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13 July 2020
Prattville Man Sentenced for Wire Fraud and Transporting Stolen VehicleRead the Press Release
Montgomery, Alabama – On Thursday, July 9, 2020, Robert Brandon Malone, 35, a resident of Prattville, Alabama, was sentenced to 71 months in prison after pleading guilty to federal wire fraud charges and to transporting a stolen vehicle, announced United States Attorney Louis V. Franklin, Sr., FBI Special Agent in Charge James Jewell, and Prattville Police Chief Mark Thompson. In addition, Malone was ordered to pay $93,784.68 in restitution to his victims and serve three years of supervised release after he completes his time in prison.
According to court records, from early 2017 through late 2018, Malone orchestrated multiple schemes to sell automobiles that did not belong to him. First, in April of 2017, Malone posted a Dodge Ram 1500 pickup truck for sale on the advertising website craigslist that was actually a trade-in vehicle to the dealership for which he worked at the time. A potential buyer saw the post and purchased the truck. However, after discovering that Malone did not actually own the vehicle, it was returned to the dealership. Malone did not refund the buyer’s money.
Later, in January of 2018, Malone was completing work on a Chevrolet C-10 pickup truck for someone and was storing it at his shop. Malone again created a craigslist post listing it for sale and he ultimately arranged to trade it for another vehicle. Once the buyer learned that Malone did not actually own the truck, it was returned to the rightful owner. However, the vehicle that was traded was not returned.
Finally, in November of 2018, Malone was in the process of completing the paperwork to purchase an Audi R8 at a car dealership in Georgia. Before the purchase was complete, he left with the vehicle and returned to Prattville. He then contacted someone that he knew was in the market for an Audi and they made a trip to Prattville to look at the vehicle. The purchaser gave him a down payment for the car and left his F-150 with Malone to hold temporarily until he could return to pick it up. However, Malone did not wait for the owner to return, instead, he listed the truck on Instagram and sold it to another individual. Ultimately, the Audi was returned to the dealership and the truck to the Audi purchaser. However, neither victim recovered their losses.
Malone was indicted by a federal grand jury in October of 2019 on three counts of wire fraud and one count of transporting a stolen vehicle. He was arrested on those charges on November 1, 2019, and released pending his trial. However, his pre-trial release was revoked on February 7, 2020 after it was discovered that, while working at a car dealership in Pelham, Alabama, he was engaging in similar conduct that violated Alabama state law. He has been in federal custody since.
“While carrying out his schemes and scamming his victims out of thousands of dollars, Malone showed no concern about being caught or held accountable,” stated U.S. Attorney Louis V. Franklin, Sr. “Even after being arrested and charged for his crimes, he chose to return to his old ways. I am thankful to our law enforcement partners for putting a stop to his crime spree and helping to get justice for his victims. Once again, this case reminds us that we must always exercise caution when making purchases through online websites.”
FBI Special Agent in Charge James Jewell stated, “This is the result when state, local, and federal authorities work together to make our communities a safer place.”
“Malone’s crimes were widespread and harmed a number of victims,” stated Prattville Police Chief Mark Thompson. “I am grateful for the cooperation and support we received from the FBI and U.S. Attorney’s Office in this case. Due to the great relationships we have established with our federal partners, the victims in this case will get the justice they deserve.”
The Federal Bureau of Investigation (FBI) and the Prattville Police Department investigated this case. Assistant U.S. Attorney Brandon Bates prosecuted this case.
Pikeville Man Sentenced to 156 Months for Human Trafficking ChargesRead the Press Release
PIKEVILLE, Ky. – A Pikeville man, Ernest Ray, 56, was sentenced Monday, to 156 months in federal prison, by U.S. District Judge Karen Caldwell, after previously pleading guilty to five counts of recruiting, enticing, harboring, transporting, providing, and maintaining minors to engage in commercial sexual acts.
According to his plea agreement, Ray admitted that he provided five minors alcohol, cigarettes, money, and drugs (i.e., marijuana), in exchange for the minors engaging in sexual acts in front of the Defendant. Ernest admitted that, on numerous occasions, he drove the minors to a rural location for the purpose of having them engage in these sexual acts. Some of the sexual acts also took place at his residence.
Ray pleaded guilty in June 2019.
Under federal law, Ray must serve 85 percent of his prison sentence; and upon his release, he will be under the supervision of the United States Probation Office for life. Additionally, Ray will be required to pay $60,000, in lieu of forfeiture of the real property and vehicles used in the crimes.
Robert M. Duncan, Jr., U.S. Attorney for the Eastern District of Kentucky, and James Robert Brown, Special Agent in Charge, FBI, Louisville Field Office, jointly made the announcement.
The investigation was conducted by the FBI. The United States was represented in the case by Assistant U.S. Attorney Hydee Hawkins.
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Ohio Resident Indicted on Charges of Enticement and Having Sex with A MinorRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that a federal grand jury has returned a three-count indictment charging Priscilla Vogelbacher, 37, of Oregon, Ohio, with one count of enticement of a minor and two counts of interstate travel with the intent to engage in illicit sexual conduct. The charges carry a mandatory minimum penalty of 10 years in prison, a maximum of life, and a $250,000 fine.
Assistant U.S. Douglas A. Penrose, who is handling the case, stated that according to the indictment, between November 2018 and June 2019, the defendant began a relationship with the minor victim over the internet and enticed the minor victim to engage in sexual activity. Vogelbacher is also accused of making two separate trips from Ohio to Jamestown, NY, for the purpose of having sex with the minor victim, who was 15 years old at the time.
The defendant was arraigned today before Judge Michael J. Roemer and released on conditions.
The indictment is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia; the Jamestown Police Department, under the direction of Acting Chief Timothy Jackson; and the Ellicott Police Department, under the direction of Chief William Ohnmeiss Jr.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Nascent Devices, Inc. to Pay $70,000 to Resolve Potential False Claims LiabilityRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Nascent Devices, Inc. (Nascent) has agreed to pay the United States $70,000 to resolve potential liability under the False Claims Act.
According to U.S. Attorney David J. Freed, the investigation arose from Nascent’s conduct with respect to a Small Business Technology Transfer (STTR) award received from the National Science Foundation. It is alleged that Nascent improperly charged unallowable and unallocable costs toward the award, applied a significantly higher overhead rate to account for underspending, and provided false certifications on its final report cover page in 2015.
“Potential false claims under grant programs such as the Small Business Technology Transfer program from the National Science Foundation, impact citizens and potential grant recipients alike,” said U.S. Attorney Freed. “It is vital that we hold grantees accountable. Our ACE Unit works closely together with a variety of federal agencies to ensure compliance and responsible stewardship of federal funds.”
“The National Science Foundation is a strong supporter of the Small Business Technology Transfer program,” said Allison Lerner, National Science Foundation Inspector General. “However, the Foundation expects grant recipients to abide by the award terms and conditions, including the federal cost principles. Expenses charged to grants must be allowable, allocable and reasonable. Similarly, awardees cannot significantly underspend awards and keep the surplus funds without consequence. I commend the U.S. Attorney’s Office for their work on upholding federal grant rules in this case.”
This Settlement Agreement is neither an admission of liability by Nascent nor a concession by the United States that its claims are not well founded.
This case was investigated by the NSF Office of Inspector General. The investigation was handled by Assistant United States Attorney, Tamara J. Haken and the Affirmative Civil Enforcement (ACE) Unit within the U.S. Attorney’s Office.
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Minneapolis Man Charged with Illegally Possessing A FirearmRead the Press Release
United States Attorney Erica H. MacDonald today announced a criminal complaint charging ZACHARY VICTOR ROBINSON, 27, with one count of possession of a firearm by a felon. ROBINSON was arrested in Chicago, Illinois, on July 10, 2020, on a Minnesota state complaint-warrant for second-degree intentional murder. ROBINSON will make an initial appearance in U.S. District Court at a later date.
According to the allegations in the criminal complaint and law enforcement affidavit, on December 31, 2019, pursuant to an active arrest warrant, officers with the Minneapolis Police Department (MPD) were conducting surveillance on ROBINSON. When MPD officers observed ROBINSON exit a residence in Brooklyn Park, Minnesota, they moved in to make an arrest, ordering ROBINSON to put his hands in the air. ROBINSON complied and told the officers that he had a gun on his left side. After taking ROBINSON into custody, officers recovered a Taurus, model PT111 Millennium G2, 9mm semiautomatic pistol from ROBINSON’s side. Because ROBINSON has prior felony convictions, he is prohibited under federal law from possessing firearms or ammunition at any time.
ROBINSON has been charged by the Hennepin County Attorney’s Office with second-degree intentional murder, second-degree assault, felon in possession of a gun, and first-degree riot. ROBINSON was arrested in Chicago on July 10, by the FBI, in partnership with the Bureau of Alcohol, Tobacco, Firearms and Explosives, Cook County Sheriff’s Office, Chicago Police Department, and the Illinois State Police.
This case is the result of an investigation conducted by the Minneapolis Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was brought as part of the Twin Cities Violent Crime Task Force, a multi-agency effort that brings together additional federal and state resources to assist local law enforcement to investigate, arrest, and prosecute individuals responsible for gun violence in the Twin Cities. For more information about the Twin Cities Violent Crime Task Force, please visit https://www.justice.gov/usao-mn/pr/united-states-attorney-announces-new-twin-cities-violent-crime-task-force.
Assistant U.S. Attorney Benjamin Bejar is prosecuting the case.
The charges contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defendant Information:
ZACHARY VICTOR ROBINSON, 27
Minneapolis, Minn.
Charges:
- Felon in possession of a firearm, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Mexican Man Given More than a Decade Long Prison Sentence for Methamphetamine TraffickingRead the Press Release
A man who conspired to distribute over 750 grams of methamphetamine was sentenced today to more than a decade in federal prison.
Fredy Juan Morales-Alvarez, age 33, from Michoaćan, Mexico, received the prison term after a February 2020 guilty plea to Conspiracy to Distribute Methamphetamine.
In a plea agreement, Morales-Alvarez admitted that, beginning in the fall of 2013 and continuing through December 17, 2013, he conspired to traffic methamphetamine. On December 17, 2013, law enforcement searched Morales-Alvarez’s car during a traffic stop in Waterloo, Iowa, and recovered over 50 grams of methamphetamine. Law enforcement then searched his home, finding an additional 122 grams of methamphetamine, $6,540 in United States currency, and a digital scale.
Morales-Alvarez was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Morales-Alvarez was sentenced to 121 months’ imprisonment. He must also serve a five-year term of supervised release after the prison term. There is no parole in the federal system.
Morales-Alvarez is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Lisa Williams and Special Assistant United States Attorney Dillan Edwards and investigated by the Iowa Division of Narcotics Enforcement, the Waterloo Police Department, the Cedar Falls Police Department, and the Black Hawk County Sheriff’s Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 14-CR-2013.
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Marrero Man, Convicted in 2006 of Child Pornography Possession, Charged Again with Receipt and Possession of Child PornographyRead the Press Release
NEW ORLEANS – U.S. Attorney Peter G. Strasser announced that BRADLEY EDWARD CORLEY, age 45, a resident of Marrero, Louisiana, was charged July 10, 2020 in a two-count Indictment with receipt and possession of images and videos depicting the sexual exploitation of children, including children as young as approximately four (4) years old, in violation of 18 U.S.C. ' 2252(a)(2) and 2252(a)(4)(B). In 2006, CORLEY was convicted in the United States District Court for the Eastern District of Louisiana of possession of child pornography.
Because of his prior conviction, if convicted in this matter CORLEY faces a mandatory minimum term of imprisonment of fifteen (15) years and a maximum term of imprisonment of forty (40) years under the receipt charge and a mandatory minimum term of imprisonment of ten (10) years and a maximum term of imprisonment of twenty (20) years for the possession charge. CORLEY also faces a lifetime of supervised release, a $250,000 fine, and he can be required to register as a sex offender.
U. S. Attorney Strasser reiterated that an indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
U.S. Attorney Strasser praised the work of the Federal Bureau of Investigation in investigating this matter, with support from the Jefferson Parish Sheriff’s Office. Assistant United States Attorney Jordan Ginsberg is in charge of the prosecution.
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Man Sentenced to Prison for Assaulting Federal Officer in Owyhee, NevadaRead the Press Release
RENO, Nev. — Richard Frank Roa Jr., 36, was sentenced today by U.S. District Judge Larry R. Hicks to 37 months in prison for assaulting a federal officer and causing bodily injury to the officer while he was engaged in official duties, announced U.S. Attorney Nicholas A. Trutanich for the District of Nevada.
“This case illustrates how law enforcement officers put themselves in harm’s way at a moment’s notice to protect vulnerable members of the community,” said U.S. Attorney Trutanich. “Our office is grateful to the women and men who serve on the front lines in their mission to keep our communities safe.”
Roa pleaded guilty March 3, 2020, to one count of assault on a federal officer. Roa was remanded to the custody of the U.S. Marshals Service after today’s sentencing hearing.
According to court documents, on November 12, 2017, Roa’s father called the police to report that Roa was causing a disturbance and damaging a vehicle at his father’s house, located in Owyhee, Nevada. A Bureau of Indian Affairs officer responded to the call. When the officer arrived, Roa’s father told the officer that he wanted Roa removed from the house. The officer attempted to arrest Roa, but he resisted, and assaulted and caused injury to the officer.
The charges resulted from an investigation by the Bureau of Indian Affairs. Assistant U.S. Attorney Penelope Brady prosecuted the case.
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Jury Finds Eagle Butte Man Not Guilty of AssaultRead the Press Release
United States Attorney Ron Parsons announced that an Eagle Butte, South Dakota, man was acquitted of Assault Resulting in Serious Bodily Injury as a result of a federal jury trial in Pierre, South Dakota, beginning July 8, 2020, and concluding on July 9, 2020.
Lucian Rising Sun, a/k/a Sonny Rising Sun, age 28, was indicted by a federal grand jury on March 9, 2020.
The charge stemmed from an alleged incident that occurred on January 29, 2020, in Eagle Butte.
The investigation was conducted by the Cheyenne River Sioux Tribe Law Enforcement Services and the U.S. Attorney's Office prosecuted the case.
Jury Finds Bullhead Man Guilty of Child AbuseRead the Press Release
United States Attorney Ron Parsons announced that Tyson Keepseagle, age 33, of Bullhead, South Dakota, was found guilty of three counts of Child Abuse as a result of a federal jury trial in Aberdeen, South Dakota. The verdict was returned on July 10, 2020.
The charges carry a maximum penalty of 35 years in federal prison and/or a $750,000 fine, 9 years of supervised release, and a $300 special assessment to the Federal Crime Victims Fund.
Keepeagle was indicted by a federal grand jury on May 14, 2019.
The conviction stems from incidences between June 1, 2018, and August 12, 2018, when the child victims lived with Keepseagle and he abused the children leaving them with bruises, bloody noses, and swelling.
This case was investigated by the Bureau of Indian Affairs, Standing Rock Agency. Assistant U.S. Attorney Kirsten Jasper prosecuted the case.
A presentence investigation was ordered and a sentencing date was set for September 28, 2020. The defendant remained out on bond and given a date to self-report to the custody of the U.S. Marshals Service.
IRS Criminal Investigation and the U.S. Attorney remind taxpayers of upcoming tax filing deadline; urge taxpayers to remain vigilant of scamsRead the Press Release
SACRAMENTO, Calif. — The Internal Revenue Service Criminal Investigation division and the U.S. Attorney’s Office for the Eastern District of California reminded taxpayers of the July 15 filing and payment deadline and warned against an increase in tax and COVID-19 scams.
Due to COVID-19, the original filing deadline and tax payment due date for 2019 was postponed from April 15 to July 15. Taxpayers filing Form 1040 series returns must file Form 4868 by July 15 to obtain the automatic extension to Oct. 15.
“Although the extension provides additional time to file the tax return – it is not an extension to pay any taxes due,” said Kareem Carter, Special Agent in Charge of the IRS Criminal Investigation division in California. “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. “Criminals use the tax filing deadline as an opportunity to steal personal and financial information,” said U.S. Attorney McGregor W. Scott for the Eastern District of California. “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.”
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) emails 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. To verify the identity of an IRS Special Agent please contact [email protected].
IRS Criminal Investigation and United States Attorney's Office Remind Taxpayers of Upcoming Tax Filing Deadline and Urge Taxpayers to Remain Vigilant of ScamsRead the Press Release
The Internal Revenue Service Criminal Investigation division and the U.S. Attorney’s Office for the Western District of North Carolina reminded taxpayers of the July 15 filing and payment deadline and warned against an increase in tax and COVID-19 scams.
Due to COVID-19, the original filing deadline and tax payment due date for 2019 was postponed from April 15 to July 15. Taxpayers filing Form 1040 series returns must file Form 4868 by July 15 to obtain the automatic extension to Oct. 15.
"Although the extension provides additional time to file the tax return – it is not an extension to pay any taxes due", said Matthew D. Line, Special Agent in Charge of the IRS Criminal Investigation division in North Carolina, South Carolina and Tennessee. "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. "Criminals use the tax filing deadline as an opportunity to steal personal and financial information", said R. Andrew Murray, U.S. Attorney for the Western District of North Carolina. "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."
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.
Houma Man Charged with Federal Firearm and Drug ChargesRead the Press Release
NEW ORLEANS - U.S. Attorney Peter G. Strasser announced today that a federal grand jury returned a four-count indictment on July 10, 2020 against defendant DONOVAN D. CLAY a/k/a “Donavan D. Clay,” a/k/a “Pluto,” age 27, of Houma, LA, for distribution of heroin, in violation of Title 21, United States Code, Section 841(a)(1)(C) (Counts 1-2); possession with intent to distribute heroin, in violation of Title 21, United States Code, Section 841(a)(1)(B) (Count 3); and possession of a felon in possession of a firearm, in violation of Title 18, United States Code, Section 922(g)(1) (Count 4).
If convicted for a violation of either Count 1 or 2, CLAY faces a maximum term of imprisonment of twenty (20) years and a fine of not more than $1,000,000, at least three (3) years supervised release following any term of imprisonment, and a $100 special assessment fee. For Count 3, CLAY faces a minimum of five (5) years up to maximum of forty (40) years imprisonment and a fine of not more than $5,000,000, at least four (4) years supervised release following any term of imprisonment, and a $100 special assessment fee. For Count 4, CLAY faces a maximum of ten (10) years imprisonment and a fine of not more than $250,000, up to three (3) years supervised release following any term of imprisonment, and a $100 special assessment fee.
United States Attorney Strasser reiterated that an Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
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 matter was handled by Homeland Security Investigations and the Houma Police Department. Assistant United States Attorney Duane A. Evans is prosecuting the matter.
Hartford Drug Dealer Sentenced to 5 Years in Federal PrisonRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that PEDRO RIVERA, also known as “Heavy,” 42, of Hartford, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 60 months of imprisonment, followed by five years of supervised release, for trafficking narcotics.
According to court documents and statements made in court, in August 2017, the Drug Enforcement Administration’s Hartford Task Force launched an investigation into a drug trafficking organization that was selling large amounts of heroin, fentanyl, cocaine and crack cocaine in Hartford. Julio Oliveras, also known as “Cuzzo Jay,” was identified as the leader of the organization. The investigation, which included approximately six months of court-authorized wiretaps, controlled purchases of narcotics and physical surveillance, revealed that Oliveras and his associates supplied distribution quantities of narcotics to several Hartford-area drug dealers, including Rivera, and used multiple locations in Hartford to process, store and distribute narcotics.
Rivera was regularly intercepted on wiretaps ordering fentanyl and heroin, typically in 50-gram or 100-gram quantities, and wholesale quantities of cocaine, from Oliveras.
Rivera, Oliveras and other members of the organization were arrested on July 19, 2018. On that date, investigators executed 10 search warrants and seized approximately 2.7 kilograms of fentanyl, one kilogram of heroin, approximately 500 grams of crack cocaine, 100 grams of cocaine, eight firearms, more than 1,000 rounds of ammunition, cash, and other evidence of narcotics trafficking activity. The drugs and firearms were found at a stash house Oliveras maintained, a storage unit he rented, and the residences of his associates.
On August 2, 2018, a grand jury in Hartford returned an indictment charging Rivera, Oliveras and 14 co-defendants with various offenses.
Rivera has been detained since his arrest. On August 29, 2019, he pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute heroin, fentanyl and cocaine.
Oliveras pleaded guilty to narcotics and firearm offenses and, on January 15, 2020, was sentenced to 186 months of imprisonment.
This is Rivera’s second federal conviction. In September 2004, he was sentenced to 60 months of imprisonment for distributing large quantities of crack cocaine. His sentence was subsequently reduced to 48 months of imprisonment pursuant to changes in the federal sentencing guidelines for crack cocaine offenses.
The Drug Enforcement Administration’s Hartford Task Force includes personnel from the DEA Hartford Resident Office and the Bristol, Hartford, East Hartford, Manchester, New Britain, Rocky Hill, Wethersfield, Windsor Locks and Willimantic Police Departments. Agencies assisting the investigation include the Bureau of Alcohol, Tobacco, Firearms and Explosives, Connecticut Department of Correction, and the East Hartford, New Britain, Newington and West Hartford Police Departments.
This case is being prosecuted by Assistant U.S. Attorney Geoffrey M. Stone.
Hancock County Man Pleads Guilty to Illegal Moonshine ChargesRead the Press Release
Gulfport, Miss – Willie Necaise, Jr., 77, of Hancock County, pled guilty Friday before U.S. District Judge Sul Ozerden to Unlawful Production of Distilled Spirits and Interstate Travel in Aid of a Racketeering Enterprise, announced U.S. Attorney Mike Hurst and Kurt Theilhorn, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Judge Ozerden will sentence Necaise on October 16, 2020 at 10:00 a.m. He faces a maximum penalty of 5 years in prison on each charge. He further faces fines up to $250,000 and 3 years of supervised release.
Agents with the Enforcement Office of the Mississippi Alcoholic Beverage Control (“ABC”) Division began investigating Necaise in 2018. The investigation revealed that, over time, Necaise traveled out of state and obtained at least 569,775 pounds of sugar, a primary ingredient for moonshine. In addition, records showed Necaise getting large deliveries of propane gas to a rural shed in Hancock County, even during the summer. Agents tracked Necaise to Slidell, Louisiana, and observed him getting a pallet of sugar and coming back to Hancock County. Armed with a search warrant, ABC Agents found forty 55-gallon drums of mash, 1200 new plastic jugs and a 200-gallon stainless steel cooker, along with sugar and other items related to illegal moonshine. Necaise did not have a license to distill liquor.
Based on the records of the sugar purchased, it was determined that over 74,070 gallons of taxable whiskey would be produced. No excise tax has ever been paid by Necaise. He therefore owes the ATF Tax and Trade Bureau $898,691.63 in Federal Excise Tax and the Mississippi Department of Revenue $369,752.50 in State Excise Tax.
U.S. Attorney Hurst commended the incredible work of the agents of the Enforcement Office of the Mississippi Alcoholic Beverage Control Division of the Mississippi Department of Revenue and the Bureau of Alcohol, Tobacco, Forearms and Explosives, who cooperated in investigating the case. Assistant United States Attorney Annette Williams is prosecuting the case.
Guatemalan Man Sentenced to Prison for Illegally Reentering the United States after Being Deported Two TimesRead the Press Release
A man who illegally returned to the United States after being deported two times was sentenced today to eight months in federal prison.
Juan Sanchez-Cobo, age 35, a citizen of Guatemala illegally present in the United States and residing in Fort Madison, Iowa, received the prison term after a February 6, 2020 guilty plea to one count of illegal reentry into the United States.
At the guilty plea, Sanchez-Cobo admitted he had previously been deported from the United States and illegally reentered the United States without the permission of the United States government. Sanchez-Cobo was deported in October 2016 following a conviction in the Western District of Texas for illegal entry, a misdemeanor. He was also deported in July 2018 following a conviction in the Western District of Texas for illegal reentry, a felony. Sanchez-Cobo most recently came to the attention of immigration agents on December 25, 2019, following his arrest and conviction in Linn County, Iowa, for public intoxication.
Sanchez-Cobo was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Sanchez-Cobo was sentenced to eight months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Sanchez-Cobo is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Daniel C. Tvedt and investigated by Department of Homeland Security, Immigration and Customs Enforcement, Enforcement and Removal Operations.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 20-CR-04.
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Georgia Man to Federal Prison for Iowa Meth ConspiracyRead the Press Release
A man who conspired to distribute methamphetamine was sentenced July 13, 2020, to 12 years in federal prison.
Dylan Davis, 27, from Hartwell, Georgia, received the prison term after a March 10, 2020, guilty plea to conspiracy to distribute methamphetamine.
Evidence at the guilty plea and sentencing hearing, showed that in November 2017, a traffic stop was conducted on a vehicle Davis was a passenger in. During the stop, law enforcement located a loaded CZ Scorpion EVO 3 S1 9mm pistol and two magazines - one loaded with 12-9mm rounds over which which Davis admitted ownership. Pursuant to the stop, officers lawfully searched the vehicle and recovered approximately 4 ounces of methamphetamine located on the back seat near the gun, along with numerous baggies containing approximately 70 grams of marijuana, three digital scales, a red plastic grinder containing methamphetamine, numerous prescription pills, zig zag rolling papers, syringes, 2 glass methamphetamine pipes, numerous plastic zip-lock baggies of various size, two cell phones, and other drug paraphernalia.
Davis was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Davis was sentenced to 144 months’ imprisonment. He must also serve a 5-year term of supervised release after the prison term. There is no parole in the federal system. Davis is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Mikala Steenholdt and investigated by Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 17-4074.
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Fort Ann Man Sentenced on Cocaine and Methamphetamine Distribution ConvictionsRead the Press Release
ALBANY, NEW YORK – Nestor Cordero-Hernandez, age 43, of Fort Ann, New York, was sentenced today to 87 months in prison for conspiring to distribute and possess with intent to distribute more than 500 grams of cocaine and more than 50 grams of methamphetamine.
The announcement was made by United States Attorney Grant C. Jaquith and Ray Donovan, Special Agent in Charge, U.S. Drug Enforcement Administration (DEA), New York Division.
Cordero-Hernandez was also ordered to serve a 3-year term of supervised release following his release from prison, and to forfeit $42,450 in proceeds from his drug trafficking activity.
In imposing sentence, the Court found that between September 2018 and November 2019, Cordero-Hernandez agreed with others to participate in a drug trafficking conspiracy that distributed over 600 grams of methamphetamine and 450 grams of cocaine in Fort Ann, and elsewhere, for profit. He faces deportation to Mexico following the completion of his sentence.
This case was investigated by the DEA, and the Warren and Washington County Sheriff’s Offices, and was prosecuted by Assistant U.S. Attorney Ashlyn Miranda.
Former VA Pharmacist to Serve Time in Federal Prison for Stealing Controlled Drugs from Veterans' PrescriptionsRead the Press Release
SHREVEPORT, La. – United States Attorney David C. Joseph announced that Melissa W. Richardson, 44, of Shreveport, was sentenced today by U.S. District Judge Donald E. Walter to serve one year in federal prison, followed by one year of supervised release, for stealing controlled substances from mail-out prescriptions. Richardson was found guilty on January 17, 2020, by a federal jury in Shreveport, of 15 counts of acquiring a controlled substance by fraud, following a one-week trial.
According to evidence presented during trial, on June 9, 2017, Richardson, a licensed pharmacist, who was formerly employed with the Overton Brooks VA Medical Center (VAMC) in Shreveport, stole various quantities of Hydrocodone out of individual prescription bottles as she verified mail-out prescriptions meant for veterans. The prescriptions at issue had been prepared by a pharmacy technician and were awaiting a second count and verification from Richardson. Video surveillance from inside the VAMC controlled substances vault showed Richardson slipping the pills into her pocket as she counted the prescriptions. In multiple instances, she slipped pills into her pocket before the pills were counted. Video footage showed her then verify that the prescription was correct in the VAMC’s computer system, seal the bottle, place it in a sealed envelope, and drop it in a bin for mail-out. When federal agents confronted Richardson, she had 236 loose pills in her pocket.
“Combatting the opioid epidemic is one of our nation’s most critical law enforcement and public health initiatives,” said U.S. Attorney Joseph. “Pharmacists, such as the defendant here, are entrusted with the responsibility to ensure that opioids and other controlled substances are lawfully dispensed. Richardson abused this trust when she stole prescriptions for her own use. My office will continue to hold accountable those medical professionals who violate the law in dispensing controlled substances.”
The U.S. Department of Veterans Affairs, Office of Inspector General, conducted the investigation. Assistant U.S. Attorney Brian C. Flanagan and Supervisory Assistant U.S. Attorney Allison D. Bushnell prosecuted the case.
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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.
Florida Man Sentenced for His Role in Counterfeiting SchemeRead the Press Release
Montgomery, Alabama – On Thursday, July 9, 2020, Morris Bryan Parmer, a 61-year-old man from Quincy, Florida, was sentenced to 18 months in prison for his part in a U.S. currency-counterfeiting scheme, announced United States Attorney Louis V. Franklin, Sr. Parmer was also ordered to serve two years of supervised release after he serves his prison sentence and to pay $400.00 in restitution to Home Depot.
According to court records, on August 4, 2018, the Dothan Police Department conducted a traffic stop on a vehicle occupied by Parmer and his co-defendant, Tyra Keisha Denise Jefferson, 24, from Tallahassee, Florida. During the stop, officers discovered approximately fifty-five counterfeit $100 bills and three counterfeit $20 bills in the vehicle, along with materials used to manufacture them. Further investigation revealed that the two had purchased merchandise from a Home Depot store in Lake City, Florida, on August 2, 2018, using at least four counterfeit $100 bills. On July 8, 2020, Jefferson pleaded guilty to her role in the conspiracy and will be sentenced in the next few months.
The United States Secret Service and the Dothan Police Department investigated this case. Assistant United States Attorneys Hollie Reed and Russell Duraski prosecuted the case.
Five-Time Drug Felon Sentenced to Federal PrisonRead the Press Release
A man with four prior drug-related felonies who trafficked methamphetamine in 2016 was sentenced today to more than 14 years in federal prison.
Andrew Sarchett, age 39, from Kailua Kona, Hawaii, and previously from Marion, Iowa, received the prison term after a January 22, 2020 guilty plea to one count of distribution of methamphetamine.
In a plea agreement, Sarchett admitted he was involved with the sale of methamphetamine in the Cedar Rapids area in 2016. The plea agreement also showed Sarchett was involved in the manufacture of methamphetamine at a Marion residence rented by Sarchett’s then-girlfriend. After the discovery of the methamphetamine laboratory, the landlord of the residence spent approximately $7,500 to clean up the residence. Sarchett had been convicted of four prior drug related felonies.
Sarchett was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Sarchett was sentenced to 176 months’ imprisonment and he was ordered to make $7,500 in restitution to the landlord for repair of the property. He must also serve a six-year term of supervised release after the prison term. There is no parole in the federal system. Sarchett is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Patrick J. Reinert and investigated by the Marion, Iowa, Police Department and the Iowa Division of Narcotics Enforcement.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-CR-00082. Follow us on Twitter @USAO_NDIA.
El Salvadoran National Involved in Bridgeport Shooting Death Sentenced for Immigration OffenseRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that DOUGLAS ALEXANDER RIVAS, 38, a citizen of El Salvador, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to six months of imprisonment for illegally reentering the U.S. Judge Underhill ordered Rivas to begin serving the prison term after he completes an unrelated state sentence connected to a Bridgeport homicide in 2016.
According to court documents and statements made in court, in March 2003, Rivas was convicted in Connecticut state court of misdemeanor offenses, including criminal trespass in the first degree, criminal mischief in the second degree, and reckless endangerment in the first degree. For these convictions, he received an 11-month suspended sentence and three years of probation. In March 2007, Rivas was removed to El Salvador.
Rivas subsequently illegally reentered the U.S.
On April 25, 2017, Rivas was arrested, in Florida, in connection with the shooting death of a 36-year old man at the El Paraiso Restaurant in Bridgeport on September 25, 2016. On November 8, 2019, Rivas pleaded guilty in state court to manslaughter in the first degree, and criminal possession of a firearm.
On January 6, 2020, Rivas pleaded guilty in federal court to one count of illegal reentry by a removed alien.
Rivas has been detained since April 25, 2017.
This matter was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement (ICE), Enforcement and Removal Operations. The case was prosecuted by Assistant U.S. Attorney Hal Chen.
Drug Felon Sentenced to 7 Years for Committing Drug and Gun Crimes while on Federal Supervised ReleaseRead the Press Release
PITTSBURGH - Nico Nixon was sentenced to 7 years (84 months) in prison for committing fentanyl and heroin trafficking and firearm crimes while on supervised release following a prior conviction for heroin trafficking, United States Attorney Scott W. Brady announced today.
Nixon, 29, of Pittsburgh, was sentenced by United States District Judge Arthur J. Schwab. Earlier this year, Nixon pled guilty to possessing with intent to distribute fentanyl and heroin, and possessing a firearm in furtherance of a drug trafficking crime, on August 3, 2019.
Nixon was previously convicted in federal court in 2012 for conspiring to distribute at least 100 grams of heroin. He was sentenced to 87 months in prison at that time. In 2015, his prison sentence was reduced by 16 months as a result of across-the-board retroactive reductions to the sentencing guideline ranges for drug trafficking crimes.
Nixon was on federal supervised release in 2019 when he committed the additional fentanyl and heroin trafficking and firearm crimes for which he was sentenced. Judge Schwab imposed a 12-month consecutive prison sentence for the violations of release conditions.
Assistant United States Attorney Craig W. Haller prosecuted this case on behalf of the United States.
The Pittsburgh Police Bureau of Police, the United States Marshals Service, and the Pennsylvania Office of Attorney General conducted the investigation leading to the convictions and sentences in this case. This case is being prosecuted as part of Project Safe Neighborhoods (PSN) which is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Denver Man Sentenced to Federal Prison for Conspiracy to Distribute and Possession with Intent to Distribute MethamphetamineRead the Press Release
DENVER – United States Attorney Jason R. Dunn announced that Luis Enrique Delgado-Arvizu, age 32, of Denver, was sentenced late last week to serve 150 months (over 12 years) in federal prison, followed by 5 years on supervised release for his role as an organizer-supervisor of a large methamphetamine distribution organization that shipped hundreds of pounds of methamphetamine to the Denver area. The Denver Division of the DEA joined in the announcement.
In July 2015, DEA OCDETF Strike Force Group-1 initiated an investigation into the drug trafficking activities of two methamphetamine trafficking organizations, the first led by convicted defendant Cesar Paul Cansino-Obeso and the second led by fugitive Isaias Campos-Rutiaga. Both organizations imported multi-pound quantities of methamphetamine from Mexico into the United States. The drugs were transported by drug trafficking organization couriers from California to three Denver-based distributors working for Campos-Rutiaga, one of whom was Delgado-Arvizu. On a monthly basis, Delgado-Arvizu received 60-to-100 pounds of methamphetamine from Campos-Rutiago, which Delgado-Arvizu then distributed to customers throughout the metro area.
Delgado-Arvizu was arrested in possession of 22 pounds of methamphetamine and $60,571.41 in currency. During the investigation, the strike force seized 126 pounds of methamphetamine (four of which were mixed with fentanyl), 4 guns and $120,000.
“The work in this case disrupted a major drug trafficking operation and took a significant dealer off Colorado’s streets,” said U.S. Attorney Jason Dunn. “Together with our law enforcement partners, we were able to stop a major supplier of methamphetamine from poisoning our communities further.”
“The specific mission of the DEA Denver Field Division’s StrikeForce Group is to target and dismantle trans-national drug trafficking organizations operating in the Rocky Mountain Region and beyond. Mr. Delgado-Arizu was a member of a drug trafficking organization responsible for the distribution of significant amounts of methamphetamine along the Front Range,” said DEA Special Agent in Charge Deanne Reuter. “This investigation is an example of DEA’s commitment to the protection our communities by working alongside our state, federal and local law enforcement partners to identify the most significant threats to the public safety.”
U.S. District Court Judge Raymond P. Moore sentenced Delgao-Arvizu, noting during the sentencing that although this was the defendant’s first offense of any kind, the amount of drugs distributed by the defendant warranted the twelve-year sentence.
Delgado-Arvizu was prosecuted by Assistant United States Attorney Stephanie Podolak as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program. The Colorado Attorney General’s Office assisted with this matter. The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking, weapons trafficking, and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the District of Colorado. Related court documents can be found on PACER by searching for Case Number 18-cr-192.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Convicted Felon Sentenced to Federal Prison for Firearm PossessionRead the Press Release
MEMPHIS, TN – Antonio Buntyn, 45, has been sentenced to 37 months in federal prison for being a felon in possession of a firearm. D. Michael Dunavant, U.S. Attorney announced the sentence today.
According to the information presented in court, on April 6, 2019, at approximately 2:05 a.m. Memphis Police responded to a car crash. Buntyn’s car was inoperable, and ultimately had to be towed away. He then walked to the house of his girlfriend, who had an order of protection against him. At her house, he physically assaulted her and as they got into her car he continued the assault. She was able to escape from the car at a local gas station where she contacted law enforcement. Buntyn fled the scene.
Later, still in the early morning hours of April 6, at approximately 8:30 a.m., Memphis Police responded to yet another call involving Buntyn. Buntyn had returned to the girlfriend’s house, and was being chased off the property by her son. Law enforcement placed him in custody. The girlfriend told law enforcement that Buntyn was in possession of a firearm, which she was able to take away from him and placed in a storm drain. Assisted by the Memphis Fire Department, law enforcement was able to open the storm drain and recover the weapon.
Buntyn has one prior felony conviction for Aggravated Assault and one prior misdemeanor conviction for domestic assault. As a result of his prior conviction history, Buntyn is prohibited by federal law from possessing firearms or ammunition.
On July 10, 2020, U.S. District Court Judge Jon P. McCalla sentenced Buntyn to 37 months in federal prison followed by 2 years supervised release.
U.S. Attorney D. Michael Dunavant said: "Prohibited persons in possession of firearms such as convicted felons and persons with histories of domestic violence present a known and immediate risk of violence to their families and the community at large. In order to protect public safety, uphold the rule of law, and achieve justice for victims, must remove firearms from the hands of prohibited persons and remove dangerous felons from our streets. This sentence does just that.”
This case was investigated by the Memphis Police Department.
Special Assistant U.S. Attorney Samuel D. Winnig prosecuted this case on behalf of the government. SAUSA Winnig is currently assigned from the Shelby County District Attorney General’s Office for the purpose of prosecuting violent crimes and firearms offenses in federal court.
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Bronx Resident Sentenced to 71 Months in Federal Prison for Trafficking HeroinRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that JOSE LUIS REYES, also known as "Roberto Camacho Figueroa,” “Joselito” and “Gordo,” 50, a citizen of the Dominican Republic last residing the Bronx, New York, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 71 months of imprisonment, followed by four years of supervised release, for trafficking heroin.
According to court documents and statements made in court, this matters stems from a DEA Hartford Task Force investigation of a heroin trafficking organization that was operating in Connecticut, Massachusetts, New York and the Dominican Republic. The investigation, which included court-authorized wiretaps, revealed that Reyes oversaw the drug trafficking organization’s drug distribution and cash collection activities when the organization’s leader was residing in the Dominican Republic. On multiple occasions in 2017, Reyes was observed traveling from New York to meet with associates at a suspected narcotics stash location on Wethersfield Avenue in Hartford.
Reyes has been detained since his arrest on related New York state charges on April 12, 2017. On that date, a search of his residence revealed more than 1.4 kilograms of heroin and more than 750 grams of cocaine.
On April 27, 2017, a federal grand jury in Connecticut returned an indictment charging Reyes and nine other individuals with various heroin trafficking offenses stemming from this investigation. On October 3, 2018, Reyes pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute one kilogram of heroin.
Reyes faces deportation proceedings when he completes his prison term.
The DEA’s Hartford Task Force includes personnel from the DEA Hartford Resident Office and the Bristol, Hartford, East Hartford, Manchester, New Britain, Rocky Hill, Wethersfield, Windsor Locks and Willimantic Police Departments.
This case is being prosecuted by Assistant U.S. Attorney Geoffrey M. Stone.
Attorney Sentenced for Tax OffensesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that WILLIAM S. PALMIERI, 56, of Bethany, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to three years of probation, the first six months of which Palmieri must serve in home confinement, for failing to pay all of the federal income taxes he owed over several years. Judge Underhill also ordered Palmieri to perform 150 hours of community service.
According to court documents and statements made in court, Palmieri is an attorney with a practice specializing in civil rights law. Between 2006 and 2014, Palmieri reported to the IRS, but did not pay, all the income taxes he owed, even though he had the ability to make substantially greater tax payments during that time. The investigation also revealed that Palmieri used his attorney IOLTA bank account to pay various personal expenses, including his home mortgage and private school tuition payments.
Palmieri is required to pay $141,474.53 in back taxes, and $86,234.47 in interest and penalties, totaling $227,709.
On December 19, 2019, Palmieri pleaded guilty to two counts of willful failure to pay income taxes.
This matter was investigated by the Internal Revenue Service – Criminal Investigation Division. The case was prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.
Alabama Orthopaedic Clinic, P.C. and Dr. Russell A. Hudgens to Pay the United States $74,000 in Civil PenaltiesRead the Press Release
United States Attorney Richard W. Moore, of the Southern District of Alabama, announces that Alabama Orthopaedic Clinic, P.C. (AOC) and Dr. Russell A. Hudgens, have agreed to pay $74,000 to settle civil allegations that they violated the Controlled Substances Act (CSA). AOC, an orthopaedic clinic located in Mobile, Alabama, also operated a Workers’ Compensation Pharmacy (Pharmacy), where Dr. Hudgens served as the registrant with the Drug Enforcement Administration (DEA).
Congress passed the CSA to combat the illegal distribution and abuse of highly addictive and dangerous controlled substances, and requires individuals and entities, such as Dr. Hudgens and AOC, who are registered with DEA, to maintain complete and accurate records of all controlled substances. The CSA is enforced by the DEA’s Diversion Control Division.
“Failure to maintain proper records of narcotics like oxycodone and hydrocodone contribute to the opioid crisis,” said U.S. Attorney Moore. “Our Office is committed to ensuring total compliance with the Controlled Substances Act, and we will vigorously enforce violations wherever we find them.”
The United States alleges that between January 1, 2019, and August 5, 2019, AOC and Dr. Hudgens violated the CSA by failing to make a complete and accurate record of all controlled substances on hand at the time the Pharmacy began dispensing and every two years thereafter, failing to maintain complete and accurate records of each controlled substance received, sold, delivered or otherwise disposed of, and failing to record dates and quantities of controlled substances as they were received.
“Today’s settlement highlights DEA efforts to ensure that our pharmaceutical drug supply system remains in compliance with the Controlled Substances Act,” said Clay Morris, DEA Assistant Special Agent In Charge for the Birmingham Field Office. “Securing our nation’s pharmaceutical drug supply is of critical importance in our fight against the opioid epidemic and drug addiction. Proper record keeping of controlled substances by DEA registrants is a major responsibility to ensure the safety of our communities. DEA’s Diversion Control Program is unwavering in their commitment to maintain a safe, secure and accountable drug supply system.”The investigation and settlement were conducted by the United States Attorney’s Office for the Southern District of Alabama and DEA’s Mobile Field Division. The United States recognizes the investigative cooperation of AOC and Dr. Hudgens, including the voluntary closure of AOC’s Pharmacy. The CSA claims settled are allegations only, and there has been no determination of liability.
27 Skilled Nursing Facilities Controlled by Longwood Management Corp. to Pay $16.7 Million to Resolve Allegations of Inflated Medicare BillsRead the Press Release
LOS ANGELES – Longwood Management Corporation and 27 affiliated skilled nursing facilities (Longwood) have agreed to resolve allegations that they violated the False Claims Act by submitting false claims to Medicare for rehabilitation therapy services that were not reasonable or necessary, the Department of Justice announced today. Longwood is headquartered in Los Angeles, and the 27 skilled nursing facilities are located in Southern California.
“Longwood’s business plan called for substantial revenue from Medicare, and it pressured therapists to provide additional, unnecessary services when targets were not met,” said United States Attorney Nick Hanna. “This case demonstrates the power of whistleblowers to shine a light on improper business practices and obtain significant recoveries on behalf of United States taxpayers.”
“This settlement reflects the Department’s continuing commitment to ensure that patients are receiving individualized healthcare services appropriate to their specific medical needs,” said Acting Assistant Attorney General Ethan P. Davis for the Department of Justice’s Civil Division. “When skilled nursing facilities provide rehabilitation therapy services based on maximizing revenue rather than the interests of their patients, we will hold them accountable.”
The settlement resolves allegations that Longwood submitted false claims for rehabilitation therapy by engaging in a systematic effort to increase Medicare billings. Medicare reimburses skilled nursing facilities at a daily rate that reflects the skilled therapy and nursing needs of qualifying patients. The greater the patient’s needs, the higher the level of Medicare reimbursement. The highest level of Medicare reimbursement for skilled nursing facilities is for “Ultra High” therapy patients, who require a minimum of 720 minutes of skilled therapy from two therapy disciplines (e.g., physical, occupational or speech therapy), one of which has to be provided five days a week.
Longwood allegedly knowingly submitted or caused the submission of false and fraudulent claims to Medicare for medically unreasonable and unnecessary Ultra High levels of rehabilitation therapy for Medicare Part A residents. Specifically, Longwood allegedly pressured therapists to increase the amount of therapy provided to patients to meet pre-planned targets for Medicare revenue. These targets were alleged to have been set without regard to patients’ individual therapy needs and could only be achieved by billing for a high percentage of patients at the Ultra High level.
The settlement covers conduct that occurred from May 1, 2008 through August 1, 2012 at six facilities: Alameda Care Center in Burbank, Burbank Rehabilitation Center, Magnolia Gardens Convalescent Hospital in Granada Hills, Montrose Healthcare Center, Sherman Oaks Health & Rehab Center, and West Hills Health & Rehab Center.
The settlement also covers conduct that occurred from January 1, 2006 through October 10, 2014 at 21 facilities: Burlington Convalescent Hospital in the Westlake District of Los Angeles, Chino Valley Rehabilitation Center LLC, Colonial Care Center in Long Beach, Covina Rehabilitation Center, Crenshaw Nursing Home, Green Acres Lodge in Rosemead, Imperial Care Center in Studio City, Imperial Crest Health Care Center in Hawthorne, Laurel Convalescent Hospital in Fontana, Live Oak Rehabilitation Center in San Gabriel, Longwood Manor Convalescent Hospital in the Mid-City District of Los Angeles, Monterey Care Center in Rosemead, Intercommunity Healthcare Center in Norwalk, Park Anaheim Healthcare Center, Pico Rivera Healthcare Center, San Gabriel Convalescent Center, Whittier Pacific Care Center, Studio City Rehabilitation Center, Sunnyview Care Center in the Pico Union District of Los Angeles, View Park Convalescent Center in Baldwin Hills, and Western Convalescent Hospital in the Jefferson Park District of Los Angeles.
Contemporaneous with the civil settlement, Longwood has entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG) that requires an independent review organization to annually assess the medical necessity and appropriateness of therapy services billed to Medicare.
“The government contended Longwood falsely claimed medically unreasonable and unnecessary levels of rehabilitation services at the expense of taxpayers,” said Timothy B. DeFrancesca, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “My agency’s compliance agreement is designed to monitor claims to Medicare and prevent submission of false claims in the future.”
The settlement partially resolves allegations brought in two lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act, which allows private parties to bring suit on behalf of the government and to share in any recovery. The whistleblowers – Judy Boyce, Benjamin Monsod and Keith Pennetti – will collectively receive $3,006,000 of the settlement proceeds.
The settlement was the result of a coordinated effort by the United States Attorney’s Office for the Central District of California (Assistant United States Attorney John Lee of the Civil Fraud Section), the Civil Division of the Department of Justice, the United States Attorney’s Office for the Northern District of Alabama, the U.S. Department of Health and Human Services Office of Inspector General, and the Defense Criminal Investigative Service.
The cases are captioned United States ex rel. Pennetti v. Longwood Management Corp., et al., CV14-4133 (C.D. Cal.), and United States ex rel. Boyce, Judy and Monsod, Benjamin v. Aegis Therapies, Inc., GGNSC Holdings LLC, and Longwood Management Corp., CV16-8050 (C.D. Cal.). The claims resolved by this agreement are allegations only and there has been no determination of liability.
11 July 2020
Associated Pain Specialists, P.C. of Knoxville Enters into Settlement Resolving False Claims Act AllegationsRead the Press Release
KNOXVILLE, Tenn. – On June 26, Associated Pain Specialists, P.C., of Knoxville, a pain management based clinic, agreed to pay $400,000 to resolve allegations of violating the False Claims Act.
The settlement resolves allegations that from February 1, 2016 through August 10, 2018, Associated Pain Specialists, P.C. knowingly billed Medicare and Tennessee Medicaid (TennCare) for medically unnecessary screening tests at higher costs than appropriate, when less costly or alternative tests were available.
The government alleged that Associated Pain Specialists, P.C. performed tests on patients whose medical records did not support a medical diagnosis for the tests and the associated billing codes. The government also alleged the Vital System Assessment Tests (VSAT) did not benefit patients because the test results were not used in the treatment subsequently provided, and that, ultimately, Associated Pain Specialists, P.C. knowingly submitting false claims to federal health care programs for payment for VSATs that were not reasonable or medically necessary.
Allegations were brought in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims, and to receive a share of any recovery. The government may intervene and file its own complaint in such a lawsuit, as was done in this case.
“Medical providers have a duty to uphold ethical standards of care and to provide services when medically necessary in order to meet the professionally recognized standards of health care. Our office will continue to root out those who attempt to take advantage of government medical programs. Those who fail to comply with the law in order to increase profit will be pursued by the Department of Justice,” said U.S. Attorney J. Douglas Overbey.
“Patients benefit when they receive only medically necessary treatments – they deserve nothing less,” said Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services (HHS-OIG). “We will continue working with our Federal and State Law Enforcement partners to protect taxpayers and government health care beneficiaries.”
“This VSAT is one of many so-called medical devices that we are seeing across Tennessee and the nation that are fraudulently used with the sole purpose of generating revenue for a health care provider by conducting unnecessary and sometimes worthless tests,” said Tony Hullender, Deputy Attorney General of the Medicaid Fraud and Integrity Division.
As part of the settlement, Associated Pain Specialists, P.C., entered an Integrity Agreement (IA) with HHS-OIG which promotes its future compliance with the statutes, regulations, program requirements, and written directives of Medicare and all other federal health care programs. The IA focuses on the pain clinic’s continuing obligation to accurately bill and properly submit reimbursement claims to Medicare and TennCare.
This investigation resulted from a coordinated effort between the U.S. Attorneys’ Office for the Eastern District of Tennessee, HHS-OIG, and the Tennessee Attorney General’s Office, Medicaid Fraud and Integrity Division. Support was provided from HHS-OIG, the Tennessee Bureau of Investigation, and the Medicaid Fraud Control Division.
The case is docketed as United States and State of Tennessee ex rel. Cox. v. Associated Pain Specialist, P.C. and Smoky Mountain Ambulatory Surgery Center LLC., No. 3:18-cv-154.
Assistant U.S. Attorneys Jeremy Dykes and Margaret Harker represented the United States. Deputy Attorney General Tony Hullender represented the State of Tennessee.
The claim settled by this agreement are allegations only, and there has been no determination of liability.
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10 July 2020
“SCO” Gang Member Sentenced to 70 Months ImprisonmentRead the Press Release
PITTSBURGH, PA -A former resident of Wilmerding, Pennsylvania, was sentenced in federal court on July 8, 2020 on his conviction of narcotics trafficking, United States Attorney Scott W. Brady announced today.
Senior United States District Judge Arthur J. Schwab imposed the sentence of 70 months imprisonment followed by four years of supervised release on Richard Coto-Wheat, 27.
According to information presented to the Court, the Greater Pittsburgh Safe Streets Task Force conducted a long-term investigation of drug trafficking occurring in and around the Braddock section of Pittsburgh. Wells and other individuals were identified as members or associates of a neighborhood based street gang, self-titled "SCO", which illegally distributed controlled substances in the Greater Pittsburgh Region.
In January of 2019, investigators obtained authorization to conduct a federal wire investigation, which continued through May of 2019. Wells, along with 32 others were indicted in June of 2019 by a federal grand jury in three separate, but related, Indictments.
As to Coto-Wheat, the Court was informed that intercepted communications confirmed that he was conspiring with others to possess with intent to distribute and distribute 100 to 400 grams of heroin between August 2018 and May 2019. Coto-Wheat admitted, in conjunction with his guilty plea, that he is a member of “SCO.” On June 12, 2019, law enforcement executed both a search and arrest warrant at the defendant’s residence in Braddock and seized numerous items indicative of drug trafficking, including: scales, stamps, stamp pads, masks, strainers, suspected controlled substances as well as $456.00 in U.S. Currency.
Assistant United States Attorney Rebecca L. Silinski prosecuted this case on behalf of the government.
United States Attorney Brady commended the multi-agency team, which was led by the Federal Bureau of Investigation, for the investigation leading to the successful prosecution of Wolford. Partners in this investigation included the Drug Enforcement Administration, Bureau of Alcohol Tobacco Firearms and Explosives, United States Marshals Fugitive Task Force, Allegheny County Sheriff’s Office, Allegheny County Police Department, Pennsylvania State Police, Pennsylvania Attorney General’s Office Bureau of Narcotics, and the Pittsburgh Bureau of Police. Other assisting agencies included the Monroeville Police Department, Penn Hills Police Department, Wilkinsburg Police Department, and Allegheny County Adult Probation.
The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
Wirt County Woman Pleads Guilty to Bank FraudRead the Press Release
CHARLESTON, W.Va. – A Wirt County woman pled guilty to a bank fraud charge today, announced United States Attorney Mike Stuart. Melissa Evans, 49, of Palestine, pled guilty to one count of bank fraud.
“Aren’t we all taught not to take things that don’t belong to us? Ms. Evans took her employer’s insurance checks like they were here own personal paychecks,” said United States Attorney Mike Stuart.
Evans worked as the financial coordinator for a dental practice in Parkersburg. Over the course of four years, Evans stole checks mailed to the dental practice from insurance groups and fraudulently deposited the stolen checks into her bank account, instead of the dental practice’s bank account. Throughout her scheme, Evans fraudulently appropriated more than 300 checks and embezzled more than $120,000.
She faces up to 30 years in prison when sentenced on November 18, 2020.
The United States Secret Service and the Parkersburg Police Department conducted the investigation. United States District Judge Irene Berger presided over the plea hearing. Assistant United States Attorney Kathleen Robeson is handling the prosecution.
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Virgin Islands U.S. Attorney’s Office and IRS-Criminal Investigation Remind Taxpayers to Remain Vigilant of ScamsTaxpayers of Upcoming Tax Filing Deadline and UrgeRead the Press Release
St. Thomas, USVI – U.S. Attorney Gretchen C.F. Shappert and Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office, made the announcement today in an effort to remind taxpayers of the July 15 filing and payment deadline and warned against an increase in tax and COVID-19 scams.
Due to COVID-19, the original filing deadline and tax payment due date for 2019 was postponed from April 15 to July 15. Taxpayers filing Form 1040 series returns must file Form 4868 by July 15 to obtain the automatic extension to October 15.
Although the extension provides additional time to file the tax return – it is not an extension to pay any taxes due. For people facing hardships who cannot pay in full, including those affected by COVID-19, the IRS has several options available to help. The IRS encourages taxpayers to visit IRS.gov as soon as possible to explore these options and avoid accruing interest and penalties after the July 15 deadline.As the filing deadline approaches, taxpayers should beware of tax and COVID-19 related scams. “Con artists and scammers use every opportunity to take advantage of innocent people. Everyone should take care to protect their personal information—especially during tax season— and to resist ‘to-good-to-be-true’ claims related to COVID-19 and Economic Payment scams,” said U.S. Attorney Gretchen C.F. Shappert. “We always encourage concerned citizens to contact local or federal law enforcement if they receive emails or phone calls which seem suspicious. If you see something, say something.”
“Taxpayers should remain vigilant in the handling of their personal and financial information as criminals use this as an opportunity to take advantage of vulnerabilities,” said Michael J. De Palma Special Agent in Charge of the IRS Criminal Investigation division in
Florida. “IRS-CI will continue to pursue these crimes and the perpetrators will be brought to justice.”
In the last few months, the IRS Criminal Investigation division (CI) has continued to see a tremendous increase in a variety of Economic Impact Payment scams and other financial schemes. CI continues to work with its law enforcement partners to put a stop to these schemes and bring criminals to justice.
Taxpayers can report COVID-19 scams to the National Center for Disaster Fraud. Taxpayers can also report fraud or theft of their Economic Impact Payments to the Treasury Inspector General for Tax Administration (TIGTA). Unsolicited (phishing) e-mails that appear to be from the IRS should be forwarded to [email protected].For the most up-to-date information about the tax filing deadline and IRS impersonation scams, taxpayers can visit IRS.gov.
Universal Health Services, Inc. to Pay $117 Million to Settle False Claims Act AllegationsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain today announced that Universal Health Services, Inc. and UHS of Delaware, Inc. (together, UHS) have agreed to pay $117 million to resolve alleged violations of the False Claims Act for billing for medically unnecessary inpatient behavioral health services and failing to provide adequate and appropriate services. UHS, which is headquartered in King of Prussia, Pennsylvania, owns and provides management and administrative services to nearly 200 acute care inpatient psychiatric hospitals and residential psychiatric and behavioral treatment facilities nationwide.
The resolution of these claims in the Eastern District of Pennsylvania is part of a comprehensive settlement between the Department of Justice and UHS, which arose out of UHS’s billing practices in multiple healthcare institutions across the United States. UHS will pay the United States and participating states a total of $117 million to resolve allegations that its hospitals and facilities knowingly submitted false claims for payment to the Medicare, Medicaid, TRICARE, Department of Veterans Affairs, and Federal Employee Health Benefit programs for inpatient behavioral health services that were not reasonable or medically necessary and/or failed to provide adequate and appropriate services for adults and children admitted to UHS facilities across the country.
The government alleged that between January 2006 and December 2018, UHS facilities admitted as patients federal healthcare beneficiaries who were not eligible for inpatient or residential treatment because their conditions did not require that level of care, while also failing to properly discharge appropriately admitted beneficiaries when they no longer required inpatient care. The government further alleged that UHS facilities billed for services not rendered, billed for improper and excessive lengths of stay, failed to provide adequate staffing, training, and/or supervision of staff, and improperly used physical and chemical restraints and seclusion. In addition, UHS facilities allegedly failed to develop and/or update individual assessments and treatment plans for patients, failed to provide adequate discharge planning, and failed to provide required individual and group therapy services in accordance with federal and state regulations.
Of the $117 million to be paid by UHS to resolve these claims, the federal government will receive a total of $88,124,761.27, and a total of $28,875,238.73 will be returned to individual states, which jointly fund state Medicaid programs.
“Quality mental health treatment is critical for the patients who place their trust in the hands of service providers,” said U.S. Attorney McSwain. “The allegations involved in this matter -- inappropriate billing and inadequate care – have no place in our health care system. Behavioral health service entities must have strong mechanisms in place, including appropriate supervision and oversight, to avoid fraud and abuse in order to ensure they provide the level of care that their patients deserve.”
The government’s investigation included 19 lawsuits filed under the whistleblower provision of the False Claims Act, which permits private citizens to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The global settlement with UHS involved 18 cases that are currently pending in the Eastern District of Pennsylvania, Western District of Michigan, the Eastern District of Michigan, and Northern District of Georgia. As part of the resolution with UHS, the whistleblowers will receive $15,862,457.03, from the federal share of the settlement.
“We sincerely thank the relators in these cases. Together with their lawyers, these citizens provided essential assistance to the government throughout this case. Without the willingness of relators to shed light on allegations of fraud, preserving government program funds would be far more challenging. Their efforts played a vital role in the resolution of these cases,” said U.S. Attorney McSwain.
“The Department of Justice is committed to protecting patients and taxpayers by ensuring that the treatment provided to federal healthcare beneficiaries is reasonable, necessary, and free from illegal inducements,” said Acting Assistant Attorney General Ethan P. Davis for the Department of Justice’s Civil Division. “The Department will continue to be especially vigilant when vulnerable patient populations are involved, like those served by behavioral healthcare providers.”
In connection with the settlements, UHS has entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General (OIG), which will remain in effect for five years. UHS must retain an independent monitor, selected by the OIG, which will assess UHS’s Behavioral Health Division’s patient care protections and report to the OIG. In addition, an independent review organization will perform annual reviews of UHS inpatient behavioral health claims to federal health care programs.
“Today’s settlement resolves allegations of failing to provide adequate and appropriate mental health services to beneficiaries of multiple federal health care programs, to include Medicare and Medicaid,” said Maureen R. Dixon, Special Agent in Charge of the Office of Inspector General, U.S. Department of Health and Human Services in Philadelphia. “We will continue to work with the U.S. Attorney’s Office to investigate violations of the False Claims Act and ensure the integrity of our federal health care programs.”
The settlement with UHS was the result of a collaborative effort among numerous federal and state agencies. The Commercial Litigation Branch of the Justice Department’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Pennsylvania handled the cases, with substantial assistance from the U.S. Attorney’s Offices for the Middle District of Florida, the Northern District of Georgia, the Eastern District of Michigan, the Western District of Michigan, the Middle District of Georgia, the Northern District of Illinois, the Middle District of North Carolina, the Western District of North Carolina, the District of Oregon, the Middle District of Pennsylvania, the Southern District of Texas, the District of Utah, the Eastern District of Virginia, the Western District of Virginia, the Northern District of Oklahoma, and the District of Wyoming, as well as the National Association of Medicaid Fraud Control Units (NAMFCU). The nationwide investigation was a coordinated effort among the DOJ Civil Frauds Division, NAMFCU, and the Office of Inspector General for the Department of Health and Human Services; the Department of Defense Criminal Investigative Service; the Department of Veterans Affairs, Office of Inspector General; the Office of Personnel Management, Office of Inspector General; and the Federal Bureau of Investigation.
The civil settlement with UHS involved the cases that are captioned: United States ex rel. Gardner v. Universal Health Services, Inc., 2:17-cv-03332-AB (E.D. Pa.); United States ex rel. Naylor v. Universal Health Services, Inc., 2:14-cv-06198-AB (E.D. Pa.); United States ex rel. Jain v. Universal Health Services, Inc., et al., No. 2:13-cv-06499-AB (E.D. Pa.); United States ex rel. Chisholm v. Universal Health Services, Inc., et al., 2:17-cv-01892-AB (E.D. Pa.); United States ex rel. Doe, et al. v. Universal Health Services, Inc., et al., No. 2:14-cv-00921 (E.D. Pa.); United States ex rel. Pate v. Behavioral Hospital of Bellaire, et al., 2:15-cv-00554-AB (E.D. Pa.); United States ex rel. Brinson, et al. v. Universal Health Services, Inc., et al., 2:14-cv-07275-AB (E.D. Pa.); United States ex rel. Mitchell v. Turning Point Care Center, Inc., et al., 2:15-cv-00259-AB (E.D. Pa.); United States ex rel. Peterson v. Universal Health Services, Inc., et al., 2:17-cv-01897-AB (E.D. Pa.); United States ex rel. Conaway, et al. v. Universal Health Services, Inc., et al., 2:17-cv-02233-AB (E.D. Pa.); United States ex rel. Eborall v. Universal Health Services, Inc., et al., 2:17-cv-03249-AB (E.D. Pa.); United States ex rel. Sachs, et al. v. Universal Health Services, Inc., et al., 2:17-cv-03604-AB (E.D. Pa.); United States ex rel. Klotz v. Universal Health Services, Inc., et al., 2:17-cv-05163-AB (E.D. Pa.); United States ex rel. Brockman, et al. v. Universal Health Services, Inc., et al., 2:17-cv-05350-AB (E.D. Pa.); United States ex rel. Glass v. Hughes Center, LLC., et al., 2:18-04018-AB (E.D. Pa.); United States ex rel. Parent-Leonard v. Forest View Psychiatric Hospital, et al., No. 1:18-cv-1426 (W.D. Mich.); United States ex rel. Russell, et al. v. Universal Healthcare Services, Inc., et al., No. 1:19-CV-0764 (N.D. Ga.); United States ex rel. McLauchlin, et al. v. Havenwyck Holdings, Inc., et al., No. 2:19-cv-10832 (E.D. Mich).
The claims resolved by these settlements are allegations only, and there has been no determination of liability.
Assistant United States Attorney Charlene Keller Fullmer, Deputy Chief for the Civil Division, Assistant United States Attorney Stacey L.B. Smith, and Auditor Dawn Wiggins handled the matters filed in the Eastern District of Pennsylvania, working jointly with the Civil Frauds Division of the Department of Justice.
Universal Health Services, Inc. and related entities to pay $122 million to settle False Claims Act allegations relating to medically unnecessary inpatient behavioral health services and illegal kickbacksRead the Press Release
ATLANTA - Universal Health Services, Inc., UHS of Delaware, Inc.(together, UHS), and Turning Point Care Center, LLC (Turning Point), a UHS facility located in Moultrie, Georgia, have agreed to pay a combined total of $122 million to resolve alleged violations of the False Claims Act for billing for medically unnecessary inpatient behavioral health services, failing to provide adequate and appropriate services, and paying illegal inducements to federal healthcare beneficiaries, the Department of Justice announced today. UHS owns and provides management and administrative services to nearly 200 acute care inpatient psychiatric hospitals and residential psychiatric and behavioral treatment facilities nationwide. UHS is headquartered in King of Prussia, Pennsylvania.
“Illegal inducements should never play a role in a patient’s decision regarding treatment, especially when a patient is seeking care for addiction and other behavioral health needs,” said Byung J. “BJay” Pak, U.S. Attorney for the Northern District of Georgia. “Our office remains committed to pursuing unlawful arrangements that undermine the integrity of federal healthcare programs.”
“The Department of Justice is committed to protecting patients and taxpayers by ensuring that the treatment provided to federal healthcare beneficiaries is reasonable, necessary, and free from illegal inducements,” said Acting Assistant Attorney General Ethan P. Davis for the Department of Justice’s Civil Division. “The Department will continue to be especially vigilant when vulnerable patient populations are involved, like those served by behavioral healthcare providers.”
“Providing top quality health care to service members and their beneficiaries is the primary mission of the Defense Health Agency. It's unfortunate a company tried to take advantage of a system that ensures health care for those men and women who are on the front lines every day protecting our nation," said Lt. Gen. Ronald Place, director, DHA. “We commend the Department of Justice and its partners for bringing justice to those responsible for knowingly defrauding TRICARE beneficiaries.”
“VA OIG continues to be vigilant in holding those accountable who defraud VA programs and ensure that tax payer dollars are appropriately utilized for the care of our nation’s veterans and their dependents. Also, we thank our law enforcement partners and the United States Attorney’s Office for their support,” said Acting Special Agent in Charge Jeffrey Stachowiak, Department of Veterans Affairs, Office of Inspector General.
“The OPM OIG does not tolerate predatory behavior that risks the health and safety of vulnerable patients,” said Thomas W. South, Deputy Inspector General for Investigations for the Office of Personnel Management. “We are grateful for the fine work of our investigators and Department of Justice partners. Today’s settlement demonstrates OPM-OIG’s unwavering commitment to investigating conduct that affects vulnerable FEHBP enrollees.”
“Protecting the health and safety of Medicare and Medicaid patients is one of our primary concerns. Our Corporate Integrity Agreement provides future protection for patients and federal health care programs through controls and monitoring designed to ensure that UHS’s behavioral health facilities provide quality services and medically necessary care to patients,” said Gregory E. Demske, Chief Counsel to the Inspector General for the United States Department of Health and Human Services. “This case demonstrates that the government will aggressively pursue allegations of substandard inpatient care.”
As part of a comprehensive civil settlement, UHS will pay the United States and participating states a total of $117 million to resolve allegations that its hospitals and facilities knowingly submitted false claims for payment to the Medicare, Medicaid, TRICARE, Department of Veterans Affairs, and Federal Employee Health Benefit programs for inpatient behavioral health services that were not reasonable or medically necessary and/or failed to provide adequate and appropriate services for adults and children admitted to UHS facilities across the country.
In a separate civil settlement, Turning Point will pay the United States and the State of Georgia $5 million to resolve allegations that it provided free or discounted transportation services to induce Medicare and Medicaid beneficiaries to seek treatment at Turning Point’s inpatient detoxification and rehabilitation program or intensive outpatient program.
The government alleged that, between January 2006, and December 2018, UHS’s facilities admitted federal healthcare beneficiaries who were not eligible for inpatient or residential treatment because their conditions did not require that level of care, while also failing to properly discharge appropriately admitted beneficiaries when they no longer required inpatient care. The government further alleged that UHS’s facilities billed for services not rendered, billed for improper and excessive lengths of stay, failed to provide adequate staffing, training, and/or supervision of staff, and improperly used physical and chemical restraints and seclusion. In addition, UHS’s facilities allegedly failed to develop and/or update individual assessments and treatment plans for patients, failed to provide adequate discharge planning, and failed to provide required individual and group therapy services in accordance with federal and state regulations.
Of the $117 million to be paid by UHS to resolve these claims, the federal government will receive a total of $88,124,761.27, and a total of $28,875,238.73 will be returned to individual states, which jointly fund state Medicaid programs.
With respect to Turning Point, the government alleged that, from January 2007 until May 1, 2019, the facility provided free or discounted transportation services to Medicare and Medicaid beneficiaries to induce them to seek detoxification and rehabilitation treatment at Turning Point’s inpatient or intensive outpatient programs.
The government’s settlement with UHS resolves 18 cases pending in the Eastern District of Pennsylvania, Western District of Michigan, the Eastern District of Michigan, and Northern District of Georgia under the qui tam, or whistleblower, provision of the False Claims Act, which permit private parties to file suit for false claims on behalf of the United States and to share in any recovery. The whistleblower share of the federal portion of the settlement will be $15,862,457.03. The settlement with Turning Point resolves an additional qui tam lawsuit filed in the Northern District of Georgia. The whistleblower in that suit will receive $861,853.64, from the federal share of the Turning Point settlement.
Contemporaneous with the civil settlements announced today, UHS, on behalf of its inpatient acute and residential behavioral health facilities, has entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General (OIG), which will remain in effect for five years. UHS must retain an independent monitor, selected by the OIG, which will assess UHS’s Behavioral Health Division’s patient care protections and report to the OIG. In addition, an independent review organization will perform annual reviews of UHS’s inpatient behavioral health claims to federal health care programs.
The settlement with UHS was the result of a collaborative effort among numerous federal and state agencies. The Commercial Litigation Branch of the Department of Justice’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Pennsylvania handled the cases, with substantial assistance from the U.S. Attorneys’ Offices for the Middle District of Florida, the Northern District of Georgia, the Eastern District of Michigan, the Western District of Michigan, the Middle District of Georgia, the Northern District of Illinois, the Middle District of North Carolina, the Western District of North Carolina, the District of Oregon, the Middle District of Pennsylvania, the Southern District of Texas, the District of Utah, the Eastern District of Virginia, the Western District of Virginia, the Northern District of Oklahoma, and the District of Wyoming, as well as the National Association of Medicaid Fraud Control Units (NAMFCU). The Civil Division and NAMFCU coordinated the nationwide investigation of UHS in partnership with the Office of Inspector General for the Department of Health and Human Services; the Department of Defense Criminal Investigative Service; the Department of Veterans Affairs, Office of Inspector General; the Office of Personnel Management, Office of Inspector General; and the Federal Bureau of Investigation. The Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Georgia handled the Turning Point matter with assistance from the Office of Attorney General of Georgia and the Office of Inspector General for the U.S. Department of Health and Human Services.
The civil settlement with UHS resolved the following captioned cases: United States ex rel. Gardner v. Universal Health Services, Inc., 2:17-cv-03332-AB (E.D. Pa.); United States ex rel. Naylor v. Universal Health Services, Inc., 2:14-cv-06198-AB (E.D. Pa.); United States ex rel. Jain v. Universal Health Services, Inc., et al., No. 2:13-cv-06499-AB (E.D. Pa.); United States ex rel. Chisholm v. Universal Health Services, Inc., et al., 2:17-cv-01892-AB (E.D. Pa.); United States ex rel. Doe, et al. v. Universal Health Services, Inc., et al., No. 2:14-cv-00921 (E.D. Pa.); United States ex rel. Pate v. Behavioral Hospital of Bellaire, et al., 2:15-cv-00554-AB (E.D. Pa.); United States ex rel. Brinson, et al. v. Universal Health Services, Inc., et al., 2:14-cv-07275-AB (E.D. Pa.); United States ex rel. Mitchell v. Turning Point Care Center, Inc., et al., 2:15-cv-00259-AB (E.D. Pa.); United States ex rel. Peterson v. Universal Health Services, Inc., et al., 2:17-cv-01897-AB (E.D. Pa.); United States ex rel. Conaway, et al. v. Universal Health Services, Inc., et al., 2:17-cv-02233-AB (E.D. Pa.); United States ex rel. Eborall v. Universal Health Services, Inc., et al., 2:17-cv-03249-AB (E.D. Pa.); United States ex rel. Sachs, et al. v. Universal Health Services, Inc., et al., 2:17-cv-03604-AB (E.D. Pa.); United States ex rel. Klotz v. Universal Health Services, Inc., et al., 2:17-cv-05163-AB (E.D. Pa.); United States ex rel. Brockman, et al. v. Universal Health Services, Inc., et al., 2:17-cv-05350-AB (E.D. Pa.); United States ex rel. Glass v. Hughes Center, LLC., et al., 2:18-04018-AB (E.D. Pa.); United States ex rel. Parent-Leonard v. Forest View Psychiatric Hospital, et al., No. 1:18-cv-1426 (W.D. Mich.); United States ex rel. Russell, et al. v. Universal Healthcare Services, Inc., et al., No. 1:19-CV-0764 (N.D. Ga.); United States ex rel. McLauchlin, et al. v. Havenwyck Holdings, Inc., et al., No. 2:19-cv-10832 (E.D. Mich.).
Assistant U.S. Attorney Mellori Lumpkin-Dawson represented the United States in the case captioned United States ex rel. Russell, et al. v. Universal Healthcare Services, Inc., et al., No. 1:19-CV-0764 (N.D. Ga.) .
The settlement with Turning Point resolved the case captioned United States ex rel. Heatley v Turning Point Care Center LLC, et al., 1:17-CV-3869-MLBAT (N.D. Ga.).
The claims resolved by the settlements are allegations only, and there has been no determination of liability.
This case was handled by Assistant U.S. Attorney Austin Hall for the Northern District of Georgia.
For further information, please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Universal Health Services, Inc. and Related Entities to Pay $122 Million to Settle False Claims Act Allegations Relating to Medically Unnecessary Inpatient Behavioral Health Services and Illegal KickbacksRead the Press Release
WASHINGTON – Universal Health Services, Inc., UHS of Delaware, Inc. (together, UHS), and Turning Point Care Center, LLC (Turning Point), a UHS facility located in Moultrie, Georgia, have agreed to pay a combined total of $122 million to resolve alleged violations of the False Claims Act for billing for medically unnecessary inpatient behavioral health services, failing to provide adequate and appropriate services, and paying illegal inducements to federal healthcare beneficiaries, the Department of Justice announced today.
As part of a comprehensive civil settlement, UHS will pay the United States and participating states a total of $117 million to resolve allegations that its hospitals and facilities knowingly submitted false claims for payment to the Medicare, Medicaid, TRICARE, Department of Veterans Affairs, and Federal Employee Health Benefit programs for inpatient behavioral health services that were not reasonable or medically necessary and/or failed to provide adequate and appropriate services for adults and children admitted to UHS facilities across the country. UHS owns and provides management and administrative services to nearly 200 acute care inpatient psychiatric hospitals and residential psychiatric and behavioral treatment facilities nationwide. UHS is headquartered in King of Prussia, Pennsylvania.
“The Department of Justice is committed to protecting patients and taxpayers by ensuring that the treatment provided to federal healthcare beneficiaries is reasonable, necessary, and free from illegal inducements,” said Acting Assistant Attorney General Ethan P. Davis for the Department of Justice’s Civil Division. “The Department will continue to be especially vigilant when vulnerable patient populations are involved, like those served by behavioral healthcare providers.”
In a separate civil settlement, Turning Point will pay the United States and the State of Georgia $5 million to resolve allegations that it provided free or discounted transportation services to induce Medicare and Medicaid beneficiaries to seek treatment at Turning Point’s inpatient detoxification and rehabilitation program or intensive outpatient program.
The government alleged that, between January 2006, and December 2018, UHS’s facilities admitted federal healthcare beneficiaries who were not eligible for inpatient or residential treatment because their conditions did not require that level of care, while also failing to properly discharge appropriately admitted beneficiaries when they no longer required inpatient care. The government further alleged that UHS’s facilities billed for services not rendered, billed for improper and excessive lengths of stay, failed to provide adequate staffing, training, and/or supervision of staff, and improperly used physical and chemical restraints and seclusion. In addition, UHS’s facilities allegedly failed to develop and/or update individual assessments and treatment plans for patients, failed to provide adequate discharge planning, and failed to provide required individual and group therapy services in accordance with federal and state regulations.
Of the $117 million to be paid by UHS to resolve these claims, the federal government will receive a total of $88,124,761.27, and a total of $28,875,238.73 will be returned to individual states, which jointly fund state Medicaid programs.
With respect to Turning Point, the government alleged that, from January 2007 until May 1, 2019, the facility provided free or discounted transportation services to Medicare and Medicaid beneficiaries to induce them to seek detoxification and rehabilitation treatment at Turning Point’s inpatient or intensive outpatient programs.
“Health care fraud in the behavioral health arena endangers a particularly vulnerable patient population,” said U.S. Attorney Maria Chapa Lopez for the Middle District of Florida. “This settlement should deter those providers tempted to prioritize economic gain over a commitment to patient care. We thank our colleagues in other U.S. Attorneys Offices, the Department of Justice, and state Medicaid Fraud Control Units, as well as the investigative agencies who supported this effort, for their steadfast pursuit of this critically important investigation.”
“Providing top quality health care to service members and their beneficiaries is the primary mission of the Defense Health Agency. It's unfortunate a company tried to take advantage of a system that ensures health care for those men and women who are on the front lines every day protecting our nation," said Lt. Gen. Ronald Place, director, DHA. "We commend the Department of Justice and its partners for bringing justice to those responsible for knowingly defrauding TRICARE beneficiaries.”
“VA-OIG continues to be vigilant in holding those accountable who defraud VA programs and ensure that tax payer dollars are appropriately utilized for the care of our nation’s veterans and their dependents,” said Acting Special Agent in Charge Jeffrey Stachowiak, Department of Veterans Affairs, Office of Inspector General. “Also, we thank our law enforcement partners and the United States Attorney’s Office for their support.”
“The OPM OIG does not tolerate predatory behavior that risks the health and safety of vulnerable patients,” said Thomas W. South, Deputy Inspector General for Investigations for the Office of Personnel Management. “We are grateful for the fine work of our investigators and Department of Justice partners. Today’s settlement demonstrates OPM-OIG’s unwavering commitment to investigating conduct that affects vulnerable FEHBP enrollees.”
The government’s settlement with UHS resolves 18 cases pending in the Eastern District of Pennsylvania, Western District of Michigan, the Eastern District of Michigan, and Northern District of Georgia under the qui tam, or whistleblower, provision of the False Claims Act, which permit private parties to file suit for false claims on behalf of the United States and to share in any recovery. The whistleblower share of the federal portion of the settlement will be $15,862,457.03. The settlement with Turning Point resolves an additional qui tam lawsuit filed in the Northern District of Georgia. The whistleblower in that suit will receive $861,853.64, from the federal share of the Turning Point settlement.
Contemporaneous with the civil settlements announced today, UHS, on behalf of its inpatient acute and residential behavioral health facilities, has entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General (OIG), which will remain in effect for five years. UHS must retain an independent monitor, selected by the OIG, which will assess UHS’s Behavioral Health Division’s patient care protections and report to the OIG. In addition, an independent review organization will perform annual reviews of UHS’s inpatient behavioral health claims to federal health care programs.
“Protecting the health and safety of Medicare and Medicaid patients is one of our primary concerns. Our Corporate Integrity Agreement provides future protection for patients and federal health care programs through controls and monitoring designed to ensure that UHS’s behavioral health facilities provide quality services and medically necessary care to patients,” said Gregory E. Demske, Chief Counsel to the Inspector General for the U.S. Department of Health and Human Services. “This case demonstrates that the government will aggressively pursue allegations of substandard inpatient care.”
The settlement with UHS was the result of a collaborative effort among numerous federal and state agencies. The Commercial Litigation Branch of the Department of Justice’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Pennsylvania handled the cases, with substantial assistance from the U.S. Attorneys’ Offices for the Middle District of Florida, the Northern District of Georgia, the Eastern District of Michigan, the Western District of Michigan, the Middle District of Georgia, the Northern District of Illinois, the Middle District of North Carolina, the Western District of North Carolina, the District of Oregon, the Middle District of Pennsylvania, the Southern District of Texas, the District of Utah, the Eastern District of Virginia, the Western District of Virginia, the Northern District of Oklahoma, and the District of Wyoming, as well as the National Association of Medicaid Fraud Control Units (NAMFCU). The Civil Division and NAMFCU coordinated the nationwide investigation of UHS in partnership with the Office of Inspector General for the Department of Health and Human Services; the Department of Defense Criminal Investigative Service; the Department of Veterans Affairs, Office of Inspector General; the Office of Personnel Management, Office of Inspector General; and the Federal Bureau of Investigation. The Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Georgia handled the Turning Point matter with assistance from the Office of Attorney General of Georgia and the Office of Inspector General for the U.S. Department of Health and Human Services. The investigation in the Middle District of Florida was led by Civil Chief Randy Harwell and Assistant United States Attorney Katherine Ho, and by Trial Attorney Sarah Arni of the Civil Division’s Commercial Litigation Branch.
The civil settlement with UHS resolved the following captioned cases: United States ex rel. Gardner v. Universal Health Services, Inc., 2:17-cv-03332-AB (E.D. Pa.); United States ex rel. Naylor v. Universal Health Services, Inc., 2:14-cv-06198-AB (E.D. Pa.); United States ex rel. Jain v. Universal Health Services, Inc., et al., No. 2:13-cv-06499-AB (E.D. Pa.); United States ex rel. Chisholm v. Universal Health Services, Inc., et al., 2:17-cv-01892-AB (E.D. Pa.); United States ex rel. Doe, et al. v. Universal Health Services, Inc., et al., No. 2:14-cv-00921 (E.D. Pa.); United States ex rel. Pate v. Behavioral Hospital of Bellaire, et al., 2:15-cv-00554-AB (E.D. Pa.); United States ex rel. Brinson, et al. v. Universal Health Services, Inc., et al., 2:14-cv-07275-AB (E.D. Pa.); United States ex rel. Mitchell v. Turning Point Care Center, Inc., et al., 2:15-cv-00259-AB (E.D. Pa.); United States ex rel. Peterson v. Universal Health Services, Inc., et al., 2:17-cv-01897-AB (E.D. Pa.); United States ex rel. Conaway, et al. v. Universal Health Services, Inc., et al., 2:17-cv-02233-AB (E.D. Pa.); United States ex rel. Eborall v. Universal Health Services, Inc., et al., 2:17-cv-03249-AB (E.D. Pa.); United States ex rel. Sachs, et al. v. Universal Health Services, Inc., et al., 2:17-cv-03604-AB (E.D. Pa.); United States ex rel. Klotz v. Universal Health Services, Inc., et al., 2:17-cv-05163-AB (E.D. Pa.); United States ex rel. Brockman, et al. v. Universal Health Services, Inc., et al., 2:17-cv-05350-AB (E.D. Pa.); United States ex rel. Glass v. Hughes Center, LLC., et al., 2:18-04018-AB (E.D. Pa.); United States ex rel. Parent-Leonard v. Forest View Psychiatric Hospital, et al., No. 1:18-cv-1426 (W.D. Mich.); United States ex rel. Russell, et al. v. Universal Healthcare Services, Inc., et al., No. 1:19-CV-0764 (N.D. Ga.); United States ex rel. McLauchlin, et al. v. Havenwyck Holdings, Inc., et al., No. 2:19-cv-10832 (E.D. Mich.).
The settlement with Turning Point resolved the case captioned United States ex rel. Heatley v Turning Point Care Center LLC, et al., 1:17-cv-3869-AT (N.D. Ga.).
The claims resolved by the settlements are allegations only, and there has been no determination of liability.
Universal Health Services, Inc. and Related Entities to Pay $122 Million to Settle False Claims Act Allegations Relating to Medically Unnecessary Inpatient Behavioral Health Services and Illegal KickbacksRead the Press Release
Universal Health Services, Inc., UHS of Delaware, Inc.(together, UHS), and Turning Point Care Center, LLC (Turning Point), a UHS facility located in Moultrie, Georgia, have agreed to pay a combined total of $122 million to resolve alleged violations of the False Claims Act for billing for medically unnecessary inpatient behavioral health services, failing to provide adequate and appropriate services, and paying illegal inducements to federal healthcare beneficiaries, the Department of Justice announced today. UHS owns and provides management and administrative services to nearly 200 acute care inpatient psychiatric hospitals and residential psychiatric and behavioral treatment facilities nationwide. UHS is headquartered in King of Prussia, Pennsylvania.
As part of a comprehensive civil settlement, UHS will pay the United States and participating states a total of $117 million to resolve allegations that its hospitals and facilities knowingly submitted false claims for payment to the Medicare, Medicaid, TRICARE, Department of Veterans Affairs, and Federal Employee Health Benefit programs for inpatient behavioral health services that were not reasonable or medically necessary and/or failed to provide adequate and appropriate services for adults and children admitted to UHS facilities across the country.
In a separate civil settlement, Turning Point will pay the United States and the State of Georgia $5 million to resolve allegations that it provided free or discounted transportation services to induce Medicare and Medicaid beneficiaries to seek treatment at Turning Point’s inpatient detoxification and rehabilitation program or intensive outpatient program.
“The Department of Justice is committed to protecting patients and taxpayers by ensuring that the treatment provided to federal healthcare beneficiaries is reasonable, necessary, and free from illegal inducements,” said Acting Assistant Attorney General Ethan P. Davis for the Department of Justice’s Civil Division. “The Department will continue to be especially vigilant when vulnerable patient populations are involved, like those served by behavioral healthcare providers.”
The government alleged that, between January 2006, and December 2018, UHS’s facilities admitted federal healthcare beneficiaries who were not eligible for inpatient or residential treatment because their conditions did not require that level of care, while also failing to properly discharge appropriately admitted beneficiaries when they no longer required inpatient care. The government further alleged that UHS’s facilities billed for services not rendered, billed for improper and excessive lengths of stay, failed to provide adequate staffing, training, and/or supervision of staff, and improperly used physical and chemical restraints and seclusion. In addition, UHS’s facilities allegedly failed to develop and/or update individual assessments and treatment plans for patients, failed to provide adequate discharge planning, and failed to provide required individual and group therapy services in accordance with federal and state regulations.
Of the $117 million to be paid by UHS to resolve these claims, the federal government will receive a total of $88,124,761.27, and a total of $28,875,238.73 will be returned to individual states, which jointly fund state Medicaid programs.
“Quality mental health treatment is critical for the patients who place their trust in the hands of service providers,” said William M. McSwain, United States Attorney for the Eastern District of Pennsylvania. “The allegations involved in this matter -- inappropriate billing and inadequate care – have no place in our health care system. Behavioral health service entities must have strong mechanisms in place, including appropriate supervision and oversight, to avoid fraud and abuse in order to ensure they provide the level of care that their patients deserve.”
With respect to Turning Point, the government alleged that, from January 2007 until May 1, 2019, the facility provided free or discounted transportation services to Medicare and Medicaid beneficiaries to induce them to seek detoxification and rehabilitation treatment at Turning Point’s inpatient or intensive outpatient programs.
“Illegal inducements should never play a role in a patient’s decision regarding treatment, especially when a patient is seeking care for addiction and other behavioral health needs,” said Byung J. “BJay” Pak, U.S. Attorney for the Northern District of Georgia. “Our office remains committed to pursuing unlawful arrangements that undermine the integrity of federal healthcare programs.”
The government’s settlement with UHS resolves 18 cases pending in the Eastern District of Pennsylvania, Western District of Michigan, the Eastern District of Michigan, and Northern District of Georgia under the qui tam, or whistleblower, provision of the False Claims Act, which permit private parties to file suit for false claims on behalf of the United States and to share in any recovery. The whistleblower share of the federal portion of the settlement will be $15,862,457.03. The settlement with Turning Point resolves an additional qui tam lawsuit filed in the Northern District of Georgia. The whistleblower in that suit will receive $861,853.64, from the federal share of the Turning Point settlement.
“Providing top quality health care to service members and their beneficiaries is the primary mission of the Defense Health Agency. It's unfortunate a company tried to take advantage of a system that ensures health care for those men and women who are on the front lines every day protecting our nation," said Lt. Gen. Ronald Place, director, DHA. "We commend the Department of Justice and its partners for bringing justice to those responsible for knowingly defrauding TRICARE beneficiaries.”
“VA OIG continues to be vigilant in holding those accountable who defraud VA programs and ensure that tax payer dollars are appropriately utilized for the care of our nation’s veterans and their dependents. Also, we thank our law enforcement partners and the United States Attorney’s Office for their support,” said Acting Special Agent in Charge Jeffrey Stachowiak, Department of Veterans Affairs, Office of Inspector General.
“The OPM OIG does not tolerate predatory behavior that risks the health and safety of vulnerable patients,” said Thomas W. South, Deputy Inspector General for Investigations for the Office of Personnel Management. “We are grateful for the fine work of our investigators and Department of Justice partners. Today’s settlement demonstrates OPM-OIG’s unwavering commitment to investigating conduct that affects vulnerable FEHBP enrollees.”
Contemporaneous with the civil settlements announced today, UHS, on behalf of its inpatient acute and residential behavioral health facilities, has entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General (OIG), which will remain in effect for five years. UHS must retain an independent monitor, selected by the OIG, which will assess UHS’s Behavioral Health Division’s patient care protections and report to the OIG. In addition, an independent review organization will perform annual reviews of UHS’s inpatient behavioral health claims to federal health care programs.
“Protecting the health and safety of Medicare and Medicaid patients is one of our primary concerns. Our Corporate Integrity Agreement provides future protection for patients and federal health care programs through controls and monitoring designed to ensure that UHS’s behavioral health facilities provide quality services and medically necessary care to patients,” said Gregory E. Demske, Chief Counsel to the Inspector General for the United States Department of Health and Human Services. “This case demonstrates that the government will aggressively pursue allegations of substandard inpatient care.”
The settlement with UHS was the result of a collaborative effort among numerous federal and state agencies. The Commercial Litigation Branch of the Department of Justice’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Pennsylvania handled the cases, with substantial assistance from the U.S. Attorneys’ Offices for the Middle District of Florida, the Northern District of Georgia, the Eastern District of Michigan, the Western District of Michigan, the Middle District of Georgia, the Northern District of Illinois, the Middle District of North Carolina, the Western District of North Carolina, the District of Oregon, the Middle District of Pennsylvania, the Southern District of Texas, the District of Utah, the Eastern District of Virginia, the Western District of Virginia, the Northern District of Oklahoma, and the District of Wyoming, as well as the National Association of Medicaid Fraud Control Units (NAMFCU). The Civil Division and NAMFCU coordinated the nationwide investigation of UHS in partnership with the Office of Inspector General for the Department of Health and Human Services; the Department of Defense Criminal Investigative Service; the Department of Veterans Affairs, Office of Inspector General; the Office of Personnel Management, Office of Inspector General; and the Federal Bureau of Investigation. The Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Georgia handled the Turning Point matter with assistance from the Office of Attorney General of Georgia and the Office of Inspector General for the U.S. Department of Health and Human Services.
The civil settlement with UHS resolved the following captioned cases: United States ex rel. Gardner v. Universal Health Services, Inc., 2:17-cv-03332-AB (E.D. Pa.); United States ex rel. Naylor v. Universal Health Services, Inc., 2:14-cv-06198-AB (E.D. Pa.); United States ex rel. Jain v. Universal Health Services, Inc., et al., No. 2:13-cv-06499-AB (E.D. Pa.); United States ex rel. Chisholm v. Universal Health Services, Inc., et al., 2:17-cv-01892-AB (E.D. Pa.); United States ex rel. Doe, et al. v. Universal Health Services, Inc., et al., No. 2:14-cv-00921 (E.D. Pa.); United States ex rel. Pate v. Behavioral Hospital of Bellaire, et al., 2:15-cv-00554-AB (E.D. Pa.); United States ex rel. Brinson, et al. v. Universal Health Services, Inc., et al., 2:14-cv-07275-AB (E.D. Pa.); United States ex rel. Mitchell v. Turning Point Care Center, Inc., et al., 2:15-cv-00259-AB (E.D. Pa.); United States ex rel. Peterson v. Universal Health Services, Inc., et al., 2:17-cv-01897-AB (E.D. Pa.); United States ex rel. Conaway, et al. v. Universal Health Services, Inc., et al., 2:17-cv-02233-AB (E.D. Pa.); United States ex rel. Eborall v. Universal Health Services, Inc., et al., 2:17-cv-03249-AB (E.D. Pa.); United States ex rel. Sachs, et al. v. Universal Health Services, Inc., et al., 2:17-cv-03604-AB (E.D. Pa.); United States ex rel. Klotz v. Universal Health Services, Inc., et al., 2:17-cv-05163-AB (E.D. Pa.); United States ex rel. Brockman, et al. v. Universal Health Services, Inc., et al., 2:17-cv-05350-AB (E.D. Pa.); United States ex rel. Glass v. Hughes Center, LLC., et al., 2:18-04018-AB (E.D. Pa.); United States ex rel. Parent-Leonard v. Forest View Psychiatric Hospital, et al., No. 1:18-cv-1426 (W.D. Mich.); United States ex rel. Russell, et al. v. Universal Healthcare Services, Inc., et al., No. 1:19-CV-0764 (N.D. Ga.); United States ex rel. McLauchlin, et al. v. Havenwyck Holdings, Inc., et al., No. 2:19-cv-10832 (E.D. Mich.).
The settlement with Turning Point resolved the case captioned United States ex rel. Heatley v Turning Point Care Center LLC, et al., 1:17-cv-3869-AT (N.D. Ga.).
The claims resolved by the settlements are allegations only, and there has been no determination of liability.
U.S. Attorney and IRS Criminal Investigation Remind Taxpayers of Upcoming Tax Filing Deadline, Urge Taxpayers to be Aware of ScamsRead the Press Release
Portland, Maine: U.S. Attorney Halsey B. Frank and the Internal Revenue Service Criminal Investigation division (CI) today reminded taxpayers of the July 15 filing and payment deadline and warned against an increase in tax and COVID-19 scams.
Due to COVID-19, the original filing deadline and tax payment due date for 2019 was postponed from April 15 to July 15. Taxpayers filing Form 1040 series returns must file Form 4868 by July 15 to obtain the automatic extension to Oct. 15.
“Although the extension provides additional time to file the tax return, it is not an extension to pay any taxes due,” said Kristina O’Connell, Special Agent in Charge of IRS CI in New England. “For people facing hardships who cannot pay in full, including those affected by COVID-19, the IRS has several options available to help. The IRS encourages taxpayers to visit IRS.gov as soon as possible to explore these options and avoid accruing interest and penalties after the July 15 deadline.”
As the filing deadline approaches, taxpayers also should beware of tax and COVID-19-related scams. “Criminals use the tax filing deadline as an opportunity to steal personal and financial information,” said U.S. Attorney Frank. “Taxpayers should remain vigilant and know that the IRS will not initiate contact with them via phone, email or social media to request personal or financial information. I urge any Mainers who have been the target of these scams to contact law enforcement immediately.”
In the last few months, IRS CI has continued to see a tremendous increase in a variety of Economic Impact Payment scams and other financial schemes. CI continues to work with its law enforcement partners to put a stop to these schemes and bring criminals to justice.
Taxpayers can report COVID-19 scams to the National Center for Disaster Fraud. Taxpayers can also report fraud or theft of their Economic Impact Payments to the Treasury Inspector General for Tax Administration. Unsolicited (phishing) e-mails that appear to be from the IRS should be forwarded to [email protected].
For the most up-to-date information about the tax filing deadline and IRS impersonation scams, taxpayers can visit IRS.gov.
U.S. Attorney Jay E. Town Announces Departure from the U.S. Attorney’s OfficeRead the Press Release
BIRMINGHAM, Ala. – U.S. Attorney Jay E. Town announced today that he will resign from the Department of Justice, effective Wednesday, July 15, 2020, at midnight.
“After much thoughtful prayer and great personal consideration, I have made the decision to resign as the United States Attorney of the Northern District of Alabama. I have tendered my resignation to Attorney General William Barr. General Barr expressed his gratitude for my service to the Department of Justice and to the Northern District and, despite having hoped I would continue in my role, understood and respected my decision.
I am extremely grateful to President Trump, to whom I also tendered a letter, for his special trust and confidence in me to serve as the U.S. Attorney. It was an honor to be a part of this Administration with an unrivaled class of United States Attorneys from around the nation. I will forever remain thankful to those who supported my nomination and my tenure as the U.S. Attorney.
I have been humbled and honored to lead the dedicated men and women of this office that work tirelessly each day. I have also been so very fortunate to admire the brave men and women of law enforcement - local, state, and federal – who serve this District so honorably and truly are the very best among us. I believe our collective efforts have made the Northern District of Alabama safer.
This difficult and personal decision to move on is one that I have been wrangling with for many months. With that being said, I have accepted an incredible opportunity to work for a privately held defense contractor and cybersecurity solutions company located in Huntsville operating in both the government and commercial sectors. My role, which will begin later this year, will be significant but also has the virtue of allowing me to remain much closer to home. There will be an announcement by the company in a few weeks further explaining my position.
My service as the U.S. Attorney has been the highest honor of my legal career. I am saddened to depart, but it is undeniable that I leave behind an incredibly competent and talented team that will always fight for justice here in the great state of Alabama.
The Attorney General of the United States will announce my replacement in the coming days or weeks.”
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Under Town’s leadership, the Northern District played a major role in carrying out the priorities of the Department of Justice to reduce violent crime and aggressively address the opioid crisis. In 2019, the number of defendants charged with federal crimes in the Northern District and the percentage of those defendants sentenced to prison was the highest ever recorded.
In response to the Department of Justice’s renewal of Project Safe Neighborhood initiative, Town developed the Prosecutor-to Prosecutor Program (P3) which designates the combined efforts of state and federal prosecutors to collaborate on the prosecution of the worst offenders when federal sanction is significantly higher than the analogue state sanction. The P3 Program is now a nationally recognized PSN best practice.
Town also worked closely with federal, state and local law enforcement in Huntsville, Birmingham, Tuscaloosa, Anniston, Oxford and other cities, to establish violent crime reduction programs. Town created the Birmingham Public Safety Task Force and the Huntsville Public Safety Task Force, a strategic partnership between federal, state and local law enforcement to utilize enhanced crime intelligence to aggressively pursue the worst offenders in those communities. The Northern District had three cities – Birmingham, Anniston and Oxford – selected to join the National Public Safety Partnership (PSP) initiative. Through the creation of the task forces and participation in the PSP initiative there has been a reduction in violent crime in the Northern District.
During his tenure as U.S. Attorney, Town served as the Chair of the Attorney General’s Servicemembers and Veterans Rights Subcommittee and also served on the Cyber, Law Enforcement Relations, and Manpower, Performance, & Personnel Subcommittees for the Department. He was one of five United States Attorneys selected to serve on the Attorney General’s China Initiative Steering Committee. Town was one of three U.S. Attorneys to serve on the ATF’s National Crime Gun Intelligence Governance Board. He was also the lone U.S. Attorney member of the Attorney General’s Violent Crime Reduction Coordinating Committee. Town recently completed his primary duties as a Working Group Chair on President Trump’s Commission on Law Enforcement and the Administration of Justice.
Town, 46, was appointed by President Trump to the position of United States Attorney in August 2017, and was the second longest serving United States Attorney in the nation. Prior to his confirmation as United States Attorney, Town, is a former judge advocate in the U.S. Marine Corps and was a senior prosecutor in the Madison County District Attorney’s Office.
Attorney General William Barr offered the following statement:
“I offer my gratitude to Jay Town for his three years of service as United States Attorney for the Northern District of Alabama. Jay’s leadership in his District has been immense. His contributions to the Department of Justice have been extensive, especially his work on the China Initiative and most recently as a Working Group Chair on the President’s Commission on Law Enforcement and the Administration of Justice. I appreciate his service to our nation and to the Justice Department, and I wish him the very best.”
Two Men Charged with Illegally Possessing FirearmsRead the Press Release
United States Attorney Erica H. MacDonald today announced a criminal complaint charging JARVAE JOSIAH SOMERVILLE, 27, and RONALD DONTE FINLEY, JR., 25, with one count each of possession of a firearm by a felon. SOMERVILLE and FINLEY made their initial appearances earlier today before Magistrate Judge Katherine M. Menendez in U.S. District Court in Minneapolis, Minnesota. The defendants were ordered to remain in custody pending a formal detention hearing, which is scheduled for Tuesday, July 14, 2020.
According to the allegations in the criminal complaint and law enforcement affidavit, investigators with the Minneapolis Police Department (MPD) determined that SOMERVILLE and FINLEY were suspects in a shooting that occurred on May 19, 2020, in North Minneapolis. While conducting surveillance on SOMERVILLE, MPD officers observed SOMERVILLE and FINLEY at a restaurant on Lake Street in Minneapolis. SOMERVILLE was inside the restaurant and FINLEY was outside near an Infinity sedan that the men were driving. Officers moved in to make an arrest. When officers approached FINLEY, FINLEY ran from the Infinity sedan but was apprehended and arrested. Inside the Infiniti sedan, officers found a Sig Sauer 9mm semi-automatic pistol. When officers entered the restaurant and attempted to arrest SOMERVILLE, SOMERVILLE ran inside a private bathroom in the back of the restaurant. An officer chasing SOMERVILLE followed SOMERVILLE inside, and SOMERVILLE reached into his waistband. Concerned that SOMERVILLE was reaching for a firearm, the officer grabbed SOMERVILLE’s hand, and the two men struggled until other officers arrived to assist. After SOMERVILLE was handcuffed and taken into custody, officers recovered from the floor of the bathroom a Glock, .45 caliber semi-automatic handgun with an extended magazine.
According to the allegations in the criminal complaint and law enforcement affidavit, later that day, officers executed a search warrant at SOMERVILLE’s residence and found a box of .45 caliber ammunition and a gun cleaning kit. On July 9, 2020, investigators confirmed that FINLEY’s fingerprints were present on the magazine of the 9mm pistol found in the Infiniti sedan. Because SOMERVILLE has prior felony convictions in Hennepin County and FINLEY has prior felony convictions in Cook County, Illinois, they are prohibited under federal law from possessing firearms or ammunition at any time.
This case is the result of an investigation conducted by the Minneapolis Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was brought as part of the Twin Cities Violent Crime Task Force, a multi-agency effort that brings together additional federal and state resources to assist local law enforcement to investigate, arrest, and prosecute individuals responsible for gun violence in the Twin Cities. For more information about the Twin Cities Violent Crime Task Force, please visit https://www.justice.gov/usao-mn/pr/united-states-attorney-announces-new-twin-cities-violent-crime-task-force.
Assistant U.S. Attorney Thomas Calhoun-Lopez is prosecuting the case.
Defendant Information:
JARVAE JOSIAH SOMERVILLE, 27
White Bear Lake, Minn.
Charges:
- Felon in possession of a firearm, 1 count
RONALD DONTE FINLEY, JR., 25
Minneapolis, Minn.
Charges:
- Felon in possession of a firearm, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Two Members of Family-Run Heroin Trafficking Ring SentencedRead the Press Release
NORFOLK, Va. – Two Portsmouth men were sentenced this week to a combined 33 years in prison for their roles in a family-run heroin-trafficking organization that trafficked at least one kilogram of heroin throughout Hampton Roads and sold handguns, rifles, and shotguns with the drugs.
According to court documents, Corey Luther Jones, 50, and Malcolm Dominic Jones, Jr., 25, were members of the Jones DTO run by Malcolm Jones, Sr., Corey Jones’s brother and Malcolm Jones, Jr.’s father. The organization operated at least three drug premises, including the “Court,” a residence serving as the distribution point for Jones’s drugs—heroin, fentanyl, Acetyl fentanyl, crack, and powder cocaine. Since the beginning of 2017, the Court serviced 50 to 100 customers a day until authorities shut down the operation on Sept. 11, 2019. During that time, Corey and Malcolm Jr. lived at the court, managed drug-trafficking efforts there, and stockpiled firearms there to protect their drug trade. Corey Jones was involved in more than 20 controlled purchases of heroin, fentanyl, and Acetyl fentanyl and sold several firearms during some of those deals—two rifles, including an AR-style rifle, two shotguns, and three handguns.
Corey Jones was sentenced to 20 years, while Malcolm Jones was sentenced to 13 years.
This case is part of Operation High Tide, a proactive, large-scale narcotics trafficking and firearms investigation that focused on high-impact targets driving crime in some of the most hardest hit neighborhoods in Hampton Roads.
This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. Click here for more information about Project Guardian.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; Ashan M. Benedict, Special Agent in Charge of the ATF’s Washington Field Division; and Col. K.L. Wright, Chief of Chesapeake Police, made the announcement after sentencing by U.S. District Judge Raymond A. Jackson. Assistant U.S. Attorney William B. Jackson and Special Assistant U.S. Attorney Kristin Bird prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:19-cr-155.
Three First NBC Executives Indicted for Fraud against Failed $5 Billion BankRead the Press Release
NEW ORLEANS – The United States Attorney’s Office announced that a grand jury indicted ASHTON J. RYAN, age 72, of Kenner; WILLIAM BURNELL, age 70, of Kenner; ROBERT BRAD CALLOWAY, age 60, of Metairie; and FRANK J. ADOLPH, age 60, of Kenner, for defrauding First NBC Bank, the New Orleans-based bank that failed in April 2017.
According to the 46-count Indictment, from 2006 through April 2017, RYAN, BURNELL, CALLOWAY, and ADOLPH conspired to defraud First NBC Bank (the “Bank”) through a variety of schemes. RYAN was the President and CEO of the Bank for most of its existence. BURNELL was the Chief Credit Officer. CALLOWAY was an Executive Vice President. ADOLPH was a borrower at the Bank who was charged with conspiring with the three Bank executives to obtain loans based on false statements and forged documents.
The Indictment alleges that RYAN, BURNELL, CALLOWAY, ADOLPH, and others conspired to defraud First NBC Bank by disguising the true financial status of certain borrowers and their troubled loans, concealing the true financial condition of the Bank from the Board, auditors, and examiners. The borrowers included real estate developer Gary Gibbs, real estate developer Kenneth Charity, Bank general counsel Gregory St. Angelo, factoring business owner FRANK ADOLPH, hotel owner Arvind “Mike” Vira, contractor Warren Treme, and contractor Jeffrey Dunlap. CALLOWAY was Gibbs’s loan officer, and RYAN served as the loan officer or oversaw the loan officers for all of those borrowers. BURNELL approved the risk rating for all of these borrowers’ loans and was the gatekeeper tasked with protecting the safety and soundness of the Bank’s loan portfolio. Dunlap, Charity, and St. Angelo have previously been charged in individual Bills of Information with conspiracy to commit bank fraud, and all three have pled guilty. Vira, Gibbs, and Treme have been charged more recently, in their own individual Bills of Information, with conspiring to defraud First NBC Bank. All six of these borrowers are listed in the Indictment as members of the bank fraud conspiracy with RYAN, BURNELL, CALLOWAY, and ADOLPH.
During the course of the conspiracy, RYAN, BURNELL, and CALLOWAY repeatedly extended loans to borrowers who were unable to pay their loans without relying on loan payments to keep them current. To hide this practice, RYAN, BURNELL, and CALLOWAY made false statements in loan documents and elsewhere about the purposes of loans, the borrowers’ abilities to repay those loans, and the sources of funds used to pay those loans. When the borrowers were unable to pay those loans, RYAN, BURNELL, and CALLOWAY made new loans to these same borrowers and then used the proceeds from those new loans to pay the existing loans. This created the false impression that the borrowers were able to pay their loans, when in fact they would not have been able to pay their loans without going further into debt through new borrowing from the Bank. The new loans prevented these borrowers from appearing on lists that RYAN and BURNELL gave the Bank’s Board each month, which would have highlighted that the borrowers were unable to make loan payments or had cash flow problems. RYAN, BURNELL, and CALLOWAY also made false statements about the purpose of those loans, misrepresenting in Bank documents that the borrowers were able to pay loans with cash generated from the borrowers’ businesses, when in fact the borrowers were only able to pay those loans with proceeds from new Bank loans. The borrowers often spent the proceeds of these business loans on unrelated personal expenses, including by overdrawing their checking accounts at the Bank, and RYAN, BURNELL, and CALLOWAY paid these overdrafts by issuing new loans to the borrowers. This practice kept the borrowers off of month-end overdraft reports to the Board and hid the borrowers’ inability to pay their own expenses without new loan proceeds.
For certain loans, RYAN, BURNELL, and CALLOWAY included borrower documents in loan files despite knowing that the documents were false. For example, even after RYAN and BURNELL learned that ADOLPH was submitting falsified documents to the Bank to inflate his collateral, RYAN and BURNELL continued to submit loans for ADOLPH that included the false documents. Similarly, even though RYAN, BURNELL, and CALLOWAY knew that Gibbs could not pay his loans with cash generated from his businesses, they continued to submit loan documents that included false documents showing that Gibbs’s business earned enough cash to pay his loans at the Bank.
When members of the Board or the Bank’s outside auditors or examiners asked about loans to these borrowers, RYAN, BURNELL, and CALLOWAY made false statements about the borrowers and their loans, and left out the truth about the borrowers’ inability to pay their debts without getting new loans. As a result, the balance on these borrowers’ loans continued to grow. By the time regulators closed First NBC Bank in April of 2017, Gibbs owed the Bank $123 million; Charity owed $18 million; St. Angelo owed $46 million; ADOLPH owed $6 million; Vira owed $39 million; Treme owed $6 million; and Dunlap owed $22 million. The Bank’s failure cost the Federal Deposit Insurance Corporation deposit insurance fund just under $1 billion.
RYAN, BURNELL, and CALLOWAY each received millions of dollars in compensation from the Bank during the course of the conspiracy. RYAN also received personal benefits from three of the borrower relationships. Vira lent millions of dollars to RYAN at the same time Vira was a borrower at the Bank, and RYAN and Vira conspired to hide their business dealings from the Board, auditors, and examiners. Treme was RYAN’s partner in several businesses and real estate development projects, and RYAN used Treme’s borrowing from the Bank as a way to spend Bank loan proceeds on RYAN’s own projects. Even when parts of RYAN’s business dealings with Vira and Treme were revealed to regulators, RYAN continued to conceal from regulators that he exercised authority over loans to Vira and Treme. Dunlap was a contractor for a business that RYAN and Treme ran, and RYAN used loan proceeds from Dunlap’s business to benefit his own development project, Wadsworth Estates. RYAN never disclosed his business relationship with Dunlap to the Board, auditors, or examiners. BURNELL was aware of this business relationship and also never disclosed it to the Board, auditors, or examiners.
“Along with our partners, the FBI has dedicated significant time and resources toward investigating the failure of First NBC Bank, which resulted in nearly a billion dollar loss to the FDIC,” stated FBI New Orleans Special Agent in Charge Bryan Vorndran. “This should be a deterrent for others interested in participating in fraudulent schemes that affect our financial system.”
“Today’s indictment sends a clear message that bank executives who engage in fraud that impacts the safety and soundness of financial institutions will be held accountable for their actions,” said Stephen Donnelly, Acting Special Agent in Charge, Eastern Region, Office of Inspector General for the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection.
“This indictment is the product of a complex investigation involving multiple agencies over a long period,” said Laurie Younger, Special Agent in Charge, Dallas Region, Office of Inspector General for the Federal Deposit Insurance Corporation. “It sends an important message to those who would attempt to unlawfully manipulate the nation’s banking system.”
RYAN, BURNELL, CALLOWAY, and ADOLPH are each charged in Count 1 of the Indictment with conspiracy to commit bank fraud, in violation of Title 18, United States Code, Sections 1344 and 1349. RYAN, BURNELL, CALLOWAY, and ADOLPH are also charged with multiple instances of bank fraud, as listed in Counts 2 through 37, in violation of Title 18, United States Code, Section 1344. RYAN, BURNELL, and CALLOWAY are charged with making false entries in bank records, in violation of Title 18, United States Code, Section 1005, as listed in Counts 38 through 46. For each of the charged counts, the maximum penalties that may be imposed upon conviction are thirty years in prison; a fine of $1,000,000, or the greater of twice the gain to a defendant or twice the loss to any victim; up to five years of supervised release; and a $100 mandatory special assessment.
The United States Attorney’s Office stated that an Indictment is merely an accusation and that the guilt of the defendants must be proven beyond a reasonable doubt.
This case is being investigated by the Federal Bureau of Investigation; the Federal Deposit Insurance Corporation, Office of Inspector General; and the Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau, Office of Inspector General. Assistant U.S. Attorneys Sharan E. Lieberman, Matthew R. Payne, Nicholas D. Moses, and J. Ryan McLaren are in charge of the prosecution.
Three Charged in Drug Trafficking ConspiracyRead the Press Release
TALLAHASSEE, FLORIDA – A federal grand jury returned an indictment on July 7, 2020, charging three defendants with federal drug trafficking offenses. The indictment was announced by Lawrence Keefe, United States Attorney for the Northern District of Florida.
The defendants are:
- Kammra Witt, 52, Silver Springs, Florida;
- Rebecca Newmeyer, 55, Perry, Florida; and
- Connie Sullivan, 50, Perry, Florida
The indictment and arrests resulted from an ongoing Organized Crime Drug Enforcement Task Force (OCDETF) Operation which targeted a drug trafficking organization alleged to be responsible for the distribution of methamphetamine throughout northern Florida since the beginning of 2019.
The charged defendants face penalties ranging up to 40 years imprisonment and fines up to $10,000,000.
This case resulted from an investigation by the Drug Enforcement Administration Tallahassee Resident Office, Taylor County Sheriff’s Office, Marion County Sheriff’s Office, Baker County Sheriff’s Office, Williston Police Department, Madison County Sheriff’s Office, Perry Police Department and the Florida Department of Law Enforcement. Assistant United States Attorney Gary Milligan is prosecuting the case.
The prosecution, part of an extensive investigation by the OCDETF, is a joint federal, state, and local cooperative approach to combat drug trafficking. OCDETF is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations, and coordinating the necessary law enforcement entities and resources to take down criminal organizations and seize assets.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Press Release - WittTaxpayers Reminded to be Vigilant as Filing Deadline ApproachesRead the Press Release
PROVIDENCE — The Internal Revenue Service Criminal Investigation division and the U.S. Attorney’s Office for the District of Rhode Island reminded taxpayers of the July 15 filing and payment deadline and warned against an increase in tax and COVID-19 scams.
Due to COVID-19, the original filing deadline and tax payment due date for 2019 was postponed from April 15 to July 15. Taxpayers filing Form 1040 series returns must file Form 4868 by July 15 to obtain the automatic extension to Oct. 15.
“Although the extension provides additional time to file the tax return – it is not an extension to pay any taxes due”, said Kristina O’Connell, Special Agent in Charge of the IRS Criminal Investigation division in New England. “For people facing hardships who cannot pay in full, including those affected by COVID-19, the IRS has several options available to help. The IRS encourages taxpayers to visit IRS.gov as soon as possible to explore these options and avoid accruing interest and penalties after the July 15 deadline.”
“With the extended tax filing deadline now just days away, scammers are working overtime to steal your identity and your personal financial information,” noted United States Attorney Aaron L. Weisman. “Be vigilant. The IRS will not call you, email you, text you, or contact you on social media.”
In the last few months, the IRS Criminal Investigation division (CI) has continued to see a tremendous increase in a variety of Economic Impact Payment scams and other financial schemes. CI continues to work with its law enforcement partners to put a stop to these schemes and bring criminals to justice.
Taxpayers can report COVID-19 scams to the National Center for Disaster Fraud. Taxpayers can also report fraud or theft of their Economic Impact Payments to the Treasury Inspector General for Tax Administration (TIGTA). Unsolicited (phishing) e-mails that appear to be from the IRS should be forwarded to [email protected].
For the most up-to-date information about the tax filing deadline and IRS impersonation scams, taxpayers can visit IRS.gov.
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Tampa Man Sentenced to Four Years in Federal Prison for Credit Card OffensesRead the Press Release
Tampa, Florida – U.S. District Judge Virginia M. Hernandez Covington today sentenced Yosvani Concepcion Izqueirdo (31, Tampa) to four years in federal prison for access device fraud and aggravated identity theft.
Izqueirdo had pleaded guilty on February 7, 2019.
According to court documents, Izquierdo and others conspired to commit credit card fraud. Specifically, they obtained breached and stolen credit card and debit card account information from skimming devices and then used the stolen account numbers and account information to manufacture counterfeit credit cards, which they then used at retailers in the Middle District of Florida and throughout the United States. Most commonly, working together and alone, the conspirators used the counterfeit credit cards to purchase gift cards, electronics, and other items at retailers such as Sam’s Club, Publix, and Walgreens.
This case was investigated by the United States Secret Service and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorney Jennifer L. Peresie.
St. Louis Man Sentenced to 76 Months in Prison for Dealing Drugs at the St. Louis Galleria MallRead the Press Release
St. Louis, Missouri – United States District Judge John A. Ross sentenced Emanuel Mays, 29, of St. Louis, to 76 months in prison for possession with intent to distribute one or more controlled substances and possession of a firearm in furtherance of a drug trafficking crime.
According to the plea agreement, on November 5, 2018, an undercover St. Louis County detective conducted a controlled buy of fentanyl from co-defendant Derrick George. Detectives conducting surveillance before the buy saw an Infiniti headed to the location of the buy, the St. Louis Galleria Mall in St. Louis County. Mays, along with co-defendants Derrick George and Larry Calloway, were in the car. Once at the Galleria Mall, George approached the undercover detective's car and gave him thirteen capsules of fentanyl. The detective then provided sixty dollars to George, who was subsequently arrested.
Mays and Calloway unsuccessfully attempted to flee in the Infiniti. Mays got out of the car and fled on foot. When Mays was finally apprehended after he ran into a dead end, detectives found the key fob for the Infiniti on his person, as well as a cell phone. Mays was arrested and the following items were found in the Infiniti:
• a 9mm Smith & Wesson pistol loaded with one live round in the chamber and fifteen
9mm rounds in the magazine found on the driver's side floorboard;
• .40 caliber Smith & Wesson pistol loaded with one round in the chamber and sixteen
rounds in the magazine found on the front passenger's side floorboard;
• a semi-automatic Zastava rifle loaded with one round in the chamber and four
rounds in the magazine found on the rear passenger floorboard;
• cigars and a plastic bag with marijuana;
• plastic bags with fentanyl and methamphetamine; and
• two face masks.
Co-defendants George and Calloway were sentenced to 16 and 76 months in prison, respectively.
The St. Louis County Police Department and Federal Bureau of Investigation investigated this case.
Springfield Man Charged with Racketeering Offenses Relating to ProstitutionRead the Press Release
BOSTON – A Springfield man was indicted yesterday with racketeering offenses relating to the promotion of commercial sex.
Kevin Smoot, 59, was indicted on one count of conspiracy to use a facility of interstate commerce to promote prostitution offenses and seven counts of use a facility of interstate commerce to promote prostitution offenses. On June 26, 2020, Smoot was arrested and charged by complaint and has been detained since his arrest.
According to the charging documents, between February 2019 and June 2020, Smoot conspired with others to promote commercial sex involving several women. Smoot promoted prostitution by transporting females to and from commercial sex appointments, recruiting and encouraging women to engage in commercial sex acts for money, and helping to procure illegal drugs for use by drug-addicted women engaged in commercial sex. It is further alleged that Smooth promoted prostitution by providing a residential location for commercial sex acts between female sex workers and male customers, taking actions to collect money from male customers, and benefiting from the proceeds of commercial sex acts performed by female sex workers.
The charging statutes provide for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Massachusetts Attorney General Maura Healey; Michael Shea, Acting Special Agent in Charge of Homeland Security Investigations in Boston; Hampden County Sheriff Nicholas Cocchi; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; and Springfield Police Commissioner Cheryl Clapprood made the announcement today. Assistant U.S. Attorney Alex J. Grant of Lelling’s Springfield Branch Office is prosecuting the case.
Members of the public who have questions, concerns, or information regarding this case should call 617-748-3274.
The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
South Bend Man Sentenced to 57 Months in PrisonRead the Press Release
SOUTH BEND – Jose Salazar, age 21, of South Bend, Indiana was sentenced today by United States District Court Judge Damon Leichty upon his guilty pleas to Hobbs Act Robbery and Attempted Hobbs Act Robbery, announced U.S. Attorney Kirsch.
Mr. Salazar was sentenced to 57 months in prison followed by 1 year of supervised release.
According to documents filed in this case, Mr. Salazar walked from his apartment to a gas station, displayed what appeared to be a handgun, racked the slide, and demanded money. The next morning he did virtually the same thing at another gas station. Both times he obtained cash. After the second robbery he attempted a third robbery at a tobacco store, but the employees refused to give him cash. Mr. Salazar was caught a short time after the third attempt and the weapon recovered turned out to be a BB gun that resembled a real firearm. He was charged by the State of Indiana, posted bond, and while on bond Mr. Salazar attempted to rob one of the gas stations by displaying a knife. Clerks at the gas station refused to give him money. Law enforcement arrested him and he confessed to his crimes.
This case was investigated by Federal Bureau of Investigation with the assistance of the South Bend Police Department. Assistant U.S. Attorney Joel Gabrielse prosecuted the case.
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South Bend Man Sentenced to 10 Years in PrisonRead the Press Release
SOUTH BEND – Isaiah Whitmore, age 27, of South Bend, Indiana, was sentenced by United States District Court Chief Judge Jon E. DeGuilio upon his plea of guilty to conspiracy to distribute heroin, announced United States Attorney Thomas L. Kirsch II.
Mr. Whitemore was sentenced to 120 months in prison followed by 5 years of supervised release.
According to documents in this case, from March 2017 up to and including October 2017, Mr. Whitmore and other co-defendants knowingly and intentionally conspired to distribute a Schedule I controlled substance, heroin, in excess of 1 kilogram. The group shared at least one cell phone which was used to arrange heroin sales. Members of the group would receive the phone, along with multiple pre-packaged small baggies of heroin, from one of the other members of the group. Buyers would call, and whichever member of the group had the phone would arrange the transaction. The majority of the proceeds would be turned over to higher ranking members of the group.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; the Indiana State Police; the Mishawaka Police Department; St. Joseph County Drug Investigations Unit; the St. Joseph County Police Department; the St. Joseph County Prosecuting Attorney; and the United States Marshals Service. The above agencies were also supported by Project Disarm, a Bureau of Alcohol, Tobacco, Firearms and Explosives Task Force; the Drug Enforcement Administration Task Force; Elkhart Police ICE Unit; and the United States Marshals Service Fugitive Task Force. The case is being handled by Assistant U.S. Attorneys Joel Gabrielse and Molly Donnelly.
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Sex Offender Sentenced to More Than 15 Years for Sexually Exploiting ChildrenRead the Press Release
Orlando, Florida – U.S. District Judge Carlos E. Mendoza has sentenced James Edward Groover, II (34, Antwerp, Ohio) to 15 years and 8 months in federal prison for transportation of child pornography. The court also ordered Groover to forfeit the electronic devices he used to commit the offense.
Groover had pleaded guilty on February 6, 2020.
According to court documents, on June 17, 2019, Groover returned to the United States from a three-day cruise to the Bahamas, carrying his cell phone and laptop computer. Upon his entry into Port Canaveral, Florida, law enforcement agents conducted a border search of his devices and located 4,638 images and 1,763 videos depicting the sexual abuse and exploitation of infants, toddlers and prepubescent children. The agents also found a digital manual that provided instructions for sexually molesting little girls.
Previously, in 2005, Canadian authorities located images of child sex abuse on a laptop that Groover had transported across the Canadian border. Groover was convicted of possession of child pornography in Canada.
“This repeat child predator did not learn his lesson the first time,” said HSI Orlando Assistant Special Agent in Charge David J. Pezzutti. “This sentencing is a message to this criminal and others, that HSI special agents and our law enforcement partners, like the Brevard County Sheriff’s Office, continue to fight to protect the most vulnerable in our communities.”
Sheriff Wayne Ivey stated, “I am so very proud of these agents who are devoted to protecting children. Through their outstanding efforts, an individual who participated in the exploitation of our children has been removed from our communities. I want to thank the US Attorney’s Office for prosecuting these cases and Homeland Security Investigations for all their support in fighting the exploitation of children.”
This case was investigated by Homeland Security Investigations and the Brevard County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Karen L. Gable.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.