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14 July 2020
Last Conspirator Pleads Guilty in $5 Million Fraud over Hurricane Michael Cleanup in Lynn HavenRead the Press Release
PANAMA CITY, FLORIDA – The last remaining defendant indicted in a $5 million fraud against the City of Lynn Haven has pled guilty to a charge stemming from the Hurricane Michael-related scheme. Lawrence Keefe, United States Attorney for the Northern District of Florida, announced that David Wayne Horton, who was the city’s Community Services Director at the time of the fraud, entered a guilty plea to wire fraud. The charge stemmed from a 35-count federal indictment that included the former Lynn Haven city manager.
The indictment, handed down by a federal grand jury, alleged that in the wake of Hurricane Michael, the City of Lynn Haven entered into contracts for debris removal. The indictment alleged that ECS and Greenleaf submitted invoices that were false and fraudulent, but then-City Manager Michael White approved them and directed city employees to immediately pay ECS and Greenleaf for those invoices. The other defendants took various actions to advance the conspiracy, which defrauded Lynn Haven of approximately $5 million.
In entering his guilty plea, Horton admitted to signing and certifying fraudulent time sheets that purported to show how various individuals had performed hurricane cleanup work for the city. According to a Statement of Facts entered with Horton’s plea, when he was interviewed by federal agents in 2018, Horton made false statements to agents claiming that he had signed and certified the time sheets and that the number of workers on the time sheets had actually provided the services represented.
“With today’s guilty plea, everyone who has been indicted thus far has admitted to their role in a shameless scheme to defraud the taxpayers. These individuals violated the public trust, and now they will pay the consequences. The plea closes this chapter of our ongoing investigation, but our Public Trust Unit will continue to pursue those involved in similar conduct within Bay County and throughout the Northern District,” U.S. Attorney Keefe said.
Four of the five defendants named in the indictment last November had previously pled guilty. They are former Lynn Haven City Manager Michael Edward White, ECS owner David Mitchelle White, Shannon Delores Rodriguez, a/k/a Shannon Delores Harris, and Joshua Daniel Anderson, owner of Greenleaf Lawn Care of Bay County, all of Panama City.
"The citizens of Florida are entitled to decisions based on the best interests of the public, not the best interests of corrupt public officials and the individuals who pay them bribes," said Rachel L. Rojas, Special Agent in Charge of the FBI Jacksonville Division. "The FBI is committed to aggressively pursuing those who violate the trust placed in them by the public, and holding them accountable for their actions."
As a result of his guilty plea, Horton faces a maximum of 20 years in prison, three years of supervised release, a $250,000 fine, and a $100 special monetary assessment to be paid prior to sentencing. He also agreed to pay full restitution to his victims and to forfeit all property derived from the proceeds of the fraud or used to facilitate it. Sentencing hearing is scheduled for September 29, 2020, at 3:00pm at the United States Courthouse in Tallahassee.
"I am pleased that those that took advantage of us in the aftermath of Hurricane Michael will be held accountable," Sheriff Tommy Ford said. "I look forward to our continuing investigation with the Federal Bureau of Investigation and the U.S. Attorney's Office."
The Federal Bureau of Investigation and Bay County Sheriff’s Office conducted the investigation. The case has been prosecuted by Assistant U.S. Attorney Stephen M. Kunz.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Press Release - David HortonKimberly Man Pleads Guilty to Mailing Threatening Letter to Twin Falls County Deputy ProsecutorRead the Press Release
BOISE – Nathaniel Michael West, 23, of Kimberly, Idaho, pleaded guilty to mailing threatening communications, U.S. Attorney Bart M. Davis announced today. West was indicted by a federal grand jury in Boise on January 14, 2020. Sentencing is set for October 7, 2020 before U.S. District Judge Winmill at the federal courthouse in Boise.
According to court records, West admitted that on August 22, 2019, he knowingly sent a threatening letter through the United States Postal Service to a Twin Falls County Deputy Prosecutor. This prosecutor had previously prosecuted West for crimes he committed. West stated in the letter that he was going to get out of prison and the kill the prosecutor and her family. West also threatened to kill a witness from a prior prosecution.
After the prosecutor received the letter, law enforcement officers interviewed West. During the interview, West confessed to sending the letter using the United States Postal Service. West claimed he sent it out of anger and that he wanted scare the threatened parties. West sent the letter from an Idaho Department of Correction facility, where he is currently housed for other crimes.
The charge of mailing threatening communications is punishable by up to five years in prison, a maximum fine of $250,000, and up to three years of supervised release.
This case was investigated by the Ada County Sheriff’s Office.
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Kemah Man Guilty of Liberty County Attempted Bank RobberyRead the Press Release
BEAUMONT, Texas – A 59-year-old Kemah, Texas man has pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.
Jimmy James Mamoth, Jr., pleaded guilty to attempted bank robbery before U.S. District Judge Thad Heartfield on July 13, 2020.
According to information presented in court, on Sep. 27, 2019, a witness observed Mamoth approach the entrance to the Texas First Bank in Hull, Texas, wearing a dark hooded jacket, gloves, a Halloween-style mask on his face, and carrying a duffle bag. The witness honked his vehicle’s horn to draw attention to Mamoth, who subsequently fled into the nearby woods. Law enforcement was able to locate and arrest Mamoth, and from him recovered an Airsoft-style replica gun meant to resemble a Beretta 9mm pistol. Mamoth was indicted by a federal grand jury on Oct. 9, 2019.
As part of his plea agreement, Mamoth admitted his participation in a string of other robberies and attempted robberies, specifically, the robbery of the Arbor 8 movie theater in Austin, Texas, on March 17, 2019; an attempted robbery of the Benchmark Bank in West Lake Hills, Texas, on June 4, 2019; the robbery of the Broadway Bank in Wimberley, Texas, on June 19, 2019; and the robbery of the First National Bank of Hughes Springs in Kilgore, Texas, on June 28, 2019. Mamoth further agreed to pay restitution for the above crimes.
This case is being investigated by the Federal Bureau of Investigation, the Liberty County Sheriff’s Office, the Austin Police Department, the West Lake Hills Police Department, the Hays County Sheriff’s Office, and the Gregg County Sheriff’s Office and is prosecuted by Assistant U.S. Attorneys Christopher Rapp and Rachel Grove.
Jewelry Wholesaler Indicted for $200 Million Ponzi SchemeRead the Press Release
An indictment was unsealed today in federal court in Brooklyn charging Gregory Altieri, the president of LNA Associates, with one count of wire fraud for allegedly running a two-year, $200 million Ponzi scheme based on nonexistent wholesale jewelry deals and false promises of inflated returns. Altieri was arrested today and will be arraigned this morning via video conference before United States Magistrate Judge James Orenstein.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrest and charge.
According to the indictment, beginning in August 2017, Altieri solicited between $75 million to $85 million from over 80 investors from Queens, Staten Island, Long Island and elsewhere, allegedly to purchase jewelry at “closeout” prices and resell it at a high profit. Altieri promised returns of between 30 and 70 percent in a matter of months. While Altieri initially purchased some jewelry with investors’ money, in approximately May 2018 he began to use new investors’ money to pay earlier investors, representing to the latter group that they were receiving returns on their investments. These purported “returns” were used by Altieri to convince the earlier investors to keep their money with LNA Associates, by “rolling over” their investments into new investments based on false promises to use this money to purchase additional jewelry. By January 2020, when Altieri stopped making paybacks to investors, he owed them approximately $200 million based on the falsely inflated promised returns.
“As alleged, Altieri defrauded investors, including retirees living off their pensions, by representing that he was buying and reselling jewelry for big profits, which was a lie,” stated Acting United States Attorney DuCharme. “This Office is committed to protecting the investing public from con artists who would prey upon our community.”
“Stealing millions based on false promises made to retirees who rely on their pensions is contemptible. We allege Mr. Altieri knew he was going to have problems paying off his first round of investors, but he kept his con going anyway. As a result of his actions, the FBI has provided him with stainless steel jewelry for his wrists today, and a guarantee of working to hold him and others who commit similar frauds accountable for their behavior,” stated FBI Assistant Director-in-Charge Sweeney.
The charge in the indictment is an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted, Altieri faces a maximum sentence of 20 years’ imprisonment.
The government’s case is being handled by the Office’s Business & Securities Fraud Section. Assistant United States Attorneys Andrey Spektor and Lindsay K. Gerdes are in charge of the prosecution, assisted by EDNY Special Agent Martin Sullivan.
The Defendant
GREGORY ALTIERI
Age: 53
Melville, New YorkE.D.N.Y. Docket No. 20-CR-249 (BMC)
Jail Inmate Charged with Failing to Update His Sex Offender RegistrationRead the Press Release
ERIE, Pa. - An inmate at the Pamunkey Regional Jail in Hanover, Virginia, has been indicted by a federal grand jury in Erie on a charge of failure to register under SORNA, United States Attorney Scott W. Brady announced today.
The one-count Indictment named Jeremy Christopher Ester, 40, as the sole defendant.
According to the Indictment presented to the court, Ester knowingly failed to update his registration as required by the Sex Offender Registration and Notification Act.
The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The United States Marshals Service conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Henderson Man Sentenced to 14 Years for Drug DistributionRead the Press Release
RALEIGH, N.C. – A Henderson man was sentenced today to 168 months in prison for drug conspiracy and distribution offenses.
According to court documents, Steven Lamar Cooke, 38, managed a drug distribution conspiracy in 2017 that distributed heroin, cocaine, and fentanyl in the Henderson community. The drug-trafficking organization distributed primarily from a trailer on Brown Hills Road where customers sometimes had to wait in line for their turn to purchase drugs from Cooke or his associates. Cooke also pled guilty to personally distributing a quantity of heroin during the conspiracy time frame. Cooke had a history of other drug distribution-related offenses at the state level.
Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge James C. Dever III. The North Carolina State Bureau of Investigation, Warren County Sheriff’s Office and the Franklin County Sheriff’s Office investigated the case and Assistant U.S. Attorney Lucy Brown prosecuted the case.
Related court documents and information are located on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 2:19-CR-2-D.
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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.
Four Sentenced to Federal Prison for Federal Firearms ConspiracyRead the Press Release
Charles Westfall, Jr, age 32, from Clarion, Iowa, Donald Rundall III, age 42, from Stratford, Iowa, Jami Stupka, age 29, from Ames, Iowa and Leah Hanson, age 32, from Cedar Rapids, Iowa, received prison terms, ranging from over 8 years to time served for their roles in a conspiracy to steal, possess, and traffic firearms.
Donald Rundall III and Leah Hanson were each convicted of one count of conspiracy to possess a stolen firearm, one count of possession of a stolen firearm and one count of possession of a firearm by a prohibited person. Jami Stupka was convicted of one count of conspiracy to possess a stolen firearm, and Charles Westfall, Jr., was convicted of one count of possession of a stolen firearm.
Evidence presented by the United States in court revealed before on or about June 17, 2017, Donald Rundall, III and Leah Hanson identified M.C.’s home to Charles Westfall, Jr. and Jami Stupka as containing valuables including firearms. On or about June 17, 2017, defendant Donald Rundall, III, using a crowbar broke into M.C.’s Humboldt County home and garage. Defendants, Charles Westfall, Jr., Donald Rundall, III, Jami Stupka, and Leah Hanson stole valuables including a Mossberg 535 12 gauge shotgun. The weapon and other valuables were concealed at Livermore Mini Storage Units, Leah Hanson’s home as well as other places. Defendants, Charles Westfall, Jr. and Jami Stupka, took a stole TV and the stolen firearm to be bartered, sold, and dispose of to B. H. in exchange for methamphetamine. Charles Westfall, Jr. and Jami Stupka, paid Donald Rundall, III and Leah Hanson in methamphetamine because they expected to obtain methamphetamine in exchange for the TV and firearm. B.H. subsequently sold the firearm to a felon, who could not have lawfully purchased a firearm.
Rundall was sentenced on May 1, 2020, Hanson was sentenced on July 8, 2020, Westfall was sentenced on June 26, 2020, and Stupka was sentenced on June 19, 2020, in United States District Court in Sioux City by United States District Court Chief Judge Leonard T. Strand. Rundall was sentenced to 96 month’s imprisonment, Westfall was sentenced to 104 months’ and 29 days’ imprisonment, and Stupka and Hanson were each sentenced to time served. Rundall, Hanson, Westfall, and Stupka each must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
Westfall and Rundall are being held in the United States Marshal’s custody until they can be transported to a federal prison.
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. The United States Attorney’s Office has prosecuted this case with support from its Project Guardian partners. For more information about Project Guardian, please see /media/1122011/dl?inline.
The case was investigated by the United States Department of Justice’s Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Humboldt County and Wright County Sheriff’s Offices, and the Eagle Grove, Iowa Police Department. The case was prosecuted by Assistant United States Attorneys Mikala M. Steenholdt and Forde Fairchild.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-3024.
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Fort Wayne Man Sentenced to 121 Months in PrisonRead the Press Release
FORT WAYNE – Juan Salas, age 31, of Fort Wayne, Indiana, was sentenced before U.S. District Court Judge Holly A. Brady following his plea of guilty to distributing fentanyl, announced U.S. Attorney Kirsch.
Salas was sentenced to 121 months in prison followed by 8 years of supervised release and was ordered to forfeit $22,839.00 and to pay $2,802.53 in restitution.
According to documents presented in this case, on May 30, 2019, Salas distributed over 40 grams of fentanyl. Salas has a 2010 conviction for possession with intent to distribute cocaine.
The case was investigated by the Federal Bureau of Investigation’s Fort Wayne Safe Streets and Gang Task Force with the assistance of the Indiana State Police, the Allen County Sheriff’s Department and the Fort Wayne Police Department. The case was prosecuted by Assistant United States Attorneys Anthony W. Geller and Stacey R. Speith.
Former supervisor in DeKalb County’s Tax Commissioner’s Office pleads guilty to bribery and blackmailRead the Press Release
ATLANTA - Gerald D. Harris, a former supervisor in the DeKalb County Tax Commissioner’s Office, has pleaded guilty to accepting bribe payments from customers to unlawfully register vehicles and then trying to blackmail a bribe payer by threatening to inform on her to the FBI.
“By repeatedly accepting bribe payments, Harris peddled his honor for money and in doing so sold out the citizens of DeKalb County – sometimes for as little as $100 per car,” said U.S. Attorney Byung J. “BJay” Pak. “By then attempting to blackmail one of bribe payers, Harris showed his seemingly limitless greed.”
“Harris’s blatant disregard for the law and abuse of his position help to erode the public's trust in government,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “We continually work hard with our partners in law enforcement to regain that trust by seeking justice for those who choose their own financial interest over the taxpayers they serve.”
“I applaud the swift effort of the U.S. Attorney's Office, the FBI and other law enforcement agencies in bringing this case to a quick resolve. The DeKalb County Tax Commissioner's Office remains committed to safeguarding the trust of DeKalb's taxpayers and weeding out individuals who act unlawfully in any way,” said DeKalb County Tax Commissioner Irvin J. Johnson.
According to U.S. Attorney Pak, the charges, and other information presented in court: The DeKalb County Tax Commissioner’s Office is an agency of DeKalb County, Georgia responsible for the billing and collection of property taxes, processing of homestead exemptions, and collecting delinquent taxes. In addition, the Motor Vehicle Division of the DeKalb County Tax Commissioner’s Office handled all aspects of motor vehicle registrations, including: (a) managing the collection of motor vehicle taxes, (b) issuing vehicle tags and titles, and (c) processing vehicle registration renewals for citizens and businesses located in DeKalb County.
From July 2017 to November 2019, Harris served as the Supervisor of Tax Tag Clerks for the DeKalb County Tax Commissioner’s Office. In that position, Harris oversaw the Tax Commissioner - North Office’s clerks who processed motor vehicle registrations and renewals for customers.
From approximately mid-2018 to November 2019, Harris accepted bribe payments from customers to unlawfully register vehicles or renew vehicle registrations. For example, Harris accepted bribe payments:
- To register vehicles to individuals who did not have Georgia driver’s licenses or identification cards as required, typically in exchange for $200 per vehicle;
- To register vehicles that did not have the required accompanying documentation (such as: titles or Forms MV-1 title/tag application), typically in exchange for $500 to $1,000 per vehicle; and
- To renew vehicles that had not passed emissions tests by falsely entering that the vehicles had emissions exemptions, typically in exchange for $100 per vehicle.
In total, Harris is alleged to have accept at least $30,000 in bribe payments.
In addition to accepting bribe payments, Harris also attempted to blackmail one of the individuals who had been paying him bribe money. On November 18, 2019, DeKalb County Tax Commissioner’s Office fired Harris for accepting bribe payments (as fully detailed above). On the same date, Harris admitted to the FBI that he had accepted thousands in bribe payments in exchange for illegally registering/renewing vehicles for several people, including a person identified as Individual-1.
On December 12, 2019, Harris met with Individual-1 at an Atlanta, Georgia, gas station. During the meeting, Individual-1 (who did not know that Harris had been fired) gave Harris registration documentation so that Harris could register four vehicles. Indvidual-1 gave Harris checks and cash to cover the costs of the required fees and taxes for each vehicle. Given that Harris no longer worked for the DeKalb County Tax Commissioner’s Office, Harris obviously could not register the four vehicles for Individual-1. Nevertheless, Harris accepted and kept the money from Individual-1.
Then on December 17, 2019, Individual-1 sent a series of text messages to Harris requesting that Harris return the registration documentation and money. On December 17 and 18, 2019, Harris sent a series of text messages to Individual-1 where Harris stated that: (a) he was under investigation by the FBI, (b) the FBI has a video of Harris and Individual-1 meeting, (c) “[a]ll of us can be in trouble,” (d) Harris needed to know “how much” money will he be paid not to give information to the FBI, and (e) Harris is “not going to prison empty handed. It’s that simple.”
Based on the conduct set forth above, on February 28, 2020, the U.S. Attorney charged Gerald D. Harris, 51, of Fulton County, Georgia, in a criminal information with one count each of federal program bribery and blackmail. Harris pleaded guilty to both counts.
The FBI, DeKalb County District Attorney’s Office, Georgia Department of Revenue, and DeKalb County Tax Commissioner’s Office are investigating this case.
Assistant U.S. Attorney Jeffrey W. Davis, Chief of the Public Integrity and Special Matters Section, and Assistant U.S. Attorney Nicholas Hartigan are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
- To register vehicles to individuals who did not have Georgia driver’s licenses or identification cards as required, typically in exchange for $200 per vehicle;
Former VA Hospital Nursing Assistant Admits to Murdering Seven Veterans and Assault with Intent to Commit Murder of an EighthRead the Press Release
U.S. Attorney Bill Powell announces a plea in the murders of 8 veteransCLARKSBURG, WEST VIRGINIA – A former nursing assistant pled guilty today in federal court here to murder and assault charges in the deaths of eight veterans at the Veterans Affairs Medical Center (VAMC) in Clarksburg, West Virginia, U.S. Attorney Bill Powell announced.
Reta Mays, 46, of Harrison County, West Virginia, pled guilty today to seven counts of second degree murder in the deaths of veterans Robert Edge, Sr., Robert Kozul, Archie Edgell, George Shaw, W.A.H., Felix McDermott, and Raymond Golden. She pled guilty to one count of assault with Intent to commit murder” involving the death of veteran R.R.P.
“In today’s plea agreement, the defendant has admitted to actions that ended the lives of several military veterans who served our country honorably. Our investigation never lost sight of each of these lives and the sacrifices these men made for their country. The investigative work and the time it took to do it was always done with an eye towards honoring these men. Though we can’t bring these men back because of her evil acts, we hope the conclusion of the investigation and guilty plea helps ease the pain of the victims’ families,” said Powell. “I want to thank the incredible work by the FBI, the VA-OIG, the West Virginia State Police, the Greater Harrison Drug & Violent Crimes Task Force and our prosecution team. I also want to especially thank Attorney General Barr, and the families of the victims who never wavered in their support of this investigation. We look forward to the conclusion of this matter at the sentencing, where we will be seeking the maximum penalty.”
Mays was employed as a nursing assistant at the VAMC, working the night shift during the same period of time veterans in her care died of hypoglycemia while being treated at the hospital. Nursing assistants at the VAMC are not qualified or authorized to administer any medication to patients, including insulin. Mays admitted to administering insulin to several patients with the intent to cause their deaths.
“These cases are tragic and heart breaking,” said Veterans Affairs Inspector General Michael J. Missal. “I thank the VA OIG agents and our law enforcement partners who worked tirelessly to ensure justice was served and that the victims’ families have some measure of closure. They are in our thoughts and prayers as we work with VA to help prevent anything like this from ever happening again.”
“When you break the trust you’re given as a medical professional and break the law, there are consequences,” said FBI Special Agent in Charge Michael Christman. “This was a lengthy and thorough investigation with hundreds of interviews, extensive medical and administrative records to review and forensic testing that needed to be done. These eight Veterans deserved respect and honor. They served our country and we all owe them a debt of gratitude. They didn’t deserve to die at the hands of a nursing assistant who intentionally inflicted pain on them and their families. I commend the work of my agents and our law enforcement partners with the Veterans Affairs Office of Inspector General.”
Mays faces up to life in prison for each count of second-degree murder. Mays faces up to 20 years in prison for assault with intent to commit murder.” Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorneys Jarod J. Douglas and Brandon S. Flower are prosecuting the case on behalf of the government. The Veterans Affairs Office of Inspector General and the FBI investigated. The West Virginia State Police and the Greater Harrison Drug & Violent Crimes Task Force, a HIDTA-funded initiative, assisted.
U.S. District Judge Thomas S. Kleeh presided.
View the announcement here: https://www.youtube.com/watch?v=kvGG23_mZQg
Former State Senator Sentenced for Making False StatementRead the Press Release
NEW ORLEANS - U.S. Attorney Peter G. Strasser announced that today WESLEY T. BISHOP, age 52, of New Orleans was sentenced to 4 (four) years of probation, before U.S. District Judge Greg Guidry, for making a false statement, a crime punishable by up to five years’ imprisonment. BISHOP admitted to knowingly and willfully making a false, material statement to the United States Department of Housing and Urban Development (“HUD”) in connection with rental property that he owned. As explained by FBI New Orleans Special Agent in Charge Bryan Vorndran, “Former State Senator Bishop made false statements on HUD paperwork which resulted in Bishop receiving a forgivable $188,000 loan under the “road home” program.”
Pursuant to the plea agreement, BISHOP has agreed to pay restitution of $188,000 to the State of Louisiana, Division of Administration, Office of Community Development, which administers the subject Small Rental Property Program on behalf of HUD. In addition to probation, BISHOP has been ordered to pay a $100.00 special assessment fee.
U.S. Attorney Strasser praised the work and tireless efforts of the HUD Office of Inspector General and the FBI in investigating, and of Assistant United States Attorney Andre J. Lagarde in prosecuting this matter.
Former Pearl Resident Sentenced for Dog FightingRead the Press Release
Jackson, Miss. – Antoine Clayborne, 42, formerly of Pearl, Mississippi, was sentenced today by Senior U.S. District Judge David Bramlette III to 36 months’ probation for his participation in a pit bull dog fighting venture, announced U.S. Attorney Mike Hurst and Dax Roberson, Special Agent in Charge, U.S. Department of Agriculture, Office of Inspector General. Clayborne was also ordered to pay a $1,500 fine.
Clayborne pled guilty before Judge Bramlette on March 5, 2020, admitting that he trained pit bulls to fight to the death. Clayborne admitted that he entered one of his pit bulls in a dog fight outside the State of Mississippi, his pit bull won the fight, and as a result Clayborne won a substantial amount of money. Law enforcement discovered Clayborne’s dog-fighting activities as a result of a tip from a citizen concerned about the condition of the pit bulls at Clayborne’s house. After investigating the tip, law enforcement officers obtained a search warrant for Clayborne’s residence and seized eleven adult pit bulls and eight pit bull puppies. Law enforcement also seized a variety of equipment commonly used to train pit bulls to fight, including weighted vests, collars and harnesses, a slat mill used to force the dog to walk, two treadmills with boxes built onto them to hold the dog and force it to walk, heavy chains, hanging scales, flirt poles and break/bite sticks. Clayborne’s cell phone contained gruesome videos of dogs fighting until one dog killed the other, text messages with photos of dogs Clayborne had used for dog fights, invitations to enter animals in fights, and financial receipts of wire transfers related to dog fighting ventures.
The case was investigated by the U.S. Department of Agriculture - Office of Inspector General and the Rankin County Sheriff’s Office. The case was prosecuted by Assistant United States Attorney Carla J. Clark.
Former Director of Chabad of Poway and Several Co Defendants Plead Guilty to Multi Million-Dollar Tax Evasion and FraudRead the Press Release
For Further Information, Contact:
Assistant U. S. Attorneys Emily W. Allen (619) 546-9738, Andrew Young (619) 546-7981, and Oleksandra Johnson (619) 546-9769
SAN DIEGO – Rabbi Yisroel Goldstein, former director at Chabad of Poway, and five of his associates pleaded guilty in federal court today and Monday to fraud charges, admitting that they participated in a complex, years-long, multi-million dollar tax-evasion scheme and other financial deceptions involving theft of public money.
According to his plea agreement, while Rabbi Goldstein was director of the Poway synagogue, he received at least $6.2 million in phony contributions to the Chabad and affiliated charities and secretly refunded up to 90 percent of the donations to the “donors.” After Rabbi Goldstein provided these donors with fake receipts, they illegally claimed huge tax deductions for these nonexistent donations, and the rabbi kept about 10 percent – more than half a million dollars over the course of the fraud - for himself. Tax losses to the IRS were more than $1.5 million. At least 20 taxpayers were involved in this and related tax-evasion schemes.
This case was under investigation for more than two years before Rabbi Goldstein was shot and wounded during the April 27, 2019 attack on worshippers at the Chabad. In that case, federal civil rights and hate crimes charges are pending against John T. Earnest of Rancho Peñasquitos.
The rabbi was aware of the investigation at the time of the shooting. FBI and IRS agents had searched his home in October of 2018, and he began cooperating with the investigation shortly after that time.
According to his plea agreement, Rabbi Goldstein has agreed to cooperate with ongoing investigations of uncharged co-conspirators and to forfeit $1 million in proceeds and pay restitution of $2.5 million.
“This case has brought us all a great deal of anguish because of the attack on Chabad of Poway,” said U.S. Attorney Robert Brewer. “But whatever a defendant’s dire personal circumstances, or stature in the community, we will always seek justice, first and foremost. We cannot, and will not, sweep serious criminal conduct under the rug. We cannot look the other way because a perpetrator of crime has suddenly become a victim of crime.”
“This case shows the FBI’s dedication to untangling the web of fraud in a complex, multi-million dollar charitable donation scheme that violated the trust of the Chabad of Poway and defrauded the United States government," said FBI San Diego Acting Special Agent-in-Charge Omer Meisel. “The FBI is committed to holding those accountable who use their position and stature in the community as a disguise to commit fraud. All the defendants in this case, including Rabbi Yisroel Goldstein, have admitted their guilt in these fraudulent schemes and will no longer be able to use deceit and lies to cheat those who were intended to receive charitable funds and taxpayer dollars.”
“The Chabad of Poway, which has served its community for decades, was used by Rabbi Yisroel Goldstein and the five co-defendants to evade over $1.5 million in taxes over the last 8 years,” said Ryan L. Korner, Special Agent in Charge of the IRS’s Criminal Investigation Division. “The Chabad was further victimized in April 2019 when a shooter attacked its worshippers, and we recognize the pain that terrible event has caused for the Chabad, Rabbi Goldstein, and the community. Ultimately, the financial fraud schemes uncovered during this multi-year, multi-defendant investigation were egregious and IRS Criminal Investigation has a responsibility to bring to justice those who exploit and manipulate non-profit and religious organizations in order to benefit themselves. The IRS is responsible for protecting honest taxpayers and serving the public by ensuring the integrity of our tax system, which funds our nation’s critical infrastructures and vital programs, including supporting our citizens and small businesses during the ongoing pandemic. The hard work of our Special Agents will not stop despite the ongoing challenges posed by Covid-19. We will continue to work alongside our law enforcement partners, and this week’s six guilty pleas demonstrate our collective efforts to continue to enforce the law and ensure the public trust.”
Five others who participated in the scheme with Rabbi Goldstein also entered guilty pleas in federal court this week, admitting that they knowingly participated by concealing their donations through the Chabad and making false deductions on their tax forms, or by recruiting new taxpayers to participate in the scheme. One taxpayer, defendant Bruce Baker, admitted that he began participating in this scheme with Rabbi Goldstein in the 1980s, and made millions of dollars in fictitious donations over the years.
Rabbi Goldstein admitted today that in one instance in late 2017, he attempted to disguise the source of more than $1.1 million in fraudulent donations by purchasing gold coins worth approximately $1 million. He then delivered the gold to the phony donor.
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There were many schemes within the broader tax-fraud and kickback scheme, dating back to 2010 or earlier and continuing through 2018.
Rabbi Goldstein admitted he defrauded three different Fortune 500 companies by tricking them into matching supposed charitable donations of their employees. Working with the employees, Rabbi Goldstein fabricated fake receipts and then secretly returned their fake “donations.” This allowed the employees to claim tax deductions for the completely fabricated donations, and allowed Rabbi Goldstein to collect the companies’ matching funds—including some that matched double their employees’ donations. Rabbi Goldstein helped to orchestrate this scheme with at least six taxpayer-employees and two other associates who helped recruit new donors or conceal the true recipient of the funds. In total, Rabbi Goldstein defrauded the companies out of at least $134,000, and helped the taxpayer-employees to claim nearly as much in fictitious tax-deductible charitable contributions to the IRS.
Rabbi Goldstein admitted that he also helped an individual conceal more than $700,000 in income by allowing the individual to use Chabad bank accounts to deposit his income, thereby hiding it from the IRS. As his cut, Rabbi Goldstein kept 10 percent of this individual’s income—more than $70,000.
Separate and apart from the tax evasion scheme, Rabbi Goldstein and defendant Alexander Avergoon, who also pleaded guilty today, used false information and fabricated invoices and other records to pretend to be eligible for emergency funds, grants or donations, and private loans. These frauds on the Federal Emergency Management Agency (FEMA), the California Governor’s Office of Emergency Services (Cal OES), and private foundations resulted in losses to these programs of at least $875,000. Rabbi Goldstein and Avergoon have agreed to pay restitution to recoup these losses and reimburse these programs.
The rabbi also admitted in his plea agreement that he defrauded San Diego County courts by falsely certifying that co-conspirators and associates had performed volunteer work at the Chabad or its affiliated entities, so that those associates could submit fake reports to the courts that they had fulfilled sentencing requirements for criminal offenses showing dozens or even hundreds of community service hours. Finally, Rabbi Goldstein admitted that, along with Avergoon, he fraudulently obtained loans from banks and mortgage lending businesses by submitting false information in loan applications that they verified for one another.
“Sadly, the facts of this case show a willful, devious effort to deceive on the part of a trusted community leader,” Brewer said. “Evading taxes causes harm not just to the government, but also to one’s fellow citizens, who are forced to bear a heavier burden. Members of the Chabad of Poway are also victims of this crime, for those fake donations certainly did not benefit their congregation.
“There is no doubt that Rabbi Goldstein was the victim of a heinous hate crime that terrorized him and Chabad congregants,” Brewer said. “This is a mitigating factor, but this is no excuse. We acknowledge the rabbi’s cooperation and his community leadership in the wake of the shooting. But this illegal conduct had been going on for many years, and it cannot be ignored.”
U.S. Magistrate Judge Karen S. Crawford presided over today’s arraignment and guilty plea. Rabbi Goldstein is next scheduled to appear at a sentencing hearing on October 19, 2020 at 9 a.m. before U.S. District Judge Cynthia Bashant.
The five related guilty pleas involve a series of fraud and tax evasion schemes by Rabbi Goldstein’s co‑defendants:
1. Defendant Alexander Avergoon
Avergoon admitted that from 2010 to 2015, he recruited at least nine taxpayers who made more than $275,000 in fraudulent “donations” to the Chabad, then used Avergoon as a conduit to secretly return 90 percent of the money to the purported “donors.” He also admitted that he joined Rabbi Goldstein in the grant fraud scam in which they obtained hundreds of thousands of dollars in misappropriated grant funds.
As part of the government benefits fraud scheme, Avergoon used shell companies, including “Imagination Construction Company,” to create fictitious and backdated invoices for services like carpet installation, repairs to the Chabad of Poway’s HVAC system, and replacing damaged books and other supplies—even though Avergoon had never performed these services. In some cases, Avergoon would give Goldstein several fake bids from different shell companies, so that Rabbi Goldstein could trick the grant program administrators into believing he had complied with their competitive bidding requirements. Avergoon and Goldstein pretended that the government grant funds would be used for facilities upgrades, security systems, and community programs. But in reality, the money often went straight to Goldstein’s and Avergoon’s pockets; other times they used portions of it to pay contractors who had in fact charged much lower prices than reflected on Avergoon’s phony paperwork.
Apart from his fraudulent partnership with Rabbi Goldstein, Avergoon also admitted to participating in separate real estate Ponzi schemes from 2010 to 2016, in which he cheated retirement investors out of a total of $12 million. Avergoon was a San Diego-based real estate agent, and he used his industry knowledge and reputation to target trusting victims who would invest in what they thought was the purchase of rental property. Avergoon promised monthly dividends that would be paid from rental income. He created written investment materials like prospectus and projected income and expenses calculations, designed to give investors the false impression that their money would be safely tucked away in passive-income retirement investments. But in truth, instead of using investors’ money to buy rental properties as he promised, Avergoon spent the money himself and just pretended that he had purchased the apartment buildings and office space he advertised. In true Ponzi fashion, for a time, Avergoon made the promised dividend payments—but rather than using rent income, he funded those payments using new investor money.
Avergoon deceived more than a dozen unwitting investors, and convinced them to part with at least $5 million. When an investor would ask to cash out, he encouraged them to re-invest, and at one point he pretended to “roll over” their retirement investments to purchase a multi-million dollar commercial building. In reality, he bought that building with a loan, not with investor money, and again diverted their money to his own personal use. He created fake partnership agreements, false purchase documents and deeds, and other fictitious records, and forged the signatures of his investors to conceal the fraud—then laundered the proceeds in order to disguise the true source and ownership of the money.
Avergoon did not stop there. He convinced investors to part with another $5 million or more by pretending to use their money to fund short-term, low-risk loans supposedly secured by the borrowers’ high-end San Diego homes. But in reality, there were no “borrowers”—Avergoon used his real estate connections to identify homes he could pose as collateral, and he simply doctored up fake loan agreements and forged the borrowers’ signatures. In some cases, the individuals he claimed were the borrowers did not even own the homes that were purportedly used as collateral. Avergoon made fake loan agreements, Deeds of Trust, mortgage Notes, and other official-looking documents, and he even created fake notary stamps and San Diego County Recorder’s Office markings to make the paperwork appear legitimate. Once again, Avergoon used new investor money to make occasional payments to his victims, to make it appear that the “loans” were performing. But in truth, he diverted the money to his own use and the “investments” were worthless.
Avergoon was indicted in August 2019 and apprehended in Latvia. He was extradited to the United States in November 2019 and has remained in custody since his extradition and initial appearance in federal court in San Diego. U.S. Magistrate Judge Barbara L. Major presided over his change of plea hearing today. Avergoon is next scheduled to appear at a sentencing hearing on October 19, 2020 at 9 a.m. before U.S. District Judge Cynthia Bashant.
2. Defendant Bruce Baker
Bruce Baker pleaded guilty to conspiring with Rabbi Goldstein to defraud the IRS and file false tax returns beginning as early as the mid-1980s. For three decades, Baker admitted that he used fabricated records from Goldstein to fraudulently reduce his tax liabilities by pretending he was eligible for tax deductions for millions of dollars in nonexistent “gifts to charity” he reportedly made to the Chabad. In reality, Goldstein secretly returned 90 percent of Baker’s donations, and kept a 10 percent fee.
This part of the scheme was especially complex and intricate. Rather than simply paying cash or returning Baker’s money in direct payments, Goldstein would pay Baker’s creditors, make large purchases on his behalf, give money to Baker’s relatives, or pay off bills on behalf of his family. To disguise the repayments, Rabbi Goldstein delivered the money in clandestine ways by, for example, paying:
- around $200,000 to Baker’s business partner to buy the partner’s share of their business assets on Baker’s behalf;
- more than $420,000 in tuition and fees for Baker’s son to attend dental school and a post-doctoral residency in dentistry;
- at least $90,000 to a construction company for Baker’s benefit, another $200,000 directly to a building contractor working for Baker and $129,000 to a home builder, and more than $300,000 to Baker’s account at a construction and building supply company; and
- $200,000 from the proceeds of the sale of Goldstein’s property paid directly to Baker’s son.
Over the years, Baker admitted that he “donated” at least $2.6 million to Chabad of Poway, with at least $2.4 million secretly funneled back from Goldstein to Baker. In total, Baker’s and Goldstein’s scheme cost the IRS around $644,000 in tax losses.
Separate from his dealings with Rabbi Goldstein, Baker also admitted that he engaged in a similar tax evasion scheme with the director of a separate religious congregation and community organization in San Diego. In 2006, that individual offered Baker and his family an arrangement where they would pretend to make an “in-kind” donation to the religious organization of an ancient Iranian Torah—although no such Torah existed and the “in-kind” donation was a hoax. This other director provided Baker with a fraudulent appraisal that valued the Torah at $1.2 million. Baker and his family used the fake paperwork to claim exorbitant tax deductions, and gave the co-conspirator a 10 percent fee—or $120,000—in return. On top of that, the director charged Baker $20,000 for the fake appraisal.
U.S. Magistrate Judge Karen S. Crawford presided over Baker’s arraignment and guilty plea on July 13, 2020. Baker is scheduled for sentencing on October 19, 2020, at 9 a.m. before U.S. District Judge Cynthia Bashant. He has agreed to make full restitution to the IRS including all unpaid taxes, penalties, and interest.
3. Defendant Bijan Moossazadeh
Bijan Moossazadeh began participating in the tax evasion scheme with Rabbi Goldstein as early as 2012. As he admitted in his plea agreement, between 2012 and 2018 he pretended to “donate” a total of around $290,000 to Chabad of Poway. But instead of using the money for charitable purposes, Goldstein secretly funneled back 90 percent of the funds to Moossazadeh. Even so, Goldstein generated fraudulent donation receipt letters for Moossazadeh, so he could fraudulently verify that the money was indeed a “gift to charity.” Moossazadeh fraudulently reduced his tax liability—or intended to, before he learned of this investigation in 2018—by more than $91,500.
Goldstein concealed his repayments by giving Moossazadeh large cash payments that would be difficult to trace. And he communicated in code when he had cash available, referring to his cash supplies as “challah” and his supplier as “the baker.” In 2016, for example, Goldstein texted Moossazadeh to tell him he had cash: “I got a call from the Baker today he’s preparing for Friday how many Chalah do you need?” Moossazadeh answered, “22”—by which he meant, $22,000. The next day, Goldstein followed up: “Good morning[.] The baker came in earlier and has today 22 challa ready for pickup[.] Let me know what time?” Moossazadeh met Rabbi Goldstein at the Chabad on March 16, 2016, where he delivered a $22,000 check made payable to the Chabad (with “Contribution” written in the memo line), and in exchange Goldstein gave him $20,000 in cash (keeping the remaining $2,000). Goldstein also gave Moossazadeh a fraudulent donation receipt thanking Defendant for his “generous tax deductible donation.”
They followed a similar pattern in 2018, when Goldstein again used coded text messages to alert Moossazadeh that he did not have cash ready and available: “Just got a call the baker is not baking challah this Friday-will be back next Friday and have the full order.” A week later, Goldstein followed up: “Cook just finished . [] Come and pickup[.]” Moossazadeh admitted in his plea agreement that he met Goldstein at the Chabad the next day and delivered a check for $33,000, made payable to the Chabad (again with “Contribution” written in the memo line). In exchange, Goldstein gave Moossazadeh $30,000 in cash (keeping the remaining $3,000), along with another fraudulent donation receipt.
In August 2018—just at the time that court documents show Goldstein had offered to launder cash proceeds for an individual who he only later discovered was an undercover federal agent--—Rabbi Goldstein let Moossazadeh know he had more cash available. He texted Moossazadeh: “I have a new baker who can bake many more challah almost unlimited[.] Let Joe [SHEMIRANI] know that a new baker came to town and to let me know how many challah to bake ? Can do as many as you need .. unlimited[.]” But just a few months later in October 2018, Moossazadeh learned that Rabbi Goldstein was under investigation. He did not attempt to deduct any of his 2018 purported donations to the Chabad.
U.S. Magistrate Judge Karen S. Crawford presided over Moossazadeh’s arraignment and guilty plea on July 13, 2020. He is scheduled for sentencing on October 19, 2020, at 9 a.m. before U.S. District Judge Cynthia Bashant. He has agreed to make full restitution to the IRS including all unpaid taxes, penalties (including a 75 percent fraud penalty), and interest.
4. Defendant Yousef Shemirani
Yousef Shemirani admitted in his plea agreement that he participated in the tax scheme from 2011 to 2016, and in total he pretended to “donate” $137,650 to Rabbi Goldstein and the Chabad of Poway. In return, Goldstein secretly funneled approximately 90 percent of the “donations” back to Shemirani, keeping 10 percent (around $13,765). Shemirani’s participation in the scheme resulted in a tax loss to the IRS of more than $39,000.
As with Moossazadeh, Rabbi Goldstein used coded language to discuss the scheme with Shemirani, and he concealed his return of the “donations” by returning Shemirani’s payments in large amounts of cash. As Shemirani admitted in his plea agreement, Goldstein texted him in June 2015 to alert him that he would have cash available: “The baker will be back in July and will have all the Chalah you need :)” In July 2015, he followed up: “I just got a call from the Baker he may be in this Friday do you still need Chalah?” A year later, Goldstein continued the disguise, alerting Shemirani: “The Baker came today and actually be a nice amount of fresh Chalah – you can come by today and pick it up.”
Shemirani heard from Rabbi Goldstein again on October 20, 2018, when Goldstein appeared unannounced at Shemirani’s door. As Shemirani admitted, Goldstein warned that he was under investigation and that his home and office had been searched by federal agents. He alerted Shemirani that the next time they saw each other, Goldstein might be “wearing a wire.” Shemirani understood this was a warning, and he took steps to amend his fraudulent tax returns in response.
Shemirani was arraigned and entered a guilty plea on July 13, 2020, before U.S. Magistrate Judge Karen S. Crawford. His sentencing is scheduled on October 19, 2020, at 9 a.m. before U.S. District Judge Cynthia Bashant. He has agreed to make full restitution to the IRS including all unpaid taxes, penalties (including a 75 percent fraud penalty), and interest.
5. Defendant Boris Shkoller
Boris Shkoller admitted that from 2015 to 2016, he “donated” $122,000 to Chabad of Poway and secretly received 90 percent—or $109,800—back from Goldstein. Shkoller used Alexander Avergoon as a conduit to make the payments and receive the kickbacks. Avergoon also passed along fraudulent and backdated donation receipt letters that fraudulently verified Shkoller’s “generous tax deductible donation[s].” Shkoller admitted that he filed fraudulent tax returns for both years, resulting in tax losses to the IRS of more than $36,000.
Shkoller was arraigned and pleaded guilty today before U.S. Magistrate Judge Karen S. Crawford. His sentencing is scheduled on October 19, 2020 at 9 a.m. before U.S. District Judge Cynthia Bashant. He has agreed to pay $53,772 in restitution to the IRS for his tax underpayment, penalties, and interest.
U.S. Attorney Brewer commended the excellent work of prosecutors Emily Allen, Andrew Young and Oleksandra Johnson as well as case agents from the FBI and IRS.
DEFENDANTS AND SUMMARY OF CHARGES
Yisroel Goldstein, Case Number 20CR1916-BAS Age: 58 Poway
Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371
Maximum Penalty: Five years in prisonAlexander Avergoon, Case Number 19CR2955-BAS Age: 44 San Diego
Wire Fraud, in violation of Title 18, USC 1343
Maximum Penalty: Twenty years in prisonAggravated Identity Theft, in violation of Title 18, USC 1028A
Maximum Penalty: Two years minimum consecutive term in prisonMoney Laundering, in violation of Title 18, USC 1956(a)(1)(B)(i)
Maximum Penalty: Twenty years in prisonBruce Baker, Case Number 20CR1912-BAS Age: 74 La Jolla
Conspiracy to Defraud the United States and file false tax returns, in violation of Title 18, USC 371
Maximum Penalty: Five years in prisonBijan Moossazadeh, Case Number 20CR1893-BAS Age: 63 San Diego
Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prisonYousef Shemirani, Case Number 20CR1895-BAS Age: 74 Poway
Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prisonBoris Shkoller, Case Number 20CR1913-BAS Age: 83 Del Mar
Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prisonINVESTIGATING AGENCIES: Federal Bureau of Investigation, Internal Revenue Service
CLICK HERE - Avergoon Indictment CLICK HERE -Goldstein Plea Agreement CLICK HERE - Avergoon Plea Agreement CLICK HERE - Shkoller Plea Agreement CLICK HERE - Goldstein Information CLICK HERE - Baker Information CLICK HERE - Moossazadeh Information CLICK HERE - Shemirani Information CLICK HERE - Shkoller Information
Former Atomwaffen Division Leader Pleads Guilty to Swatting ConspiracyRead the Press Release
ALEXANDRIA, Va. – A former leader of the white supremacist group Atomwaffen Division pleaded guilty today to charges related to his role in a conspiracy that conducted multiple swatting events targeting journalists, a Virginia university, a historic Virginia church, and a former cabinet official.
According to court documents, John Cameron Denton, 26, of Montgomery, Texas, is a former leader of the Atomwaffen Division in Texas. From October 2018 to at least April 2019, Denton and several others conspired together to conduct “swatting” calls. Swatting is a harassment tactic that involves deceiving dispatchers into believing that a person or persons are in imminent danger of death or bodily harm and causing the dispatchers to send police and emergency services to an unwitting third party’s address.
“Swatting is a dangerous act with potentially tragic consequences,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia. “Sending law enforcement and emergency responders rushing to an individual’s home, business, or place of worship, in an effort to target individuals because of their race or religious affiliation or simply to create chaos shows both criminal behavior and a complete disregard for public safety. This office is committed to locating and investigating individuals responsible for such threats, and when appropriate, will seek federal charges.”
According to court documents, Denton participated in a conspiracy that conducted three swatting calls that occurred here in the Eastern District of Virginia: a former Cabinet official living in Northern Virginia on Jan. 27, 2019; Old Dominion University on Nov. 29 and Dec. 4, 2018; and Alfred Street Baptist Church on Nov. 3, 2018.
Additionally, Denton chose at least two targets to “swat”: the New York City office of ProPublica, a non-profit newsroom that produces investigative journalism; and an investigative journalist that produced materials for ProPublica. Denton chose the two targets because he was furious with ProPublica and the investigative journalist for publishing his true identity and discussing his role in Atomwaffen Division.
“The FBI takes swatting seriously because it can have harmful consequences and puts innocent people and first responders at risk,” said James A. Dawson, Special Agent in Charge of the FBI's Washington Field Office Criminal Division. “Putting the lives of others in danger by swatting is senseless and criminal. The FBI's Washington Field Office will continue to work with our partners to locate and apprehend those who are responsible for such threats.”
During the investigation, Denton unknowingly met with an undercover law enforcement officer and told the undercover officer about his role in the swatting conspiracy. Denton stated that he used a voice changer when he made swatting calls, and admitted that he swatted the offices of ProPublica and the investigative journalist. He also stated that it would be good if he was “raided” for the swatting because it would be viewed as a top tier crime, and he felt that his arrest could benefit Atomwaffen Division.
Denton pleaded guilty to conspiracy to commit an offense against the United States, interstate threats to injure. He faces a maximum sentence of five years in prison when sentenced on November 17. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and James A. Dawson, Special Agent in Charge of the FBI's Washington Field Office Criminal Division, made the announcement after Senior U.S. District Judge Liam O’Grady accepted the plea. Assistant U.S. Attorney Carina A. Cuellar is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:20-cr-154.
Five Charged as Cocaine Pipeline to Rhode Island ShutdownRead the Press Release
PROVIDENCE – An alleged drug trafficking pipeline that U.S. Postal Inspection Service agents believe may have been responsible for the shipment through the U.S. Mail of upwards of 100 kilos of cocaine into Rhode Island from Puerto Rico was shut down today when five individuals were charged in U.S. District Court in Providence and more than a dozen firearms were seized.
U.S. Postal Inspection Service (USPIS) agents and law enforcement agents and officers from the Rhode Island High Intensity Drug Trafficking Area Task Force culminated an investigation of the alleged drug trafficking organization with the execution of federal court-authorized search warrants at four locations in Woonsocket, seizing 16 firearms, multiple military style bullet proof vests, ammunition, cross bows, a kilogram of cocaine, a cocaine press, and other items used in the distribution of cocaine.
Also today, USPIS agents intercepted and seized three packages sent from Puerto Rico to addresses in Woonsocket. A federal court-authorized search of the packages resulted in the seizure of eight kilos of cocaine.
According to information presented to the court, 15 unsecured firearms, many of which were loaded, to include handguns, shotguns and rifles, including a modified AK-47, were seized from a Woonsocket residence. The firearms were discovered by members of law enforcement out in the open and within reach of a 6-year-old child who was in the residence at the time. Luis Alvarez, 25, was arrested, charged by way of a federal criminal complaint with conspiracy, possession with intent to distribute cocaine, and using a communication facility (U.S. Mail) to commit a drug felony.
A loaded firearm was also seized from another Woonsocket residence searched today by law enforcement, where William Lugo, 29, was arrested, charged by way of a federal criminal complaint with conspiracy, possession with intent to distribute cocaine, and using a communication facility (U.S. Mail) to commit a drug felony. According to court documents, Lugo is currently on state probation related to a 2016 firearm conviction.
According to court documents, a USPIS investigation identified approximately 55 Priority Mail packages alleged to contain one or more kilograms of cocaine that were shipped from different post offices in Puerto Rico to various addresses in Woonsocket since January 2019. Often times, multiple packages were mailed on the same day. The investigation showed that the parcels’ sender names were not associated with the listed return address, and similarly, the listed recipients were not associated with the Rhode Island addresses to which the parcels were sent. Many of the parcels had similar weights, and some bear similar handwriting.
It is alleged that several individuals worked together to track the shipments through the U.S. Postal Service, retrieve the Priority Mail parcels, and deliver them to other members of the drug trafficking organization at the locations searched today by law enforcement.
Also arrested today, charged by way of federal criminal complaints with conspiracy, possession with intent to distribute cocaine, and using a communication facility (U.S. Mail) to commit a drug felony, were Natasha Belardo, 27, of Woonsocket, and Hector G. Rios, 37, of Cranston.
An arrest warrant has been issued for a fifth person, Victor L. Casanova, 26, of Woonsocket. Casanova is charged by way of federal criminal complaint with conspiracy, possession with intent to distribute cocaine, and using a communication facility (U.S. Mail) to commit a drug felony.
A federal criminal complaint is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
The investigation and today’s arrests and seizures are announced by United States Attorney Aaron L. Weisman, Joseph W. Cronin, Inspector in Charge of the U.S. Postal Inspection Service, Boston Division, and Superintendent of the Rhode Island State Police Colonel James M. Manni.
United States Attorney Aaron L. Weisman acknowledges and thanks the Woonsocket Police Department for their assistance today in the execution of the search warrants and in the arrest of Alvarez, Lugo, and Belardo.
The Rhode Island HIDTA Task Force is managed by the Rhode Island State Police and is comprised of law enforcement agents and officers from the Rhode Island State Police, Lincoln Police Department, Providence Police Department, North Providence Police Department, Middletown Police Department, West Warwick Police Department, Bristol Police Department, ATF, DEA, Homeland Security Investigations, ACI Special Investigative Unit, and Rhode Island National Guard Counterdrug Program.
The case is being prosecuted by Assistant U.S. Attorney Christine D. Lowell and Denise M. Barton.
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Federal Prosecutions Serve as Reminder to Comply with Tax Obligations as Revised Filing Deadline ArrivesRead the Press Release
CHICAGO — With the upcoming arrival of Tax Day on July 15, the U.S. Attorney’s Office and IRS Criminal Investigation Division in Chicago remind taxpayers to accurately file their returns and promptly pay any money owed.
The new deadline to file and pay 2019 income taxes and estimated taxes is Wednesday, July 15, 2020. The federal government and state of Illinois postponed the original filing deadline of April 15 due to the COVID-19 pandemic.
Tax evaders face criminal charges, including potential incarceration, as well as civil penalties, and they remain responsible for all taxes and interest due, said John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, and Kathy A. Enstrom, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago.
“Taxes are how governments provide essential services,” said U.S. Attorney Lausch. “Tax offenses are neither victimless nor without consequence. Our office strives to preserve the integrity of the federal tax system through vigorous enforcement of the internal revenue laws.”
“As the tax filing deadline quickly approaches, I am asking all citizens to file correct and accurate tax returns and to pay their share of taxes,” said Special Agent-in-Charge Enstrom. “We all pay when others cheat the government. IRS Criminal Investigation, together with the U.S. Attorney’s Office, works year-round to make certain that those who willfully defy the tax laws will be investigated and criminally prosecuted. Taxpayers are encouraged to visit the IRS.gov website for tips on filing a tax return accurately and searching for a reputable return preparer.”
Several Chicago-area defendants have recently been prosecuted in federal court for a variety of tax violations, exemplifying the serious nature of the offense.
MOHAMMAD KHATIB and his wife, LISA KHATIB, pleaded guilty to filing false tax returns. The couple concealed more than $2.2 million in taxable income from their business in south suburban Harvey, leading to a total tax loss of at least $822,266. U.S. District Judge Sharon Johnson Coleman sentenced Mohammad Khatib to two years in federal prison, and Lisa Khatib to six months of home confinement. The government was represented by Assistant U.S. Attorney Sean J.B. Franzblau.
SAMANTHA RILEY, of Oak Park, pleaded guilty to stealing federal tax refunds in other taxpayers’ names and directing the money to be deposited into her personal bank accounts. Riley used the illegal proceeds to purchase clothing at Gucci and to make a down payment on a Porsche Cayenne. U.S. District Judge Virginia M. Kendall sentenced Riley to five years of probation and ordered her to pay $77,726 in restitution to the IRS. The government was represented by Assistant U.S. Attorney Sean K. Driscoll.
Another recent tax prosecution resulted in a term of imprisonment for a Chicago business owner for filing a false tax return. PATRYK TRYNDA, the sole owner of Kitchen and Bath Design Inc., failed to report $4.03 million of gross receipts for 2015 and 2016, resulting in tax losses of $345,091. Trynda also employed at least eleven individuals but failed to pay payroll taxes to the IRS for the years 2015, 2016, and 2017, causing $166,617 in additional tax losses. U.S. District Judge Andrea R. Wood sentenced Trynda to a year and day in federal prison and ordered him to pay a fine of $10,000. The government was represented by Assistant U.S. Attorney Jordan Matthews.
A federal prison sentence was also handed down to ROBERT S. WAKSMUNDZKI, of Chicago and Palos Hills, on conspiracy and false tax return charges. For several years Waksmundzki significantly underreported income he received from operating multiple websites, including Torrentz, through which visitors were re-directed via links to other sites where they could download motion picture content without the authority of lawful copyright holders. U.S. District Judge Edmond E. Chang sentenced Waksmundzki to a year and a day in federal prison and ordered him to pay $194,166 in restitution to the IRS. The government was represented by Assistant U.S. Attorney Sean K. Driscoll.
RICHARD T. DAVIS, the owner of a McHenry County tooling and plastics business, pleaded guilty to diverting nearly $500,000 in business receipts into his personal checking account and failing to report the income on his personal tax return. U.S. District Judge Philip G. Reinhard sentenced Davis to two years of probation and ordered him to pay restitution of $113,845 to the IRS. The government was represented by Assistant U.S. Attorney Michael Love.
For tips to assist taxpayers in choosing a reputable tax professional or preparing their own taxes, visit the official IRS website at https://www.irs.gov/newsroom/irs-tax-tips. Taxpayers facing hardships due to COVID-19 may also find assistance by visiting the official IRS website at https://www.irs.gov/coronavirus-tax-relief-and-economic-impact-payments.
Federal Judge Sentences Serial Bank Robber to over 10 YearsRead the Press Release
ASHEVILLE, N.C. – U.S. District Judge Max O. Cogburn, Jr. sentenced John Howard Johnson, 65, to 130 months in prison followed by three years of supervised release, in connection with a series of armed bank robberies he committed in 2019, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. In addition to the prison term, Judge Cogburn also ordered Johnson to pay $8,569 as restitution.
According to filed court documents and today’s sentencing hearing, between July 3, 2019, and August 23, 2019, Johnson robbed four banks in North and South Carolina. Court records show that on July 3, 2019, Johnson entered a BB&T bank located at 174 Meeting Street, in Charleston, S.C., and passed a demand note written on an envelope to a teller that read, “I have a gun. Give me $100s and $50s.” According to court records, Johnson lifted his shirt and exposed what appeared to be a firearm and threatened to shoot the teller. The teller placed $1,800 into an envelope and gave it to Johnson, who then fled the scene in a vehicle.
According to court records, the second bank robbery occurred on July 23, 2019. On that date, Johnson entered the First Bank located at 201 Market Street, in Wilmington, N.C., and, similar to the first robbery, Johnson passed a demand note to the teller, threatening to kill the teller and asking for cash. After the teller handed Johnson the money, Johnson again fled in his vehicle. The next bank robbery occurred on July 31, 2019, at the BB&T bank located at 150 S. Main Street, in Mount Holly, N.C. As with the prior robberies, Johnson entered the bank, passed a demand note written on an envelope to a teller that read, “I have a gun in my shorts. Give me all of your 50s and 100s. Don’t make me kill you. Don’t make me shoot you.” After the teller put the cash into an envelope and gave it to Johnson, the defendant fled in the same vehicle.
According to court records, on August 23, 2019, Johnson entered the TD Bank located at 535 Greenville Highway, in Hendersonville, N.C., and again passed a demand note to the teller that read, “This is not a joke, I have a gun, I will kill you.” Johnson took the money the teller handed him and left the bank in his vehicle.
Law enforcement arrested Johnson in Charleston in September 2019. On February 3, 2020, he pleaded guilty to bank robbery charges. Johnson is in federal custody and will be transferred into custody of the Federal Bureau of Prisons upon designation of a federal facility.
In making today’s announcement, U.S. Attorney thanked the FBI, the Mt. Holly Police Department, the Hendersonville Police Department, the Wilmington Police Department, the Charleston Police Department and the Sever County Police Department for investigation of this case.
Assistant U.S. Attorney Don Gast, of the U.S. Attorney’s Office in Asheville, prosecuted the case.
Federal Grand Jury in Waco Indicts Killeen Woman in Connection with the Disappearance of U.S. Army Specialist Vanessa GuillenRead the Press Release
In Waco today, a federal grand jury indicted 22-year-old Cecily Aguilar in connection with the disappearance of U.S. Army Specialist Vanessa Guillen, announced U.S. Attorney John F. Bash, FBI Special Agent in Charge Christopher Combs, San Antonio Division, and U.S. Army Criminal Investigative Command (USACID) Special Agent in Charge Vanessa Neff at Fort Hood.
The federal grand jury indictment charges Aguilar with one count of conspiracy to tamper with evidence and two substantive counts of tampering with evidence. Aguilar faces up to 20 years in federal prison for each count upon conviction.
According to court records, U.S. Army Specialist Aaron Robinson told Aguilar that he killed a female soldier by striking her in the head with a hammer while on Ft. Hood on April 22, 2020. Robinson further admitted to Aguilar that he transferred the woman’s body off of Ft. Hood to a remote site in Bell County. Subsequently, Robinson enlisted the help of Aguilar in disposing of the victim’s body. At a later time Aguilar recognized the deceased, whom she helped Robinson mutilate and dispose of, as Vanessa Guillen.
The indictment alleges that from April 22, 2020, through July 1, 2020, Aguilar conspired with Robinson to corruptly alter, destroy, mutilate and conceal evidence, including the victim’s body in order to prevent Robinson from being charged with and prosecuted for any crime. The indictment also alleges that on April 23, 2020, and on April 26, 2020, Aguilar tampered with evidence in this case, including the victim’s body, to impair its integrity and availability for use in an official proceeding.
During a previously scheduled court hearing in Waco today, U.S. Magistrate Judge Jeffrey C. Manske arraigned Aguilar on the indictment now pending against her. A not-guilty plea was entered by Aguilar’s counsel. Judge Manske also ordered that Aguilar remain in federal custody until further notice. No further court dates have been scheduled.
Agents and investigators from USACID, FBI, Texas Rangers, Bell County Sheriff’s Office, Killeen Police Department, Belton Police Department, Texas Parks and Wildlife and the U.S. Marshals Service are continuing to investigate this case. Assistant U.S. Attorneys Mark Frazier and Greg Gloff are prosecuting this case on behalf of the government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Fannin County Woman Sentenced for Tax FraudRead the Press Release
SHERMAN, Texas – A 40-year-old Honey Grove, Texas woman has been sentenced to federal prison for tax fraud in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.
Kristi Michelle Finney, also known as Kristi Michelle Fry, pleaded guilty on Aug. 29, 2019 to five counts of tax fraud. On July 2, 2020, U.S. District Judge Amos Mazzant sentenced Finney to 33 months in federal prison. Finney was also ordered to pay restitution of $359,733 to the Internal Revenue Service.
According to information presented in court, from 2013 to 2018, Finney offered tax services from her home, where she would complete and file tax returns for others at a fee of around $200. An IRS investigation linked 147 suspicious tax returns to Finney, many of which contained false employment, income, and expense information. Specifically, Finney would claim large financial losses for businesses that never existed, resulting in a larger tax refund for her clients than they would otherwise be entitled to. Finney would then divert portions of the fraudulent tax refund to herself by placing the refunds on prepaid debit cards. Finney concealed her involvement by falsely claiming that the fraudulent returns were personally prepared by her clients, rather than her. The IRS was ultimately able to identify Finney as the filer of these returns through internet protocol addresses and email addresses associated with the electronic returns, as well as through witness interviews.
This case was investigated by the Internal Revenue Service, Criminal Investigation, and prosecuted by Assistant U.S. Attorney Wes Wynne.
Erie Felon Charged with Illegally Possessing a FirearmRead the Press Release
ERIE, Pa. - A resident of Erie, Pennsylvania has been indicted by a federal grand jury in Erie on a charge of violating federal firearms laws, United States Attorney Scott W. Brady announced today.
The one-count Indictment named William Anthony Eldridge, 56, as the sole defendant.
According to the Indictment presented to the court, on or about May 18, 2020, Eldridge possessed a firearm while being a convicted felon.
The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Paul S. Sellers is prosecuting this case on behalf of the government.
The Erie Police Department and the Erie Law Enforcement Crime Task Force-Gun Working Group conducted the investigation leading to the indictment in this case. The Erie Law Enforcement Crime Task Force-Gun Working Group is a multi-agency taskforce consisting of federal, state, county and local law enforcement partners and agencies that formed in 2015 to combat gun violence in the Erie area.
Project Safe Neighborhoods (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 www.justice.gov/projectguardian.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
EOIR Announces Disciplinary Action Under Rules of Professional ConductRead the Press Release
FALLS CHURCH, VA – The Executive Office for Immigration Review (EOIR) today announced that it has ordered Phoenix Attorney Jose A. Bracamonte suspended for 45 days from practice before the Board of Immigration Appeals, the immigration courts, and the Department of Homeland Security (DHS), effective July 15, 2020.
“EOIR will continue to pursue disciplinary actions to address the misuse and manipulation of the asylum process by immigration practitioners. Such actions detract from the timely processing of legitimate asylum claims and undermine the overall integrity of the asylum system,” said EOIR Director James McHenry. Adjudicating Official Irene C. Feldman issued the decision and final order on July 1, 2020, between Bracamonte and EOIR Disciplinary Counsel Paul A. Rodrigues and DHS Disciplinary Counsel Catherine M. O’Connell.
On Nov. 3, 2016, DHS and EOIR jointly initiated disciplinary proceedings against Bracamonte based on complaints that he filed affirmative asylum applications with U.S. Citizenship and Immigration Services for the sole purpose of causing DHS to issue Notices to Appear (NTAs) to his clients, without any intention to pursue asylum or related forms of relief. DHS and EOIR alleged that Bracamonte’s conduct violated the Rules of Professional Conduct (8 C.F.R. § 1003.102). Specifically, Bracamonte made false statements of material fact, and engaged in frivolous behavior, conduct lacking competence, and conduct prejudicial to the administration of justice.
Pursuant to the settlement agreement, Bracamonte acknowledged that his conduct was an abuse of the asylum system. Bracamonte admitted that he engaged in unprofessional and improper conduct when he filed affirmative asylum applications without an indicated basis for asylum or an indication as to any asylum claim, cancelled or otherwise advised clients to fail to appear for asylum interviews before DHS, and did not demonstrate a clear intention to pursue an asylum claim, in order to cause DHS to issue an NTA and place his clients in removal proceedings before EOIR.
Complaints about professional misconduct by private attorneys or accredited representatives may be sent to the EOIR Disciplinary Counsel through Form EOIR-44.
Durable medical equipment company owner admits participation in kickback schemeRead the Press Release
SAVANNAH, GA: A Florida man who operated a durable medical equipment company has admitted participating in a Medicare kickback and telemedicine fraud scheme.
Patrick Wolfe, 48, of Belleair Beach, Fla., the operator of Wilmington Island Medical Inc., which does business as WI Medical Inc., a Georgia company, entered a guilty plea in U.S. District Court to one count of Conspiracy as charged in an Information, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. Wolfe admits paying kickbacks in return for “leads,” which were in actuality signed orders from physicians and nurse practitioners, and then billing those orders to Medicare Part B and Medicare Part C using WI Medical.
The financial total for orders facilitated through this scheme is alleged to be in the millions of dollars. Medicare beneficiaries were located in the Southern District of Georgia and elsewhere.
The charge carries a sentence of up to five years in prison, plus substantial financial penalties and forfeitures, followed by three years of supervised release upon completion of any prison sentence. There is no parole in the federal system.
“When the delivery of health care turns from providing comfort to patients to padding the pockets of greedy criminals, our office and those of our law enforcement partners will be there to protect our federal treasury,” said U.S. Attorney Christine.
This prosecution, arising out of the related “Operation Brace Yourself” and “Operation Double Helix,” together with 25 other cases, involve the largest fraud operation in the history of the Southern District of Georgia. Those charged in this string of cases include eight physicians, two nurse practitioners, three operators of different telemedicine companies, three brokers of patient data, and several other owners of durable medical equipment companies. The Medicare and Medicaid beneficiaries whose identities were used as part of the scheme are located throughout the country, including throughout the Southern District of Georgia.
The combined $480 million in fraud charged in the Southern District of Georgia is part of nationwide operations by the Department of Justice that thus far has included allegations involving billions of fraudulent claims for genetic testing, orthotic braces, pain creams, and other items.
“Wolfe's admission of guilt is the first step in accountability for the damage he caused to Medicare and the tax payers of this country,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “We must send the message that the FBI and our federal partners are dedicated to protecting the health care needs of deserving Americans that our government-subsidized programs provide.”
“It’s an outright crime when health care decisions are based on illegal kickbacks instead of what’s in the best interest of the patient,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “We will continue to work with our law enforcement partners to safeguard both the Medicare Trust Fund, as well as the health of our nation’s senior citizens.”
“Our nation’s healthcare system cannot tolerate kickbacks to physicians and pharmacies while criminals line their pockets with taxpayer-funded healthcare dollars, particularly in light of our nation’s current struggles with the COVID-19 pandemic,” said Resident Agent in Charge Glen M. Kessler, U.S. Secret Service. “Cases of this magnitude can only be tackled using a strategy that recognizes that the most effective way to fight these large criminal networks is by combining the strengths, resources, and expertise of our federal agencies.”
This investigation is ongoing. As telemedicine becomes an increasing part of our healthcare system, particularly during the COVID-19 pandemic, vigilance in ensuring that fraud and kickbacks do not usurp the legitimate practice of medicine by electronic means is more important than ever. If you are aware of any fraud or kickbacks relating to telemedicine, including COVID-19 fraud, please call the FBI hotline at 1-800-CALL-FBI.
This particular prosecution resulted from a joint investigation of multiple agencies and offices. U.S. Attorney Christine acclaimed the hard work of the investigatory team, led by FBI - Savannah, the Department of Health and Human Services Office of Inspector General, and the United States Secret Service.
Assistant U.S. Attorneys J. Thomas Clarkson and Jonathan A. Porter are prosecuting these cases on behalf of the United States.
District Man Indicted on Federal Charges for Vandalizing the Lincoln Memorial During ProtestsRead the Press Release
WASHINGTON – Micah Avery, 26, of Washington, D.C., was indicted today in federal court on charges of destruction of federal property for spray-painting the Lincoln Memorial last month, announced Acting U.S. Attorney for the District of Columbia Michael R. Sherwin and Acting Chief of the United States Park Police (USPP) Gregory T. Monahan.
The federal grand jury returned an indictment that alleges that on the afternoon of May 30, 2020, officers with the U.S. Park Police witnessed Avery graffiti the words “Yall not tired yet?” with black spray paint on the Lincoln Memorial (see photo below). Avery fled as the officers approached him. After a chase, officers apprehended and handcuffed Avery. Officers attempted to put the defendant into a patrol car, but he resisted their attempts. A crowd converged on the officers and began pushing and striking the officers. During this melee, Avery broke free and ran away. One of the officers sustained an injury to his hand. A look-out was broadcast, and Avery was located shortly thereafter by other officers back at the Lincoln Memorial, still wearing the handcuffs.
An indictment is a formal accusation of criminal conduct for purposes of establishing probable cause, not evidence of guilt. The defendant is presumed innocent unless proven guilty.
“Defacing one of our country’s national monuments will not be tolerated,” said Acting U.S. Attorney Michael R. Sherwin.
In announcing the indictment, Acting U.S. Attorney Sherwin and Acting Chief Monahan commended the work of the USPP officers who apprehended Avery and are investigating the incident. The case is being prosecuted by Assistant U.S. Attorney James B. Nelson of the U.S. Attorney’s Office for the District of Columbia.
Couple arrested for laundering over $400,000 on behalf of India-based phone scammersRead the Press Release
ATLANTA – Federal agents have arrested husband and wife Mehulkumar Manubhai Patel and Chitali Dave for laundering over $400,000 on behalf of India-based phone scammers.
“Criminal India-based call centers sought to prey on vulnerable members of our community and steal from them by misleading them over the phone,” said U.S. Attorney Byung J. “BJay” Pak. “Those, like Patel and Dave, who allegedly launder money in the United States on behalf of foreign-based fraudsters, are the linchpins of those schemes.”
“I commend the Department of Justice and Social Security’s Office of the Inspector General for their aggressive work to fight fraudsters who target Americans through various phone scams,” said Andrew Saul, Commissioner of Social Security. “People who receive suspicious calls should just hang up, and never give out their personal information. They should go online to oig.ssa.gov to report these Social Security scams.”
“This arraignment is a bold statement that we will aggressively pursue overseas phone scammers—and their facilitators in this country—who are stealing Americans’ hard-earned money,” said Inspector General Ennis. “I want to thank the U.S. Attorney’s Office in the Northern District of Georgia for bringing these charges, and our law enforcement partners for their efforts in investigating these scams and bringing the perpetrators to justice.”
According to U.S. Attorney Pak, the charges, and other information presented in court: Criminal India-based call centers defraud U.S. residents, including the elderly, by misleading victims over the telephone utilizing scams such as Social Security and tech support scams.
As part of their Social Security scam, India-based callers pose as federal agents in order to mislead victims into believing their Social Security numbers were involved in crimes. Callers threatened arrest and the loss of the victims’ assets if the victims did not send money. The callers directed victims to mail cash to aliases used by other members of the fraud network, including Patel and Dave.
As part of the tech support scam, callers allegedly induced victims to send money in exchange for supposed technical support for their computers. The callers then provided nothing in return. At times, callers misled the victims into providing remote access to their computers and the callers would access the victims’ bank accounts. The callers routinely misled the victims by making it appear as though the caller added money to the victims’ bank accounts. The callers then instructed the victims to mail cash to aliases used by other members of the fraud network, including Patel and Dave.
Based on misrepresentations made during the calls, the victims, including a number of Georgia residents, mailed money to a network of individuals that allegedly laundered funds on behalf of the overseas fraud network. From on or about May 2019, to on or about January 2020, Patel and Dave allegedly laundered over $400,000 sent by at least twenty-four victims of the scams.
On June 9, 2020, Mehulkumar Manubhai Patel, 36, and Chitali Dave, 36, both of Lexington, South Carolina, were charged by a federal grand jury with money laundering conspiracy and money laundering. Patel was arraigned on June 19, 2020 before U.S. Magistrate Judge Christopher C. Bly. Defendant Dave was arraigned on July 14, 2020 before U.S. Magistrate Judge Linda T. Walker.
Members of the public are reminded that the indictment only contains charges. The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.
Separately, on July 9, 2020, the U.S. District Court Judge William M. Ray, II sentenced defendant Joish Patel to over two years in prison by for his role in a criminal India-based phone scam. In 2017, Patel picked up over $140,000 dollars in victim funds using fake IDs. Some victims in that case sent money to aliases used by Joish Patel in response to an IRS scam where callers claimed they owed taxes or would be arrested. Other victims were tricked into believing that they needed to send money in order to qualify for loans.
The Social Security Administration - Office of the Inspector General is investigating the Mehulkumar Manubhai Patel and Chitali Dave case, with the assistance of the U.S. Secret Service, Aiken Department of Public Safety (South Carolina), Naperville Police Department (Illinois), Lexington County Sheriff’s Department (South Carolina), Rocky River Police Department (Ohio), and Henrico County Police Division (Virginia). The U.S. Treasury Inspector General for Tax Administration (TIGTA) investigated the Joish Patel case.
Northern District of Georgia Elder Justice Coordinator and Assistant U.S. Attorney Jolee Porter and Special Assistant U.S. Attorney Diane Schulman are prosecuting the case.
The U.S. Attorney’s Office for the Northern District of Georgia is part of the Department of Justice Transnational Elder Fraud Strike Force. The Strike Force focuses on investigating and prosecuting defendants associated with foreign-based fraud schemes that disproportionately affect American seniors. These include romance scams, phone scams, mass-mailing fraud schemes, and tech-support fraud schemes. For further information on these scams, see https://www.justice.gov/elderjustice/senior-scam-alert.
The public should exercise caution with any caller who claims to be a government employee. Government agencies will never threaten you with immediate arrest or other legal action if you do not send cash, retail gift cards, wire transfers, or internet currency. They will also never demand secrecy from you in resolving a debt or any other problem. If you need to send a payment to Social Security, SSA will send a letter with payment options and appeal rights. If you suspect you have received a Social Security scam call, report it at https://oig.ssa.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
California Couple in College Admissions Case Pleads GuiltyRead the Press Release
BOSTON – A California couple pleaded guilty today to conspiracy charges in connection with agreeing to pay $250,000 to secure the fraudulent admission of their daughter to the University of Southern California (USC) as a purported athletic recruit.
Diane Blake, 55, and Todd Blake, 54, both of Ross, Calif., pleaded guilty to one count of conspiracy to commit wire and mail fraud and honest services wire and mail fraud. Todd Blake also pleaded guilty to one count of conspiracy to commit money laundering. U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for Nov. 17, 2020.
Beginning in 2017, the Blakes conspired with William “Rick” Singer and others to facilitate their daughter’s admission to USC as a purported athletic recruit. Specifically, Singer had an athletic profile of their daughter created and sent to the USC athletic admissions committee, allegedly through co-conspirator Donna Heinel, then a USC athletics administrator. As a result, their daughter was allocated an athlete admission spot even though she was not actually recruited and did not play on the USC women’s volleyball team. The Blakes paid $50,000 to USC women’s athletics and $200,000 to Singer’s non-profit charity, The Key Worldwide Foundation, as a quid pro quo for the admission spot. The Blakes concealed this deal from USC personnel.
Under the terms of Diane Blake’s plea agreement, the parties have agreed to a sentence, subject to the Court’s approval, of six weeks in prison, a $125,000 fine and two years of supervised release with 100 hours of community service. Under the terms of Todd Blake’s plea agreement, the parties have agreed to a sentence, subject to the Court’s approval, of four months in prison, a $125,000 fine and two years of supervised release with 100 hours of community service.
Diane and Todd Blake are the 27th and 28th parents to plead guilty in the college admissions case.
Case information, including the status of each defendant, charging documents and plea agreements are available here: https://www.justice.gov/usao-ma/investigations-college-admissions-and-testing-bribery-scheme.
The charge of conspiracy to commit mail and wire fraud and honest services mail and wire fraud provides for a sentence of up 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. The charge of conspiracy to commit money laundering provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $500,000 or twice the gross gain or loss, whichever is greater. 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; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston made the announcement today. Assistant U.S. Attorneys Eric S. Rosen, Justin D. O’Connell, Leslie A. Wright, Kristen A. Kearney, Karin M. Bell and Stephen E. Frank of Lelling’s Criminal Division are prosecuting the case.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Business Owner Sentenced to Prison for Tax EvasionRead the Press Release
PITTSBURGH, PA -- A resident of Sewickley, PA, has been sentenced in federal court in Pittsburgh, Pennsylvania, following his guilty plea on charges of tax evasion, United States Attorney Scott W. Brady announced today.
According to the information presented to the court, Mark Stanford evaded payment of both his personal income taxes and the employer and employee portions of Social Security and Medicare taxes that he should have paid by virtue of owning and operating a cleaning business during the period 2009 through 2013. At the same time he was evading the payment of his tax obligations he made large personal expenditures (such as Bentley and Mercedes Benz automobiles).
United States District Court Judge Cathy Bissoon sentenced Stanford to two years (24 months) in prison, a $4000 fine, three years of supervised release (upon his release from prison) and Stanford was ordered to pay more than $330,000 in back taxes.
The Internal Revenue Service, Criminal Investigation conducted the investigation leading to the indictment, plea and sentence in this case.
Buffalo Man Going to Prison for More Than 7 Years for Selling FentanylRead 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 Torri McCray, 41, of Buffalo, NY, who was convicted of possessing with intent to distribute and distributing fentanyl and 10 grams of more of buytryl fentanyl was sentenced to serve 90 months in prison by U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorney Brendan T. Cullinane, who handled the case, stated that on four dates between June and August of 2017, the defendant distributed controlled substances, including heroin, fentanyl, U-47700, butyryl fentanyl, and furanyl fentanyl. On August 16, 2017, the Drug Enforcement Administration arrested McCray and recovered from him a quantity of heroin that he intended to distribute.
The sentencing is the culmination of an investigation on the part of the Drug Enforcement Administration, under the direction of Special Agent in Charge Ray Donovan, New York Field Division.
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Baltimore Felon Sentenced to Eight Years in Federal Prison for His Role in a Southwest Baltimore Drug Shop that Distributed Heroin, Fentanyl, and CocaineRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell, III today sentenced Raheem Benjamin, age 27, of Baltimore Maryland, to eight years in federal prison, followed by three years of supervised release, for conspiracy to distribute heroin.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Assistant Special Agent in Charge Orville O. Greene of the Drug Enforcement Administration, Baltimore District Office; and Commissioner Michael Harrison of the Baltimore Police Department.
According to his guilty plea, from February 2018 through May 7, 2019, Benjamin and other co-conspirators agreed to distribute and possess with intent to distribute 400 grams or more of fentanyl for a drug trafficking organization (DTO) known as “Lex Luthor.” The Lex Luthor DTO operated 24 hours a day, 7 days a week as an open-air drug shop in southwest Baltimore, typically selling gel capsules containing a mixture of heroin, cocaine, and fentanyl. Benjamin’s responsibilities as a member of the DTO included distributing packs of these gel capsules to street-level distributors—who would then sell the gel capsules to paying customers—and collecting drug proceeds from those distributors in exchange for the packs.
On October 17, 2018, while monitoring surveillance from a pole camera, law enforcement saw Benjamin pull out a firearm. Officers with the Baltimore Police Department responded to arrest Benjamin, who fled, discarding the loaded firearm. Police immediately recovered the gun, a revolver loaded with six .22-caliber cartridges. Officers apprehended Benjamin shortly thereafter. Benjamin had a previous felony conviction and was prohibited from possessing a firearm or ammunition.
As a result of the Benjamin’s day-to-day activities obtaining and supplying street-level distributors with narcotics, as well as from his conversations with other co-conspirators and general familiarity with the drug shop’s operation, Benjamin knew that members of the DTO would take possession of and distribute more than 400 grams of fentanyl.
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. Project Safe Neighborhoods (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; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian.
United States Attorney Robert K. Hur commended the DEA and the Baltimore Police Department for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorney Michael Goldsticker, who prosecuted the case.
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Audubon County Resident Sentenced for being a Drug User in possession of firearmRead the Press Release
COUNCIL BLUFFS, Iowa - United States Attorney Marc Krickbaum announced on July 8, 2020, Brandon Michael Barringer, age 36, of Audubon, was sentenced to two years in prison followed by two years of supervised release by United States District Court Senior Judge James E. Gritzner for being a drug user in possession of a firearm. Barringer pleaded guilty to the offense on March 6, 2020.
The sentencing was the result of an incident in Audubon on November 15, 2019. Barringer removed a .40 caliber rifle from his car and threatened an individual with the rifle after a domestic disturbance. Barringer then left Audubon and was located by law enforcement in Carroll County, where the rifle was recovered along with ammunition. Barringer is a long time user of methamphetamine.
The case was investigated by the Audubon Police Department, Audubon County Sheriff’s Office, Carroll Police Department, Carroll County Sheriff’s Office, and the Iowa Division of Narcotics Enforcement. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Attorney Sentenced to Federal Prison for Obstruction of Justice OffensesRead the Press Release
Tampa, Florida – U.S. District Judge Mary S. Scriven today sentenced Nelson Israel Alfaro (49, Miami) to 14 months in federal prison for conspiring to defraud the United States, obstruction of justice, and making false statements to federal law enforcement officers. The court also ordered Alfaro to forfeit $117,500 to the United States, the proceeds of his related crimes.
Alfaro had pleaded guilty on December 13, 2019.
According to court documents, Alfaro was an attorney who represented criminal defendants in Florida federal and state courts, including the United States District Court for the Middle District of Florida. From early 2017 to August 2019, Alfaro and his former client, Gilberto De Los Rios, concocted a scheme to charge an already-sentenced federal defendant tens of thousands of dollars for information that they then falsely and fraudulently presented to the United States as the defendant’s “cooperation” and “substantial assistance,” in order to trigger a sentence reduction for the defendant.
To achieve this sentence reduction, Alfaro concocted a plan to purchase information that would be of interest to law enforcement, which the federal defendant could falsely claim as his own cooperation. Alfaro planned to charge the federal defendant $50,000 as Alfaro’s personal fee for this effort, and an additional $30,000 to pay for the information that would earn the federal defendant substantial assistance credit. Alfaro’s scheme required him to enlist the aid of another person known to him, but unknown to the federal defendant—De Los Rios, whom Alfaro had represented regarding Florida state criminal charges in 2010-2011.
Over time, Alfaro’s plan transformed into a plot to earn the federal defendant substantial assistance credit by paying De Los Rios to cooperate on behalf of the federal defendant. In doing so, Alfaro fabricated a story about the relationship between De Los Rios and the federal defendant, about which he repeatedly lied and provided false and fraudulent information to federal law enforcement agents.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Josephine W. Thomas.
Another Houston man charged with COVID relief fraudRead the Press Release
HOUSTON - A local man has been taken into custody on allegations he fraudulently obtained more than $1.1 million in Paycheck Protection Program (PPP) loans, announced U.S. Attorney Ryan K. Patrick and Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.
Joshua Thomas Argires, 29, Houston, is charged in a criminal complaint with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions.
Argires allegedly perpetrated a scheme to file two fraudulent loan applications seeking more than $1.1 million in forgivable loans. The Small Business Administration (SBA) guarantees the loans for COVID-19 relief through the PPP under the Coronavirus Aid, Relief and Economic Security (CARES) Act.
The complaint alleges Argires submitted two fraudulent PPP loan applications to federally insured banks. One of these applications was submitted on behalf of an entity called Texas Barbecue; the other was filed on behalf of a company called Houston Landscaping. Argires allegedly claimed these two companies had numerous employees and hundreds of thousands of dollars in payroll expenses.
According to the complaint, neither Texas Barbecue nor Houston Landscaping has employees or pays wages consistent with the amounts claimed in the PPP loan applications. The complaint further asserts that both of these loans were funded, but that none of the funds were used for payroll or other expenses authorized under the PPP. Rather, the funds received on behalf of Texas Barbecue were invested in a cryptocurrency account, while the funds obtained for Houston Landscaping were held in a bank account and slowly depleted via ATM withdrawals, according to the charges.
The 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 the CARES Act provides 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.
The Federal Housing Finance Agency - Office of the Inspector General (OIG), SBA - OIG and U.S. Postal Inspection Service’s Houston Division conducted the investigation. Trial Attorney Timothy A. Duree of the Criminal Division’s Fraud Section and Assistant U.S. Attorney James McAlister for the Southern District of Texas are prosecuting the case.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
A federal criminal complaint is merely an accusation. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Albany Felon Pleads Guilty to Possessing a HandgunRead the Press Release
ALBANY, NEW YORK – Saul McDuffie, age 33, of Albany, pled guilty today to being a felon in possession of a firearm. The announcement was made by United States Attorney Grant C. Jaquith; Kevin Kelly, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI); and Chief Eric Hawkins of the Albany Police Department.
In pleading guilty, McDuffie admitted to possessing a loaded Taurus handgun, which he placed on the tire of a car parked on North Swan Street in Albany, on October 28, 2019. McDuffie has multiple prior felony convictions, including two convictions for drug offenses, for which he was sentenced to a total of over six years in prison, and a burglary conviction, for which he was sentenced to two to six years in prison.
At sentencing, McDuffie faces a maximum sentence of 10 years in prison, a fine of up to $250,000, and a term of supervised release of up to 3 years. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case was investigated by the Albany Police Department and Homeland Security Investigations, and is being prosecuted by Assistant U.S. Attorneys Cyrus P.W. Rieck and Rachel L. Williams.
13 Defendants Charged in Second Phase of Federal Investigation Targeting Heroin Trafficking on West Side of ChicagoRead the Press Release
CHICAGO — Thirteen individuals are facing criminal charges as part of the second phase of a federal investigation into heroin trafficking on the West Side of Chicago.
The 13 new defendants allegedly participated in a drug trafficking operation that was responsible for distributing at least 25 kilograms of heroin to individual customers in Chicago from at least February 2019 until earlier this month, when law enforcement shut down the operation. The street-level sales occurred at two open-air drug markets in the city’s Austin neighborhood.
The charges are the result of the second phase of “Operation Dirty Ice,” a multi-agency investigation led by the FBI, IRS Criminal Investigation Division, and Chicago Police Department. The first phase of the probe led to drug conspiracy charges against eleven other defendants in October 2018. Operation Dirty Ice was conducted in collaboration with the Organized Crime Drug Enforcement Task Force (OCDETF), whose principal mission is to identify, disrupt, and dismantle the most serious drug trafficking organizations.
During the probe, authorities seized three kilograms of heroin, 500 grams of crack cocaine, approximately $1.1 million in illicit cash proceeds, five handguns, and a rifle.
A criminal complaint filed in U.S. District Court in Chicago charges the 13 new defendants with conspiracy to possess a controlled substance with the intent to distribute. All of the defendants have made initial appearances in federal court in Chicago.
The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI; Kathy A. Enstrom, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago; and David Brown, Superintendent of CPD. Assistant U.S. Attorneys Kelly Guzman and Kaitlin Klamann represent the government.
The newly charged defendants are CLIFTON COLEMAN, 45, of Westchester; TARRENCE WATSON, 45, of Bellwood; BERNARD ROWSEY, 42, of Chicago, and his brother, RODNEY ROWSEY, 41, of Chicago; CHARLES ARMSTRONG, 55, of Chicago; DEXTER JONES, 48, of Chicago; VERNON EDWARDS, 49, of Chicago; LAVERIC DAWSON, 36, of Chicago; KEITH MOORE, 49, of Oak Park; ERIC BERNARD, 53, of Chicago; KENNETH BOWDRY, 57, of Chicago; BRYAN LANDFAIR, 58, of Chicago; and MORRIS SIMMONS, 59, of Chicago.
According to the charges, Coleman led a drug trafficking organization that obtained and distributed 800 to 1,000 grams of heroin in the Chicago area on a weekly basis. Coleman’s crew used two stash houses to mix the heroin with other substances, including sleeping pills, in preparation for street-level distribution, the complaint states. During the investigation, law enforcement observed numerous hand-to-hand purchases of heroin at the two open-air drug markets, located near the intersections of Chicago and Lavergne Avenues, and Chicago and Pine Avenues. Police also coordinated undercover purchases of heroin at the markets, the complaint states.
The public is reminded that a complaint only contains a charge and is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
13 July 2020
Wood County Man Pleads Guilty to Embezzling from Labor UnionRead the Press Release
CHARLESTON, W.Va. – A Wood County man pled guilty today to a charge of embezzling from a union, announced United States Attorney Mike Stuart. Rick Drain, 56, of Vienna, pled guilty to one count of embezzling from a labor union.
“You can’t make up story lines like this - a man named Drain draining the union of its hard earned money solely for personal greed,” said United States Attorney Mike Stuart. “These union members deserved far better. These terrible acts of greed happen far too often.”
Drain faces up to five years in prison when sentenced on October 15, 2020.
Drain was the business manager of a local union and used his position to defraud the union. Law enforcement learned that Drain had defrauded the union of approximately $50,000 by collecting dues and other fees from union members and keeping the money for himself, not depositing it into the union’s bank account. The Department of Labor, through its Office of Labor Management Standards, conducted the investigation. United States District Judge Joseph R. Goodwin presided over the plea hearing. Assistant United States Attorney Kathleen Robeson is handling the prosecution.
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Washington, D.C. General Contractor Charged with COVID-Relief FraudRead the Press Release
The owner of a residential construction contracting firm based in Washington, D.C., was charged with allegedly submitting fraudulent documents to a bank in connection with applications seeking more than $400,000 in a forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, Acting U.S. Attorney Michael R. Sherwin for the District of Columbia, Special Agent in Charge James A. Dawson of the FBI Washington Field Office’s Criminal Division, Inspector General Hannibal “Mike” Ware of the Small Business Administration's Office of Inspector General (SBA OIG), and J. Russell George, the Treasury Inspector General for Tax Administration (TIGTA) made the announcement.
Oludamilare Olugbuyi, 40, of Washington, D.C., was charged in a federal criminal complaint filed in the District of Columbia with making false statements to a financial institution. According to the complaint, Olugbuyi submitted several fake and fraudulent documents to a financial institution in support of two PPP loan applications seeking more than $400,000 in forgivable loans for a construction firm that he owned. Specifically, Olugbuyi submitted what purported to be several IRS Forms 1099-MISC reporting hundreds of thousands of dollars in disbursements made to independent contractors.
The complaint alleges that the social security numbers reflected on the forms were either invalid or assigned to other people. In addition, Olugbuyi allegedly submitted to the financial institution what purported to be a tax return reporting $175,565 in adjusted gross income for tax year 2019. According to IRS records, however, on April 14, 2020, Olugbuyi filed an IRS Form 1040 reporting $1 in total income for 2019. This document, known as a “non-filer return,” qualified Olugbuyi to receive a $1,200 Coronavirus Aid, Relief, and Economic Security Act (CARES) economic impact payment.
The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was 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 1 percent. PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal on the PPP loan to be entirely forgiven if the business spends the loan proceeds on these expense items within a designated period of time after receiving the proceeds and uses a certain amount of the PPP loan proceeds on payroll expenses.
A federal criminal complaint is merely an accusation. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Deputy Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Christine Macey are prosecuting the case. The Justice Department acknowledges and thanks the FBI, TIGTA, and the SBA OIG for their efforts investigating this matter.
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.
Washington State Felon Arrested in the Bay Area for Possessing an Assault RifleRead the Press Release
OAKLAND – James David Allen II made an initial appearance today in federal court on a criminal complaint for being a felon in possession of a firearm and ammunition, after police arrested him on July 8, 2020, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. Allen made his initial appearance in federal court today before Magistrate Judge Sallie Kim.
According to the complaint, Allen, a resident of Washington State, was found sleeping in a stolen car in Pinole on the morning of July 8, 2020. After confirming that the vehicle was stolen, officers arrested Allen and conducted an inventory search of the vehicle.
The complaint alleges that on the front passenger floorboard of the vehicle, officers found a loaded AR-15 style rifle with handwritten numbers and words all over it. The rifle was pointed barrel down with the rear stock leaning against the front edge of the passenger seat, making it immediately accessible to the driver’s hand. It was equipped with a loaded, high-capacity 30-round magazine. Upon taking possession of the rifle, the arresting officers found a live round chambered and the fire control switch set to “fire.” A second loaded, high-capacity 30-round magazine was taped to this magazine. The second magazine was positioned opposite so that the shooter could drop the first magazine from the rifle and easily flip it over to insert the other loaded magazine. A third loaded, high capacity magazine was found in the trunk of the vehicle.
The charges contained in the criminal complaint are mere allegations. As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.
Michael A. Rodriguez is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Kay E. Konopaske. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the Pinole Police Department.
United States Attorney William M. McSwain Announces Launch of Violent Crime Prevention and Public Awareness CampaignRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced the launch of a public awareness campaign aimed at discouraging violent crime, specifically robbery and gun crimes, throughout the Eastern District of Pennsylvania. The campaign employs targeted messaging to educate and inform the public that crimes committed with a gun can often violate federal laws, and therefore carry stiffer potential penalties than crimes prosecuted under local and state statutes. One component of the campaign is a series of public service announcements (PSAs) that will run on television, radio, and streaming platforms urging individuals to rethink committing violent crimes that could be federal offenses.
For example, under a federal statute called the Hobbs Act, passed by the United States Congress in 1946, it is a federal crime to use force or threats of force to rob a commercial business – like a pharmacy, a convenience store, or even a corner market. It does not matter whether the robber steals thousands of dollars from the cash register or nothing more than a pack of cigarettes. Because these stores operate in “interstate commerce,” the U.S. Attorney’s Office can take these cases federally. And that is exactly what it will do to get justice for the victims in these cases – store owners and their patrons who live in fear in their neighborhoods.
Violent crime, particularly gun crime, has become a pervasive issue in Philadelphia and other parts of the Eastern District of Pennsylvania. For example, in 2019, 2,181 robberies with a gun occurred in Philadelphia. So far in 2020, there have been 219 homicides, with the past two weekends in July becoming particularly violent. The U.S. Attorney’s Office has committed to a strong response to violent crime in this District. Part of that response has been to increase the number of violent crime prosecutions: in 2019, the Violent Crime Unit of the U.S. Attorney’s Office charged 53% more cases than in the previous year. Another part of the Office’s response is deterrence: the primary goal of this public awareness campaign is to put potential offenders and the community on notice and reduce violent crime throughout the District. The campaign will appear in Philadelphia and its surrounding collar counties, and will also reach audiences in Lancaster, Berks, Lehigh and Northampton counties.
The campaign will focus on informing the public of the legal consequences of committing a federal violent crime and thereby discourage potential perpetrators of violence and gun crimes by raising awareness of the potential for federal jail time. The slogan “Fed Crime Gets Fed Time,” accompanied by #FedCrimeGetsFedTime, will be deployed across social media platforms, traditional media, and public service announcements on television and radio in communities throughout the District’s nine counties.
“When criminals think there are no consequences for their actions, serious violent crime rises. That is the root of the crisis we are facing in Philadelphia today,” said U.S. Attorney McSwain. “Anyone who commits a federal violent crime in the Eastern District of Pennsylvania will feel the full force of the law. My message to would-be criminals is simple: put the guns down and think about your future.”
For more information and to see the campaign materials, visit the “Fed Crime Gets Fed Time” website.
U.S. Marshals Service Investigation Referred to Department of Justice Office of the Inspector GeneralRead the Press Release
PORTLAND, Ore.—U.S. Attorney Billy J. Williams released the following statement regarding the U.S. Marshals Service use of less-lethal munitions during weekend protests:
“Per U.S. Marshals Service protocols, their internal investigation of this weekend’s incident has now been referred to the Department of Justice Office of the Inspector General. We must respectfully decline further comment on this matter.”
U.S. Attorney’s Office Shuts Down Multiple Websites Claiming to Offer Preorders for COVID-19 VaccineRead the Press Release
LOUISVILLE, Ky. – United States Attorney Russell Coleman today announced that the U.S. Attorney’s Office for the Western District of Kentucky has filed a lawsuit in federal court in Louisville, Kentucky to shut down a webpage, six related web addresses and a related Facebook page that the suit says are attempting to lure consumers to “pre-register” for a non-existent COVID-19 vaccine in exchange for $100 worth of Bitcoin (“BTC”), a type of cryptocurrency. The lawsuit names Luke John Flint, of Louisville, Kentucky, doing business through “coronavaccine.center”, “coronavaccine.today”; “coronatesting.site”; “coronatesting.center”; “coronavaccine.shop”; “coronavaccine.club”; and “covid19vaccine.center. Today a federal judge entered an order prohibiting Flint and others associated with the websites from committing wire fraud, maintaining and doing business through the websites and social media, and destroying business records.
According to the civil complaint, the purpose of these websites, which contain several false statements, is to induce victims to pay Flint and those working in concert with him for a non-existent vaccine for COVID-19 amid the global pandemic. There is currently no known FDA approved COVID-19 vaccine. The website and related Facebook page lists the Corona Vaccine Center’s address as 545 South Clay Street, Louisville, KY, which is nothing more than an empty parking lot/field.
The civil complaint further alleges that Flint is not a licensed medical professional and he is not registered with the FDA to investigate or develop a COVID-19 vaccine, and as such, he could not legally distribute a vaccine. When interviewed by federal agents, Flint admitted that there is no known FDA approved vaccine for COVID-19 and that he is unaware if and when one would become available. During this interview, Flint also admitted that he is not a licensed medical professional and is not registered with the FDA to distribute a vaccine for COVID-19, if and when one becomes available.
“Seeking to profit during a global pandemic by offering false hope is both foul and flat out puts vulnerable people at risk,” said U.S. Attorney Russell Coleman. “We will pursue every available legal tool in our toolkit to swiftly put an end to such predatory conduct.”
Flint has signed an agreed injunction, agreeing that the “United States can establish by a preponderance of the evidence that Defendant is about to violate or is violating” the federal wire fraud statute.
The case is styled United States of America v. Luke John Flint, 3:20-cv-489-CHB. Assistant United States Attorneys Nicole Elver and William F. Campbell are handling the case. The investigation was conducted by the Department of Homeland Security, Immigration and Customs Enforcement, Homeland Security Investigations (HSI).
If you think you are a victim of a scam or attempted fraud involving COVID-19, you can report it without leaving your home by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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U.S. Attorney Trent Shores’ Statement Regarding Possible Federal Actions in Cases Affected by the Supreme Court’s Ruling in McGirt v OklahomaRead the Press Release
U.S. Attorney Trent Shores has made the following statement:
“The United States Attorney’s Office for the Northern District of Oklahoma has received a number of media inquiries about its anticipated actions in a variety of state cases that have been or may be dismissed as a result of the Supreme Court’s McGirt decision, including the recently dismissed case State of Oklahoma v. Dustin Dennis. First, as a general matter, the United States does not comment on pending investigations. We do our utmost to protect the integrity and confidentiality of federal Grand Jury proceedings, consistent with Federal Rules of Criminal Procedure. Second, let there be no doubt that my team of federal prosecutors, legal support staff, victim specialists, and administrative staff are working around the clock right now to pursue justice and help victims of crime. We are doing so in partnership with tribal, state, and federal law enforcement agencies as well as with the Tulsa County and Creek County District Attorneys and the Muscogee (Creek) Attorney General. We want to ensure the citizens of northeastern Oklahoma continue to receive seamless public safety services. Oklahomans have always been good about working together to achieve a common goal. Since the McGirt decision came down, I’ve seen just that – Oklahomans working together to promote continued public safety in this new jurisdictional landscape.”
Twenty-Seven Skilled Nursing Facilities Controlled by Longwood Management Corporation to Pay $16.7 Million to Resolve False Claims Act AllegationsRead the Press Release
Longwood Management Corporation and 27 affiliated skilled nursing facilities (Longwood) have agreed to resolve allegations that they violated the False Claims Act by submitting false claims to Medicare for rehabilitation therapy services that were not reasonable or necessary, the Department of Justice announced today. Longwood is headquartered in California and the 27 skilled nursing facilities are also located in California.
“This settlement reflects the Department’s continuing commitment to ensure that patients are receiving individualized healthcare services appropriate to their specific medical needs,” said Acting Assistant Attorney General Ethan P. Davis for the Department of Justice’s Civil Division. “When skilled nursing facilities provide rehabilitation therapy services based on maximizing revenue rather than the interests of their patients, we will hold them accountable.”
“Longwood’s business plan called for substantial revenue from Medicare, and it pressured therapists to provide additional, unnecessary services when targets were not met,” said U.S. Attorney Nick Hanna for the Central District of California. “This case demonstrates the power of whistleblowers to shine a light on improper business practices and obtain significant recoveries on behalf of United States taxpayers.”
The settlement resolves allegations that Longwood submitted false claims for rehabilitation therapy by engaging in a systematic effort to increase Medicare billings. Medicare reimburses skilled nursing facilities at a daily rate that reflects the skilled therapy and nursing needs of qualifying patients. The greater the patient’s needs, the higher the level of Medicare reimbursement. The highest level of Medicare reimbursement for skilled nursing facilities is for “Ultra High” therapy patients, who require a minimum of 720 minutes of skilled therapy from two therapy disciplines (e.g., physical, occupational, or speech therapy), one of which has to be provided five days a week.
Longwood allegedly knowingly submitted or caused the submission of false and fraudulent claims to Medicare for medically unreasonable and unnecessary Ultra High levels of rehabilitation therapy for Medicare Part A residents. Specifically, Longwood allegedly pressured therapists to increase the amount of therapy provided to patients to meet pre-planned targets for Medicare revenue. These targets were alleged to have been set without regard to patients’ individual therapy needs and could only be achieved by billing for a high percentage of patients at the Ultra High level.
The settlement covers conduct that occurred from May 1, 2008 through Aug. 1, 2012 at six facilities (Alameda Care Center, Burbank Rehabilitation Center, Magnolia Gardens Convalescent Hospital, Montrose Healthcare Center, Sherman Oaks Health & Rehab Center, and West Hills Health & Rehab Center); and from Jan. 1, 2006 through Oct. 10, 2014 at twenty-one facilities (Burlington Convalescent Hospital, Chino Valley Rehabilitation Center LLC, Colonial Care Center, Covina Rehabilitation Center, Crenshaw Nursing Home, Green Acres Lodge, Imperial Care Center, Imperial Crest Health Care Center, Laurel Convalescent Hospital, Live Oak Rehabilitation Center, Longwood Manor Convalescent Hospital, Monterey Care Center, Intercommunity Healthcare Center, Park Anaheim Healthcare Center, Pico Rivera Healthcare Center, San Gabriel Convalescent Center, Whittier Pacific Care Center, Studio City Rehabilitation Center, Sunnyview Care Center, View Park Convalescent Center, Western Convalescent Hospital).
Contemporaneous with the civil settlement, Longwood has entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG) that requires an independent review organization to annually assess the medical necessity and appropriateness of therapy services billed to Medicare.
“The government contended Longwood falsely claimed medically unreasonable and unnecessary levels of rehabilitation services at the expense of taxpayers,” said Timothy B. DeFrancesca, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “My agency’s compliance agreement is designed to monitor claims to Medicare and prevent submission of false claims in the future.”
The settlement partially resolves allegations brought in two lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act, which allows private parties to bring suit on behalf of the government and to share in any recovery. The whistleblowers, Judy Boyce, Benjamin Monsod, and Keith Pennetti will collectively receive $3,006,000 of the settlement proceeds.
The settlement was the result of a coordinated effort by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Central District of California, the U.S. Attorney’s Office for the Northern District of Alabama, and the U.S. Department of Health and Human Services Office of Inspector General.
The cases are captioned United States ex rel. Pennetti v. Longwood Management Corp., et al., Case Number CV-14-4133 (C.D. Cal.), and United States ex rel. Boyce, Judy and Monsod, Benjamin v. Aegis Therapies, Inc., GGNSC Holdings LLC, and Longwood Management Corp., CV-16-8050 (C.D. Cal.). The claims resolved by this agreement are allegations only and there has been no determination of liability.
Tulsa Man charged for Murder Occurring on Creek Nation LandRead the Press Release
A Tulsa man has been charged with murder in the first degree in Indian Country after he allegedly shot and killed a woman in Philpott Park on July 10, 2020.
According to a Criminal Complaint, James Michael Landry, 29, committed the crime on the Creek Nation reservation. The victim was an enrolled member of the Cherokee Nation.
“The United States Attorney’s Office is pursuing this case consistent with our new responsibilities following the Supreme Court’s McGirt decision,” said U.S. Attorney Trent Shores. “The cooperation among tribal, local, state, and federal law enforcement is as strong as ever in northeastern Oklahoma. In this case, investigators with the Federal Bureau of Investigation, Tulsa Police Department, and Muscogee (Creek) Nation Lighthorse were on the scene and working together. In this case and others that may now fall under federal jurisdiction, the U.S. Attorney’s Office will uphold its trust responsibility in the public safety arena. As always, we will seek to hold accountable criminal wrongdoers and pursue justice for victims in United States District Court.”
According to the Criminal Complaint and affidavit, Tulsa police officers and emergency personnel arrived at Philpott Park in response to a 911 call. The caller stated that a man had requested help because his girlfriend was going to die. At the scene, first responders observed James Michael Landry, 29, standing over a woman lying on the ground. Because Landry was making conflicting statements and acting strange he was put in investigative detention. Upon processing the scene, the medical examiner discovered what appeared to be a shotgun wound to the head. Detectives located a double barrel shotgun hidden under sticks next to a tree near the crime scene. During an interview with police, Landry allegedly admitted that the shotgun belonged to him and that he had pointed it at the victim on days prior to the crime as well as the day of the crime. He also allegedly claimed that the victim put the gun in her own mouth on the day of the crime as he held the firearm and they argued. He claimed the gun was fired unintentionally.
A Criminal Complaint is a temporary charge alleging a violation of law. For the case to proceed to trial, the United States must present the charge to a federal Grand Jury within 30 days. Once a Grand Jury returns an Indictment, a defendant has a right to a jury trial at which the United States would have the burden of proving the defendant’s guilt beyond a reasonable doubt.
The charges were filed today in federal court due to the Supreme Court’s recent ruling in the case of McGirt v. Oklahoma. As a result of the Court’s ruling, all major crimes occurring on the Creek Nation reservation and involving Native American defendants and/or victims are required, by law, to be tried in federal court.
Landry was remanded into the custody of the U.S. Marshals Service and is scheduled for a preliminary hearing at 2 p.m. CDT on July 16.
The FBI, Muscogee (Creek) Nation Lighthorse Police Department and Tulsa Police Department are the investigative agencies. Assistant U.S. Attorney Ryan M. Roberts is prosecuting the case.
The U.S. Attorney’s Office and the IRS Criminal Investigation Remind Taxpayers of Upcoming Tax Filing Deadline; Urge Taxpayers to Remain Vigilant of ScamsRead the Press Release
Fort Smith, Arkansas – David Clay Fowlkes, Acting United States Attorney for the Western District of Arkansas and the Internal Revenue Service Criminal Investigation division reminded taxpayers of the July 15 filing and payment deadline and warned against an increase in tax and COVID-19 scams.
Due to COVID-19, the original filing deadline and tax payment due date for 2019 was postponed from April 15 to July 15. Taxpayers filing Form 1040 series returns must file Form 4868 by July 15 to obtain the automatic extension to Oct. 15.
As the filing deadline approaches, taxpayers should beware of tax and COVID-19 related scams. “Criminals use the tax filing deadline as an opportunity to steal personal and financial information”, said Acting U.S. Attorney David Clay Fowlkes for the Western District of Arkansas. “Taxpayers should remain vigilant and know that the IRS will not initiate contact with them via phone, email or social media to request personal or financial information.”
“Although the extension provides additional time to file the tax return – it is not an extension to pay any taxes due”, said Tamera Cantu, Special Agent in Charge of IRS-CI’s Dallas Field Office. “For people facing hardships who cannot pay in full, including those affected by COVID-19, the IRS has several options available to help. The IRS encourages taxpayers to visit IRS.gov as soon as possible to explore these options and avoid accruing interest and penalties after the July 15 deadline.”
In the last few months, the IRS Criminal Investigation division (CI) has continued to see a tremendous increase in a variety of Economic Impact Payment scams and other financial schemes. CI continues to work with its law enforcement partners to put a stop to these schemes and bring criminals to justice.
Taxpayers can report COVID-19 scams to the National Center for Disaster Fraud. Taxpayers can also report fraud or theft of their Economic Impact Payments to the Treasury Inspector General for Tax Administration (TIGTA). Unsolicited (phishing) e-mails that appear to be from the IRS should be forwarded to [email protected].
For the most up-to-date information about the tax filing deadline and IRS impersonation scams, taxpayers can visit IRS.gov.
Texas Man Charged with Assaulting Deputy U.S. Marshal with Hammer During Weekend Protests in Portland (Photo)Read the Press Release
PORTLAND, Ore.—U.S. Attorney Billy J. Williams announced today that a Texas man has been charged with assaulting a U.S. Marshals Service deputy with a construction hammer during weekend protests at the Mark O. Hatfield U.S. Courthouse in downtown Portland.
Jacob Michael Gaines, 23, a Texas man currently residing in a recreational vehicle in Portland, has been charged by criminal complaint with one count of assaulting a federal officer.
According to court documents, at approximately 1:00am on July 11, 2020, Gaines was observed using a hammer to damage a barricaded entrance at the Hatfield Federal Courthouse. At the time, federal law enforcement personnel were staged inside the courthouse to protect the facility and respond to incidents. Law enforcement attempted to exit the courthouse to prevent Gaines from breaching the barricaded entrance.
While attempting to detain him, Gaines struck a U.S. Marshals Service deputy three times with the hammer. The deputy deflected the blows to prevent serious injury, but in process was struck in the left shoulder, lower neck, and upper back. While being struck, the deputy managed to hold onto Gaines while other officers handcuffed him and placed him under arrest.
Gaines made his initial appearance in federal court today before a U.S. Magistrate Judge and was released pending further proceedings.
The case is being investigated by the U.S. Marshals Service and Federal Protective Service. It is being prosecuted by the U.S. Attorney’s Office for the District of Oregon.
A criminal complaint is only an accusation of a crime, and a defendant is presumed innocent unless and until proven guilty.
For several weeks, the Hatfield Federal Courthouse has been a repeated 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.
Deputy U.S. Marshal approaching Gaines Gaines outside courthouse barricade with hammer in right hand Courthouse barricade with hole from Gaines' hammer strikes 4 lb DeWalt construction hammer seized from GainesTampa Man Arrested for Burning A Building During Civil Disturbance in TampaRead the Press Release
Tampa, Florida – United States Attorney Maria Chapa Lopez announces the arrest of Terrance Lee Hester, Jr. ( 20, Tampa) based on a criminal complaint for damaging or destroying by fire a building used in interstate commerce. Hester surrendered to federal authorities in Oswego, New York. After an initial appearance on Friday afternoon in the Northern District of New York, Hester remains in custody. If convicted, Hester faces a minimum mandatory penalty of 5 years, up to 20 years, in federal prison.
According to the
complaint , on May 30 and May 31, 2020, a protest near a shopping plaza located at 2301 East Fowler Avenue in Tampa devolved into civil unrest, looting, and destruction of property. During this disturbance, the Champs Sports store in the shopping plaza was set on fire. The building became fully engulfed in fire, resulting in major damage to the building and the loss of property. The estimated loss to the building, the Champs Sports store, and other businesses in the plaza is approximately $1.25 million.Video footage obtained by investigators revealed that Hester was one of the individuals participating in the civil disturbance, and that he tossed a flaming piece of cloth into the Champs store through a broken window. Fire investigators determined that the fire originated inside the Champs store and that Hester’s act caused or contributed to the cause of the fire.
A complaint is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Tampa Police Department, and Tampa Fire Rescue. It will be prosecuted by Assistant United States Attorney Michael Sinacore.
St. Thomas Airport Passenger Departing for California Arrested at Cyril E. King Airport for Illegal Re-EntryRead the Press Release
St. Thomas, USVI – United States Attorney Gretchen C.F. Shappert for the District of the Virgin Islands announced today that Gilberto Arana Wence was arrested on July 10, 2020 and charged with illegal re-entry by a removed alien.
According to court documents, Wence was departing St. Thomas for Charlotte, North Carolina and then on to San Francisco, California when U.S. Customs and Border Protection officers determined he was not lawfully present in the United States. Based on record checks conducted using Wence’s fingerprints, officers discovered that he had previously been removed from the United States under a different name.
An initial appearance in federal court occurred on July 13, 2020.
The case is being investigated by Homeland Security Investigations and U.S. Customs and Border Patrol. It is being prosecuted by Assistant U.S. Attorney Adam Sleeper.
United States Attorney Gretchen C.F. Shappert reminds the public that a criminal complaint is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
South Florida U.S. Attorney’s Office and IRS-Criminal Investigation Remind Taxpayers of Upcoming Tax Filing Deadline; Urge Taxpayers to Remain Vigilant of ScamsRead the Press Release
MIAMI, Florida -- Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, and Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office, remind taxpayers of the July 15 filing and payment deadline and warned against an increase in tax and COVID-19 scams.
Due to COVID-19, the original filing deadline and tax payment due date for 2019 was postponed from April 15 to July 15. Taxpayers filing Form 1040 series returns must file Form 4868 by July 15 to obtain the automatic extension to Oct. 15.
Although the extension provides additional time to file the tax return – it is not an extension to pay any taxes due. For people facing hardships who cannot pay in full, including those affected by COVID-19, the IRS has several options available to help. The IRS encourages taxpayers to visit IRS.gov as soon as possible to explore these options and avoid accruing interest and penalties after the July 15 deadline.
As the filing deadline approaches, taxpayers should beware of tax and COVID-19 related scams. “Taxpayers cannot let their guard down,” said Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida. “This tax season is particularly attractive to criminals because it coincides with the COVID-19 pandemic, which has placed many people in vulnerable positions.”
“Taxpayers should remain vigilant in the handling of their personal and financial information as criminals use this as an opportunity to take advantage of vulnerabilities,” said Michael J. De Palma Special Agent in Charge of the IRS Criminal Investigation division in Florida. “IRS-CI will continue to pursue these crimes and the perpetrators will be brought to justice.”
In the last few months, the IRS Criminal Investigation division (CI) has continued to see a tremendous increase in a variety of Economic Impact Payment scams and other financial schemes. CI continues to work with its law enforcement partners to put a stop to these schemes and bring criminals to justice.
Taxpayers can report COVID-19 scams to the National Center for Disaster Fraud. Taxpayers can also report fraud or theft of their Economic Impact Payments to the Treasury Inspector General for Tax Administration (TIGTA). Unsolicited (phishing) e-mails that appear to be from the IRS should be forwarded to [email protected].
For the most up-to-date information about the tax filing deadline and IRS impersonation scams, taxpayers can visit IRS.gov.
San Diego Doctor Sentenced to Prison for Fraud Against TRICARERead the Press Release
Assistant U. S. Attorney Valerie H. Chu, (619) 546-6750
SAN DIEGO – Dr. Marco Antonio Chavez was sentenced to 21 months in custody and ordered to pay restitution of $783,764.37 for defrauding TRICARE, the health care benefits program for military service members and their dependents.
According to court documents, Chavez was a physician licensed by the State of California Medical Board. Chavez provided psychiatry services, including therapy and prescription medications for children and adults diagnosed with ADHD and depression, for San Diego patients whose health care was covered by TRICARE. Chavez defrauded TRICARE by using the personal information of these patients to create and submit false and fraudulent claims for nonexistent appointments when he did not actually treat those patients. And he routinely selected the billing code for the highest-level (and highest-reimbursement) patient visit for these fabricated appointments, to maximize the fraudulent reimbursements he received from TRICARE. He swindled more than $783,000 from the taxpayer-funded health care program, and used these ill-gotten gains to buy himself luxuries including a red 2016 Jaguar and thousands of dollars’ worth of David Yurman jewelry.
Beginning in April 2013, Chavez became a network provider for TRICARE under contract with United Health Care Military & Veterans, West. That August, Chavez became eligible to submit claims directly to TRICARE through XPressClaim (“XPC”), a web-based system. Chavez used that access to help his scheme to defraud TRICARE, using his unique personal security key code to avoid review by other billing staff. He then caused the payments to be electronically transferred into an account that was in his name, which he controlled.
For example, Patient A was taken by his/her mother to see Chavez on just three occasions: December 2, 2013, December 16, 2013, and January 13, 2014. Records indicate that Chavez billed and was paid by TRICARE for 80 dates of service for Patient A, including for 21 dates before Patient A’s initial visit on December 2, 2013. On each of the three dates that correspond to dates when Patient A actually saw Chavez, the claim was submitted to TRICARE via the billing system used by administrative staff in Chavez’s clinic. But for the remaining 77 dates of service billed to TRICARE for Patient A, in which the patient did not actually see Chavez, the XPC code was used—indicating it was Chavez himself who submitted those fraudulent claims directly.
Similarly, Patient B was taken by his/her father to see Chavez on five occasions between May 2014 and August 2014. Records indicate that Chavez billed and was paid by TRICARE for 76 dates of service for Patient B. Each of the remaining 71 dates of service billed to TRICARE for Patient B, when the patient did not actually see Chavez, contained the XPC code, again indicating they were submitted by Chavez directly using XPressClaim.
Chavez tried to deflect attention and avoid detection of his fraudulent billing through a variety of deceptive means. For example, he notified patients that they might see entries on their Explanation of Benefit (“EOB”) forms from TRICARE that they would not recognize. This was an attempt to prevent patients from complaining to TRICARE and drawing attention to the false bills. In reality, Chavez knew that the reason the patients would not recognize the entries on their EOBs was because they had not actually occurred – Chavez had simply made them up.
When the TRICARE contractor conducted an audit and requested certain of Chavez’s patient files, Chavez falsely claimed that he had already sent the files, when he knew those files did not exist and could not have been sent. Chavez also misrepresented that a member of the office staff had stolen his TRICARE checks and deposited them without his permission.
Over the course of his scheme, Chavez submitted approximately $928,800 in false and fraudulent claims to TRICARE via XPC, and was paid $783,764.37 on those claims by TRICARE.
Separately, records of the State of California reflect that Chavez’s medical license was suspended in May 2018, upon the finding of an administrative judge that Chavez had treated patients while under the influence of a narcotic or alcohol.
The United States argued in its sentencing papers that Chavez exploited his privileged position as a physician, and his access to patients’ data, to commit his crime. Patients went to Chavez seeking psychiatric treatment for a variety of issues, and trusted him with some of the most troubling and sensitive aspects of their lives. Unbeknownst to them, Chavez saw the patients as his own personal piggy bank: billing opportunities to feed his lifestyle. What is more, Chavez took advantage of TRICARE—a program built upon reliance and trust. Chavez, as a medical provider, easily submitted claims under his name for services he claimed he provided, and got federal funds paid directly into his bank account.
“Through flagrant fraudulent billing, Dr. Chavez stole a quarter of a million dollars from TRICARE and spent it on luxury items, including a Jaguar and designer jewelry. But neither the citizens of this district nor the Department of Justice will stand for defrauding the government,” said U.S. Attorney Robert Brewer. “Anyone who uses TRICARE as a path to unjust enrichment will pay a heavy price, as we are 100 percent committed to protecting vital government health programs for our military and veterans.”
“Dr. Marco Chavez stole more than $780,000 from the TRICARE program which serves our veterans, military members and their families. This deliberate targeting of a healthcare program which solely aids our military troops and their families is appalling,” said Acting FBI Special Agent in Charge Omer Meisel. “When medical professionals violate their oath to honest patient care for personal greed, it significantly damages the trust required within our health care system. In order to protect the integrity of the healthcare system and government programs like TRICARE that serve our military members, the FBI is committed to rooting out fraud within the healthcare industry. We urge anyone with information about suspected healthcare fraud to contact their local FBI Field Office.”
“Dr. Chavez’ conduct is a particularly egregious example of fraud against the TRICARE program in that his greed clearly took priority over his patients’ trust and well-being,” said Bryan D. Denny, Special Agent in Charge of the Defense Criminal Investigative Service, Western Field Office. “The doctor's sentencing should serve notice to other unscrupulous healthcare providers that any unprincipled actions that corrupt the integrity of the TRICARE program and ultimately degrade the quality of health care provided to military service members and their families will be vigorously investigated by DCIS and its law enforcement partners.”
U.S. Attorney Brewer commended Assistant U.S. Attorney Valerie Chu and the FBI and DCIS agents for their exemplary work on this case.
DEFENDANT Case Number 18cr2930-L
Marco Antonio Chavez Age: 40 Brownsville, Texas
SUMMARY OF CHARGES
Health Care Fraud – Title 18, U.S.C., Section 1347
Maximum penalty: Ten years in prison and $250,000 fine
AGENCY
Federal Bureau of Investigation
Defense Criminal Investigative Service
Riviera Beach Men Charged with Stealing 93 Protected Sea Turtle Eggs After Digging Them out of Their Nest on Singer Island BeachRead the Press Release
West Palm Beach, Fl. – Federal prosecutors in West Palm Beach have charged two Florida residents with felony crimes for allegedly poaching protected sea turtle eggs to later sell them. The accused poachers allegedly stole 93 eggs from their nest on Florida’s Singer Island Beach in May of this year.
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, David Pharo, Resident Agent in Charge, Florida, U.S. Fish and Wildlife Service (USFWS); and Major Olin Rondeau, South A Regional Commander, Florida Fish and Wildlife Conservation Commission (FWC) made the announcement.
The criminal complaint charges Carl Lawrence Cobb, 63, and Bruce Wayne Bivins, 63, both of Riviera Beach, Florida, with violating the Lacey Act and with criminal conspiracy. The Endangered Species Act protects sea turtle eggs. Under the Lacey Act, it is a crime to transport endangered species of fish and wildlife, including sea turtle eggs, if the purpose is to sell them. If convicted, Cobb and Bivins face up to five years in prison on each charge.
According to the criminal complaint affidavit, Cobb used his green pick-up truck to drive Bivins to the Singer Island Beach on May 24. At about 9:45 p.m., Cobb allegedly dropped Bivins off on the beach and drove away. The affidavit alleges that Bivins located a sea turtle nest, started digging, removed 93 eggs from that nest, put the eggs in a black bag, and then called Cobb for pick-up. Officers with Florida’s Fish and Wildlife Conservation Commission (FWC) saw the alleged drop-off, digging, and stealing of the protected eggs from their nest. They also saw Cobb on his return trip for Bivins. This time, Cobb drove a white pick-up truck because Cobb allegedly believed that a “game warden” had spotted him earlier in his green truck.
FWC officers stopped the white truck. They found Cobb in the driver’s seat, Bivins in the passenger’s seat, and 93 sand-dusted sea turtle eggs inside a black bag in the bed of the truck. Officers arrested Cobb and Bivins.
Marine biologists relocated the recovered eggs. The hope is that some of them will yield sea turtle hatchlings.
U. S. Attorney Fajardo Orshan commended the investigative efforts of U.S. Fish and Wildlife Service and the Florida Fish and Wildlife Conservation Commission. Assistant United States Attorneys Lauren Jorgensen and John McMillan are prosecuting this case.
A criminal complaint is a charging instrument containing allegations. A defendant is presumed innocent unless and until proven guilty in a court of law.
You may find related court documents and information on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 20-8242-WM.
For more information on the U.S. Attorney’s Office for the Southern District of Florida, visit https://www.justice.gov/usao-sdfl.
President of Law Enforcement Union Charged with Defrauding Union’s Annuity FundRead the Press Release
Audrey Strauss, Acting United States Attorney for the Southern District of New York, William F. Sweeny Jr., Assistant Director-in-Charge, New York Division, Federal Bureau of Investigation (“FBI”), and Andriana Vamvakas, Northeastern Regional Director, U.S. Department of Labor Office of Labor-Management Standards (“DOL-OLMS”), announced the arrest of KENNETH WYNDER Jr., a former New York State Trooper and the president of the Law Enforcement Employees Benevolent Association (“LEEBA”), a labor union for law enforcement officers employed by the City of New York (the “City”), for defrauding union members by misappropriating money from LEEBA’s Annuity Fund. STEVEN WHITTICK, LEEBA’s treasurer and a police officer for New York City’s Department of Environmental Protection (“DEP”), was charged separately with obstructing the investigation into fraud in connection with LEEBA and the Annuity Fund and making false statements to federal agents. Both defendants are expected to appear before U.S. Magistrate Judge Robert W. Lehrburger in Manhattan federal court this afternoon.
Acting U.S. Attorney Audrey Strauss said: “Today we have charged two leaders of a union that represents local law enforcement officers for engaging in criminal conduct, something they and their membership are sworn to combat. As alleged, Kenneth Wynder abused his position as the union’s president and its annuity fund’s administrator and trustee to raid his members’ retirement accounts. As further alleged, Steven Whittick, the union’s treasurer, took repeated steps to obstruct a federal investigation aimed at uncovering those financial improprieties.”
FBI Assistant Director William F. Sweeny Jr. said: “As alleged, both law enforcement and civilian members of multiple city agencies had their retirement savings compromised by two individuals who prioritized their own financial well-being over that of the hardworking men and women who dedicated their livelihood to serving the public. Most people only get one chance to put aside enough money to last them into retirement. To think the money these individuals worked so hard for could allegedly be swindled by the very people who play a role in managing it is disturbing beyond belief. Today’s arrests bring us one step closer to making sure justice is served in this case.”
DOL-OLMS Northeastern Regional Director Andriana Vamvakas said: “Union officials are required to use the union’s funds only for legitimate purposes, not their own personal gain. Financial misappropriation by union officials not only breaks the law, it betrays the trust placed in them by their membership. OLMS was proud to work with its partners at the Office of the U.S. Attorney for the Southern District of New York and the Federal Bureau of Investigation in investigating this case.”
According to the allegations contained in the two Complaints unsealed in Manhattan federal court, publicly available information, and prior court filings:[1]
Law Enforcement Employees Benevolent Association and the Annuity Fund
LEEBA is a labor union that has acted as the collective bargaining representative principally for law enforcement personnel at various City agencies, and has entered into agreements on behalf of those law enforcement employees, including agreements for insurance and retirement benefits. The City agencies whose employees LEEBA represented included, at various times, the Department of Environmental Protection (“DEP”), the Department of Sanitation (“Sanitation”), and the Department of Transportation (“Transportation”).
The Annuity Fund is a LEEBA fund that received monthly contributions from the City for the benefit of LEEBA’s members, and maintained separate accounts for each fund member. These accounts were functionally similar to employer-sponsored 401(k) retirement accounts. Both WYNDER and WHITTICK were Trustees of the Annuity Fund and signatories to agreements that governed the fund. Under the relevant agreements and plans, the money in the Annuity Fund could be used for no purpose other than funding individual members’ retirement accounts and defraying reasonable administrative expenses of the Annuity Fund itself.
WYNDER
WYNDER, a former New York State Trooper, is the President of LEEBA and a member of LEEBA’s board of directors. WYNDER has also served as the Fund Administrator of the Annuity Fund and as a member of the board of trustees of the Annuity Fund, pursuant to which he owed a fiduciary duty to act in the best interests of the Annuity Fund and its account holders. WYNDER also was on the board of trustees of the LEEBA Welfare Fund (the “Welfare Fund,” and collectively with the Annuity Fund, the “LEEBA Funds”), which provided supplemental insurance benefits to its members. While occupying those positions, WYNDER centralized and controlled major decision-making authority for LEEBA and the LEEBA Funds, often acting without the proper approval of their respective boards of directors or trustees. WYNDER’s de facto dominance of LEEBA and the LEEBA Funds enabled him to make decisions in his own self-interest and contrary to the interests of the Annuity Fund and individual members.
WHITTICK
WHITTICK, a DEP police officer, is the Treasurer of LEEBA, and a member of the board of directors of LEEBA and the boards of trustees of the LEEBA Annuity Fund and the LEEBA Welfare Fund. As LEEBA’s Treasurer, WHITTICK had responsibility for LEEBA’s financial matters and accounts, arranging for LEEBA to pay its payroll through an outside payroll processing firm starting in 2016, as well as having signatory authority over LEEBA’s main operating bank account.
WYNDER’s Alleged Fraud Scheme
From at least in or about 2012 up to and including the date of this Complaint, WYNDER participated in a scheme to steal, embezzle, and misappropriate money from the Annuity Fund and individual members’ retirement accounts. Specifically, WYNDER made hundreds of thousands of dollars of fraudulent transfers from the Annuity Fund to LEEBA’s operating account, which he controlled, and regularly used the funds, once transferred from the Annuity Fund, to enrich himself at union members’ expense, including through unauthorized and excessive checks to himself and cash withdrawals for his own benefit. In addition, WYNDER caused the union to pay for various personal expenses such as a second residence, clothing, travel expenses, and the purchase of a personal automobile, all paid for by the union, and none of which were contemporaneously reported to the Internal Revenue Service (“IRS”), as required.
To accomplish this fraudulent scheme, WYNDER, acting in his capacity as the Annuity Fund’s Plan Administrator, repeatedly made false and misleading statements to a third-party retirement plan manager that served as the custodian for the Annuity Fund and the retirement accounts of individual union members, including through emails and faxes that WYNDER used to withdraw increasingly large sums of money from the Annuity Fund, effectively causing such withdrawals to be made from the retirement accounts of individual members. From in or about 2014 through in or about 2019, WYNDER caused the withdrawal of more than $500,000 from the individual retirement accounts that constitute the Annuity Fund, thereby wiping out the entire balance of certain members’ accounts. Without these improper withdrawals from the Annuity Fund, the LEEBA operating account would have been insolvent, and would have had insufficient funds to pay for WYNDER’s excessive checks to himself and cash withdrawals and the personal expenses he caused to be charged to that account.
In addition, throughout the duration of this scheme, WYNDER repeatedly made and approved false and misleading statements to LEEBA’s members and prospective members about how he was purportedly using and protecting their retirement accounts and the LEEBA Annuity Fund. WYNDER further concealed his scheme by causing LEEBA to fail to timely file mandatory reports and financial disclosures with the City and public reports to the Annuity Fund’s members, and by making false statements to the Annuity Fund’s auditors and accountants.
WHITTICK’s Alleged Obstruction of Justice
From at least in or about 2017 through in or about August 2019, while serving as LEEBA’s Treasurer, and after learning of the federal investigation into LEEBA’s finances including the embezzlement scheme described above, WHITTICK repeatedly lied to federal agents in an effort to obstruct that investigation. WHITTICK did so despite personal involvement in some of the financial improprieties with which WYNDER is charged. For example, as alleged, on at least two occasions, on or about February 1, 2018, and March 30, 2018, WHITTICK withdrew $16,000 in cash from a LEEBA bank account, and on each occasion deposited $15,000 cash into WYNDER’s personal bank account and $1,000 cash into WHITTICK’s own personal bank account.
After the FBI had executed a search warrant of LEEBA’s offices in September 2019, WHITTICK attempted to obstruct and to influence the ongoing federal investigation by making, in two different interviews with law enforcement agents, false statements about, among other subjects, cash withdrawals he made from LEEBA’s bank accounts, unauthorized withdrawals from LEEBA’s Annuity Fund and from members’ individual accounts, and LEEBA’s payment for certain travel and entertainment expenses for union officers, including WHITTICK and WYNDER.
* * *
WYNDER, 56, of Stroudsburg, Pennsylvania, is charged with one count of wire fraud, which carries a maximum penalty of 20 years in prison.
WHITTICK, 50, of Kingston, New York, is separately charged with one count of obstruction of justice, which carries a maximum penalty of 20 years in prison, and two counts of false statements to federal investigators, each of which carries a maximum penalty of five years in prison.
The maximum potential sentences in these cases are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Ms. Strauss praised the outstanding work of the FBI and the Department of Labor OLMS. Ms. Strauss also thanked IRS-Criminal Investigations, the New York City Comptroller’s Office, and the New York City Department of Investigation for their assistance.
The case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys David Raymond Lewis and Eli J. Mark are in charge of the prosecution.
The charges contained in the Complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaints, and the description of the Complaints set forth herein, constitute only allegations, and every fact described therein should be treated as an allegation.