in possession of any firearm or ammunition. Younce has prior federal felony convictions for being a felon in possession of a firearm and possessing methamphetamine to distribute. He has prior state felony convictions for forgery, tampering with a motor vehicle, possessing a controlled substance, and unlawful use of a weapon.
The charges contained in this complaint are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Mary Kate Butterfield. It was investigated by the U.S. Marshals Service, the Independence, Mo., Police Department, the Kansas City, Mo., Police Department, and the Drug Enforcement Administration.
Operation LeGend
Operation LeGend is a federal partnership with local law enforcement to address the increase in homicides and violent crime in Kansas City, Mo., in 2020. The operation honors the memory of four-year-old LeGend Taliferro, one of the youngest fatalities during a record-breaking year of homicides and shootings. Additional federal agents were assigned to the operation from the FBI, Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the U.S. Marshals Service.Informational: Federal Court arraignmentsRead the Press Release
The U.S. Attorney’s Office announced that the following persons were arraigned or appeared this week before U.S. Magistrate judges on indictments handed down by the Grand Jury or on criminal complaints. The charging documents are merely accusations and defendants are presumed innocent until proven guilty:
Appearing in Billings before U.S. Magistrate Judge Timothy J. Cavan and pleading not guilty on July 20 was:
Kristin Alise Smith, 43, of Billings, on charges of conspiracy to possess with intent to distribute methamphetamine and possession with intent to distribute meth. If convicted of the most serious crime, Smith faces a minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release. Smith was detained pending further proceedings. The FBI Western Transnational Organized Crime Task Force investigated the case. Pacer case reference. 20-80.
Mark Stephen Best, 60, of Billings, on charges of conspiracy to possess with intent to distribute meth, possession with intent to distribute meth and distribution of meth. If convicted of the most serious crime, Best faces a minimum mandatory five years to 40 years in prison, a $5 million fine and at least five years of supervised release. Best was detained pending further proceedings. Pacer case reference. 20-67.
Appearing on July 21 was:
Lisa Ann Emmett, 34, of Billings, and Anthony Scott Walker, 40, of Billings, on charges of conspiracy to possess with intent to distribute controlled substances and possession with intent to distribute controlled substances. If convicted of the most serious crime, Emmett and Walker face minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release. Emmett and Walker were released pending further proceedings. The Drug Enforcement Administration investigated the case. Pacer case reference. 20-53.
Drew Hochhalter, 37, of Hardin, on charges of distribution of methamphetamine. If convicted of the most serious crime, Hochhalter faces a maximum 20 years in prison, a $1 million fine and at least three years of supervised release. Hochhalter was released pending further proceedings. The Drug Enforcement Administration investigated the case. Pacer case reference. 20-54.
Chase Everett Sexton, 30, of Billings, on charges of false statement during firearms transaction. If convicted of the most serious crime, Sexton faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Sexton was released pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. Pacer case reference. 20-63.
Sean Evan Thomas Bad Bear, 28, of Billings, on charges of assault by strangulation of an intimate partner and dating partner. If convicted of the most serious crime, Bad Bear faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Bad Bear was released pending further proceedings. The FBI investigated the case. Pacer case reference. 20-52.
Appearing on July 23 was:
Robert Joseph Speelman, 48, of Ashland, on charges of possession with intent to distribute meth and possession of a firearm in furtherance of a drug trafficking crime. If convicted of the most serious crime, Speelman faces a minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release on the drug count and a minimum mandatory five years to life consecutive to any other sentence on the firearm count. Speelman was detained pending further proceedings. The Bureau of Indian Affairs investigated the case. Pacer case reference. 20-57.
Simon Douglas Stanley, 45, of Miles City, on charges of conspiracy to possess with intent to distribute meth, possession with intent to distribute meth, possession of a firearm in furtherance of a drug trafficking crime and felon in possession of a firearm. If convicted of the most serious crime, Stanley faces a minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release on the drug count and a minimum mandatory five years to life consecutive to any other sentence on the firearm count. Stanley was released pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. Pacer case reference. 20-58.
Cody Raymond Hanson, 39, of Billings, and Danielle Leona Dye, 29, of Billings, on charges of conspiracy to possess with intent to distribute meth and possession with intent to distribute meth. If convicted of the most serious crime, Hanson and Dye face a minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release. Hanson and Dye were detained pending further proceedings. The FBI Western Transnational Organized Crime Task Force investigated the case. Pacer case reference. 20-72.
Appearing in Missoula before U.S. Magistrate Judge Kathleen L. DeSoto and pleading not guilty on July 21 was:
Christopher Anthony Willis, 41, of Missoula, on charges of false statement in firearm acquisition. If convicted of the most serious crime, Willis faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Willis was released pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. Pacer case reference. 20-26.
Justin Patrick Kline, 33, of Bozeman, on charges of prohibited person in possession of a firearm. If convicted of the most serious crime, Kline faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Kline was released pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Montana Department of Corrections Probation and Parole. Pacer case reference. 20-12.
Appearing in Great Falls before U.S. Magistrate Judge John T. Johnston and pleading not guilty on July 22 was:
Mitchell Joseph Wright, 40, of Rancho Palos, CA, on charges of conspiracy to possess with intent to distribute controlled substances and possession with intent to distribute controlled substances. If convicted of the most serious crime, Wright faces a minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release. Wright was detained pending further proceedings. The Bureau of Alcohol, Tobacco, Firearms and Explosives, Great Falls Police Department, U.S. Postal Inspection Service and Lewistown Police Department investigated the case. Pacer case reference. 20-50.
Christopher Michael Stebbins, 53, of Williston, N.D., on charges of conspiracy to possess with intent to distribute meth and attempted possession with intent to distribute meth. If convicted of the most serious crime, Stebbins faces a minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release. Stebbins was detained pending further proceedings. The FBI and Fort Peck Criminal Investigation investigated the case. Pacer case reference. 20-49.
Austin Lee Pipe Sr., 29, of Wolf Point, on charges of assault with a dangerous weapon and assault resulting in substantial injury to dating partner. If convicted of the most serious crime, Pipe faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Pipe was detained pending further proceedings. The FBI and Fort Peck Criminal Investigation investigated the case. Pacer case reference. 20-48.
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
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Indivior Solutions Pleads Guilty to Felony Charge and Indivior Entities Agree to Pay $600 Million to Resolve Criminal and Civil Investigations as Part of DOJ’s Largest Opioid ResolutionRead the Press Release
NEWARK, N.J. – Indivior Solutions today pleaded guilty to a one-count felony information and, together with its parent companies Indivior Inc. and Indivior plc, agreed to pay a total of $600 million to resolve criminal and civil liability associated with the marketing of the opioid-addiction-treatment drug Suboxone, New Jersey U.S. Attorney Craig Carpenito, other Department of Justice officials, and officials from other state and federal agencies announced. Together with a $1.4 billion resolution with Indivior’s former parent, Reckitt Benckiser Group PLC (RB Group), announced in 2019, and a plea agreement with Indivior plc’s former CEO, Shaun Thaxter, announced last month, the total resolution relating to the marketing of Suboxone is more than $2 billion — the largest-ever resolution in a case brought by the Department of Justice involving an opioid drug.
Suboxone is a drug product approved for use by recovering opioid addicts to avoid or reduce withdrawal symptoms while they undergo treatment for opioid-use disorder. Suboxone contains buprenorphine, a powerful opioid.
“Combatting the opioid crisis is a Department of Justice priority,” said Principal Deputy Associate Attorney General Claire M. Murray. “Today’s announced resolution and related actions hold accountable entities and individuals that unlawfully marketed opioid-addiction products.”
“The opioid crisis is a public health emergency. Prevention and access to effective treatments for opioid addiction are critical to fighting this epidemic,” said Deputy Assistant Attorney General Michael D. Granston for the Department's Civil Division. “When a drug manufacturer claims to be part of a solution for opioid addicts, we expect honesty and candor to government officials, as well as to the physicians and patients making important treatment decisions based on those representations.”
Resolution of the Criminal Investigation
Indivior Solutions pleaded guilty today in U.S. District Court for the Western District of Virginia to a one-count felony criminal information charging false statements relating to health care matters. In connection with its guilty plea, Indivior Solutions admitted making false statements to promote the film version of Suboxone (Suboxone Film) to the Massachusetts Medicaid program (MassHealth) relating to the safety of Suboxone Film around children. The resolution includes a criminal fine, forfeiture, and restitution totaling $289 million. On June 30, 2020, Indivior plc’s former CEO Shaun Thaxter pleaded guilty to a one-count misdemeanor information, also in the Western District of Virginia, related to Indivior’s false and misleading representations to MassHealth.
In 2002, Indivior Inc. received approval to market Suboxone tablets for use in the treatment of opioid addiction and dependence. At that time, Indivior Inc. was an RB Group subsidiary known as Reckitt Benckiser Pharmaceuticals Inc. In December 2014, RB Group spun off Indivior Inc., and the two companies are no longer affiliated. Thereafter, Indivior Inc. became a subsidiary of Indivior plc. On April 9, 2019, a federal grand jury sitting in Abingdon, Virginia, indicted Indivior Inc. and Indivior plc for allegedly engaging in an illicit nationwide scheme to increase prescriptions of Suboxone.
In its guilty plea today, Indivior Solutions, which employed marketing and sales personnel for the Indivior group of companies, admitted to an aspect of the scheme alleged in the indictment. Specifically, Indivior Solutions admitted that, in October 2012, it sought to convince MassHealth to expand Medicaid coverage of Suboxone Film in Massachusetts and sent MassHealth false data and a chart that was misleading in light of the false data indicating that Suboxone Film had the lowest rate of accidental pediatric exposure (i.e., children taking medication by accident) of all buprenorphine drugs in Massachusetts, when in fact, it did not. Indivior Solutions further admitted that sending the false and misleading information occurred in the context of marketing and promotional efforts directed at MassHealth, which were overseen by top executives. MassHealth announced it would provide access to Suboxone Film for patients with children under the age of six shortly after Indivior provided the false and misleading information to agency officials.
“During the nationwide opioid epidemic, Indivior Solutions made false statements about Suboxone’s safety to increase its sales. In doing so, Indivior Solutions misled government health care officials and is being held accountable today for its felonious conduct,” First Assistant United States Attorney Daniel P. Bubar of the Western District of Virginia said today. “This resolution is the culmination of years of work by prosecutors and agents and demonstrates that we will continue to work tirelessly to hold pharmaceutical manufacturers responsible for illegal conduct.”
In addition to its financial aspects, the agreement with Indivior Inc. includes novel provisions that:
- Require Indivior Inc. to disband its Suboxone sales force and not reinstate it;
- Require Indivior Inc.’s CEO to personally certify, under penalty of perjury, on an annual basis that during the prior year (a) Indivior was in compliance with the Food Drug and Cosmetic Act and did not commit health care fraud or (b) list all non-compliant activity and the steps taken by Indivior to remedy these acts;
- Prohibit Indivior Inc. from using data obtained from surveys of health care providers for marketing, sales, and promotional purposes;
- Require Indivior Inc. to remove health care providers from their promotional programs who are at a high risk of inappropriate prescribing; and
- Make Indivior subject to contempt sanctions by the Court and reinstatement of the dismissed charges if it violates the agreement.
“The opioid crisis has devastated families and communities across the Commonwealth and drug manufacturers must be held accountable for their role in creating and prolonging this crisis,” said Virginia Attorney General Mark R. Herring. “I want to thank my Medicaid Fraud Control Unit for their work on this important case, as well as our local, state and federal partners for their continued collaboration. My team and I will continue to do everything in our power to hold pharmaceutical companies accountable for their role in the opioid crisis and help to ensure justice for those families who have been effected by the opioid crisis.”
“Parties that contract with the government will be held to the letter of the contract,” said Kenneth Cleevely, Special Agent in Charge of the Eastern Field Office for the U.S. Postal Service Office of Inspector General. “The U.S. Postal Service spends billions of dollars per year in workers compensation-related costs, most of which are legitimate. However, when medical providers or companies choose to flout the rules and profit illegally, special agents with the USPS OIG will work with our law enforcement partners to hold them responsible. To report fraud or other criminal activity involving the Postal Service, contact USPS OIG special agents at www.uspsoig.gov or 888-USPS-OIG.”
United States District Judge James P. Jones accepted the guilty plea but deferred acceptance of the plea agreement until after the preparation of a presentence report. He scheduled sentencing for Oct. 20, 2020 at the United States Courthouse in Abingdon, Virginia.
The Civil Settlement
Under the civil settlement, Indivior Inc. and Indivior plc have agreed to pay a total of $300 million to resolve claims that the marketing of Suboxone caused false claims to be submitted to government health care programs. The $300 million settlement amount includes approximately $209.3 million to the federal government and $90.7 million to states that opt to participate in the agreement.
The civil settlement resolves allegations by the United States that, from 2010 through 2015, Indivior companies knowingly (a) promoted the sale and use of Suboxone to physicians who were writing prescriptions that were not for a medically accepted indication and that lacked a legitimate medical purpose, were issued without any counseling or psychosocial support, were for uses that were unsafe, ineffective, and medically unnecessary, and were often diverted; (b) promoted the sale or use of Suboxone Film to physicians and state Medicaid agencies using false and misleading claims that Suboxone Film was less susceptible to diversion and abuse than other buprenorphine products and that Suboxone Film was less susceptible to accidental pediatric exposure than tablets; and (c) submitted a petition to the Food and Drug Administration on Sept. 25, 2012, claiming that Suboxone Tablet had been discontinued “due to safety concerns” about the tablet formulation of the drug and took other steps to delay the entry of generic competition for Suboxone to improperly control pricing of Suboxone, including pricing to federal healthcare programs.
“Prescription opioids are both addictive and dangerous when diverted for improper use or prescribed without accurate information about the risks that they pose,” U.S. Attorney Craig Carpenito for the District of New Jersey said. “This resolution holds Indivior to account for placing profit above patient and community safety.”
The civil settlement resolves claims against Indivior in six lawsuits pending in federal court in the Western District of Virginia and the District of New Jersey under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. The False Claims Act also permits the government to intervene in such actions, as the government previously did in the three lawsuits pending in the Western District of Virginia. The whistleblower share to be awarded in this case has not yet been determined.
“Opioid addiction and abuse is an immense public health crisis and taking steps to address it is one of the FDA’s highest priorities,” said FDA Commissioner Stephen M. Hahn, M.D. “Medication-assisted treatments incorporating drugs like Indivior’s Suboxone, in combination with counseling and behavioral therapy, are an important tool in combating opioid use disorder but can quickly become part of the problem if not used responsibly. When companies encourage the use of powerful drugs where not medically necessary and provide misleading information about relative product benefits, they can ultimately risk more misuse, abuse, diversion, and accidental exposure to opioid drugs as well as make treatment more difficult to obtain for those suffering from this crisis. We will continue to work with the Department of Justice to investigate and hold accountable those who devise and participate in schemes to the detriment of the public health.”
Non-monetary Provisions of the Corporate Integrity Agreement
In addition to the criminal and civil resolutions, Indivior executed a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The CIA requires that Indivior implement numerous accountability and auditing provisions. On an annual basis, top executives and the Board of Directors must certify about compliance, Indivior must conduct annual risk assessments and other monitoring, and an independent review organization will conduct multi-faceted audits.
“Addressing the opioid crisis is a top priority for OIG, and we will continue to work closely with the Department of Justice to hold corporations and individuals accountable when they use illegal tactics to promote and sell opioids,” said Gregory E. Demske, Chief Counsel to the Inspector General, HHS-OIG. “Among other things, our CIA with Indivior imposes accountability on the Board and top executives, subjects the company to internal and external auditing, and ensures that the company will separate itself from its prior top leadership.”
“The opioid epidemic has ravaged this nation,” said Elton Malone, Assistant Inspector General for Investigations with the Office of Inspector General of the U.S. Department of Health and Human Services. “This resolution, along with our law enforcement partners’ work, should serve as a warning that large companies will face prosecution if they break the law.”
FTC Resolution
Under a separate agreement with the Federal Trade Commission (FTC), Indivior has agreed to pay $10 million to resolve claims that it engaged in unfair methods of competition in violation of the Federal Trade Commission Act, 15 U.S.C. § 53(b). The FTC filed a complaint in the United States District Court for the Western District of Virginia alleging anticompetitive activities by Indivior designed to impede competition from generic equivalents of Suboxone. As part of a consent decree, Indivior agreed that it would notify the FTC if it filed a Citizen Petition with the FDA in connection with a drug product, it would simultaneously disclose to both the FDA and the FTC all studies and data relevant to that Citizen Petition. Indivior further agreed not to withdraw a drug from the market or otherwise disadvantage a drug after obtaining approval to market another drug containing the same active ingredient.
“As alleged in the FTC’s complaint, in the midst of the nation’s opioid crisis, a critical opioid-addiction treatment was about to become more affordable,” said Gail Levine, a Deputy Director of the FTC’s Bureau of Competition. “But Indivior prevented that. It kept its drug prices high by unlawfully impeding generic manufacturers from competing effectively.”
A Multilateral Effort
The criminal case against Indivior was prosecuted by Randy Ramseyer of the U.S. Attorney’s Office for the Western District of Virginia, Albert P. Mayer and Carol Wallack of the Department of Justice Civil Division’s Commercial Litigation Branch, Charles J. Biro and Matthew J. Lash of the Department of Justice Civil Division’s Consumer Protection Branch, Kristin L. Gray, Joseph S. Hall and Janine M. Myatt of the Virginia Medicaid Fraud Control Unit of the Office of the Virginia Attorney General, and Garth W. Huston of the Federal Trade Commission. This matter was investigated by the Virginia Attorney General’s Medicaid Fraud Control Unit; FDA - Office of Criminal Investigation; United States Postal Service – Office of Inspector General; and Department of Health and Human Services - Office of Inspector General.
The civil settlement was handled by Edward Crooke of the Civil Division’s Commercial Litigation Branch, Sara Bugbee Winn of the U.S. Attorney’s Office for the Western District of Virginia, and Andrew A. Caffrey III of the U.S. Attorney’s Office for the District of New Jersey. Assistance was provided by representatives of the HHS Office of Counsel to the Inspector General; the HHS Office of the General Counsel, CMS Division; FDA’s Office of Chief Counsel; the U.S. Attorney’s Office for the Eastern District of Virginia; the U.S. Department of Agriculture Office of the General Counsel; the National Association of Medicaid Fraud Control Units; the Defense Criminal Investigative Service; the Office of Personnel Management - Office of Inspector General; the Department of Veterans’ Affairs Office of Inspector General; the Department of Labor - Office of Inspector General; and TRICARE Program Integrity.
The joint effort advances the goals of the Department’s Prescription Interdiction & Litigation (PIL) Task Force to deploy all available criminal, civil, and regulatory tools to hold opioid manufacturers accountable for unlawful practices and to ensure that prescription opioid products are marketed truthfully.
Except to the extent admitted as part of the criminal resolution, the claims resolved by the civil settlement are allegations only. There has been no determination of liability in the civil case.
Additional information about the Consumer Protection Branch and the Civil Fraud Section and their enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
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Indivior Solutions Pleads Guilty to Felony Charge and Indivior Entities Agree to Pay $600 Million to Resolve Criminal and Civil Investigations as Part of DOJ's Largest Opioid ResolutionRead the Press Release
indivior_resolution_documents.pdfABINGDON, VIRGINIA – Indivior Solutions today pleaded guilty to a one-count felony information and, together with its parent companies Indivior Inc. and Indivior plc, agreed to pay a total of $600 million to resolve criminal and civil liability associated with the marketing of the opioid-addiction-treatment drug Suboxone. Together with a $1.4 billion resolution with Indivior’s former parent, Reckitt Benckiser Group PLC (RB Group), announced in 2019, and a plea agreement with Indivior plc’s former CEO, Shaun Thaxter, announced last month, the total resolution relating to the marketing of Suboxone is more than $2 billion
—the largest-ever resolution in a case brought by the Department of Justice involving an opioid drug.Suboxone is a drug product approved for use by recovering opioid addicts to avoid or reduce withdrawal symptoms while they undergo treatment for opioid-use disorder. Suboxone contains buprenorphine, a powerful opioid.
“Combatting the opioid crisis is a Department of Justice priority,” said Principal Deputy Associate Attorney General Claire M. Murray. “Today’s announced resolution and related actions hold accountable entities and individuals that unlawfully marketed opioid-addiction products.”
“The opioid crisis is a public health emergency. Prevention and access to effective treatments for opioid addiction are critical to fighting this epidemic,” said Deputy Assistant Attorney General Michael D. Granston for the Department's Civil Division. “When a drug manufacturer claims to be part of a solution for opioid addicts, we expect honesty and candor to government officials, as well as to the physicians and patients making important treatment decisions based on those representations.”
Resolution of the Criminal Investigation
Indivior Solutions pleaded guilty today to a one-count felony criminal information charging false statements relating to health care matters. In connection with its guilty plea, Indivior Solutions admitted making false statements to promote the film version of Suboxone (Suboxone Film) to the Massachusetts Medicaid program (MassHealth) relating to the safety of Suboxone Film around children. The resolution includes a criminal fine, forfeiture, and restitution totaling $289 million. On June 30, 2020, Indivior plc’s former CEO Shaun Thaxter pleaded guilty to a one-count misdemeanor information related to Indivior’s false and misleading representations to MassHealth.
In 2002, Indivior Inc. received approval to market Suboxone tablets for use in the treatment of opioid addiction and dependence. At that time, Indivior Inc. was an RB Group subsidiary known as Reckitt Benckiser Pharmaceuticals Inc. In December 2014, RB Group spun off Indivior Inc., and the two companies are no longer affiliated. Thereafter, Indivior Inc. became a subsidiary of Indivior plc. On April 9, 2019, a federal grand jury sitting in Abingdon, Virginia, indicted Indivior Inc. and Indivior plc for allegedly engaging in an illicit nationwide scheme to increase prescriptions of Suboxone.
In its guilty plea today, Indivior Solutions, which employed marketing and sales personnel for the Indivior group of companies, admitted to an aspect of the scheme alleged in the indictment. Specifically, Indivior Solutions admitted that, in October 2012, it sought to convince MassHealth to expand Medicaid coverage of Suboxone Film in Massachusetts and sent MassHealth false data indicating that Suboxone Film had the lowest rate of accidental pediatric exposure (i.e., children taking medication by accident) of all buprenorphine drugs in Massachusetts, when in fact, it did not. Indivior Solutions further admitted that sending the false and misleading information occurred in the context of marketing and promotional efforts directed at MassHealth, which were overseen by top executives. MassHealth announced it would provide access to Suboxone Film for patients with children under the age of six shortly after Indivior provided the false and misleading information to agency officials.
“During the nationwide opioid epidemic, Indivior Solutions made false statements about Suboxone’s safety to increase its sales. In doing so, Indivior Solutions misled government health care officials and is being held accountable today for its felonious conduct,” said First Assistant United States Attorney Daniel P. Bubar of the Western District of Virginia said today. “This resolution is the culmination of years of work by prosecutors and agents and demonstrates that we will continue to work tirelessly to hold pharmaceutical manufacturers responsible for illegal conduct.”
In addition to its financial aspects, the agreement with Indivior Inc. includes novel provisions that:
- Require Indivior Inc. to disband its Suboxone sales force and not reinstate it;
- Require Indivior Inc.’s CEO to personally certify, under penalty of perjury, on an annual basis that during the prior year (a) Indivior was in compliance with the Food Drug and Cosmetic Act and did not commit health care fraud or (b) list all non-compliant activity and the steps taken by Indivior to remedy these acts;
- Prohibit Indivior Inc. from using data obtained from surveys of health care providers for marketing, sales, and promotional purposes;
- Require Indivior Inc. to remove health care providers from their promotional programs who are at a high risk of inappropriate prescribing; and
- Make Indivior subject to contempt sanctions by the Court and reinstatement of the dismissed charges if it violates the agreement.
“The opioid crisis has devastated families and communities across the Commonwealth and drug manufacturers must be held accountable for their role in creating and prolonging this crisis,” said Virginia Attorney General Mark R. Herring. “I want to thank my Medicaid Fraud Control Unit for their work on this important case, as well as our local, state and federal partners for their continued collaboration. My team and I will continue to do everything in our power to hold pharmaceutical companies accountable for their role in the opioid crisis and help to ensure justice for those families who have been effected by the opioid crisis.”
“Parties that contract with the government will be held to the letter of the contract,” said Kenneth Cleevely, Special Agent in Charge of the Eastern Field Office for the U.S. Postal Service Office of Inspector General. “The U.S. Postal Service spends billions of dollars per year in workers compensation-related costs, most of which are legitimate. However, when medical providers or companies choose to flout the rules and profit illegally, special agents with the USPS OIG will work with our law enforcement partners to hold them responsible. To report fraud or other criminal activity involving the Postal Service, contact USPS OIG special agents at www.uspsoig.gov or 888-USPS-OIG.”
United States District Judge James P. Jones accepted the guilty plea but deferred acceptance of the plea agreement until after the preparation of a presentence report. He scheduled sentencing for Oct. 20, 2020 at the United States Courthouse in Abingdon, Virginia.
The Civil Settlement
Under the civil settlement, Indivior Inc. and Indivior plc have agreed to pay a total of $300 million to resolve claims that the marketing of Suboxone caused false claims to be submitted to government health care programs. The $300 million settlement amount includes approximately $209.3 million to the federal government and $90.7 million to states that opt to participate in the agreement.
The civil settlement resolves allegations by the United States that, from 2010 through 2015, Indivior companies knowingly (a) promoted the sale and use of Suboxone to physicians who were writing prescriptions that were not for a medically accepted indication and that lacked a legitimate medical purpose, were issued without any counseling or psychosocial support, were for uses that were unsafe, ineffective, and medically unnecessary, and were often diverted; (b) promoted the sale or use of Suboxone Film to physicians and state Medicaid agencies using false and misleading claims that Suboxone Film was less susceptible to diversion and abuse than other buprenorphine products and that Suboxone Film was less susceptible to accidental pediatric exposure than tablets; and (c) submitted a petition to the Food and Drug Administration on Sept. 25, 2012, claiming that Suboxone Tablet had been discontinued “due to safety concerns” about the tablet formulation of the drug and took other steps to delay the entry of generic competition for Suboxone to improperly control pricing of Suboxone, including pricing to federal healthcare programs.
“Prescription opioids are both addictive and dangerous when diverted for improper use or prescribed without accurate information about the risks that they pose,” said U.S. Attorney Craig Carpenito for the district of New Jersey. “This resolution holds Indivior to account for placing profit above patient and community safety.”
The civil settlement resolves claims against Indivior in six lawsuits pending in federal court in the Western District of Virginia and the District of New Jersey under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. The False Claims Act also permits the government to intervene in such actions, as the government previously did in the three lawsuits pending in the Western District of Virginia. The whistleblower share to be awarded in this case has not yet been determined.
“Opioid addiction and abuse is an immense public health crisis and taking steps to address it is one of the FDA’s highest priorities,” said FDA Commissioner Stephen M. Hahn, M.D. “Medication-assisted treatments incorporating drugs like Indivior’s Suboxone, in combination with counseling and behavioral therapy, are an important tool in combating opioid use disorder but can quickly become part of the problem if not used responsibly. When companies encourage the use of powerful drugs where not medically necessary and provide misleading information about relative product benefits, they can ultimately risk more misuse, abuse, diversion, and accidental exposure to opioid drugs as well as make treatment more difficult to obtain for those suffering from this crisis. We will continue to work with the Department of Justice to investigate and hold accountable those who devise and participate in schemes to the detriment of the public health.”
Non-monetary Provisions of the Corporate Integrity Agreement
In addition to the criminal and civil resolutions, Indivior executed a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The CIA requires that Indivior implement numerous accountability and auditing provisions. On an annual basis, top executives and the Board of Directors must certify about compliance, Indivior must conduct annual risk assessments and other monitoring, and an independent review organization will conduct multi-faceted audits.
“Addressing the opioid crisis is a top priority for OIG, and we will continue to work closely with the Department of Justice to hold corporations and individuals accountable when they use illegal tactics to promote and sell opioids,” said Gregory E. Demske, Chief Counsel to the Inspector General, HHS-OIG. “Among other things, our CIA with Indivior imposes accountability on the Board and top executives, subjects the company to internal and external auditing, and ensures that the company will separate itself from its prior top leadership.”
“The opioid epidemic has ravaged this nation,” said Elton Malone, Assistant Inspector General for Investigations with the Office of Inspector General of the U.S. Department of Health and Human Services. “This resolution, along with our law enforcement partners’ work, should serve as a warning that large companies will face prosecution if they break the law.”
FTC Resolution
Under a separate agreement with the Federal Trade Commission (FTC), Indivior has agreed to pay $10 million to resolve claims that it engaged in unfair methods of competition in violation of the Federal Trade Commission Act, 15 U.S.C. § 53(b). The FTC filed a complaint in the United States District Court for the Western District of Virginia alleging anticompetitive activities by Indivior designed to impede competition from generic equivalents of Suboxone. As part of a consent decree, Indivior agreed that it would notify the FTC if it filed a Citizen Petition with the FDA in connection with a drug product, it would simultaneously disclose to both the FDA and the FTC all studies and data relevant to that Citizen Petition. Indivior further agreed not to withdraw a drug from the market or otherwise disadvantage a drug after obtaining approval to market another drug containing the same active ingredient.
“As alleged in the FTC’s complaint, in the midst of the nation’s opioid crisis, a critical opioid-addiction treatment was about to become more affordable,” said Gail Levine, a Deputy Director of the FTC’s Bureau of Competition. “But Indivior prevented that. It kept its drug prices high by unlawfully impeding generic manufacturers from competing effectively.”
A Multilateral Effort
The criminal case against Indivior was prosecuted by Randy Ramseyer of the U.S. Attorney’s Office for the Western District of Virginia, Albert P. Mayer and Carol Wallack of the Department of Justice Civil Division’s Commercial Litigation Branch, Charles J. Biro and Matthew J. Lash of the Department of Justice Civil Division’s Consumer Protection Branch, Kristin L. Gray, Joseph S. Hall and Janine M. Myatt of the Virginia Medicaid Fraud Control Unit of the Office of the Virginia Attorney General, and Garth W. Huston of the Federal Trade Commission. This matter was investigated by the Virginia Attorney General’s Medicaid Fraud Control Unit; FDA - Office of Criminal Investigation; United States Postal Service – Office of Inspector General; and Department of Health and Human Services - Office of Inspector General.
The civil settlement was handled by Edward Crooke of the Civil Division’s Commercial Litigation Branch, Sara Bugbee Winn of the U.S. Attorney’s Office for the Western District of Virginia, and Andrew A. Caffrey III of the U.S. Attorney’s Office for the District of New Jersey. Assistance was provided by representatives of the HHS Office of Counsel to the Inspector General; the HHS Office of the General Counsel, CMS Division; FDA’s Office of Chief Counsel; the U.S. Attorney’s Office for the Eastern District of Virginia; the U.S. Department of Agriculture Office of the General Counsel; the National Association of Medicaid Fraud Control Units; the Defense Criminal Investigative Service; the Office of Personnel Management - Office of Inspector General; the Department of Veterans’ Affairs Office of Inspector General; the Department of Labor - Office of Inspector General; and TRICARE Program Integrity.
The joint effort advances the goals of the Department’s Prescription Interdiction & Litigation (PIL) Task Force to deploy all available criminal, civil, and regulatory tools to hold opioid manufacturers accountable for unlawful practices and to ensure that prescription opioid products are marketed truthfully.
Except to the extent admitted as part of the criminal resolution, the claims resolved by the civil settlement are allegations only. There has been no determination of liability in the civil case.
For more information about the U.S. Attorney’s Office for the Western District of Virginia, visit its website at https://www.justice.gov/usao-wdva. Additional information about the Consumer Protection Branch and the Civil Fraud Section and their enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch and http://www. justice.gov/civil/fraud-section. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Indivior Solutions Pleads Guilty to Felony Charge and Indivior Entities Agree to Pay $600 Million to Resolve Criminal and Civil Investigations as Part of DOJ’s Largest Opioid ResolutionRead the Press Release
Indivior Solutions today pleaded guilty to a one-count felony information and, together with its parent companies Indivior Inc. and Indivior plc, agreed to pay a total of $600 million to resolve criminal and civil liability associated with the marketing of the opioid-addiction-treatment drug Suboxone. Together with a $1.4 billion resolution with Indivior’s former parent, Reckitt Benckiser Group PLC (RB Group), announced in 2019, and a plea agreement with Indivior plc’s former CEO, Shaun Thaxter, announced last month, the total resolution relating to the marketing of Suboxone is more than $2 billion — the largest-ever resolution in a case brought by the Department of Justice involving an opioid drug.
Suboxone is a drug product approved for use by recovering opioid addicts to avoid or reduce withdrawal symptoms while they undergo treatment for opioid-use disorder. Suboxone contains buprenorphine, a powerful opioid.
“Combatting the opioid crisis is a Department of Justice priority,” said Principal Deputy Associate Attorney General Claire M. Murray. “Today’s announced resolution and related actions hold accountable entities and individuals that unlawfully marketed opioid-addiction products.”
“The opioid crisis is a public health emergency. Prevention and access to effective treatments for opioid addiction are critical to fighting this epidemic,” said Deputy Assistant Attorney General Michael D. Granston for the Justice Department's Civil Division. “When a drug manufacturer claims to be part of a solution for opioid addicts, we expect honesty and candor to government officials, as well as to the physicians and patients making important treatment decisions based on those representations.”
Resolution of the Criminal Investigation
Indivior Solutions pleaded guilty today to a one-count felony criminal information charging false statements relating to health care matters. In connection with its guilty plea, Indivior Solutions admitted to making false statements to promote the film version of Suboxone (Suboxone Film) to the Massachusetts Medicaid program (MassHealth) relating to the safety of Suboxone Film around children. The resolution includes a criminal fine, forfeiture, and restitution totaling $289 million. On June 30, 2020, Indivior plc’s former CEO Shaun Thaxter pleaded guilty to a one-count misdemeanor information related to Indivior’s false and misleading representations to MassHealth.
In 2002, Indivior Inc. received approval to market Suboxone tablets for use in the treatment of opioid addiction and dependence. At that time, Indivior Inc. was an RB Group subsidiary known as Reckitt Benckiser Pharmaceuticals Inc. In December 2014, RB Group spun off Indivior Inc., and the two companies are no longer affiliated. Thereafter, Indivior Inc. became a subsidiary of Indivior plc. On April 9, 2019, a federal grand jury sitting in Abingdon, Virginia, indicted Indivior Inc. and Indivior plc for allegedly engaging in an illicit nationwide scheme to increase prescriptions of Suboxone.
In its guilty plea today, Indivior Solutions, which employed marketing and sales personnel for the Indivior group of companies, admitted to an aspect of the scheme alleged in the indictment. Specifically, Indivior Solutions admitted that, in October 2012, it sought to convince MassHealth to expand Medicaid coverage of Suboxone Film in Massachusetts and sent MassHealth false data indicating that Suboxone Film had the lowest rate of accidental pediatric exposure (i.e., children taking medication by accident) of all buprenorphine drugs in Massachusetts, when in fact, it did not. Indivior Solutions further admitted that sending the false and misleading information occurred in the context of marketing and promotional efforts directed at MassHealth, which were overseen by top executives. MassHealth announced it would provide access to Suboxone Film for patients with children under the age of six shortly after Indivior provided the false and misleading information to agency officials.
“During the nationwide opioid epidemic, Indivior Solutions made false statements about Suboxone’s safety to increase its sales. In doing so, Indivior Solutions misled government health care officials and is being held accountable today for its felonious conduct,” said First Assistant U.S. Attorney Daniel P. Bubar of the Western District of Virginia. “This resolution is the culmination of years of work by prosecutors and agents and demonstrates that we will continue to work tirelessly to hold pharmaceutical manufacturers responsible for illegal conduct.”
In addition to its financial aspects, the agreement with Indivior Inc. includes novel provisions that:
- Require Indivior Inc. to disband its Suboxone sales force and not reinstate it;
- Require Indivior Inc.’s CEO to personally certify, under penalty of perjury, on an annual basis that during the prior year (a) Indivior was in compliance with the Food Drug and Cosmetic Act and did not commit health care fraud or (b) list all non-compliant activity and the steps taken by Indivior to remedy these acts;
- Prohibit Indivior Inc. from using data obtained from surveys of health care providers for marketing, sales, and promotional purposes;
- Require Indivior Inc. to remove health care providers from their promotional programs who are at a high risk of inappropriate prescribing; and
- Make Indivior subject to contempt sanctions by the court and reinstatement of the dismissed charges if it violates the agreement.
“The opioid crisis has devastated families and communities across the Commonwealth and drug manufacturers must be held accountable for their role in creating and prolonging this crisis,” said Virginia Attorney General Mark R. Herring. “I want to thank my Medicaid Fraud Control Unit for their work on this important case, as well as our local, state and federal partners for their continued collaboration. My team and I will continue to do everything in our power to hold pharmaceutical companies accountable for their role in the opioid crisis and help to ensure justice for those families who have been effected by the opioid crisis.”
“Parties that contract with the government will be held to the letter of the contract,” said Kenneth Cleevely, Special Agent in Charge of the Eastern Field Office for the U.S. Postal Service Office of Inspector General. “The U.S. Postal Service spends billions of dollars per year in workers compensation-related costs, most of which are legitimate. However, when medical providers or companies choose to flout the rules and profit illegally, special agents with the USPS OIG will work with our law enforcement partners to hold them responsible. To report fraud or other criminal activity involving the Postal Service, contact USPS OIG special agents at www.uspsoig.gov or 888-USPS-OIG.”
U.S. District Judge James P. Jones accepted the guilty plea but deferred acceptance of the plea agreement until after the preparation of a presentence report. He scheduled sentencing for Oct. 20, 2020 at the U.S. Courthouse in Abingdon, Virginia.
The Civil Settlement
Under the civil settlement, Indivior Inc. and Indivior plc have agreed to pay a total of $300 million to resolve claims that the marketing of Suboxone caused false claims to be submitted to government health care programs. The $300 million settlement amount includes approximately $209.3 million to the federal government and $90.7 million to states that opt to participate in the agreement.
The civil settlement resolves allegations by the United States that, from 2010 through 2015, Indivior companies knowingly (a) promoted the sale and use of Suboxone to physicians who were writing prescriptions that were not for a medically accepted indication and that lacked a legitimate medical purpose, were issued without any counseling or psychosocial support, were for uses that were unsafe, ineffective, and medically unnecessary, and were often diverted; (b) promoted the sale or use of Suboxone Film to physicians and state Medicaid agencies using false and misleading claims that Suboxone Film was less susceptible to diversion and abuse than other buprenorphine products and that Suboxone Film was less susceptible to accidental pediatric exposure than tablets; and (c) submitted a petition to the Food and Drug Administration on Sept. 25, 2012, claiming that Suboxone Tablet had been discontinued “due to safety concerns” about the tablet formulation of the drug and took other steps to delay the entry of generic competition for Suboxone to improperly control pricing of Suboxone, including pricing to federal healthcare programs.
“Prescription opioids are both addictive and dangerous when diverted for improper use or prescribed without accurate information about the risks that they pose,” said U.S. Attorney Craig Carpenito for the District of New Jersey. “This resolution holds Indivior to account for placing profit above patient and community safety.”
The civil settlement resolves claims against Indivior in six lawsuits pending in federal court in the Western District of Virginia and the District of New Jersey under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. The False Claims Act also permits the government to intervene in such actions, as the government previously did in the three lawsuits pending in the Western District of Virginia. The whistleblower share to be awarded in this case has not yet been determined.
“Opioid addiction and abuse is an immense public health crisis and taking steps to address it is one of the FDA’s highest priorities,” said FDA Commissioner Stephen M. Hahn, M.D. “Medication-assisted treatments incorporating drugs like Indivior’s Suboxone, in combination with counseling and behavioral therapy, are an important tool in combating opioid use disorder but can quickly become part of the problem if not used responsibly. When companies encourage the use of powerful drugs where not medically necessary and provide misleading information about relative product benefits, they can ultimately risk more misuse, abuse, diversion, and accidental exposure to opioid drugs as well as make treatment more difficult to obtain for those suffering from this crisis. We will continue to work with the Department of Justice to investigate and hold accountable those who devise and participate in schemes to the detriment of the public health.”
Non-monetary Provisions of the Corporate Integrity Agreement
In addition to the criminal and civil resolutions, Indivior executed a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The CIA requires that Indivior implement numerous accountability and auditing provisions. On an annual basis, top executives and the Board of Directors must certify about compliance, Indivior must conduct annual risk assessments and other monitoring, and an independent review organization will conduct multi-faceted audits.
“Addressing the opioid crisis is a top priority for OIG, and we will continue to work closely with the Department of Justice to hold corporations and individuals accountable when they use illegal tactics to promote and sell opioids,” said Gregory E. Demske, Chief Counsel to the Inspector General, HHS-OIG. “Among other things, our CIA with Indivior imposes accountability on the Board and top executives, subjects the company to internal and external auditing, and ensures that the company will separate itself from its prior top leadership.”
“The opioid epidemic has ravaged this nation,” said Elton Malone, Assistant Inspector General for Investigations with the Office of Inspector General of the U.S. Department of Health and Human Services. “This resolution, along with our law enforcement partners’ work, should serve as a warning that large companies will face prosecution if they break the law.”
FTC Resolution
Under a separate agreement with the Federal Trade Commission (FTC), Indivior has agreed to pay $10 million to resolve claims that it engaged in unfair methods of competition in violation of the Federal Trade Commission Act, 15 U.S.C. § 53(b). The FTC filed a complaint in the U.S. District Court for the Western District of Virginia alleging anticompetitive activities by Indivior designed to impede competition from generic equivalents of Suboxone. As part of a consent decree, Indivior agreed that it would notify the FTC if it filed a Citizen Petition with the FDA in connection with a drug product, it would simultaneously disclose to both the FDA and the FTC all studies and data relevant to that Citizen Petition. Indivior further agreed not to withdraw a drug from the market or otherwise disadvantage a drug after obtaining approval to market another drug containing the same active ingredient.
“As alleged in the FTC’s complaint, in the midst of the nation’s opioid crisis, a critical opioid-addiction treatment was about to become more affordable,” said Gail Levine, a Deputy Director of the FTC’s Bureau of Competition. “But Indivior prevented that. It kept its drug prices high by unlawfully impeding generic manufacturers from competing effectively.”
A Multilateral Effort
The criminal case against Indivior was prosecuted by Randy Ramseyer of the U.S. Attorney’s Office for the Western District of Virginia, Albert P. Mayer and Carol Wallack of the Department of Justice Civil Division’s Commercial Litigation Branch, Charles J. Biro and Matthew J. Lash of the Department of Justice Civil Division’s Consumer Protection Branch, Kristin L. Gray, Joseph S. Hall and Janine M. Myatt of the Virginia Medicaid Fraud Control Unit of the Office of the Virginia Attorney General, and Garth W. Huston of the Federal Trade Commission. This matter was investigated by the Virginia Attorney General’s Medicaid Fraud Control Unit; FDA - Office of Criminal Investigation; United States Postal Service – Office of Inspector General; and Department of Health and Human Services - Office of Inspector General.
The civil settlement was handled by Edward Crooke of the Civil Division’s Commercial Litigation Branch, Sara Bugbee Winn of the U.S. Attorney’s Office for the Western District of Virginia, and Andrew A. Caffrey III of the U.S. Attorney’s Office for the District of New Jersey. Assistance was provided by representatives of the HHS Office of Counsel to the Inspector General; the HHS Office of the General Counsel, CMS Division; FDA’s Office of Chief Counsel; the U.S. Attorney’s Office for the Eastern District of Virginia; the U.S. Department of Agriculture Office of the General Counsel; the National Association of Medicaid Fraud Control Units; the Defense Criminal Investigative Service; the Office of Personnel Management - Office of Inspector General; the Department of Veterans’ Affairs Office of Inspector General; the Department of Labor - Office of Inspector General; and TRICARE Program Integrity.
The joint effort advances the goals of the Department’s Prescription Interdiction & Litigation (PIL) Task Force to deploy all available criminal, civil, and regulatory tools to hold opioid manufacturers accountable for unlawful practices and to ensure that prescription opioid products are marketed truthfully.
Except to the extent admitted as part of the criminal resolution, the claims resolved by the civil settlement are allegations only. There has been no determination of liability in the civil case.
For more information about the U.S. Attorney’s Office for the Western District of Virginia, visit its website at https://www.justice.gov/usao-wdva. Additional information about the Consumer Protection Branch and the Civil Fraud Section and their enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch and http://www. justice.gov/civil/fraud-section. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
Hudson man charged with embezzling $600k from Discovery Tours, IncRead the Press Release
Justin Herdman, United States Attorney for the Northern District of Ohio, announced today that a federal grand jury sitting in Cleveland has returned a eighteen-count indictment charging Joseph A. Cipolletti, age 45, of Hudson, with wire fraud, money laundering, bank fraud, and making a false statement under oath.
“This defendant is accused of embezzling thousands of dollars from hardworking Northeast Ohio families, intended to provide their children and students with meaningful educational experiences, for his own personal use – such as buying vehicles and backyard renovations,” said U.S. Attorney Justin Herdman. “As a result of the defendant’s alleged actions, his place of business was forced into bankruptcy, and our community’s schoolchildren were deprived of invaluable experiences and memories.”
“The fraud perpetrated by Mr. Cipolletti stole money from hardworking families and school districts. The scheme deprived students of annual trips that have become a tradition and provide a lifetime of memories,” said FBI Special Agent in Charge Eric B. Smith. “Great work by partner agencies including the Summit County Prosecutor’s Office, the Geauga County Prosecutor’s Office, and Ohio BCI, laid the initial groundwork for the FBI and the USAO to obtain this federal indictment. We will continue to work with partners throughout Northeast Ohio to seek justice for the communities we serve.”
“When these families paid for a trip, fraud wasn’t on the itinerary,” said Ohio Attorney General Dave Yost. “This business owner didn’t keep his word, so now his next destination will be the courthouse.”
“This individual is a typical con man,” said Cuyahoga County Prosecutor Michael O’Malley. “He took money from parents and never intended on fulfilling his obligations.”
“Thank you to U.S. Attorney Justin Herdman and his office and the FBI for their thorough investigation,” said Summit County Prosecutor Sherri Bevan Walsh. “My office began an investigation into this conduct over two years ago. My hope is those responsible for taking money from local families and depriving students of a once-in-a-lifetime trip will be held accountable.”
According to the indictment, Cipolletti was employed as Vice President of Discovery Tours, Inc., a business located in Mayfield Village, Ohio, that offered educational trips for grade school and high school students to destinations such as Washington, D.C., Chicago, Illinois, New York City, New York, Columbus, Ohio, and Gettysburg, Pennsylvania. These trips took place via coach bus and included transportation, hotel accommodations, meals, sightseeing admissions, and security. The defendant’s responsibilities included managing the organization’s finances, cash withdrawals, general ledger entries, accounts payable, accounts receivable, payroll, taxes and the defendant had signature authority on the business bank accounts.
According to court documents, from June 2014 to May 2018, the defendant is alleged to have devised a scheme to divert payments intended for these trips for personal use. The defendant defrauded parents, other student trip purchasers, and embezzled funds meant for school trips on items such as home renovations and personal vehicles. Overall, the defendant is alleged to have embezzled approximately $609,942 from his place of business.
The defendant allegedly took many actions to further his scheme, including making multiple false entries in the Discovery Tours general ledger claiming embezzled funds were trip-related expenses, forging an email to a hotel vendor claiming that the business suffered a loss of $236,022.27 due to a hacked account, paying vendors for previous student trips with deposits from future trips, and obtaining high-out interest loans to conceal his actions. The high interest on these loans ultimately led to Discovery Tours eventual bankruptcy filing.
In one instance, according to the indictment, on or about May 19, 2016, a hotel vendor sent the defendant an email stating that payment for a previous school trip had not been made and was overdue. The hotel vendor informed the defendant that because of this delay in payment, the business would be required to prepay for future events. The hotel vendor advised the defendant that payment in full for the hotel accommodations was not received by a specific time and date, then the next student group would not be permitted to check-in.
On or about May 21, 2016, knowing that his organization’s business account did not have sufficient funds, the defendant issued five checks totaling $72,540, payable to the hotel, and had an employee travel in interstate commerce from Ohio to Virginia to hand deliver the checks to the hotel. All the checks were returned for insufficient funds.
That indictment states that as a result of the defendant’s actions, on May 7, 2018, Discovery Tours abruptly ended operations and filed for bankruptcy in United States Bankruptcy Court for the Northern District of Ohio. Student trips to Washington, D.C. were cancelled for dozens of schools across Ohio and more than 5,000 families lost the money they had previously paid for trip fees.
Furthermore, on December 10, 2018, in the United States Bankruptcy Court for the Northern District of Ohio, the defendant is alleged to have knowingly made statements under oath in and in relation to his organization’s bankruptcy status. The defendant claimed that he did not owe his business any money, when in fact, and as he then knew, the defendant embezzled $609,942 from his place of business and made false entries in the general ledger.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigation was conducted by the Cleveland Division of the FBI and Akron Resident Agency. The U.S. Attorney’s Office for the Northern District of Ohio would like to acknowledge and thank the Ohio Bureau of Criminal Investigations and the Summit County, Geauga County, and Cuyahoga County Prosecutor Offices for their cooperation with this matter. This case is being prosecuted by Assistant U.S. Attorney Brian McDonough.
Hudson County Man Charged with Being Felon in Possession of WeaponRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man made his initial appearance today on a charge stemming from his arrest for illegally possessing a handgun with a large capacity magazine, U.S. Attorney Craig Carpenito announced.
Malik Holloway, 28, of Jersey City, New Jersey, is charged by complaint with one count of possession of a firearm and ammunition by a convicted felon. He appeared by videoconference before U.S. Magistrate Judge James B. Clark III and was detained.
According to documents filed in this case:
At 8:20 p.m. on July 13, 2020, a Jersey City Police Department (JCPD) officer observed via surveillance camera what he believed to be the transfer of a firearm between two individuals on Neptune Avenue. Approximately 30 minutes later, members of JCPD observed a large group of people. Malik Holloway began to walk away from the group. An officer observed what appeared to be a bulge protruding from the center of Holloway’s waistband and Holloway smelled of marijuana. Holloway was stopped and the officer conducted a pat down for weapons. The officer recovered a Glock Model 17 9mm with a large capacity magazine containing 18 rounds of ammunition
The charge of possession of a weapon by a convicted felon carries a maximum penalty of 10 years in prison and a fine of up to $250,000.
U.S. Attorney Carpenito credited the Jersey City Police Department, under the direction of Public Safety Director James Shea; the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez; and special agents and task force officers of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson, Newark Field Division, with the investigation leading to the charge and arrest.
This investigation was conducted as part of the Jersey City Violent Crime Initiative (VCI). The VCI was formed in 2018 by the U.S. Attorney’s Office for the District of New Jersey, the Hudson County Prosecutor’s Office, and the Jersey City Police Department, for the sole purpose of combatting violent crime in and around Jersey City. As part of this partnership, federal, state, county, and city agencies collaborate to strategize and prioritize the prosecution of violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Federal Bureau of Investigation (FBI), the Drug Enforcement Administration’s (DEA) New Jersey Division, the U.S. Marshals, the Jersey City Police Department, the Hudson County Prosecutor’s Office, the Hudson County Sheriff’s Office, New Jersey State Parole, the Hudson County Jail, and the New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center.
The government is represented by Assistant U.S. Attorney Tracey Agnew of the Organized Crime and Gangs Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
High Desert Man Charged with Unlawfully Importing Ancient MosaicRead the Press Release
LOS ANGELES – A Palmdale resident was charged today with illegally importing a mosaic depicting the Roman god Hercules that is believed to have been made nearly two millennia ago.
Yassin Alcharihi, 53, was named in an indictment that charges him with one count of entry of goods falsely classified.
The indictment alleges that Alcharihi claimed he was importing a mosaic and other items valued at $2,199, when in fact he was importing an ancient mosaic worth more than that. The indictment also alleges that he misrepresented the quality of the mosaic and what the artwork depicted.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
Alcharihi will receive a summons to appear for an arraignment in United States District Court for an arraignment that will likely take place next month.
This case is being investigated by the FBI’s Art and Antiquity Investigations group and Homeland Security Investigation’s Los Angeles Public Safety Group.
The case is being prosecuted by Assistant United States Attorneys Mark A. Williams and Matthew W. O’Brien of the Environmental and Community Safety Crimes Section, and Justice Department Trial Attorney Ann Marie Ursini of the Criminal Division’s Human Rights and Special Prosecutions Section.
The government is pursuing forfeiture of the mosaic, which was seized by FBI and HSI agents in 2016, in both the indictment and a 2018 asset forfeiture complaint being handled by Assistant United States Attorney Katharine Schonbachler.
Hazard Couple Sentenced for Labor Trafficking ChargesRead the Press Release
LONDON, Ky. - Two defendants, Jordan Allen Otis, 26, and Tiffany Louis Walsh, 34, were sentenced in federal court this week, to 360 months and 108 months in federal prison respectively, by U.S. District Judge Robert Wier for labor trafficking charges. Otis had previously pled guilty to using force and threats of force to obtain labor and services, and Walsh had previously pled guilty to benefiting financially from labor trafficking.
According to their plea agreements, Otis and Walsh used threats of physical force to compel minor victims to make various homemade items and sell those items, by walking door to door for approximately six hours a day. Otis also admitted to forcing the victims to hand out flyers he made, which offered various services the victims would provide for payment. Otis further admitted that, if the victims did not comply, they had to choose a punishment from a “punishment jar,” which was filled with handwritten punishments he would impose. Otis kept all or most of the money for himself, and using it to purchase electronics, cigarettes and food for himself and Walsh. Their criminal conduct occurred from March 2016 through May 2017, in Hazard, Kentucky, and other locations, including Tennessee and South Carolina.
“Protecting the most vulnerable, including children, from harm is a fundamental priority for law enforcement. Because of the dedicated work of FBI and KSP personnel, the defendants were held accountable for their crimes,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “The lengthy sentences imposed underscore the seriousness of the conduct and help ensure the defendants are not able to victimize others for the foreseeable future.”
Under federal law, Otis and Walsh must serve 85 percent of their prison sentences and upon their release will be under the supervision of the U.S. Probation Office for three years.
U.S. Attorney Duncan; James Robert Brown, Special Agent in Charge, FBI, Louisville Field Office; and Commissioner Rodney Brewer, Kentucky State Police, jointly made the announcement.
The investigation was directed by the FBI and KSP. The United States was represented by Assistant U.S. Attorney Hydee Hawkins.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
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Harrisburg Man Indicted for EscapeRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Terrell Ike Luster, age 31, of Harrisburg, Pennsylvania, was indicted by a federal grand jury on July 22, 2020, for escape. Luster was taken into custody without incident on July 23, 2020.
According to United States Attorney David J. Freed, the indictment alleges that on July 7, 2020, Luster failed to return to the Capital Pavilion Residential Reentry Center where he was confined for his conviction by the United States District Court for the Middle District of Pennsylvania for unlawful possession of a firearm by a felon, possession of firearm during commission of federal drug charge, and possession with intent to distribute crack cocaine.
The case was investigated by the United States Marshal Services for the Middle District of Pennsylvania. Assistant U.S. Attorney Jaime Keating is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for this offense is 5 years imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Guilty Verdict for Parolee-Felon in Possession of FirearmsRead the Press Release
United States Attorney Joe Kelly announced that on July 24, 2020, Emmanuel John of Omaha was found guilty following a jury trial before United States District Judge Brian C. Buescher on six counts of being a felon in possession of a firearm. John will be sentenced on October 21, 2020, and faces up to 10 years’ incarceration on each of the six counts. This was the first jury trial in federal court in Nebraska since trials were suspended due to COVID.
Between July 2018 and August 2018, John illegally sold eight guns to a confidential informant during six separate controlled buys. At the time of the events, John, a Trip Set gang member, was out on parole for a robbery conviction. Following his arrest on the federal case, John’s parole was revoked and he was sent back to the Nebraska Department of Corrections where he remained in custody.
As a now three-time convicted felon, John’s arrest was part of a Project Safe Neighborhood initiative and a larger operation to make controlled purchases of firearms and narcotics, which targeted members of the Trip Set and African Pride gangs. This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Omaha Police Department. Project Safe Neighborhood is a national initiative of the Department of Justice that was announced in 2001 to reduce and prevent violent crime and make the nation’s neighborhoods safer.
Fort Wayne Man ChargedRead the Press Release
FORT WAYNE – John Clark, age 53, of Fort Wayne, Indiana was charged in a criminal complaint with drug and weapon violations, announced U.S. Attorney Kirsch.
According to documents in this case, Mr. Clark, a convicted felon, was arrested after a search warrant was executed on his residence. The complaint alleges that Clark used his residence to distribute narcotics. During the search, agents found crack cocaine, firearms, other drugs and items used for distribution and cash.
“I wish to commend all the law enforcement agencies on this case for their tireless efforts to reduce drug trafficking in the Allen County area,” said United States Attorney Thomas L. Kirsch II. “Getting illegal guns and drugs off the streets promotes safety for law abiding citizens.”
Assistant Special Agent in Charge, Michael Gannon said, “DEA is committed to working hand and hand with the Allen County Police Department and our state, local and federal partners. We will utilize all available resources to target drug dealers and put them in jail. I commend the exceptional work that was done in this investigation which resulted in the seizure of cocaine, several firearms, and currency.”
The United States Attorney’s Office emphasizes that a Complaint is merely an allegation and that all persons are presumed innocent until, and unless proven guilty in court.
If convicted, any specific sentence to be imposed will be determined by the Judge after a consideration of federal statutes and the Federal Sentencing Guidelines.
The case is being investigated by the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives and Allen County Drug Task Force, comprised of the Allen County Sheriff’s Department and New Haven Police Department. This case is being prosecuted by Assistant United States Attorney Anthony W. Geller.
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Former U.S. Army Soldier Indicted on Conspiracy to Commit Marriage Fraud, Marriage Fraud, Harboring an Alien for Financial Gain, Visa Fraud, False Statements Under Oath, Theft of Government Property and Criminal Contempt ChargesRead the Press Release
RALEIGH, N.C. – A federal grand jury returned an indictment charging a former U.S. Army soldier with conspiracy to commit marriage fraud, marriage fraud, harboring an alien for financial gain, visa fraud, false statement under oath, theft of government property, and criminal contempt.
According to the indictment, Endasia Mahagony East, a U.S. Citizen, knowingly induced a foreign-born national to enter into a sham marriage with her for the purpose of evading United States immigration laws and obtaining lawful permanent residence status for the otherwise inadmissible foreign-born national.
East is charged in a 7-count indictment, if convicted she faces multiple counts of 5 years maximum imprisonment, multiple counts of 10 years maximum imprisonment, a count of 15 years maximum imprisonment, a maximum fine of $250,000 per count, and a term of supervised release following any term of imprisonment.
Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement. The case was investigated by the U.S. Army Criminal Investigation Division and the Document and Benefit Fraud Task Force (DBFTF) in the Eastern District of North Carolina lead by Homeland Security Investigations.
A copy of this press release is located on our website.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Former Sault Ste. Marie Man Sentenced to Seven Years in Prison for Abusive Sexual Contact with A MinorRead the Press Release
GRAND RAPIDS, MICHIGAN —U.S. Attorney Andrew Birge announced today that Allen Michael Foster, 29, was sentenced in U.S. District Court to 84 months imprisonment for abusive sexual contact with a minor under the age of 12 years. As part of his sentence, Foster will be on supervised release for six years following his incarceration and be required to register as a sex offender.
The charge arose from an investigation initiated in 2016 that determined that between 2012 and 2014, Foster sexually abused a minor who was residing in his household on the Sault Ste. Marie reservation.
The Door County Sheriff’s Department, Sault Tribe Law Enforcement Department, and the FBI investigated the case. Assistant U.S. Attorney Hannah N. Bobee prosecuted the case.
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Former Rockcastle Deputy Jailer Convicted of Civil Rights ViolationsRead the Press Release
LONDON, Ky. - A Mt, Vernon, Kentucky, man was convicted Thursday by a federal jury in London for violating the civil rights of an inmate under custody.
After seven hours of deliberation, following a four-day trial, the jury convicted 25-year-old Derek Steven Clark, a former Deputy Jailer at the Rockcastle County Detention Center, from Mt. Vernon, Kentucky, of two counts of injuring, oppressing, threatening, and intimidating a victim, an arrestee, and one count of making a false entry in a record or document intending to impede or influence the investigation of the matter within a federal jurisdiction.
According to testimony at trial, Clark and others placed an inmate victim into a restraint chair. Clark then aided and commanded the assault of the victim by another, which resulted in bodily injury. Afterwards, Clark completed an official incident report to document the incident. In completing that report, Clark falsely wrote that after he and others placed the victim in the restraint chair, the victim began spitting at deputy jailers, causing two inmates to intervene. Clark’s false report indicated one inmate instinctively slapped the victim which caused the victim’s lip to bleed, and that the victim then spit blood, causing the inmate to punch the victim.
Evidence at trial established that, in truth, Clark and others placed the victim into the restraint chair, and the victim did not become physically combative or spit at deputies, before being punched by the inmate.
Clark was indicted in December 2019.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky, and James Robert Brown, Special Agent in Charge, FBI, Louisville Field Office, jointly announced the conviction.
The investigation was conducted by the FBI. The United States was represented in the case by Assistant U.S. Attorney Hydee Hawkins.
Clark will appear for sentencing on November 18, 2020. He faces a maximum of ten years in prison for Count 1 and 2, and a maximum of 20 years in prison for Count 3. However, the Court must consider the U.S. Sentencing Guidelines and the applicable federal sentencing statutes before imposing a sentence.
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Former Howard University Associate Director Pleads Guilty to Defrauding the School Out of More Than $100,000Read the Press Release
WASHINGTON – Doemini Mosley, 35, of Washington, D.C., pled guilty today to defrauding Howard University out of more than $100,000, announced Acting U.S. Attorney Michael R. Sherwin and James A. Dawson, Special Agent in Charge of the Federal Bureau of Investigation’s (FBI) Washington Field Office Criminal Division.
Mosley pled guilty to one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 371, in the U.S. District Court for the District of Columbia. Her co-conspirator, Brian Johnson, 35, of Washington, D.C., pled guilty last week to the same offense. The charge carries a statutory maximum sentence of five years in prison. Under federal sentencing guidelines, Mosley faces a potential recommended sentence of between 10 and 24 months in prison. The plea agreement calls for Mosley to pay $139,697.75 in restitution and $85,850 in a forfeiture money judgment.
Mosley worked at Howard from 2011 through June 2017, initially in the financial aid office and then ultimately as the Associate Director of the Bursar’s Office. Johnson, a Howard graduate, served as Associate Director of Financial Aid from 2014 through August 2016. In the fall of 2016, Mosley proposed a scheme to Johnson in which Mosley would cause fraudulently-obtained money to be sent from Howard University to Johnson, with Johnson then kicking back half of the proceeds to Mosley. As part of the scheme, Mosley applied fraudulent financial aid awards onto Johnson’s student profile even though he was no longer a student or employed at the school. As a result, Mosley caused Howard University to issue $107,697.75 to Johnson’s bank account between November 2016 and May 2017. Johnson admitted sharing half of the fraud proceeds with Mosley in the form of cash or electronic payments.
Mosley also separately defrauded the university out of an additional $32,000 in May 2017.
The Honorable Beryl A. Howell accepted Johnson’s guilty plea last Friday and Mosley’s guilty plea today. Johnson is scheduled to be sentenced on September 25, 2020. Mosley is scheduled to be sentenced on October 2, 2020.
This case is part of an ongoing investigation being conducted by the FBI’s Washington Field Office. Assistant U.S. Attorney Kondi Kleinman of the Fraud and Public Corruption Section is prosecuting the case.
Former CEO and Founder of Technology Company Charged in Investment Fraud SchemeRead the Press Release
WASHINGTON – The CEO and co-founder of Trustify Inc. (Trustify), a privately-held technology company founded in 2015 and based in Arlington, Virginia, was charged in an indictment unsealed today for his alleged role in a fraud scheme resulting in millions of dollars of losses to investors.
Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney G. Zachary Terwilliger for the Eastern District of Virginia, and Assistant Director in Charge Timothy R. Slater of the FBI’s Washington Field Office made the announcement.
Daniel Boice, 41, of Alexandria, Virginia, was charged with five counts of wire fraud, one count of securities fraud, and two counts of money laundering.
The indictment alleges that, beginning in 2015, Boice fraudulently solicited investments in Trustify, a privately-held technology start-up company that connected customers with private investigators. Boice allegedly raised approximately $18.5 million from over 90 investors by, among other things, falsely overstating Trustify’s financial performance. The indictment also alleges that Boice made false statements to investors about the amount of investor funds that he would personally receive, while diverting a substantial amount of the investor money to his own benefit.
The charges in the indictment are merely allegations, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI’s Washington Field Office is investigating the case. The U.S. Securities and Exchange Commission provided assistance and is also filing a civil complaint against the defendant for related conduct. Trial Attorney Blake Goebel of the Criminal Division’s Fraud Section and Special Assistant U.S. Attorney Russell Carlberg of the Eastern District of Virginia are prosecuting the case. The department would also like to thank the Virginia State Corporation Commission for its assistance.
Individuals who believe they may be a victim in this case should contact the Victim Witness Services Unit of the U.S. Attorney’s Office for the Eastern District of Virginia at 703-299-3700 for more information.
Former CEO and Founder of Technology Company Charged in Investment Fraud SchemeRead the Press Release
The CEO and co-founder of Trustify Inc. (Trustify), a privately-held technology company founded in 2015 and based in Arlington, Virginia, was charged in an indictment unsealed today for his alleged role in a fraud scheme resulting in millions of dollars of losses to investors.
Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney G. Zachary Terwilliger for the Eastern District of Virginia, and Assistant Director in Charge Timothy R. Slater of the FBI’s Washington Field Office made the announcement.
Daniel Boice, 41, of Alexandria, Virginia, was charged with five counts of wire fraud, one count of securities fraud, and two counts of money laundering.
The indictment alleges that, beginning in 2015, Boice fraudulently solicited investments in Trustify, a privately-held technology start-up company that connected customers with private investigators. Boice allegedly raised approximately $18.5 million from over 90 investors by, among other things, falsely overstating Trustify’s financial performance. The indictment also alleges that Boice made false statements to investors about the amount of investor funds that he would personally receive, while diverting a substantial amount of the investor money to his own benefit.
The charges in the indictment are merely allegations, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI’s Washington Field Office is investigating the case. The U.S. Securities and Exchange Commission provided assistance and is also filing a civil complaint against the defendant for related conduct. Trial Attorney Blake Goebel of the Criminal Division’s Fraud Section and Special Assistant U.S. Attorney Russell Carlberg of the Eastern District of Virginia are prosecuting the case. The department would also like to thank the Virginia State Corporation Commission for its assistance.
Individuals who believe they may be a victim in this case should contact the Victim Witness Services Unit of the U.S. Attorney’s Office for the Eastern District of Virginia at 703-299-3700 for more information.
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.
Felon Who Shot at Police During High Speed Chase Sentenced to a Decade in Federal PrisonRead the Press Release
A man who assaulted his girlfriend before leading police on a high-speed chase was sentenced today to ten years in federal prison.
Richard Dale Ogle, II, age 31, from Eden, North Carolina, received the prison term after a November 12, 2019 guilty plea to being a felon in possession of a firearm.
Evidence at the sentencing hearing showed Ogle was on parole after serving a prison term in North Carolina for assault with a deadly weapon which inflected serious injury. Ogle absconded from parole and moved to Iowa to live with his girlfriend. On March 16, 2019, Ogle held a gun to his girlfriend’s head and threatened to kill her. Police responded to the residence and were able to remove the girlfriend from the home. Ogle then left the residence in a vehicle, driving through the town of Cresco. When he was near the high school in Cresco, officers attempted to conduct a traffic stop of his car. Ogle refused to stop and led officers on a high-speed chase through Cresco and continuing into Winneshiek County. The chase took place over the course of fourteen miles and involved speeds in excess of 100 miles per hour. During the chase, Ogle shot his gun six times at police. Ogle eventually stopped his car and was taken into custody by law enforcement.
Ogle was sentenced in Cedar Rapids by United States District Court C.J. Williams. Ogle was sentenced to 120 months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
At the sentencing, Judge Williams noted that, “defendant’s serious violent criminal history and high likelihood at reoffending” warranted the statutory maximum sentence.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives 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 /media/1122011/dl?inline.
Ogle 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 Lisa C. Williams and investigated by the Cresco Police Department, the Federal Bureau of Investigation, Howard County Sheriff’s Office, Winneshiek County Sheriff’s Office, and the Iowa State Patrol.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-CR-2041.
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Federal Inmate Sentenced to Nearly Five Years in Prison Assault CaseRead the Press Release
OKLAHOMA CITY – ROBERT GONZALEZ, 40, has been sentenced to 57 months in prison for an assault that resulted in serious bodily injury, announced U.S. Attorney Timothy J. Downing.
In September 2019, a federal grand jury indicted Gonzalez for the assault. The indictment alleged Gonzalez assaulted another inmate while serving a term of imprisonment at the Federal Correction Institution (FCI) in El Reno, Oklahoma. He pleaded guilty on October 28, 2019.
Court documents detail that, as a result of the assault, the victim inmate sustained fractures to his left orbit and nasal bone, damage to the retina, and lost consciousness. On Wednesday, July 22, 2020, U.S. District Judge Scott L. Palk sentenced Gonzalez to serve 57 months in prison, followed by three years of supervised release. In announcing the sentence, Judge Palk noted the nature and circumstances of the assault.
Public records further indicate that Gonzalez was convicted in the Southern District of Texas for conspiracy to transport undocumented aliens. When this assault occurred, he was serving a term of imprisonment of 18 months in that case. He was previously scheduled to be released from the custody of the Federal Bureau of Prisons on September 20, 2019.
This case is the result of investigations by FCI El Reno Special Investigative Services and the Federal Bureau of Investigation Oklahoma City Field Office. Assistant United States Attorney Ashley L. Altshuler prosecuted the case.
Reference is made to court filings for further information. To download a photo of U.S. Attorney Downing, click here.
Federal Inmate Sentenced for Murdering CellmateRead the Press Release
BEAUMONT, Texas – A federal inmate has been sentenced for murdering his cellmate in a Federal Bureau of Prisons facility in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.
Carroll Ellis Hayes, 40, of Mobile, AL, pleaded guilty on Jan. 27, 2020 to 2nd degree murder and was sentenced to 360 months in federal prison today by U.S. District Judge Marcia A. Crone today.
According to information presented in court, Hayes was serving a sentence for federal firearms violations and was in the Special Housing Unit (SHU) at the Federal Correctional Complex’s Medium Facility in Beaumont, Texas. On Feb. 9, 2018, another prisoner moved into the same cell as Hayes, and within an hour, a correctional officer discovered the new cellmate motionless on the floor—he had been beaten and strangled. Correctional officers attempted CPR before the cellmate was taken to a local hospital, where he was pronounced dead.
This case was investigated by the Bureau of Prisons and prosecuted by Assistant U.S. Attorney Michael Anderson.
Drug trafficking ring leader sentenced to 504 months in federal prisonRead the Press Release
Indianapolis – United States Attorney Josh J. Minkler announced today, Reggie M. Balentine, 43, Kokomo, Ind., and Perry O. Jones, 45, Kokomo, Ind. were sentenced for their role in a large drug trafficking ring operating in Kokomo, Ind. Balentine was sentenced to 504 months in federal prison and Jones was sentenced to 260 months in federal prison.
“Shutting this drug trafficking organization down was a big victory for the law abiding citizens of Kokomo and the entire Hoosier state.” said Minkler. Investigations like this where drug dealers are arrested, held without bond, convicted at trial and sentenced to a lengthy federal prison sentence will restore some peace to the citizens of Kokomo.”
From the fall of 2017 to May 1, 2018, Drug Enforcement Administration (DEA) Indianapolis District Office, Internal Revenue Service (IRS) Criminal Investigation, and the Kokomo Police Department conducted an extensive investigation that resulted in the federal arrest of 15 Kokomo, Indiana residents including Balentine and Jones.
The investigation revealed that Balentine was coordinating drug shipments from co-conspirator, Pierre Riley, in Atlanta, GA for further distribution in the Kokomo area by Michael Jones, who was earlier sentenced to 35 years, as well as other co-conspirators, to include his roommate, Perry Jones. Balentine would utilize female couriers to travel between Kokomo and Georgia to deliver controlled substances to Balentine and deliver drug proceeds to his supplier Pierre Riley in Georgia. These couriers would travel by bus or vehicle to complete this task.
Throughout the conspiracy, many of the conspirators possessed firearms in relation to their drug trafficking activities, in order to protect themselves, their drugs, and their drug proceeds. Investigators were also able to arrest two hitmen that were hired by the organization to travel from Atlanta, Georgia to Kokomo to murder a Kokomo resident.
During the investigation, agents seized approximately 17 pounds of methamphetamine, 2 pounds of cocaine, 2 ounces of heroin, 122 grams of fentanyl, $37,000 in drug proceeds and 24 firearms.
In October 2019, Balentine plead guilty to the following federal offenses: conspiracy to possess with intent to distribute and to distribute controlled substances, distribution of 50 grams or more of methamphetamine, conspiracy to use interstate commerce in the commission of murder-for-hire, felon in possession of a firearm, attempted possession with intent to distribute 50 grams or more of methamphetamine, and possession with intent to distribute 50 grams or more of methamphetamine.
Jones also plead guilty to the following federal offenses: conspiracy to possess with intent to distribute and to distribute controlled substances, felon in possession of a firearm, and possession of a firearm as a previously convicted felon.
This case was the result of an investigation by the Drug Enforcement Administration, Internal Revenue Service Criminal Investigation, and the Kokomo Police Department.
DEA Assistant Special Agent in Charge, Michael Gannon said, “The 42 year sentence for Mr. Balentine and the 21 year sentence of Mr. Jones is a big win for the fine citizens of Kokomo. Mr. Balentine headed a violent drug trafficking organization that utilized fear and violence to fuel the illicit distribution of methamphetamine, fentanyl, heroin, and cocaine in the Kokomo area. The DEA and their local, state, and federal partners are committed to targeting the most violent individuals who are wreaking havoc in our communities. Mr. Balentine was clearly that person.
According to Assistant United States Attorney Michelle Brady, who prosecuted this case for the government, Balentine must also serve five years of supervised release and Jones must serve ten years supervised release following their sentence.
In October 2017, United States Attorney Josh J. Minkler announced a Strategic Plan designed to shape and strengthen the District’s response to its most significant public safety challenges. This prosecution sentencing demonstrates the office’s firm commitment to target, investigate, and prosecute organizations that distribute methamphetamine and or heroin. See United States Attorney’s Office, Southern District of Indiana Strategic Plan Sections 3.1 and 3.3
Danbury Man Admits $1.1 Million Embezzlement SchemeRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that ANTHONY TEIXEIRA, 50, of Danbury, pleaded guilty today before U.S. Magistrate Judge Donna F. Martinez to a fraud offense related to $1.1 million embezzlement 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, for more than 25 years, Teixeira was employed by Joseph Merritt & Company (“JMC”), a Hartford-based printing company. Teixeira most recently oversaw the JMC branch located in Danbury. Between approximately January 2012 and February 2019, Teixeira defrauded JMC and its customers by presenting sales orders, or test sales orders, to customers as though they were actually invoices. Customers, believing they were paying JMC for the work, then delivered payments into accounts that Teixeira controlled. Teixeira also stole printing-related inventory from JMC inventory and sold it online, but manipulated invoices to deceive JMC’s systems into thinking the company had sold the inventory. The loss attributable to Teixeira through these schemes is approximately $1.1 million.
Teixeira pleaded guilty to one count of wire fraud, an offense that carries a maximum term of imprisonment of 20 years. He is scheduled to be sentenced by U.S. District Judge Vanessa L. Bryant on November 12, 2020.
Teixeira was arrested on a federal criminal complaint on December 12, 2019, and he was subsequently released on a $50,000 bond. He has been detained since June 1, 2020, after Judge Bryant determined that Teixeira had violated the conditions of his release and revoked his bond. An investigation revealed that Teixeira spent more than $48,000 while released on bond, in violation of court-imposed restrictions on his financial activity.
This investigation is being conducted by the Federal Bureau of Investigation and Danbury Police Department. The case is being prosecuted by Assistant U.S. Attorneys John T. Pierpont, Jr. and Amanda S. Oakes.
Convicted Sex Offender from Underhill Charged with Possessing Child PornographyRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that Ryan Beaulieu, 43, of Underhill, Vermont, was arrested today and charged with possession of child pornography. Beaulieu appeared today before the Honorable John M. Conroy, United States Magistrate Judge, and was ordered detained pending a detention hearing.
According to court records, the Vermont Internet Crimes Against Children Task Force (VT-ICAC) received information from a social media company and the Federal Bureau of Investigation that Beaulieu was distributing child pornography over the internet. This morning, Special Agents of the Department of Homeland Security and investigators with the Vermont Attorney General’s Office executed a search warrant at Beaulieu’s residence in Underhill, Vermont. In interviews with law enforcement, Beaulieu admitted to having accessed child pornography on his electronic devices. Investigators discovered numerous images and videos of child pornography on Beaulieu’s devices, including recordings of video-chat sessions in which Beaulieu coached prepubescent female children, directing them to display their genitalia on camera while he masturbated.
In 2013, Beaulieu was convicted of Lewd and Lascivious Conduct in Washington County District Court for conduct related to the sexual abuse of a child.
If convicted of the new charge, Beaulieu faces a maximum of ten years of imprisonment. The actual sentence however, would be determined by the Court with guidance from the advisory Federal Sentencing Guidelines. The United States Attorney emphasizes that the charges in the complaint are merely accusations, and that the defendant is presumed innocent unless and until he is proven guilty.
United States Attorney Christina E. Nolan commended the investigative efforts of the Department of Homeland Security, the Vermont Attorney General’s Office, Vermont Internet Crimes Against Children Task Force, and the Federal Bureau of Investigation.
The United States is represented in this matter by Assistant U.S. Attorney Jonathan Ophardt. Defendant Beaulieu was represented by the Office of the Federal Public Defender for the purposes of his initial appearance, and has not yet retained counsel.
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 United States Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources better to 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.justice.gov/psc.
Convicted Felon Sentenced to 15 Years in Federal Prison for Illegally Possessing Loaded Gun on South Side of ChicagoRead the Press Release
CHICAGO — A convicted felon has been sentenced to 15 years in federal prison for illegally possessing a loaded handgun in the Avalon Park neighborhood of Chicago.
ANTOINE JACKSON, 31, of Chicago, illegally possessed the loaded gun in the 8200 block of South Woodlawn Avenue on March 4, 2018. Jackson initially ran from Chicago Police officers who attempted to handcuff him, but he was apprehended a short time later. The semiautomatic handgun had a 16-round magazine and was capable of accepting an even larger capacity magazine.
Jackson was not legally allowed to possess a firearm after previously being convicted in the Circuit Court of Cook County for armed robbery and attempted armed robbery.
Jackson pleaded guilty earlier this year in the federal case to one count of illegal possession of a firearm by a felon. U.S. District Judge Joan Humphrey Lefkow imposed the 15-year sentence Wednesday in federal court in Chicago.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kristen deTineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; and David Brown, Superintendent of the Chicago Police Department.
“Despite being a convicted felon, just three years after getting paroled on his state cases, Jackson was again in possession of a firearm on the streets of Chicago,” Assistant U.S. Attorney Jared C. Jodrey argued in the government’s sentencing memorandum. “Jackson’s criminal record and offense conduct demonstrate a continued disrespect for the law.”
Holding illegal firearm possessors accountable through federal prosecution is a centerpiece of Project Guardian and Project Safe Neighborhoods – the Department of Justice’s violent crime reduction strategies. In the Northern District of Illinois, U.S. Attorney Lausch and law enforcement partners have deployed the Guardian and PSN programs to attack a broad range of violent crime issues facing the district.
Cleveland man indicted for robbery and evidence tampering during May 30 demonstrations in Downtown ClevelandRead the Press Release
Justin Herdman, United States Attorney for the Northern District of Ohio, announced today that a federal grand jury sitting in Cleveland has returned a two-count indictment charging Tandre Buchanan, Jr., age 22, of Cleveland, with one count of interference with commerce by means of robbery and one count of tampering with evidence.
“This indictment is part of the Department of Justice’s commitment to identify, arrest and prosecute those who participated in the widespread looting and damaging of downtown Cleveland on May 30th,” said U.S. Attorney Justin Herdman. “As I’ve said all along in this process, where we have jurisdiction, federal charges will be brought against those who abused a constitutionally-protected assembly to commit acts of destruction and violence in the downtown Cleveland neighborhood.”
“The right to engage in peaceful protest is a cornerstone of our Republic and the United States Constitution,” said FBI Special Agent in Charge Eric B. Smith. “The FBI will continue to work with our state and local partners and protect our citizen’s right to protest peacefully, but we will not let those who engaged in violence and destruction to go unchecked.”
According to the indictment, on or about May 30, 2020, the defendant did and aided and abetted others in the unlawful obstruction of commerce by means of robbery. The defendant is accused of obtaining property in the custody, possession, and presence of Colossal Cupcakes employees in downtown Cleveland. The defendant did so against the will of the employees by means of actual and threatened force, violence, and fear of immediate injury.
Furthermore, the defendant is alleged to have tampered with evidence by disposing of the clothing that he wore during the commission of these offenses. The indictment states that the defendant did so with the intention of impairing the use and availability of the object in an official proceeding.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
If convicted, the defendant’s sentence will be determined by the Court after a review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation.
In all cases, the sentence will not exceed the statutory maximum, and in most cases, it will be less than the maximum.
The investigation preceding this indictment was conducted by the FBI with the help of the Cleveland Police Department. This case is being prosecuted by Assistant United States Attorney Scott C. Zarzycki.
California Man Charged with Unlawfully Importing MosaicRead the Press Release
A California man was charged today with one count of unlawfully affecting the entry of goods into the United States upon false classification as to quality and value.
Acting Assistant Attorney General Brian C. Rabbitt of the Criminal Division, U.S. Attorney Nicola T. Hanna for the Central District of California, Special Agent in Charge David Prince of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Los Angeles and Special Agent in Charge Voviette D. Morgan of the FBI’s Los Angeles Field Office, Criminal Division made the announcement.
According to the indictment, Mohamad Yassin Alcharihi, 53, of Palmdale, California, claimed he was importing a shipment of items valued at $2,199, when in fact he was importing a mosaic worth more than that amount, and he misrepresented the quality of the mosaic, including what the mosaic depicted.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
This case is being investigated by the FBI’s Art and Antiquity Investigations group and HSI’s Los Angeles Public Safety Group. The case was prosecuted by Trial Attorney Ann Marie Ursini of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorneys Mark A. Williams and Matthew W. O’Brien of the Central District of California.
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.
Caldwell Man Sentenced to Prison on Federal Gun ChargesRead the Press Release
BOISE – Edgar Flores-Moreno, 36, of Caldwell, Idaho, was sentenced to 41 months in federal prison for unlawful possession of a firearm, U.S. Attorney Bart M. Davis announced today. A federal grand jury indicted Flores-Moreno on August 14, 2019.
According to court records, in July 2019, agents arrested Flores-Moreno in Nampa, Idaho for being an alien unlawfully present in the United States after deportation. Subsequent investigation revealed that Flores-Moreno possessed eleven firearms at his residence in Caldwell. This included two semi-automatic rifles with high-capacity magazines. Flores-Moreno is prohibited from possessing firearms due to his status as an alien unlawfully present in the United States, as well as prior felony convictions for statutory rape and attempted illegal reentry into the United States after deportation.
This case was investigated by the Homeland Security Investigations, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, and Nampa Police Department.
This case was prosecuted as part of the Department of Justice’s Project Safe Neighborhoods (PSN) program. PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives 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 visit: https://www.justice.gov/projectguardian.
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Buffalo Man Sentenced for Using A Controlled Substance While Possessing FirearmRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. – U.S. Attorney James P. Kennedy, Jr. announced today that Keyon Miller, 27, of Buffalo, NY, who was convicted of being an unlawful user of a controlled substance in possession of a firearm, was sentenced to serve 24 months in prison by U.S. District Court Judge Richard J. Arcara.
Assistant U.S. Attorneys Meghan E. Leydecker and Joseph M. Tripi, who handled the case, stated that prior to September 25, 2018, the defendant had posted videos of himself to social media holding what appears to be a chrome revolver. On September 25, 2018, the ATF and Buffalo Police Department executed a federal search warrant at 45 Easton Avenue in Buffalo. As law enforcement prepared to execute the search warrants, the Buffalo Police Swat team was utilized to make safe entry into the residence. At the rear of the house, investigators observed an object being thrown from a rear upper window. The object was identified as loaded .357 caliber revolver. As SWAT members made entry into the upper, they encountered co-defendant Kevin Miller and his mother. Defendant Keyon Miller was located coming out of the room from which the firearm was thrown out the window. DNA of both Keyon Miller, and a second co-defendant Kaylen Miller, was located on the revolver.
Keyon Miller admitted that he is an unlawful user of marijuana, having used marijuana for a period of years, such that he is prohibited from possessing firearms and ammunition.Kaylen Miller was previously convicted and sentenced. Kevin Miller was also previously convicted and is awaiting sentencing.
The sentencing is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division; the Buffalo Police Department, under the direction of Commissioner Byron Lockwood; and the New York State Department of Corrections and Community Supervision, under the direction of under the direction of Acting Commissioner Anthony J. Annucci.
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Boston Man Charged with Being a Felon in Possession of a Firearm and AmmunitionRead the Press Release
BOSTON – A Boston man was charged yesterday with being a felon in possession of firearms and ammunition.
Tevin Abercrombie, 25, was charged by criminal complaint with one count of being a felon in possession of a firearm and ammunition. Abercrombie is currently detained on a supervised release violation and will make an initial appearance in federal court in Boston at a later date.
According to the criminal complaint, on April 16, 2020, Abercrombie possessed a black Taurus 9mm pistol with an obliterated serial number, loaded with one round in the chamber and an additional seven rounds of 9mm ammunition in the magazine. In 2016, Abercrombie was convicted in federal court of being a felon in possession of a firearm and ammunition and conspiracy to distribute cocaine base, cocaine and heroin and sentenced to 60 months in prison. Abercrombie was on federal supervised release at the time of this offense.
The charging statute provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Kelly D. Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; and Boston Police Commissioner William Gross made the announcement today. Assistant U.S. Attorney John Dawley of Lelling’s Organized Crime and Gang Unit 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.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Arizona Woman Arrested for Attempting to Provide Material Support to Al QaedaRead the Press Release
John C. Demers, Assistant Attorney General for National Security, Michael Bailey, the U.S. Attorney for the District of Arizona, Jill Sanborn, Assistant Director of the FBI’s Counterterrorism Division, and Sean Kaul, Special Agent in Charge of the FBI Phoenix Field Office, announced that on July 22, 2020, Jill Marie Jones was arrested for attempting to provide material support to al Qaeda, a designated foreign terrorist organization.
According to the criminal complaint, the defendant was in communication with two FBI undercover employees, one of whom she believed to be a member of al Qaeda. During her conversations with the purported al Qaeda member, Jones agreed to send the employee money to purchase scopes for rifles that would be used by al Qaeda to kill American soldiers. In May 2020, Jones gave the purported al Qaeda member $500 using a prepaid gift card.
The communications with the undercover employees also revealed Jones’ desire to travel overseas to assist al Qaeda. Thereafter, Jones purchased tickets to fly overseas to join al Qaeda in Afghanistan, but due to airport closures, she changed her flights to go to Turkey instead. Jones planned to then travel on to Syria. On July 22, 2020, Jones traveled to Phoenix Sky Harbor Airport in Arizona to board a flight to begin her travel to join al Qaeda. FBI agents arrested Jones after she checked in for her flight at the airport.
The prosecution is being handled by Lisa Jennis, Assistant U.S. Attorney in the District of Arizona and Katie Sweeten, Trial Attorney with the National Security Division’s Counterterrorism Section.
The charges contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Antitrust Division Announces Agenda for Workshop on Competition in the Licensing of Public Performance Rights in the Music IndustryRead the Press Release
The Department of Justice has released a final agenda for the Antitrust Division’s July 28-29 public workshop on competition in the licensing of public performance rights in the music industry. The workshop will provide a venue for industry stakeholders to further weigh in on the American Society of Composers, Authors, and Publishers (ASCAP) and Broadcast Music, Inc. (BMI) consent decrees and their implications for antitrust law enforcement and policy as music distribution continues to evolve through technological innovation.
“We are fortunate to hear from some of the greatest talents and some of the most experienced executives in the music industry at our workshop. I anticipate an interesting and productive discussion among our esteemed panelists,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “While the ASCAP and BMI consent decrees have governed licensing of performance rights for more than 75 years, the music industry has changed significantly in the meantime. We look forward to our panelists and speakers sharing their views on whether these decrees still offer songwriters and musicians the benefit of robust competition today.”
The released agenda includes remarks from Assistant Attorney General Makan Delrahim and distinguished panelists with a wide variety of perspectives on the ASCAP-BMI consent decrees. Special keynotes will be delivered by LeAnn Rimes, Pharrell and Jon Bon Jovi, who will share their experiences as songwriters within the current licensing system. The announced panel topics will include whether or not certain terms of the ASCAP and BMI consent decrees should be modified, and whether the decrees are inhibiting innovative business models that may hurt consumers or artists. The panels will include views from the performance rights organizations, songwriters, music publishers, music licensees, legal and economic experts, and other industry stakeholders.
The final agenda and more information on the event, including registration and instructions on accessing the webcast, can be found on the Competition in Licensing Music Public Performance Rights event page. The workshop is free and open to the public, and will be webcast from 12:30pm to 5:00pm on Tuesday July 28, and from 12:30pm to 4:00pm on Wednesday July 29. After the workshop concludes, a recording will be available on the Division’s website. Members of the press should email [email protected] to register.
The Department of Justice invited public comments from the public on these topics on June 5, 2019 and the comments can be found on the Antitrust Consent Decree Review Public Comments 2019 page.
Reasonable accommodations for people with disabilities are available upon request. If you need such an accommodation, please contact the Antitrust Division at [email protected]. Such requests should include a detailed description of the accommodations needed and a way to contact you if we need more information.
Public Workshop on Competition in Licensing Music Public Performance Rights
July 28-29, 2020
Workshop Agenda
July 28, 2020
12:30 p.m.Opening Remarks
Makan Delrahim, Assistant Attorney General for Antitrust, U.S. Department of Justice
12:40 p.m.Songwriter Keynote
LeAnn Rimes
12:55 p.m.Session 1: Remarks from Stakeholders on the Consent Decrees
David Israelite, President and CEO, National Music Publishers’ Association (NMPA)
Michelle Lewis, Executive Director, Songwriters of North America (SONA)
Elizabeth Matthews, CEO, American Society of Composers, Authors, and Publishers (ASCAP)
Michael O’Neill, President and CEO, Broadcast Music Inc. (BMI)
The Honorable Gordon Smith, President and CEO, National Association of Broadcasters (NAB)
DOJ Moderator: Karina Lubell, Assistant Chief, Competition Policy and Advocacy Section, Antitrust Division, U.S. Department of Justice
1:55 p.m.Session 2: Public Performance Licensing Alternatives
Panelists will discuss the use and viability of alternatives to blanket licenses, including direct, adjustable-fee, per-program, and per-segment licenses under the Decrees. They will also address the use and viability of source and through-to-the-audience licenses and whether those types of licenses should be limited or expanded. Finally, the panel will discuss whether these alternatives present a “genuine choice” to music users or whether the genuine choice provision of the Decrees should be modified.
Panelists
Jackie Brenneman, General Counsel, National Association of Theatre Owners
Ted Cohen, Managing Partner, TAG Strategic
David Kokakis, Chief Counsel, Universal Music Publishing Group
Janet McHugh, Executive Director, TV Music License Committee
Mike Steinberg, Executive Vice President of Creative and Licensing, BMI
DOJ Moderator: Yvette Tarlov, Assistant Chief, Media, Entertainment, and Professional Services Section, Antitrust Division, U.S. Department of Justice
3:15 p.m.Songwriter Keynote
Pharrell
3:30 p.m.Session 3: Competition Between PROs for Songwriters and Publishers
The third session will discuss competition between the PROs for artists. Panelists will discuss the membership provisions of the ASCAP/BMI decrees, including provisions relating to eligibility to join a PRO, resignations, the maximum terms of membership agreements and music licenses, the use and transparency of licenses-in-effect, and member audit rights.
Panelists
Danielle Aguirre, Executive Vice President and General Counsel, NMPA
Jordan Bromley, Board Member, Music Artists Coalition
Bart Herbison, Executive Director, Nashville Songwriters Association International
Golnar Khosrowshahi, CEO, Reservoir Music Publishing
Clara Kim, Executive Vice President and General Counsel, Business and Legal Affairs, ASCAP
Jack Kugell, Board Member, SONA
DOJ Moderator: Owen Kendler, Chief, Media, Entertainment, and Professional Services Section, Antitrust Division, U.S. Department of Justice
July 29, 2020
12:30 p.m.Opening Remarks
Owen Kendler, Chief, Media, Entertainment, and Professional Services Section, Antitrust Division, U.S. Department of Justice
12:35 p.m.Songwriter Keynote
Jon Bon Jovi
12:50 p.m.Session 4: Licensing Music to Users
The fourth session will discuss the licensing of music to end-users. Panelists will discuss potential modifications to the Decrees including the “similarly situated” and interim fee provisions of the Decrees. The panel also will address if there is a need for more robust disclosure of ASCAP’s and BMI’s repertoires to licensees and potential impediments to such disclosure. Finally, the panel will consider whether the Decrees are effective or ineffective, create efficiencies or inefficiencies, or inhibit innovative business models.
Panelists
John Bodnovich, Executive Director, American Beverage Licensees
Peter Brodsky, General Counsel and Executive Vice President, Business Affairs, Sony/ATV Music Publishing
Rick Kaplan, General Counsel and Executive Vice President, Legal and Regulatory Affairs, NAB
Stuart Rosen, Senior Vice President and General Counsel, BMI
Tres Williams, Executive Vice President, Business Affairs, iHeartMedia, Inc.
DOJ Moderator: Ben Matelson, Trial Attorney, Media, Entertainment, and Professional Services Section, Antitrust Division, U.S. Department of Justice
2:15 p.m.Session 5: Economists’ Views and Wrap-up
The last session will provide a venue for economists to discuss the economic effects of the Decrees. Panelists will debate ASCAP’s and BMI’s market power and any constraints on that market power. Additionally, the panel will discuss whether the emergence of new PROs and new technologies, including streaming digital music and movie services, has made the Decrees obsolete.
Panelists
Dr. Adam B. Jaffe, Brandeis University
Dr. Kevin M. Murphy, University of Chicago
DOJ Moderator: Dr. Jeffrey Wilder, Deputy Assistant Attorney General for Economic Analysis, Antitrust Division, U.S. Department of Justice
3:40 p.m.Closing Remarks
Rene Augustine, Deputy Assistant Attorney General, Antitrust Division, U.S. Department of Justice
Acting U.S. Attorney Hails 30th Anniversary of the Americans with Disabilities ActRead the Press Release
Audrey Strauss, the Acting United States Attorney for the Southern District of New York, today hailed the 30th anniversary of the passage of the Americans with Disabilities Act of 1990 (“ADA”), which was signed into law by President George H.W. Bush on July 26, 1990. The ADA is a transformative law that prohibits discrimination on the basis of disability in places of public accommodation, including all hotels, restaurants, retail stores, theaters, health care facilities, convention centers, parks, and places of recreation (Title III), in all activities of state and local governments (Title II), and in employment (Title I). The ADA empowers the Department of Justice to investigate, litigate, and resolve complaints of discrimination as well as authorizing the Government to conduct compliance reviews of covered entities.
Acting U.S. Attorney Audrey Strauss said: “Since the passage of the ADA, this Office has taken a leading role in bringing major New York City landmarks into compliance with the ADA to improve access for people with disabilities. As we mark the 30th anniversary of this landmark civil rights law this weekend, and notwithstanding the limitations imposed by COVID, we continue to investigate and litigate significant ADA cases.”
Since the passage of the ADA in 1990, the U.S. Attorney’s Office has brought numerous New York City institutions into compliance with the ADA, through court-approved consent decrees and voluntary compliance agreements. Through hundreds of ADA cases, the Office has required places of public accommodation to eliminate barriers to access, alter or amend policies or procedures, and agree to welcome service animals. In addition, the Office has required state and local governments to make public services and facilities more accessible to people with disabilities and compelled state and local government employers who discriminated against people with disabilities to remedy their conduct and compensate victims. Major accomplishments include:
- THE VESSEL: On December 20, 2019, the Office entered into a voluntary compliance agreement with Related Companies, the developer of Hudson Yards, to increase the accessibility of New York City’s newest public landmark, the Vessel. Because the Vessel is a multi-story, open air structure composed of a network of interconnected stairways, it is inaccessible to individuals with mobility impairments. The settlement requires Related to install a one-of-a-kind platform lift, allowing individuals with disabilities, including those who use wheelchairs, to traverse the stairways and platforms at the top two levels of the Vessel, all on a single platform lift.
- NYC SUBWAYS: On March 6, 2019, the Office prevailed in a motion for partial summary judgment against the Metropolitan Transportation Authority and New York City Transit for their failure to install elevators during the renovation of the Middletown Road subway station in the Bronx. In a landmark decision, the court ruled that the ADA required the MTA to install elevators during the renovation of the station, without regard to cost, unless it was technically infeasible to do so.
- NEW YORK STATE DIABETES GUIDANCE: On May 30, 2017, the Office announced that it had resolved complaints filed by parents of children with diabetes that recently developed guidelines from the New York State Education Department (“NYSED”) interfered with their children’s diabetes treatment while in school, in violation of the ADA. The guidelines prompted schools to reject certain types of orders issued by physicians treating children with diabetes because the orders authorized parents and guardians to be involved in the adjustment of their child’s diabetes medication administered by the school healthcare team. NYSED agreed to amend the guidelines and provided a model form for physicians to use to authorize the involvement of parents and guardians in adjustment decisions where appropriate.
- NEDERLANDER THEATERS: On January 29, 2014, the Office entered into a Consent Decree with the Nederlander Organization, Inc., which owns and operates nine landmarked Broadway theaters: the Brooks Atkinson, the Gershwin, the Lunt Fontanne, the Marquis, the Minskoff, the Nederlander, the Neil Simon, the Palace, and the Richard Rodgers. Under the Consent Decree, the Nederlander Organization agreed to make these theaters accessible to people with disabilities in compliance with the ADA by providing accessible seating, restrooms, and other facilities.
- NYC RESTAURANTS INITIATIVE: In 2013, the Office announced that it had entered into two Consent Decrees with major New York City restaurants to improve compliance with the ADA, particularly with regard to entrances, seating, and restroom facilities. The restaurants were Rosa Mexicano, on January 30, 2013, and Carmine’s, on November 12, 2013. These resolutions were reached as part of the Office’s Restaurants Initiative, which investigated whether NYC’s top 50 Zagat-rated restaurants, some of which had more than one location, complied with the ADA. As a result of the Restaurants Initiative, the Office entered into Consent Decrees with five restaurants, voluntary compliance agreements with 20 restaurants, and letters of resolution with 26 restaurants.
- LINCOLN CENTER: On June 28, 2012, the Office announced a Consent Decree with Avery Fisher Hall, under which that theater agreed to install additional wheelchair and companion seating, renovate restrooms, and remove barriers to access, among other things, to make the venue more accessible to people with disabilities. Similarly, on January 13, 2011, the Office announced a Consent Decree with the Metropolitan Opera, under which the Opera agreed to install additional wheelchair and companion seating, renovate restrooms, and remove barriers to access, among other things, to make the venue more accessible to people with disabilities.
- TIMES SQUARE HOTELS INITIATIVE: On July 26, 2010, the Office marked the 20th anniversary of the ADA by announcing that as a result of a compliance initiative, it had entered into a number of voluntary compliance agreements with Times Square hotels to increase the accessibility of hotel rooms and common areas. As a result of the Hotels Initiative, the Office entered into Consent Decrees with five hotels, and voluntary compliance agreements with 41 hotels.
- YANKEE STADIUM: On April 14, 2009, the Office announced that it had completed its review of the new Yankee Stadium, resulting in an agreement with the Yankees to provide over 500 wheelchair spaces and 500 companion seats, accessible entrances, ticket windows, bars, lounges, restrooms, and other amenities. The Office had joined a lawsuit against the old Yankee Stadium for being inaccessible to people with disabilities; a Consent Decree resolving that suit and bringing the Stadium into closer compliance with the ADA was entered in December 1999.
- MADISON SQUARE GARDEN: On November 5, 2007, the Office entered into a comprehensive Consent Decree with Madison Square Garden, under which the Garden agreed for the first time to provide seating for people with disabilities at a variety of seating areas in the Garden. The Garden further agreed to pay a $55,000 penalty for operating out of compliance with the ADA.
- APOLLO THEATER: On June 28, 2005, the Office entered into a Consent Decree with the historic Apollo Theater, under which the theater, for the first time in its storied history, agreed to provide seating locations for wheelchair users and renovate its entrances, bathrooms, and other amenities so that they would be fully accessible to people with disabilities.
- SHUBERT THEATERS: On September 25, 2003, the Office entered into a Consent Decree with the Shubert Organization, Inc., which owns and operates 16 landmarked Broadway theaters: the Ambassador, the Barrymore, the Belasco, the Booth, the Broadhurst, the Broadway, the Cort, the Golden, the Imperial, the Longacre, the Lyceum, the Music Box, the Plymouth, the Royale, the Shubert, and the Winter Garden. Under the Consent Decree, the Shubert Organization agreed to make these theaters accessible to people with disabilities in compliance with the ADA by providing accessible seating, restrooms, and other facilities.
- RADIO CITY MUSIC HALL: On February 11, 1999, the Office entered into a Consent Decree with Radio City Music Hall, requiring it to provide a wide range of accessibility improvements, including 50 wheelchair and companion seats, 240 assistive listening devices, and accessible restrooms, concession stands, and bathrooms.
For more information about the 30th Anniversary of the ADA, please visit www.ada.gov.The Office’s Civil Rights Unit handles complaints of noncompliance with the ADA. Members of the public with a complaint relating to ADA compliance may use the following link to submit a complaint: https://www.justice.gov/usao-sdny/civil-rights
- THE VESSEL: On December 20, 2019, the Office entered into a voluntary compliance agreement with Related Companies, the developer of Hudson Yards, to increase the accessibility of New York City’s newest public landmark, the Vessel. Because the Vessel is a multi-story, open air structure composed of a network of interconnected stairways, it is inaccessible to individuals with mobility impairments. The settlement requires Related to install a one-of-a-kind platform lift, allowing individuals with disabilities, including those who use wheelchairs, to traverse the stairways and platforms at the top two levels of the Vessel, all on a single platform lift.
18 Arrested, Facing Federal Charges After Weeknight Protests at Federal Courthouse in PortlandRead the Press Release
PORTLAND, Ore.—U.S. Attorney Billy J. Williams announced today that 18 people have been arrested and are facing federal charges this week for their roles in recent weeknight protests at the Mark O. Hatfield U.S. Courthouse in Portland.
According to court documents, since May 26, 2020, protests in downtown Portland have been followed by nightly criminal activity including assaults on law enforcement officers, destruction of property, looting, arson, and vandalism. The Hatfield Federal Courthouse has been a nightly target of vandalism during evening protests and riots, sustaining extensive damage.
U.S. Marshals Service deputies and officers from the Federal Protective Service, Homeland Security Investigations, and U.S. Customs and Border Protection working to protect the courthouse have been subjected to nightly threats and assaults from demonstrators while performing their duties.
Five people have been charged for alleged criminal conduct during a protest beginning July 20, 2020 and continuing into the early morning hours of July 21, 2020. Jennifer Kristiansen, 37, is charged with assaulting a federal officer; Zachary Duffly, 45, is charged with creating a disturbance; Wyatt Ash-Milby, 18, is charged with trespassing on federal property; and Caleb Ehlers, 23, and Paul Furst, 22, are charged with failing to comply with a lawful order.
Seven people have been charged for alleged criminal conduct during a protest beginning July 21, 2020 and continuing into the early morning hours of July 22, 2020. Jerusalem Callahan, 24, is charged with willfully damaging government property; Joseph Ybarra, 21, is charged with arson; Marnie Sager, 27, and Ella Miller, 26, are charged failing to comply with a lawful order; and Taylor Lemons, 31; Giovanni Bondurant, 19; and Gabriel Houston, 22, are charged with assaulting federal officers.
Six people have been charged for alleged criminal conduct during a protest beginning July 22, 2020 and continuing into the early morning hours of July 23, 2020. Joseph Lagalo, 37; Baily Dreibelbis, 22; Nicholas Kloiber, 26; David Hazan, 24; Hailey Holden, 30; and Cameron Knuetson, age unknown, are charged with failing to comply with a lawful order.
All defendants are presumed to be local residents.
All 18 defendants have made their first appearances in federal court and were ordered released pending jury trials or other follow-up court proceedings.
These cases are being jointly investigated the U.S. Marshals Service and Federal Protective Service. They are being prosecuted by the U.S. Attorney’s Office for the District of Oregon.
Criminal complaints and informations are only accusations of a crime, and defendants are presumed innocent unless and until proven guilty.
Aftermath of fire lit near perimeter fencing of Hatfield Federal Courthouse Pile of debris thrown at federal law enforcement at Hatfield Federal Courthouse Water bottles used as projectiles piled near entrance to Hatfield Federal Courthouse Water bottles used as projectiles piled near entrance to Hatfield Federal Courthouse Water bottles used as projectiles piled near entrance to Hatfield Federal Courthouse
23 July 2020
Watertown Man Sentenced to 70 Months in Federal Prison for Role in Heroin and Fentanyl Trafficking RingRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that ORLANDO MARTINEZ, also known as “Bolo,” 52, of Watertown, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 70 months of imprisonment, followed by five years of supervised release, for distributing heroin and fentanyl.
According to court documents and statements made in court, an investigation by the DEA New Haven Task Force and the Waterbury Police Department revealed that Nestor Sosa-Ortiz operated a Waterbury-based drug trafficking organization that received large quantities of heroin and fentanyl from suppliers in Connecticut and New York and distributed the narcotics throughout New Haven County. The organization used an apartment located at 330 Bishop Street in Waterbury to store kilogram-quantities of heroin and fentanyl, and to process and package the drugs for street sale. After Nestor Sosa-Ortiz was arrested in New York City on a separate federal heroin and fentanyl trafficking charge in May 2019, he continued to control his drug network while incarcerated by using smuggled cell phones to communicate with various co-conspirators.
The investigation revealed that Martinez purchased bulk quantities of heroin and fentanyl from a member of the organization who distributed narcotics from the Corner Mini market at 52 East Farm Road in Waterbury. Martinez then sold the drugs to his own customer base.
Sixteen individuals were charged as a result of this investigation.
Martinez and several of his codefendants were arrested on October 29, 2019. In association with the arrests, law enforcement officers executed five search warrants at locations in Waterbury, including the Bishop Street apartment and the Corner Mini Market, and seized approximately six kilograms of suspected heroin/fentanyl, approximately 100,000 bags of suspected heroin/fentanyl packaged for street distribution, approximately 1,000 fentanyl pills disguised as Percocet pills, one firearm and approximately $50,000 in cash.
Martinez has been detained since his arrest. On February 27, 2020, he pleaded guilty to one count of conspiracy to distribute, and to possess with intent to distribute 100 grams or more of heroin and fentanyl.
Martinez’s criminal history includes five convictions for narcotics offenses, and he was on special parole with the state at the time of his federal arrest.
Sosa-Ortiz pleaded guilty and awaits sentencing.
This investigation is being conducted by the Drug Enforcement Administration New Haven Task Force and the Waterbury Police Department. The DEA New Haven Task Force includes participants from the U.S. Marshals Service, Internal Revenue Service – Criminal Investigation Division, and the New Haven, Hamden, West Haven, North Haven, Branford, Ansonia, Meriden, Derby, Middletown, Naugatuck and Waterbury Police Departments.
The case is being prosecuted by Assistant U.S. Attorneys Jocelyn Courtney Kaoutzanis, Lauren Clark and Brendan Keefe.
Washington Tech Executive charged with COVID-Relief fraud and money launderingRead the Press Release
WASHINGTON – A Washington tech executive was taken into custody today and charged with fraudulently seeking over $5.5 million in Paycheck Protection Program (PPP) loans and laundering the proceeds, announced Acting Assistant Attorney General Brian C. Rabbitt at of the Justice Department’s Criminal Division and U.S. Attorney Brian T. Moran of the U.S. Attorney’s Office for the Western District of Washington.
Mukund Mohan, 48, of Clyde Hill, Washington, was charged by criminal complaint, unsealed today after he was taken into custody, in the Western District of Washington with one count of wire fraud and one count of money laundering. He is expected to make his initial appearance before U.S. Chief Magistrate Judge Brian A. Tsuchida at 2 p.m. PDT today.
The complaint alleges that Mohan submitted at least eight fraudulent PPP loan applications on behalf of six different companies to federally insured financial institutions. The complaint alleges that, in support of the fraudulent loan applications, Mohan made numerous false and misleading statements about the companies’ respective business operations and payroll expenses.
The complaint also alleges that, in further support of the fraudulent loan applications, Mohan submitted fake and altered documents, including fake federal tax filings and altered incorporation documents. For example, Mohan misrepresented to a lender that, in 2019, his company Mahenjo Inc., had dozens of employees and paid millions of dollars in employee wages and payroll taxes. In support of Mahenjo’s loan application, Mohan submitted incorporation documents showing that he incorporated the company in 2018 and filed federal unemployment tax forms for 2019. In truth, Mohan purchased Mahenjo on the Internet in May 2020 and, at time he purchased the company, it had no employees and no business activity. The incorporation documents he submitted to the lender were altered and the federal tax filings he submitted were fake.
The complaint further alleges that Mohan transferred at least $231,000 in fraudulently-obtained loan proceeds to his personal brokerage account for his personal benefit.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
A criminal complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the Federal Housing Finance Agency – Office of Inspector General, IRS-Criminal Investigation, the U.S. Treasury Inspector General for Tax Administration, and the Federal Deposit Insurance Corporation – Office of Inspector General. Trial Attorney Christopher Fenton of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Andrew Friedman of the Western District of Washington are prosecuting the case.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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.
mohan_complaint.pdfWashington Tech Executive Charged with COVID-Relief Fraud and Money LaunderingRead the Press Release
A Washington tech executive was taken into custody today and charged with fraudulently seeking over $5.5 million in Paycheck Protection Program (PPP) loans and laundering the proceeds, announced Acting Assistant Attorney General Brian C. Rabbitt at of the Justice Department’s Criminal Division and U.S. Attorney Brian T. Moran of the U.S. Attorney’s Office for the Western District of Washington.
Mukund Mohan, 48, of Clyde Hill, Washington, was charged by criminal complaint, unsealed today after he was taken into custody, in the Western District of Washington with one count of wire fraud and one count of money laundering. He is expected to make his initial appearance before U.S. Chief Magistrate Judge Brian A. Tsuchida at 2 p.m. PDT today.
The complaint alleges that Mohan submitted at least eight fraudulent PPP loan applications on behalf of six different companies to federally insured financial institutions. The complaint alleges that, in support of the fraudulent loan applications, Mohan made numerous false and misleading statements about the companies’ respective business operations and payroll expenses.
The complaint also alleges that, in further support of the fraudulent loan applications, Mohan submitted fake and altered documents, including fake federal tax filings and altered incorporation documents. For example, Mohan misrepresented to a lender that, in 2019, his company Mahenjo Inc., had dozens of employees and paid millions of dollars in employee wages and payroll taxes. In support of Mahenjo’s loan application, Mohan submitted incorporation documents showing that he incorporated the company in 2018 and filed federal unemployment tax forms for 2019. In truth, Mohan purchased Mahenjo on the Internet in May 2020 and, at time he purchased the company, it had no employees and no business activity. The incorporation documents he submitted to the lender were altered and the federal tax filings he submitted were fake.
The complaint further alleges that Mohan transferred at least $231,000 in fraudulently-obtained loan proceeds to his personal brokerage account for his personal benefit.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
A criminal complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the Federal Housing Finance Agency – Office of Inspector General, IRS-Criminal Investigation, the U.S. Treasury Inspector General for Tax Administration, and the Federal Deposit Insurance Corporation – Office of Inspector General. Trial Attorney Christopher Fenton of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Andrew Friedman of the Western District of Washington are prosecuting the case.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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.
Wagoner Woman Pleads Guilty to Firearm PossessionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Jonie Lee Welsh, a/k/a Jonie Lee Welsch, age 36, of Wagoner, Oklahoma entered a guilty plea to Felon In Possession Of Firearm, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2), punishable by not more than 10 years imprisonment, a fine up to $250,000.00, or both.
The Indictment alleged that on or about May 22, 2019, in the Eastern District of Oklahoma, the defendant, having been convicted of a crime punishable by imprisonment for a term exceeding one year, and knowing of said conviction, did knowingly possess in and affecting commerce, a firearm, which had been shipped and transported in interstate commerce.
The charges arose from an investigation by the Adair County Sheriff’s Office, the United States Marshal Service Violent Crimes Task Force, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The Honorable Kimberly E. West, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Special Assistant United States Attorney Courtney Jordan represented the United States at the change of plea hearing.
Vice President of Investment Firm Arrested for Running Multimillion-Dollar Ponzi Scheme Targeting Afghanistan-Based BankRead the Press Release
Audrey Strauss, Acting United States Attorney for the Southern District of New York, Special Inspector General John F. Sopko, of the Special Inspector General for Afghanistan Reconstruction (“SIGAR”), and Peter C. Fitzhugh, Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced today that NAIM ISMAIL, 60, a native of Afghanistan and a United States citizen, was arrested Wednesday evening in Los Angeles in connection with his participation in various investment schemes that defrauded victims of over $15 million.
The case has been assigned to U.S. District Judge Analisa Torres. ISMAIL is expected to be presented today before United States Magistrate Judge Alicia G. Rosenberg of the Central District of California.
Acting Manhattan U.S. Attorney Audrey Strauss said: “As alleged, Naim Ismail defrauded investors of more than $15 million through false promises about how investors’ money would be invested and what kind of return they could expect on their investment. Now Ismail is in U.S. custody and facing serious federal charges.”
Special Inspector General John F. Sopko said: “Afghanistan is a country struggling to create strong financial institutions and a viable economy after decades of war. The last thing it needs is to have one of its banks victimized in a Ponzi scheme. This scheme also targeted many U.S. victims. I’m proud that SIGAR special agents and our partners at HSI, the FBI and the Southern District of New York are working hard to bring justice in this case.”
Special Agent-in-Charge Peter C. Fitzhugh said: “As alleged in the indictment which was unsealed today, Ismail defrauded individual and corporate victims out of approximately $15 million dollars. Investors were allegedly duped into investing large amounts of money for investment and real estate projects that did not exist. Instead of investing the money and delivering returns, Ismail allegedly engaged in a Ponzi s scheme to fund his own lavish lifestyle. The law enforcement partnerships under HSI New York’s El Dorado Task Force are integral in combatting complex financial frauds and it is with these continued partnerships that we are able to bring individuals like Ismail to justice, to hold him accountable for his criminal acts and seek restitution for the victims.”
According to the allegations in the Indictment unsealed today in Manhattan federal court,[1] and other publicly filed documents:
From February 2007 through July 2016, ISMAIL fraudulently induced individual and corporate victims – including the New York-based subsidiary of an Afghanistan-based bank – to loan large sums of money to entities operated by ISMAIL and others. ISMAIL did so by claiming that these funds would be used in a particular investment strategy as well as several real estate development projects. ISMAIL promised investors a generous fixed annual rate of return and promised to return the investors’ principal on a specified timeline. In fact, ISMAIL and his companies did not invest these funds as promised, nor did ISMAIL repay many of his victims. Instead, ISMAIL used investor funds to pay the so-called interest payments due to earlier investors in the scheme, as well as for his own personal expenses and investments.
During the course of the fraudulent scheme, ISMAIL deprived the scheme’s victims of over $15 million.
* * *
ISMAIL, 60, most recently of Los Angeles, California, is charged with one count each of bank fraud, wire fraud affecting a financial institution, and conspiracy to commit bank and wire fraud. Each charge carries a maximum sentence of 30 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Ms. Strauss praised the outstanding work of SIGAR and HSI on this investigation. She also thanked the Federal Bureau of Investigation for their assistance in the investigation.
This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorneys Kiersten A. Fletcher and Jonathan E. Rebold are in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
United States Files Complaint to Forfeit More Than $2.37 Million from Companies Accused of Laundering Funds to Benefit Sanctioned North Korean EntitiesRead the Press Release
WASHINGTON - The United States has filed a complaint to forfeit $2,372,793 associated with four companies, announced the Acting U.S. Attorney for the District of Columbia Michael R. Sherwin, Emmerson Buie, Jr., Special Agent in Charge of the FBI Chicago Field Office, and Steven Cagen, Special Agent in Charge of the HSI Denver Field Office.
The complaint alleges that the four companies laundered United States dollars on behalf of sanctioned North Korean banks. According to the complaint, the North Korean banks used these laundered funds as part of a scheme to procure goods for the North Korean regime, as well as to illegally access the U.S. financial market.
The four companies allegedly were part of a scheme to launder payments to subsequently sanctioned entities, to include: Velmur Management Pte. Ltd. (Velmur), which the Treasury Department sanctioned for procuring Russian petroleum products for North Korea; Dandong Zhicheng Metallic Material Co. (Dandong Zhicheng), which the Treasury Department sanctioned for purchasing coal from North Korea, and then in turn laundering the proceeds of those sale to purchase items for North Korea, including nuclear and missile components; and multiple cover branches of North Korea’s Foreign Trade bank, which the Treasury Department sanctioned for facilitating transactions on behalf of actors linked to its North Korea’s proliferation network.
“The Department of Justice has repeatedly disrupted North Korea’s illicit attempts to access the U.S. financial system,” said Assistant Attorney General for National Security John C. Demers. “We will continue to do so as long as the North Korean government maintains its destabilizing, dangerous WMD activities.”
“This complaint illuminates how a global money laundering network coordinates with front companies to move North Korean money through the United States and violate the sanctions imposed by our government on North Korea,” said Acting U.S. Attorney Sherwin. “This case demonstrates that we will use all tools in our Threat Finance Unit’s portfolio to target companies that harm U.S. national security, regardless of where they are doing business.”
“The FBI, along with our domestic and international partners, will continue to prioritize and dedicate the necessary resources to investigate and combat those who are assisting North Korea in evading sanctions by providing illegal access to the U.S. financial system, contrary to our national security interests,” said Emmerson Buie, Jr., Special Agent in Charge of the FBI Chicago Field Office.
“The discovery of this transnational criminal organization is the result of international law enforcement agencies working together in the interest of national security,” said Eric Balliet Deputy Special Agent in Charge, HSI Denver. “HSI will continue to leverage our unique international authority to protect the U.S. from companies who do business with North Korea.”
The complaint was filed on July 23, 2020, in the U.S. District Court for the District of Columbia. According to the complaint, designated North Korean banks used the four companies to make and receive U.S. dollar payments to/from North Korean front companies.
The United Nations Panel of Experts reported that North Korean banks have been able to evade sanctions and continue to access the international banking system. Specifically, despite strengthened financial sanctions, North Korean networks adapt by using greater ingenuity in accessing formal banking channels. This includes maintaining correspondent bank accounts and representative offices abroad that are staffed by foreign nationals making use of front companies. These broad interwoven networks allow North Korean banks to conduct illicit procurement and banking activity. The complaint alleges activity by the four companies that tracks this paradigm.
The claims made in the complaint are only allegations and do not constitute a determination of liability.
The FBI’s Chicago Field Office and HSI’s Colorado Springs Office are investigating the case. Assistant U.S Attorneys Zia M. Faruqui and Brian P. Hudak, and National Security Division Trial Attorney David C. Recker are litigating the case, with assistance from Paralegal Specialist Brian Rickers, Legal Assistant Jessica McCormick.
United States Files Complaint to Forfeit More Than $2.37 Million from Companies Accused of Laundering Funds to Benefit Sanctioned North Korean EntitiesRead the Press Release
The United States has filed a complaint to forfeit $2,372,793, announced the Department of Justice.
The complaint alleges that four companies laundered United States dollars on behalf of sanctioned North Korean banks. According to the complaint, the North Korean banks used these laundered funds as part of a scheme to procure goods for the North Korean regime, as well as to illegally access the U.S. financial market.
The four companies allegedly were part of a scheme to launder payments to subsequently sanctioned entities, to include: Velmur Management Pte. Ltd. (Velmur), which the Treasury Department sanctioned for procuring Russian petroleum products for North Korea; Dandong Zhicheng Metallic Material Co. (Dandong Zhicheng), which the Treasury Department sanctioned for purchasing coal from North Korea, and then in turn laundering the proceeds of those sale to purchase items for North Korea, including nuclear and missile components; and multiple cover branches of North Korea’s Foreign Trade bank, which the Treasury Department sanctioned for facilitating transactions on behalf of actors linked to North Korea’s proliferation network.
“The Department of Justice has repeatedly disrupted North Korea’s illicit attempts to access the U.S. financial system,” said Assistant Attorney General for National Security John C. Demers. “We will continue to do so as long as the North Korean government maintains its destabilizing, dangerous WMD activities.”
“This complaint illuminates how a global money laundering network coordinates with front companies to move North Korean money through the United States and violate the sanctions imposed by our government on North Korea,” said Acting U.S. Attorney Sherwin. “This case demonstrates that we will use all tools in our Threat Finance Unit’s portfolio to target companies that harm U.S. national security, regardless of where they are doing business.”
“The FBI, along with our domestic and international partners, will continue to prioritize and dedicate the necessary resources to investigate and combat those who are assisting North Korea in evading sanctions by providing illegal access to the U.S. financial system, contrary to our national security interests,” said Emmerson Buie, Jr., Special Agent in Charge of the FBI Chicago Field Office.
“The discovery of this transnational criminal organization is the result of international law enforcement agencies working together in the interest of national security,” said Eric Balliet Deputy Special Agent in Charge, HSI Denver. “HSI will continue to leverage our unique international authority to protect the U.S. from companies who do business with North Korea.”
The complaint was filed on July 23, 2020, in the U.S. District Court for the District of Columbia. According to the complaint, designated North Korean banks used the four companies to make and receive U.S. dollar payments to/from North Korean front companies.
The United Nations Panel of Experts reported that North Korean banks have been able to evade sanctions and continue to access the international banking system. Specifically, despite strengthened financial sanctions, North Korean networks adapt by using greater ingenuity in accessing formal banking channels. This includes maintaining correspondent bank accounts and representative offices abroad that are staffed by foreign nationals making use of front companies. These broad interwoven networks allow North Korean banks to conduct illicit procurement and banking activity. The complaint alleges activity by the four companies that tracks this paradigm.
The claims made in the complaint are only allegations and do not constitute a determination of liability.
The FBI’s Chicago Field Office and HSI’s Colorado Springs Office are investigating the case. Assistant U.S Attorneys Zia M. Faruqui and Brian P. Hudak, and National Security Division Trial Attorney David C. Recker are litigating the case, with assistance from Paralegal Specialist Brian Rickers, Legal Assistant Jessica McCormick.
U.S. Attorney’s Office and FBI Team with AARP for Tele-Town Hall on COVID Scams Targeting SeniorsRead the Press Release
BOSTON – The U.S. Attorney’s Office and the Boston Division of the Federal Bureau of Investigation have partnered with AARP to educate senior citizens in Massachusetts about COVID-19 scams and other fraud targeting the aging population.
Through AARP’s Fraud Watch Network, approximately 5,600 Massachusetts seniors participated in the hour-long tele-town hall event yesterday with U.S. Attorney Andrew E. Lelling, federal prosecutors from the U.S. Attorney’s Office and the FBI. During the tele-town hall, federal officials discussed the types of schemes currently being reported, provided tips and tools on how to avoid becoming a victim and answered callers’ questions.
“As communities undertake efforts to stem the spread of COVID-19, scammers are using the pandemic as an opportunity to prey on public fear and take advantage of vulnerable members of our communities,” said United States Attorney Andrew E. Lelling. “Over recent months, we’ve seen a surge of scams including counterfeit medical supplies, bogus treatments and fake vaccines, and scams attempting to gain access to personal financial information. We are committed to finding and prosecuting those who perpetrate these scams as well as educating individuals about how to protect themselves from becoming victims of crime.”
“Scammers targeting seniors are a growing concern here in Massachusetts. Last year alone, more than $11.2 million in losses were reported to us by elderly victims, and we know for a fact these crimes are grossly underreported because of shame and embarrassment,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Fraudsters are using the uncertainty surrounding the COVID-19 pandemic to their advantage and that’s why we need to work together to put them out of business for good. Educating ourselves, as well as our aging family members and friends through tele-town halls like this one, is crucial to avoid becoming a victim.”
Throughout the current health crisis, federal investigators and prosecutors have continued to fulfill the Justice Department’s critical mission of protecting public safety. Federal authorities have prioritized the disruption, investigation and prosecution of crimes related to COVID-19, including fraud schemes, unapproved treatments and scams related to stimulus money and unemployment.
Massachusetts residents who believe they are victims of fraud or other criminal activity related to the pandemic should contact the U.S. Attorney’s Office at [email protected] or call 1-888-221-6023. Members of the public can also contact the FBI’s Internet Crime Complaint Center (IC3) by visiting www.IC3.gov. If you or someone you know are in immediate danger, please call 911.