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10 July 2020
Convicted Felon Sentenced to Federal Prison for Possession of a Firearm During Domestic Violence IncidentRead the Press Release
MEMPHIS, TN – Jeremy Nicks, 35, has been sentenced to 46 months in federal prison for being a convicted 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 26, 2018, Jeremy Nicks picked up his girlfriend from work. As she got into the car, Nicks pointed a gun at the victim and threatened to kill her while driving throughout various locations in Memphis. The victim reported the incident to the Memphis Police Department the next day.
On April 27, 2018, the victim notified law enforcement that Nicks was at her residence. When law enforcement responded to the domestic disturbance call, the victim informed officers that the defendant kept the gun under the hood of the Ford Escape. Nicks was immediately placed under arrest. The victim gave a signed statement, and the police obtained a search warrant for Nicks's vehicle. A Harrington and Richardson .32 caliber revolver, loaded with four live rounds, was recovered under the hood of the car.
Nicks has one prior 2007 federal felony robbery conviction and three prior domestic violence misdemeanor convictions. As a result of his prior felony conviction history, Nicks is prohibited by federal law from possessing firearms or ammunition.
On December 18, 2019, Nicks pled guilty to one count of being a convicted felon in possession of a firearm. On July 10, 2020, U.S. District Court Judge Thomas L. Parker sentenced Nicks to 46 months imprisonment followed by 3 years supervised release. There is no parole in the federal system.
U.S. Attorney D. Michael Dunavant said: "Reducing violent crimes committed with firearms is the top priority of this office and the Department of Justice. 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. This is exactly the type of dangerous offender that the PSN Task Force is designed to target, and I commend their work in holding Nicks responsible and removing him from our streets."
This case was investigated by the Memphis Police Department and the Project Safe Neighborhoods Task Force. This case is part of the Project Safe Neighborhoods (PSN) initiative, a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. In 2017, PSN was reinvigorated as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.
Assistant U.S. Attorney Wendy K. Cornejo prosecuted this case on behalf of the government.
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Compounding Pharmacy Mogul Pleads Guilty to Conspiracy to Commit Health Care Fraud and Conspiracy to Commit Money LaunderingRead the Press Release
WASHINGTON – A Mississippi businessman pleaded guilty Thursday for his role in a multi-million dollar scheme to defraud TRICARE, the health care benefit program serving U.S. military, veterans, and their respective family members, as well as private health care benefit programs, by paying kickbacks to practitioners and distributors for the prescribing and referring of fraudulent prescriptions for not medically necessary compounded medications that were ultimately dispensed by his pharmacies, as well as for his role in a scheme to launder the proceeds of the fraud scheme.
Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney Mike Hurst of the Southern District of Mississippi, Special Agent in Charge Michelle Sutphin of the FBI’s Jackson Field Office, Acting Special Agent in Charge Andrew M. Thornton of IRS Criminal Investigation’s (IRS-CI) New Orleans Field Office, Special Agent in Charge Cynthia Bruce of the Defense Criminal Investigative Service’s (DCIS) Southeast Field Office, and Interim Director Steven Maxwell of the Mississippi Bureau of Narcotics (MBN), made the announcement.
Wade Ashley Walters, 53, of Hattiesburg, Mississippi, a co-owner of numerous compounding pharmacies and pharmaceutical distributors, pleaded guilty to one count of conspiracy to commit health care fraud and conspiracy to commit money laundering before U.S. District Judge Keith Starrett of the Southern District of Mississippi. Defendant was remanded into custody following the plea hearing. Sentencing has been scheduled for Oct. 28, 2020, before Judge Starrett.
As part of his guilty plea, Walters admitted that, between 2012 and 2016, he orchestrated a scheme to defraud TRICARE and other health care benefit programs by distributing compounded medications that were not medically necessary. As part of the scheme, Walters among other things, adjusted prescription formulas to ensure the highest reimbursement without regard to efficacy; solicited recruiters to procure prescriptions for high-margin compounded medications and paid those recruiters commissions based on the percentage of the reimbursements paid by pharmacy benefit managers and health care benefit programs, including commissions on claims reimbursed by TRICARE; solicited (and at times paying kickbacks to) practitioners to authorize prescriptions for high-margin compounded medications; routinely and systematically waived and/or reduced copayments to be paid by beneficiaries and members, including utilizing a purported copayment assistance program to falsely make it appears as if the pharmacies were collecting copayments. Walters and his numerous co-conspirators effectuated a scheme to defraud health care benefit programs, including the TRICARE program, in the amount of $287,659,569, with losses to a government health care program exceeding $20,000,000. Walters obtained over $40,000,000 in proceeds derived directly or indirectly from the fraud.
Walters also admitted that he and others laundered the proceeds by engaging in monetary transactions in amounts of over $10,000 in proceeds from the fraud scheme, including transactions relating to his participation in a sham intellectual property scheme.
The FBI, IRS-CI, DCIS, FBI, and MBN investigated the case with assistance from the U.S. Postal Service Office of Inspector General (OIG), Office of Personnel Management OIG and the Mississippi Attorney General's Office. Trial Attorneys Dustin M. Davis, Sara E. Porter, and Katherine E. Payerle of the Criminal Division’s Fraud Section, Trial Attorney Stephanie Williamson of the Criminal Division’s Money Laundering and Asset Recovery Section, and Assistant United States Attorney Kathlyn R. Van Buskirk of the Southern District of Mississippi are prosecuting the case.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Compounding Pharmacy Mogul Pleads Guilty to Conspiracy to Commit Health Care Fraud and Conspiracy to Commit Money LaunderingRead the Press Release
A Mississippi businessman pleaded guilty Thursday for his role in a multi-million dollar scheme to defraud TRICARE, the health care benefit program serving U.S. military, veterans, and their respective family members, as well as private health care benefit programs, by paying kickbacks to practitioners and distributors for the prescribing and referring of fraudulent prescriptions for not medically necessary compounded medications that were ultimately dispensed by his pharmacies, as well as for his role in a scheme to launder the proceeds of the fraud scheme.
Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney Mike Hurst of the Southern District of Mississippi, Special Agent in Charge Michelle Sutphin of the FBI’s Jackson Field Office, Acting Special Agent in Charge Andrew M. Thornton of IRS Criminal Investigation’s (IRS-CI) New Orleans Field Office, Special Agent in Charge Cynthia Bruce of the Defense Criminal Investigative Service’s (DCIS) Southeast Field Office, and Interim Director Steven Maxwell of the Mississippi Bureau of Narcotics (MBN), made the announcement.
Wade Ashley Walters, 53, of Hattiesburg, Mississippi, a co-owner of numerous compounding pharmacies and pharmaceutical distributors, pleaded guilty to one count of conspiracy to commit health care fraud and conspiracy to commit money laundering before U.S. District Judge Keith Starrett of the Southern District of Mississippi. Defendant was remanded into custody following the plea hearing. Sentencing has been scheduled for Oct. 28, 2020, before Judge Starrett.
As part of his guilty plea, Walters admitted that, between 2012 and 2016, he orchestrated a scheme to defraud TRICARE and other health care benefit programs by distributing compounded medications that were not medically necessary. As part of the scheme, Walters among other things, adjusted prescription formulas to ensure the highest reimbursement without regard to efficacy; solicited recruiters to procure prescriptions for high-margin compounded medications and paid those recruiters commissions based on the percentage of the reimbursements paid by pharmacy benefit managers and health care benefit programs, including commissions on claims reimbursed by TRICARE; solicited (and at times paying kickbacks to) practitioners to authorize prescriptions for high-margin compounded medications; routinely and systematically waived and/or reduced copayments to be paid by beneficiaries and members, including utilizing a purported copayment assistance program to falsely make it appears as if the pharmacies were collecting copayments. Walters and his numerous co-conspirators effectuated a scheme to defraud health care benefit programs, including the TRICARE program, in the amount of $287,659,569, with losses to a government health care program exceeding $20,000,000. Walters obtained over $40,000,000 in proceeds derived directly or indirectly from the fraud.
Walters also admitted that he and others laundered the proceeds by engaging in monetary transactions in amounts of over $10,000 in proceeds from the fraud scheme, including transactions relating to his participation in a sham intellectual property scheme.
The FBI, IRS-CI, DCIS, FBI, and MBN investigated the case with assistance from the U.S. Postal Service Office of Inspector General (OIG), Office of Personnel Management OIG and the Mississippi Attorney General's Office. Trial Attorneys Dustin M. Davis, Sara E. Porter, and Katherine E. Payerle of the Criminal Division’s Fraud Section, Trial Attorney Stephanie Williamson of the Criminal Division’s Money Laundering and Asset Recovery Section, and Assistant United States Attorney Kathlyn R. Van Buskirk of the Southern District of Mississippi are prosecuting the case.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Clearfield County Felon Charged with Illegally Possessing a Shotgun and AmmunitionRead the Press Release
JOHNSTOWN, Pa. – A resident of Coalport, Pa., was indicted by a federal grand jury in Johnstown on a charge of violating federal firearms laws, United States Attorney Scott W. Brady announced today.
The one-count Indictment named Kenneth J. Selvage, 59, as the sole defendant.
According to the Indictment presented to the court, from on or about January 24, 2020 to on or about January 25, 2020, Selvage was found in possession of a Mossberg .20 gauge shotgun and ten shells of ammunition. On June 16, 1999, Selvage was convicted in the Court of Common Pleas of Cambria County, Pennsylvania, of Escape, which is a crime punishable by imprisonment for a term exceeding one year. Federal law prohibits persons who have been convicted of a crime punishable by a term of imprisonment exceeding one year from possessing firearms.
The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Arnold P. Bernard, Jr., is prosecuting this case on behalf of the government.
The Pennsylvania State Police and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation that led to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Clarence Center Man Sentenced for Tax EvasionRead 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 Mark E. Wolanyk, 62, of Clarence Center, NY, who was convicted of tax evasion, was sentenced to 12 months of home confinement, 3 years of supervised release and ordered to pay $243,387 in restitution to the IRS by U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorney John D. Fabian, who is handling the case, stated that in October 2010, the defendant and his minor son opened an account at First Niagara Bank in the name of the minor son, with Wolanyk listed as a custodian on the account. From October 2010 through December 2013, the defendant made deposits into the First Niagara account, including business deposits, totaling approximately $258,911.49. Between January 2011 and December 2013, Wolanyk made cash withdrawals from the First Niagara account totaling approximately $260,875.
In September 20, 2011, during the course of IRS efforts to collect taxes owed by the defendant, Wolanyk submitted what is known as a Collection Information Statement for Wage Earner and Self-Employed Individuals to the IRS. However, the defendant failed to list the First Niagara account in a designated area for listing bank accounts.
In January, April, and December of 2013, the defendant was issued five checks totaling $60,000 as compensation for services rendered in connection with a real estate transaction. All five checks were deposited into the First Niagara account.
In October 15, 2014, Wolanyk filed a false Form 1040 U.S. Individual Income Tax Return for 2013 claiming $77,477 in gross income and $56,491.58 in total income. The defendant knew his taxable income for the calendar year was greater than the amount reported on the tax return. On February 24, 2014, the defendant had previously filed a Form 1040 U.S. Individual Income Tax Return for 2013 claiming -$1,500 total income. Neither return reported the five checks totaling $60,000 deposited into the First Niagara Account.
The total tax loss associated with the defendant’s conduct is $243,386.
The sentencing is the result of an investigation by the Internal Revenue Service, Criminal Investigations Division, under the direction of Jonathan D. Larsen, Special Agent-in-Charge, New York Field Office.
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California Couple in College Admissions Case Agrees to Plead GuiltyRead the Press Release
BOSTON – A California couple has agreed to plead guilty to conspiracy charges in connection with securing the fraudulent admission of their daughter to the University of Southern California as a purported athletic recruit.
Diane Blake, 55, and Todd Blake, 54, both of Ross, Calif., will plead guilty before U.S. District Court Judge Nathaniel M. Gorton on a date to be specified by the Court. Diane Blake will plead guilty to one count of conspiracy to commit wire and mail fraud and honest services wire and mail fraud. Todd Blake will plead guilty to one count of conspiracy to commit wire and mail fraud and honest services wire and mail fraud and one count of conspiracy to commit money laundering.
Under the terms of Diane Blake’s plea agreement, the parties have agreed to a sentence, subject to the Court’s approval, of six weeks in prison, a $125,000 fine and two years of supervised release with 100 hours of community service. Under the terms of Todd Blake’s plea agreement, the parties have agreed to a sentence, subject to the Court’s approval, of four months in prison, a $125,000 fine and two years of supervised release with 100 hours of community service.
Diane and Todd Blake are the 27th and 28th parents to plead guilty in the college admissions case.
Case information, including the status of each defendant, charging documents and plea agreements are available here: https://www.justice.gov/usao-ma/investigations-college-admissions-and-testing-bribery-scheme.
The charge of conspiracy to commit mail and wire fraud and honest services mail and wire fraud provides for a sentence of up 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. The charge of conspiracy to commit money laundering provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $500,000 or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston made the announcement today. Assistant U.S. Attorneys Eric S. Rosen, Justin D. O’Connell, Leslie A. Wright, Kristen A. Kearney, Karin M. Bell and Stephen E. Frank of Lelling’s Criminal Division are prosecuting the case.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Boyle County Man Sentenced to 120 Months for Drug Trafficking and Possession of Firearm by Convicted FelonRead the Press Release
FRANKFORT, Ky. - Richard Simpson, 33, of Danville, Kentucky, was sentenced to 120 months in federal prison on Friday, before U.S. District Judge Gregory Van Tatenhove, after previously admitting that he distributed heroin and was illegally in possession of a firearm as a convicted felon.
Simpson admitted that, on August 19, 2018, he was in his vehicle at a motel parking lot, when law enforcement officers arrested him on an outstanding warrant for a parole violation. Upon Simpson’s arrest, officers found him in possession of 3.5 grams of heroin and $5,150 in cash, along with a .45 caliber pistol. Simpson further admitted that inside his motel room he had additional heroin, methamphetamine, and another firearm. During a search of the room, officers located 13.066 grams of heroin, 19 grams of methamphetamine, and a .22 caliber pistol. Simpson admitted to possessing the heroin and methamphetamine with intent to distribute, and to unlawfully possessing firearms.
Simpson pleaded guilty in February 2020.
Simpson has previously been convicted of five felony offenses: Possession of a Controlled Substance First Degree, in 2018; Trafficking in a Controlled Substance First Degree (two counts), in 2013; Burglary Third Degree and Criminal Mischief, in 2006; and Possession of a Controlled Substance First Degree, in 2006.
Under federal law, Simpson must serve 85 percent of his prison sentence; and upon his release from prison, he will be under the supervision of the U.S. Probation Office for six years.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Shawn Morrow, Special Agent in Charge for ATF; and Sheriff Derek Robbins, Boyle County Sherriff’s Department, jointly announced the sentence.
The investigation was conducted by the ATF and the Boyle County Sheriff’s Department. The United States was represented by Assistant U.S. Attorney Francisco Villalobos II.
This is another case prosecuted as part of the Department of Justice’s “Project Safe Neighborhoods” Program (PSN), which is a nationwide, crime reduction strategy aimed at decreasing violent crime in communities. It involves a comprehensive approach to public safety — one that includes investigating and prosecuting crimes, along with prevention and reentry efforts. In the Eastern District of Kentucky, U.S. Attorney Robert Duncan Jr., coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. Click here for more information about Project Guardian.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
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Bay Area Physician Agrees to Pay $400,000 to Settle Allegations of False Medicare ChargesRead the Press Release
A settlement agreement was finalized today in federal court in which a Bay Area physician, Dr. Parvez Fatteh, agreed to pay $400,000 to resolve allegations that he violated the False Claims Act by charging the Medicare Program for physical and occupational therapy services rendered by unlicensed persons, announced United States Attorney David L. Anderson, Steven J. Ryan, Special Agent in Charge, Office of Inspector General for the U.S. Department of Health and Human Services, and John L. Bennett, Special Agent In Charge of the Federal Bureau of Investigation.
Medicare pays for physical and occupational therapy rendered by individuals who are licensed to practice therapy under State law. According to the settlement agreement, Dr. Fatteh owned and operated San Francisco Pain Management and Physical Therapy (dba Total Health Plus), a clinic located in San Francisco, California, that provided physical and occupational therapy and chiropractor services. The agreement indicates that from 2012 to 2015, Dr. Fatteh billed Medicare for physical and occupational therapy rendered by individuals who allegedly were not licensed therapists under California law.
“Patients are entitled to receive care from licensed providers. When Medicare pays for patient services, it expects that the treating providers are properly licensed as required by the State. Billing Medicare to pay for services rendered by unlicensed providers is fraud upon Medicare and upon the American taxpayers,” said U.S. Attorney David L. Anderson.
“Patients expect their providers be properly credentialed, having proven to the State they have the skills needed to provide high quality care,” said Steven J. Ryan, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Along with our law enforcement partners we will continue working to protect government health plan beneficiaries and taxpayers supporting their care.”
“Healthcare fraud is not a victimless crime. Medical professionals who fraudulently bill our government’s healthcare programs are stealing from taxpayers and robbing vulnerable patients of necessary medical care,” said FBI Special Agent in Charge Bennett. "The FBI and our law enforcement partners will continue to thoroughly investigate white collar crimes such as fraud in our healthcare system.”
The settlement resolves claims against Dr. Fatteh in a lawsuit brought by Hercules Malabanan, a former employee of San Francisco Pain and Physical Therapy, under the qui tam or whistleblower provisions of the False Claims Act, 31 U.S.C. §§ 3729-33. (United States of America, State of California, ex rel. Malabanan v. San Francisco Pain Management and Physical Therapy (D.B.A. Total Care Plus), et al., 14-CV-05165 LB) The False Claims Act permits private individuals known as relators to bring lawsuits on behalf of the United States, and to share in any recovery. The relator will receive fifteen percent of the settlement announced today. The amount of the settlement was determined based on analysis of Dr. Fatteh’s ability to pay after review of his financial condition.
The claims resolved by this settlement are allegations only and there has been no determination of liability.
Gioconda Molinari is the Assistant U.S. Attorney who handled the matter with assistance from Paralegal Tiffani Chiu. The settlement is the result of an investigation by the U.S. Attorney’s Office for the Northern District of California, and the U.S. Department of Health and Human Services Office of Inspector General, along with the Federal Bureau of Investigation.
Baltimore County Man Sentenced to 10 Years in Federal Prison for Possession with Intent to Distribute FentanylRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell, III has sentenced Devon Denzel Thompson, age 26, of Woodlawn, Maryland, to 10 years in prison, followed by five years of supervised release, for possession with intent to distribute three kilograms of fentanyl. Judge Russell also ordered Thompson to forfeit drug proceeds of $14,144 in cash and a .380-caliber firearm and ammunition recovered during a search of his home. The sentence was imposed on July 9, 2020.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Timothy Jones of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; and Chief Melissa R. Hyatt of the Baltimore County Police Department.
“Law enforcement partners are working together to arrest and prosecute those who peddle deadly fentanyl on our streets and in our neighborhoods,” said U.S. Attorney Robert K. Hur. “Drug traffickers are on notice that dealing in fentanyl increases their odds of federal prosecution. Devon Thompson added a gun to that equation and will now serve 10 years in federal prison, where there is no parole—ever. Please, put down the gun and save a life—maybe even your own.”
According to his plea agreement, on March 16, 2018, Thompson fled from a traffic stop, followed by Baltimore County Police Department officers, who observed Thompson throwing items out of the window. Ultimately, Thompson was stopped and arrested. Law enforcement recovered drug paraphernalia, including a digital scale and a baggie containing over 40 grams of fentanyl.
Based on those recoveries, law enforcement officers obtained a warrant to search Thompson’s residence. During the search, law enforcement recovered three kilograms of fentanyl and over $10,000 from Thompson’s bedroom. Officers also recovered a .380-caliber handgun and rounds of live ammunition from other areas of the house. Thompson admitted that the drugs and gun were his and that he possessed the gun in connection with his drug distribution.
United States Attorney Robert K. Hur commended the ATF and the Baltimore County Police Department for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Christopher M. Rigali and Lauren E. Perry, who prosecuted the case.
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Attorney General William P. Barr Announces the Designation of Seth D. DuCharme as Acting United States Attorney for the Eastern District of New YorkRead the Press Release
WASHINGTON – Attorney General William P. Barr announced today the designation of Seth D. DuCharme as Acting U.S. Attorney for the Eastern District of New York, pursuant to 5 U.S.C. § 3345(a)(3), effective July 10, 2020.
“Seth has served the Department with distinction during his time at Main Justice,” stated Attorney General Barr. “He is a talented and experienced prosecutor who manages with a steady hand. His experience in prosecuting violent crime, terrorism, and public corruption, will serve him well in his return to New York to lead the office. The Deputy Attorney General and I look forward to working with him in his new role.”
“I am deeply honored to return to my home in the Eastern District of New York to serve as the Acting United States Attorney,” stated Mr. DuCharme. “Applying all of my experience over the many years living here and working alongside some of the most outstanding people in the Department of Justice, I am firmly committed to serving our community and our country to the highest standards and in the finest tradition of this Office. I wish my predecessor, Rich Donoghue, great success as he heads to Washington, D.C., to help lead the Department.”
Mr. DuCharme will serve as chief federal law enforcement officer for a district comprising Brooklyn, Queens and Staten Island in New York City, and Nassau and Suffolk Counties on Long Island. The district serves over eight million residents. Its Criminal Division has approximately 115 Assistant U.S. Attorneys, and its Civil Division has approximately 60 Assistant U.S. Attorneys.
Mr. DuCharme most recently served in Main Justice as the Principal Associate Deputy Attorney General. From March 2019 to December 2019, Mr. DuCharme served as a Counselor to Attorney General Barr. He worked with the Deputy Attorney General and the Attorney General to supervise and coordinate the work of all of the Department’s components, including all 93 United States Attorney’s Offices. Additionally, he helped to coordinate national initiatives against fraud, opioid trafficking, transnational organized crime, international terrorism and other national security priorities.
Prior to his work at Main Justice, Mr. DuCharme served as the Chief of the Criminal Division in the U.S. Attorney’s Office for the Eastern District of New York, where he supervised the investigations and prosecutions by the Office across a wide range of practice areas, including corporate and securities fraud, terrorism, cybercrime, public corruption, international narcotics trafficking, civil rights violations, and violent and organized crime.
Mr. DuCharme first joined the U.S. Attorney’s Office for the Eastern District of New York in March 2008 and has served in the General Crimes, Violent Crimes and Terrorism, and National Security and Cybercrime Sections. He also has served as the Office’s National Security Cyber Specialist and representative on the Anti-Terrorism Advisory Council.
Mr. DuCharme is a 2003 graduate of Fordham University School of Law, where he was selected as a Stein Scholar and as an editor on the Fordham Law Review. He graduated cum laude, Order of the Coif. Mr. DuCharme received his B.A. from Hamilton College in 1992, with Honors in English literature.
Before attending law school, Mr. DuCharme served as a Deputy U.S. Marshal in Brooklyn from 1996 to 2000.
For more information about the U.S. Attorney’s Office for the Eastern District of New York, please visit https://www.justice.gov/usao-edny.
First Assistant United States Attorney Mark J. Lesko will remain in that role.
Attorney General William P. Barr Announces the Appointment of Richard P. Donoghue as Principal Associate Deputy Attorney General; Designation of Seth D. DuCharme as Acting U.S. Attorney for the Eastern District of New YorkRead the Press Release
Today, Attorney General William P. Barr announced the appointment of U.S. Attorney Richard Donoghue as Principal Associate Deputy Attorney General. Current Principal Associate Deputy Attorney General Seth D. DuCharme has been designated as Acting U.S. Attorney for the Eastern District of New York (E.D.N.Y.), pursuant to 5 U.S.C. § 3345(a)(3). The U.S. Attorney for the Eastern District of New York is the chief federal law enforcement officer for a district comprising Brooklyn, Queens, and Staten Island in New York City, and Nassau and Suffolk Counties on Long Island, with over six million residents.
“Rich has served with distinction and integrity for many years in the Eastern District of New York, earning a well-deserved reputation throughout New York City and Long Island as an outstanding prosecutor with second-to-none judgment,” said Attorney General William P. Barr. “Throughout his time as an Assistant U.S. Attorney, Chief of the Criminal Division for E.D.N.Y., and U.S. Attorney, Rich’s intellect, decisiveness, management style, and dedication to the job has led to him successfully prosecuting many high-profile violent-crime cases (including against MS-13 and other violent gangs), drug trafficking offenses, and white-collar crimes. His experience will be a huge asset to the Office of the Deputy Attorney General, and we look forward to working with him here at Main Justice.”
Since January 2018, Richard has served as U.S. Attorney for the Eastern District of New York. During his tenure, he oversaw a number of high-profile cases of national significance. Under his leadership, his office successfully prosecuted MS-13 racketeering cases and secured convictions against Sinaloa Cartel leader Joaquin (El Chapo) Guzman, Keith Raniere, and high-ranking members of NXIVM, an organization that was engaged in sex trafficking and forced labor. Additionally, Richard has overseen the ongoing prosecutions of Chinese telecommunications company Huawei and several subsidiaries on racketeering charges and Huawei CFO Wanzhou Meng on fraud charges.
Previously, from 2000 to 2011, Richard served as an AUSA in the Eastern District of New York, including serving as Chief of the Criminal Division and Chief of the Long Island Criminal Division. While at the office, he received the New York City Bar Association’s Henry L. Stimson Medal in 2007 and the Eastern District Association’s 2009 Charles E. Rose Award. Prior to that, he served on active duty in the U.S. Army JAG Corps, where he held positions including Military Magistrate Judge, Prosecutor, Defense Counsel, and Contract Litigator. He also served as a paratrooper in the 82nd Airborne Division.
Richard received his B.A., cum laude, from Hofstra University and his J.D. from St. John’s University School of Law.
Seth DuCharme is a veteran of the U.S. Attorney’s Office for the Eastern District of New York and returns to E.D.N.Y. after serving in senior positions at Main Justice. In addition to being Principal Associate Deputy Attorney General, from March 2019 to December 2019, Seth served as a Counselor to the Attorney General. In those positions, he worked with the Attorney General and the Deputy Attorney General to supervise and coordinate the work of all of the Department’s components, including all 93 United States Attorney’s Offices. Additionally, he helped to coordinate national initiatives against transnational organized crime and violent gang elements and worked closely with the Department’s components on countering international terrorism and other national security threats.
“Seth has served the Department with distinction during his time at Main Justice,” said Attorney General William P. Barr. “He is a talented and experienced prosecutor who manages with a steady hand. His experience in prosecuting violent crime, terrorism, and public corruption, will serve him well in his return to New York to lead the office. The Deputy Attorney General and I look forward to working with him in his new role.”
Prior to his work at Main Justice, Seth was the Chief of the Criminal Division for E.D.N.Y., where he supervised investigations and prosecutions by the office across a wide range of practice areas, including corporate and securities fraud, terrorism, cybercrime, public corruption, international narcotics trafficking, civil rights violations, and violent and organized crime. He first joined E.D.N.Y. in March 2008 and served in the General Crimes, Violent Crimes and Terrorism, and National Security and Cybercrime Sections. He also served as the Office’s National Security Cyber Specialist and its representative on the Anti-Terrorism Advisory Council.
Seth is a 2003 graduate of Fordham University School of Law, where he was selected as a Stein Scholar and also as an editor on the Fordham Law Review. He graduated cum laude, Order of the Coif. Seth received his B.A. from Hamilton College in 1992, with Honors in English literature.
For more information about the U.S. Attorney’s Office for the Eastern District of New York, please visit https://www.justice.gov/usao-edny.
Asheville Man Is Sentenced to 17.5 Years for Orchestrating $22 Million Ponzi SchemeRead the Press Release
CHARLOTTE, N.C. – Hal H. Brown Jr., 70, of Asheville, N.C., was sentenced to 210 months in prison and three years of supervised release for orchestrating a $22 million Ponzi scheme, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Kenneth D. Bell also ordered Brown to pay more than $17 million as restitution.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, joins U.S. Attorney Murray in making today’s announcement.
According to filed court documents and yesterday’s sentencing hearing, from at least 2007 through September 2019, Brown fraudulently obtained more than $22.5 million from at least 60 victims, some of whom were at, or near, retirement age, by engaging in a sophisticated Ponzi scheme through his company Oodles Inc. and its various affiliates (collectively “OODLES”). Court records show that Brown was the architect and primary, if not sole, operator of the fraud, and he used his religious reputation and his respected status in the local community to con his investor-victims into trusting him with their money.
According to court documents, Brown defrauded family, friends, neighbors, and fellow church members, who invested anywhere from a few thousand to a few million dollars in OODLES. To induce victims to invest their money, Brown falsely represented that OODLES owned hundreds of millions of dollars in intellectual property, namely family entertainment shows and movies with a religious theme. As part of the scheme, Brown repeatedly lied to victims about the imminent sale of those intellectual properties to various well-known media companies. To perpetuate the fraud, Brown developed marketing material seeking investments or loans for OODLES that claimed large returns on funds invested or lent to the company.
As Brown previously admitted in court, to convince victims the scheme was legitimate and to appease investors who sought an explanation about delays in payouts, Brown provided victims with a number of fraudulent and misleading statements and fictitious information, including fake bank statements and falsified company agreements, among others. He also impersonated employees of well-known media companies and at least one law-firm to add the appearance of legitimacy to his scheme.
According to court documents and today’s sentencing hearing, Brown led an affluent lifestyle, and used a substantial part of victim money on personal expenses unrelated to purported OODLES transactions. He also used funds contributed by new investors to make payments to existing investors, commonly referred to as “Ponzi” payments.
At the sentencing hearing, the Court heard evidence, including statements from some of Brown’s victims, about the tremendous damage wrought by Brown’s fraudulent scheme. This included causing some of his victims serious substantial economic and psychological damage, robbing some of his victims’ nest eggs set aside for education and retirement, and forcing some of his victims out of retirement and back into the workforce.
On January 21, 2020, Brown pleaded guilty to securities fraud and transactional money laundering. In handing down Brown’s enhanced sentence today, the Court considered Brown’s lack of remorse and accountability and the need to protect the public from further crimes by Brown, after evidence presented at the sentencing hearing revealed that, up until very recently, Brown continued to proclaim his innocence in a video he had sent to numerous individuals with whom he had worked decades ago in a volunteer organization to solicit letters of support for his good character. Based on the false information Brown presented in his video, some of the email recipients did write letters of support for Brown, which were filed with the Court. The Court also received evidence of a recent email sent on Brown’s behalf repeating Brown’s lies about his innocence and soliciting loans to help Brown pay expenses, which Brown would purportedly repay with interest in the near future.
In imposing the lengthy sentence, Judge Bell noted that while most Ponzi schemes are horrendous, Brown’s conduct represented some of the worst fraud committed in the worst way and harming some of the most vulnerable victims. Brown was remanded into custody at the conclusion of the sentencing hearing to begin serving his sentence immediately.
In making today’s announcement U.S. Attorney Murray thanked the FBI’s Hickory Residence Agency office, which handled the investigation.
Assistant U.S. Attorneys Daniel Ryan and Mark Odulio of the U.S. Attorney’s Office in Charlotte are prosecuting the case.
In March 2019, Andrew Murray, U.S. Attorney for the Western District of North Carolina, announced the Office’s Elder Justice Initiative, which aims to combat elder financial exploitation by expanding efforts to investigate and prosecute financial scams that target seniors; educate older adults on how to identify scams and avoid becoming victims of financial fraud; and promote greater coordination with law enforcement partners. For more information please visit: /usao-wdnc/elder-justice-initiative.
Antitrust Division Applauds New International Leniency GuidelinesRead the Press Release
The Antitrust Division helped lead the International Competition Network (ICN) initiative on cross-border leniency cooperation to fight international price fixing cartels. The ICN released the “Guidance on Enhancing Cross-Border Leniency Cooperation,” a year-long effort undertaken by the ICN’s Cartel Working Group. The guidance document is designed to assist competition agencies around the globe in engaging and cooperating with their international counterparts when dealing with leniency applicants and other cooperating companies in cross-border investigations.
“Cooperation with our international partners has been a key priority of the Division and I am proud of our continued leadership in developing consensus with ICN members around this important initiative. I applaud the hard work of all of the members of the ICN Cartel Working Group who made this guidance document possible,” said Makan Delrahim, Assistant Attorney General for Antitrust.
The Antitrust Division worked with a team of antitrust agencies from around the world to develop the guidance, including the Australian Competition and Consumer Commission, Canada’s Competition Bureau, Chile’s Fiscalía Nacional Económica, Brazil’s Conselho Administrativo de Defesa Econômica, the European Commission’s Directorate-General for Competition, Hong Kong’s Competition Commission, New Zealand’s Commerce Commission, and the co-chairs of the ICN Cartel Working Group’s Subgroup 1, Turkey’s Rekabet Kurumu and Hungary’s Gazdasági Versenyhivatal.
The Antitrust Division’s efforts were led by Deputy for Criminal Enforcement, Richard Powers, and Deputy for International and Policy, Rene Augustine, and members of the International Section, including International Section Chief, Lynda Marshall, Assistant Chief Michelle Rindone, and other key staff of the Division. The Guidance on Enhancing Cross-Border Leniency Cooperation is now available on the ICN’s website. The project complements existing ICN work product on leniency, including a 2017-2018 fact-finding survey and a 2019 report entitled Good Practices for Incentivising Leniency Applications.
Anchorage Man Charged with Federal Child Pornography CrimesRead the Press Release
Anchorage, Alaska – U.S. Attorney Bryan Schroder announced that Douglass Gordon Doggett, 43, of Anchorage, has been charged with sexual exploitation of children, distribution of child pornography, receipt of child pornography, possession of child pornography, and illegal possession of a firearm as a convicted felon.
The criminal complaint alleges that, from November 2019 to May 2020, Doggett created numerous recordings of himself engaging in sexual activity with a 16-year-old girl. According to the complaint, in May 2019 Doggett and the victim began exchanging messages on Snapchat. The Snapchat activity continued until May 2020, and included the exchange of numerous videos and images depicting Doggett engaging in sexual activity with the minor.
The complaint further alleges that in May 2020, Doggett sent the victim a video of himself shooting an AR-15 at a target course. Doggett was taken into custody on July 7, 2020 and admitted to creating and exchanging the recordings recovered by law enforcement and to possessing the firearm. Doggett has multiple prior felony convictions, including a federal firearm conviction in 2010, which prohibited him from possessing firearms under federal law.
If the public has any further information regarding Doggett’s activities, please contact Anchorage FBI at (907) 276-4441.
If convicted, Doggett faces a mandatory minimum of 15 years, with a maximum of up to 30 years in federal prison, for the most serious charges alleged. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
The FBI’s Child Exploitation Task Force conducted the investigation leading to the charges in this case, with the assistance of the Anchorage Police Department (APD). This case is being prosecuted by Assistant U.S. Attorney James Klugman of the U.S. Attorney’s Office for the District of Alaska.
The investigation is 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 U.S. Attorneys’ Offices, Project Safe Childhood combines 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.justice.gov/psc.
Altercation in North Seattle leads to federal gun chargeRead the Press Release
Seattle - A repeat offender who got into a fight with a man in North Seattle made his initial appearance today on a federal charge of being a felon in possession of a firearm, announced U.S. Attorney Brian T. Moran. CHRISTOPHER TOLLIVER, 46, was transferred to federal custody today following his arrest by Seattle Police on April 7, 2020.
According to a criminal complaint filed in the case, Seattle Police were called to the scene of a fight in the 9700 block of Woodlawn Avenue North. Witnesses reported seeing two men in an argument, with one holding a baseball bat. Police located the person with the bat, who said items had been stolen from his car the night before, and he identified TOLLIVER as the person who had stolen them. The man had confronted TOLLIVER about the theft and had carried the bat because he believed TOLLIVER carried a shotgun.
TOLLIVER had left the area on a scooter, but was quickly located by police. Nearby they found various bags matching the description of the bags that witnesses had seen in TOLLIVER’s possession at the scene of the altercation, including a backpack with a loaded, sawed-off shotgun inside.
TOLLIVER has multiple prior felony convictions from King County Superior Court, including a 2001 Manslaughter conviction, a 2011 drug conviction, and a 1995 conviction for assault with a deadly weapon. TOLLIVER is therefore prohibited from possessing firearms.
Being a felon in possession of a firearm is punishable by up to ten years in prison.
The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
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 and enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes. Project Guardian ensures that federal resources are directed at the criminals posing the greatest threat to our communities. More information about Project Guardian is here.
The case is being investigated by the Seattle Police Department and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF). The case is being prosecuted by Assistant United States Attorney Tobias Tobler.
tolliver_complaint.pdf
9 July 2020
Whitesville Man Sentenced to More Than 12 Years in Federal Prison for Second Child Pornography Offense and Firearm ChargeRead the Press Release
CHARLESTON, W.Va. – A Whitesville man was sentenced to federal prison for his second child pornography offense and possessing a firearm despite being a convicted felon, announced United States Attorney Mike Stuart. Daniel Runion was sentenced to 12 and a half years in prison for possession of child pornography and being a felon in possession of a firearm. The court also ordered Runion to pay $10,000 to an identified child victim in the child pornography case. Runion also was placed on 20 years of supervised release because he committed these new offenses while on supervised release stemming from a 2012 conviction of receipt of child pornography.
“Some people are just lifetime criminals. This case is sickening. Even after serving time, and while on supervised release, Mr. Runion continued in his terrible ways,” said United States Attorney Mike Stuart. “Cases like this are painful, but my office prosecutes those who exploit children.”
Runion previously admitted that he possessed child pornography on his smartphone while in Marmet. The image showed a minor female performing oral sex on an adult male. In connection with that activity, Runion also admitted that he sent a video of child pornography over Facebook to another user of the social media website.
Runion also previously admitted that despite being a convicted felon, he possessed a Smith and Wesson .38 caliber Special Airweight Revolver, which he kept in his Whitesville residence. Runion committed both new offenses within a year of being released from prison after serving a 97-month sentence and was serving a 15-year term of supervised release.
The West Virginia State Police and Homeland Security Investigations (HSI) conducted the investigation. Senior United States District Judge John T. Copenhaver, Jr. imposed the sentence. Assistant United States Attorney Kristin F. Scott handled the prosecution.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative of the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
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U.S. Attorney Joins District Attorneys to Use Technology to Help Victims of Child Exploitation and Domestic ViolenceRead the Press Release
SACRAMENTO, Calif. — The District Attorneys of Alameda, Sacramento, and San Diego counties together with the U.S. Attorney’s Office for the Eastern District of California launched an online outreach campaign to help victims of domestic violence and child exploitation and abuse during the COVID-19 pandemic.
The outreach campaign was created to combat unintended consequence of COVID-19 public health measures — an alarming rise in domestic violence with victims trapped at home with their abusers, and in child exploitation as more children are pushed online for longer periods of time with school and summer camp closures. The National Center of Missing and Exploited Children (NCMEC) runs the CyberTipline, a centralized, national reporting system for the online exploitation of children. In March 2019, NCMEC received 983,734 reports and in April 2019, NCMEC received approximately 1 million reports through its CyberTipline. In March 2020, NCMEC received over 2 million reports, 4.2 million reports in April 2020.
“Our shared goal in this campaign is to help children who are being exploited by online predators, and other child abuse and domestic violence victims who are isolated and at risk during this pandemic by using one of the only available means to reach them — technology,” said U.S. Attorney Scott. “Every time one of our posts is seen or shared, it’s a chance to save a life.”
The public awareness messages are visible on Facebook and other social media platforms with a new post made each day for two weeks, with the ad campaign continuing to run through July. The posts provide information for victims with resources, such as 24-hour hotlines and other services vital to reporting abuse. The posts also provide tips for concerned friends, relatives, and educators on how they can help victims of abuse. This outreach campaign has reached more than 142,000 people, and will continue to reach more people throughout July.
A Facebook Live panel on July 10 featuring U.S. Attorney Scott and the District Attorneys of Alameda, Sacramento, and San Diego counties will discuss the current challenges facing victims and survivors of domestic violence and child abuse, and will be moderated by Childhelp, a nonprofit organization aiding victims of child abuse.
Two Pennsylvania-Based Doctors and Five Others Charged in Genetic Testing Kickback and Bribery SchemesRead the Press Release
NEWARK, N.J. – Seven people have been charged for their roles in conspiracies to pay and receive kickbacks in exchange for ordering genetic tests, U.S. Attorney Craig Carpenito announced today.
Three complaints were unsealed today charging the following individuals with conspiring to violate the Federal Anti-Kickback Statute: Lee Besen, 64, of Waverly, Pennsylvania, is charged in two separate complaints, one with Kimberly Schmidt, 45, of Moscow, Pennsylvania, and the other with Terri Haines, of Kennett Square, Pennsylvania. The third complaint charges Yitzachok “Barry” Kurtzer, 60, and Robin Kurtzer, 59, both of Monsey, New York; Amber Harris, 28, of Scranton, Pennsylvania; and Shanelyn Kennedy, 25, of Scranton, Pennsylvania. All of the defendants except Robin Kurtzer made their initial appearances by videoconference before U.S. Magistrate Judge Leda D. Wettre. Robin Kurtzer will surrender at a later date.
“As alleged in the criminal complaints, these defendants engaged in a long-running and complex scheme to rip off Medicare to the tune of millions of dollars,” U.S. Attorney Carpenito said. “They turned patients into human ATMs, generating cash payments for medical testing and other procedures. Those who offer or receive bribes and kickbacks for patient care will be prosecuted by this Office and swiftly brought to justice.”
“Health Care fraud costs our country billions each year, which is not just absorbed, it is passed down to the consumer,” Acting Special Agent in Charge Joe Denahan of the Newark FBI Field Office said. “Today’s arrest is a direct result of the commitment by our federal and state partners to aggressively pursue and charge those who willingly defraud our citizens of valuable resources that are in high demand. We will remain vigilant to assure that unscrupulous individuals are brought to justice.”
“Our medical system is built on trust,” Michael Montanez, Special Agent in Charge, IRS - Criminal Investigation, Newark Field Office, said. “When doctors take bribes and kickbacks that trust is broken. The allegations in the criminal complaints portray doctors who ordered genetic tests for the sole purpose of cheating Medicare and putting cash in their own pockets.”
“Scams, such as the alleged, are hardly victimless,” Maureen R. Dixon, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services, Philadelphia Regional Office, said. “These types of fraudulent activities come at a significant cost to the taxpayer and patients who were the target of these procedures. We will continue working with our law enforcement partners to stop kickbacks that threaten the integrity of government health programs.”
According to documents filed in this case and statements made in court:
Besen and Kurtzer were both primary care physicians with separate offices in the Scranton area. From at least 2018, Besen and Kurtzer each began accepting monthly cash kickbacks and bribes in exchange for collecting DNA samples from Medicare patients and sending them for genetic tests to clinical laboratories in New Jersey and Pennsylvania. The cash kickbacks ranged from $500 to $5,000 and Besen and Kurtzer typically accepted the cash in their respective offices, at times behind locked doors. At one point, Kurtzer and his wife, Robin, complained that they were not getting paid enough and renegotiated a higher kickback and bribery fee.
When Besen and Kurtzer did not receive their kickback and bribe payments, the volume of genetic tests they ordered dipped. But, when they accepted those payments, that volume typically increased because, as Besen said in a recorded conversation, “Greenbacks speak.”
Besen and Kurtzer were also recorded receiving and discussing many of their kickback and bribe payments. After Kurtzer accepted a $5,000 cash kickback, he counted the money and said, “Perfect. Didn’t short me.” Besen discussed the kickback and bribe payments as “vigs” – slang for fees collected by bookies.
Besen frequently sought ways to make more money. At one point, he proposed adding to the scheme by collecting “CGx” cancer screening tests from Medicare patients, sending the tests to a new lab, and then splitting lucrative sales commissions that the lab paid out – ranging up to $2,500 per test. Although Besen had not previously ordered CGx tests for any of his patients, once he realized there was money to be made, he said in a recording that his office was “totally open now for CGx.” He was also recorded saying that he hoped the money he made from CGx tests would help him “retire early.” Kurtzer and his staff similarly started ordering CGx tests in order to make more money off of kickbacks and bribes.
Even as the ongoing COVID-19 pandemic substantially reduced their in-patient visits, Besen and Kurtzer continued with their schemes. They worked with their staffs to generate more genetic tests from Medicare patients. Kurtzer went from receiving hand-delivered cash kickbacks and bribes to accepting his payments by wire and through a cell phone money-transfer app. Besen was recorded opining that it was “nuts” for Kurtzer to create that kind of paper trail. Instead, Besen accepted his kickback and bribe payment in cash, in a fast food parking lot. Leading up to that payoff, Besen was recorded making veiled threats and referencing the mafia, while also expressing concern about being caught on camera accepting kickbacks and bribes. Despite such concerns, he followed through with the meeting because, as he was recorded saying, he wanted to collect “greenbacks” for his “pool house.”
Neither doctor acted alone while perpetrating their bribery and kickback schemes. Besen enlisted Schmidt, his employee, who helped him with the scheme by preparing paperwork for the genetic tests. Schmidt also accepted kickbacks and bribes that were calculated based on the volume of genetic tests that Besen generated.
Kurtzer included his wife and his employees Harris and Kennedy, in the scheme. Robin Kurtzer helped negotiate the terms of the kickback and bribery payments, while Harris and Kennedy helped collect the DNA swabs in exchange for also receiving kickbacks and bribes.
As a result of these schemes, Medicare was billed over $1 million for genetic tests generated from Besen’s medical practice, and over $1.3 million for tests generated from Kurtzer’s practice.
Separately, Besen and Haines entered into a different kickback and bribery scheme involving “health fairs.” Haines was not a health care provider, but made a living soliciting and collecting CGx genetic screening tests from Medicare patients at health fairs, and then sending those tests to a lab in exchange for commissions. She was not authorized to order those CGx tests without a doctor’s sign-off. As a result, Haines paid Besen a kickback and bribe to use his name and medical credentials to order CGx tests for the Medicare patients she met at fairs, even though Besen never actually attended any of the health fairs and never met the patients for whom the genetic tests were ordered. Medicare was billed $1,936,795 for genetic tests that resulted from this scheme.
Conspiracy to violate the federal anti-kickback statute is punishable by a maximum of five years in prison and a fine of $250,000, or twice the gross gain or loss derived from the offense, whichever is greater.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Denahan in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge Montanez in Newark; and U.S. Department of Health and Human Services, Office of Inspector General, Philadelphia Regional Office, under the direction of Special Agent in Charge Dixon, with the investigation leading to the charges. He also thanked the FBI Scranton Field Office, FBI Philadelphia Division and the Pennsylvania Attorney General’s Office for their assistance.
The government is represented by Assistant U.S. Attorney Joshua L. Haber of the Health Care Fraud Unit in the Criminal Division, Newark.
The charges and allegations in the complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Two Aliens Indicted on Illegal Reentry ChargesRead the Press Release
RALEIGH, N.C. – A federal grand jury returned indictments charging Julian Arias-Rodriguez, age 21, of Mexico and Jorge Patricio-Ocampo, age 35, of Mexico, with illegal reentry of a removed alien.
If convicted of illegal reentry, Arias-Rodriguez, previously deported four times and found in Harnett County, and Patricio-Ocampo, previously deported twice and found in Wake County would face a maximum imprisonment term of two years, a $250,000 fine, and a term of supervised release following any term of imprisonment.
Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement. ICE’s Enforcement and Removal Operations and Homeland Security Investigations are investigating the case.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Three indicted on fentanyl-related chargesRead the Press Release
HOUSTON – Two Texas men are set to appear in federal court on charges of drug distribution that resulted in an overdose, announced U.S. Attorney Ryan K. Patrick.
A federal grand jury returned the nine-count superseding indictment against Joseph Raymond Weeks, 33, Katy, and Rhett Dwayne Farrell, 40, Pinehurst, Wednesday, July 1. They are expected to appear for their arraignment before U.S. Magistrate Judge Dena H. Palermo today at 2 p.m. Also charged is Jessica Wickman-Cano, 35, Katy, who is set to appearance today.
All were initially charged by criminal complaint on related offenses. They appeared before a U.S. magistrate judge who had ordered Weeks and Farrell into custody pending further criminal proceedings. Wickman-Cano was also initially remanded to custody, but was later granted release upon posting bond.
The new charges in the superseding indictment stem from an investigation into the drug overdose of a Montgomery County man. On Feb. 25, law enforcement and emergency personnel responded to an individual who was passed out in his vehicle, according to the charges. He was allegedly unresponsive, and they had to administer NARCAN to revive him.
The indictment alleges the man had overdosed on fentanyl and had purchased it from Farrell. Weeks was allegedly the source of supply.
The nine-count superseding indictment charges Weeks and Farrell with two counts each of conspiracy and possession with intent to distribute controlled substances which resulted in serious bodily injury. Additionally, Weeks and Wickman are charged with one count of possession with intent to distribute a controlled substance and one count of conspiracy to do the same, while Farrell is charged with two additional counts of possession with intent to distribute a controlled substance. Weeks is also charged with one count of being a felon in possession of a firearm.
If convicted, Weeks and Farrell face up to life in prison, while Wickman faces up to 20 years. All three could also be required to pay up to $1 million in fines.
Texas Department of Public Safety conducted the investigation with the assistance of the Drug Enforcement Administration, Montgomery County Narcotics Enforcement Team and police departments in Katy and Houston. Assistant U.S. Attorneys Jimmy Leo, Michael Day and Christine Lu are prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Three Oregon Men Sentenced to Federal Prison for Illegal Firearm Possession (Photo)Read the Press Release
PORTLAND, Ore.—In separate criminal cases, three men, Mitch Bryan Schoonover, 37, of Portland; Isaiah Holt, 32, also of Portland; and Jay Rodney Ferdig, 44, of Salem, Oregon; were sentenced this week to federal prison for illegally possessing firearms as convicted felons, announced U.S. Attorney Billy J. Williams.
“The goal of the Project Safe Neighborhoods program is to reduce violent crime and victimization across Oregon,” said U.S. Attorney Williams. “A key pillar of our strategy is to reduce illegal gun ownership. With the assistance of our federal, state, local, and tribal law enforcement partners, we have made significant progress toward this goal.”
U.S. v. Schoonover
On July 6, 2020, Schoonover was sentenced to 18 months in prison and three years’ supervised release. According to court documents, on January 1, 2020, Gresham Police officers stopped Schoonover for a traffic violation and on suspicion that the vehicle he was driving was stolen. Officers searched the vehicle after confirming it was stolen and found a .45 caliber semiautomatic pistol, a loaded magazine, and a clear glass pipe containing methamphetamine residue.
In 2005, after learning that another man had spent the night with his girlfriend, Schoonover shot and killed the man at short range with a rifle. He was convicted in Multnomah County Circuit Court of first degree manslaughter and sentenced to 15 years in state prison.
This case was investigated by the Gresham Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). It was prosecuted by Assistant U.S. Attorney Lewis S. Burkhart.
U.S. v. Ferdig
Ferdig was sentenced today to 30 months in prison and three years’ supervised release. According to court documents, on August 2, 2019, Ferdig and his fiancée were staying at a Salem motel with their 11-month- and three-year-old children. They left both children in the care of an extremely intoxicated cousin and went to a local park to inject methamphetamine. The children wandered away and a motel guest brought both children inside for their protection and to prevent the three-year-old from running into the street. During a subsequent welfare check, police discovered the children were barefoot and had not had their diapers changed for hours. Ferdig and his fiancée were arrested upon their return to the motel.
Police discovered drug packaging on Ferdig’s person and a .22 caliber pistol with a round in the chamber, two boxes of ammunition, plastic bags with shards of methamphetamine, two digital scales, hypodermic needles, and a stun gun in his vehicle.
Ferdig’s criminal history spans more than two decades. He is prohibited from possessing a firearm after numerous felony convictions for assault, sex offenses, drug offenses, robbery, burglary, and other crimes.
This case was investigated by the Salem Police Department and prosecuted by Assistant U.S. Attorney Byron G. Chatfield.
U.S. v. Holt
Holt was sentenced today to 37 months in prison and three years’ supervised release for money laundering, drug trafficking, and illegally possessing a firearm as a convicted felon. According to court documents, beginning in July 2016 and continuing until his arrest in April 2018, Holt used his association with a licensed marijuana producer in Portland to divert state-legal marijuana into the black market. Holt sold marijuana in-person to out-of-state customers traveling to Oregon and by mail to remote customers using the U.S. Postal Service.
The investigation started when Holt directed his girlfriend to purchase a handgun for him. In April 2018, ATF agents obtained and executed a search warrant on Holt’s Northeast Portland residence. They found 11.5 grams of cocaine and nearly $2,000 in cash on Holt’s person and three firearms, drug packaging materials, shipping labels, 14 pounds of marijuana, and $46,100 in cash in the residence.
After his arrest and federal indictment, Holt continued to distribute cocaine. From April to August 2019, law enforcement conducted three controlled purchases of cocaine from Holt. In total, law enforcement purchased or recovered from Holt approximately 158 grams of cocaine during these purchases.
Holt is prohibited from possessing a firearm after several felony convictions in Multnomah County Circuit Court in 2007 for selling marijuana and shooting an individual during an altercation.
This case was investigated by ATF, the U.S. Drug Enforcement Administration, and the Portland Police Bureau. It was prosecuted by Assistant U.S. Attorneys Julia E. Jarrett and Leah K. Bolstad.
These cases were brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Schoonover Firearm Ferdig Firearm Holt FirearmThird Member of Internet Romance Fraud Scheme to Serve 102 Months in Federal PrisonRead the Press Release
Oklahoma City, Oklahoma – NNAMDI FRANKLIN OJIMBA, 36, currently from Chicago, Illinois, has been sentenced to 102 months in federal prison for his role in a fraudulent romance scheme involving victims throughout the United States, announced Timothy J. Downing, U.S. Attorney for the Western District of Oklahoma.
On October 17, 2017, a grand jury indicted Ojimba for conspiracy and wire fraud. According to the indictment, the scheme involved using false profiles to open accounts on online dating websites and then courting victims by pretending to be successful financial advisors or affiliated with charitable causes. Over time, through supposedly romantic relationships, the defendant and others caused victims to share personal information about their finances and then encouraged victims to wire them money on the pretext of managing their investments. The conspirators actually kept the money for personal use. Ojimba was arrested in Chicago in October, 2017. After a jury failed to reach a unanimous decision in October, 2018, Ojimba was re-tried on the conspiracy count in August 2019 and was convicted by a jury. He has been in federal custody since his conviction.
Yesterday, Chief United States Judge Timothy D. DeGiusti sentenced Ojimba to 102 months in prison, followed by three years of supervised release. He was also ordered to pay restitution totaling almost $3.5 million.
Two other participants in the scheme were convicted separately. In 2017, KEN EJIMIFOR EZEAH, 38, of Houston, Texas, was sentenced to 11 years in prison following a plea of guilty. AKUNNA BAIYINA EJIOFOR, 36, also of Houston, was sentenced to a prison term of 7 years after being convicted at trial. For more information, please see https://www.justice.gov/usao-wdok/pr/two-sentenced-11-and-7-years-federal-prison-46-million-internet-romance-fraud.
The case was the result of an investigation by the Oklahoma City office of the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Timothy W. Ogilvie.
Texas Man Pleads Guilty to Trafficking WildlifeRead the Press Release
A Texas man pleaded guilty today in federal court in the Western District of Texas on charges of conspiring to traffic thousands of live reptiles, amphibians, and birds, valued in excess of $3.5 million.
Alejandro Carrillo of El Paso, Texas, pleaded guilty before Senior U.S. District Judge David Briones for the Western District of Texas. Sentencing has been scheduled for Sept. 16.
“Carrillo’s arrest and his removal from the trafficking network demonstrates that the Justice Department will continue to vigorously enforce laws designed to protect wildlife,” said Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Environment and Natural Resources Division. “This is a continuing investigation and reflects the seriousness with which we regard these activities and our commitment to hold accountable those who break the law.”
“This investigation has exposed a highly coordinated wildlife trafficking ring responsible for the smuggling of wild caught reptiles destined to collectors and the commercial trade across the U.S. and globe,” said Edward Grace, Assistant Director for Law Enforcement for the U.S. Fish and Wildlife Service (FWS). “The number of animals suspected of being smuggled is in the tens of thousands. Reptiles, amphibians and other protected wildlife already face enough environmental stressors worldwide. This case goes a long way to slow the impacts of wildlife trafficking on species that are under protection of the Endangered Species Act and CITES.”
According to documents filed with the court, beginning in 2016, the FWS undertook Operation Bale Out, an investigation of a network of individuals involved in the trafficking of wildlife between the United States and Mexico. “Bale” means a group of turtles, and much of the wildlife trafficked by this network involved rare turtles.
According to information in the public record, Carrillo functioned as a middle-man for the network, transporting live animals – many of which were protected under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) – from Mexico into the United States. Carrillo pleaded guilty to two counts of an indictment charging him with conspiring to traffic wildlife into the United States, and smuggling wildlife into the United States. As part of the plea, Carrillo admitted to being paid more than $92,000 to transport thousands of animals from Mexico into the United States, valued at more than $3,500,000. After transporting the animals into the United States, Carrillo then arranged for them to be delivered to domestic customers, who had purchased the animals from the Mexico-based suppliers.
This case is part of an ongoing effort by the Department of the Interior’s Fish and Wildlife Service Office of Law Enforcement, in coordination with the Department of Justice, to prosecute those involved in the illegal taking and trafficking in protected species. This prosecution is being handled by the Environment and Natural Resources Division’s Environmental Crimes Section with assistance from the U.S. Attorney’s Office for the Western District of Texas. The government is represented by Environmental Crimes Trial Attorneys Mary Dee Carraway and Gary N. Donner.
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.
Telemedicine company owner pleads guilty to telemedicine fraud conspiracyRead the Press Release
SAVANNAH, GA: A Georgia woman who operated a telemedicine network through two companies has admitted to participation in an ever-growing healthcare and telemedicine fraud scheme.
Charlene Frame, the operator of Royal Physician Network, LLC, and Envision It Perfect, LLC, both Georgia companies, pled guilty in U.S. District Court to a charge of Conspiracy for conspiring to pay medical providers, such as physicians and nurse practitioners, in exchange for obtaining orders for durable medical equipment (DME) that would then be sold to DME providers and, ultimately, billed to Medicare, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia.
The financial total for orders facilitated through this scheme is alleged in court documents to be in excess of $60 million for thousands of patient orders. Medicare beneficiaries were located in the Southern District of Georgia and elsewhere.
“Charlene Frame used her network of companies to blatantly defraud the government’s insurance safety net for seniors,” said U.S. Attorney Christine. “We will not tolerate such greed-fueled theft from these programs, and will continue to root out these despicable frauds.”
This prosecution, arising out of the related “Operation Brace Yourself” and “Operation Double Helix,” together with 25 other previously announced cases, involve the largest fraud operation in the history of the Southern District of Georgia. Those charged in this string of cases include eight physicians, two nurse practitioners, two other operators of different telemedicine companies, three brokers of patient data, and several owners of durable medical equipment companies. The Medicare and Medicaid beneficiaries whose identities were used as part of the scheme are located throughout the country, including throughout the Southern District of Georgia.
The combined $480 million in fraud charged in the Southern District of Georgia is part of nationwide operations by the Department of Justice that thus far has included allegations involving billions of fraudulent claims for genetic testing, orthotic braces, pain creams, and other items.
“Frame’s fraud scheme of $60-million has put tremendous strain on our federally-subsidized health care programs and it is only a small part of a much larger operation,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “She will be held accountable for her greed and the affect it has had on our tax paying citizens, especially those who need government assistance for their health care needs.”
“Paying kickbacks in exchange for patient referrals is a dangerous and illegal practice,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “The OIG, in concert with our law enforcement partners, is dedicated to ensuring that patient referrals are based on sound medical advice and not financial remuneration.”
“This type of corruption involving health care fraud against Medicare has managed to defraud American taxpayers of millions upon millions of dollars,” said Resident Agent in Charge Glen M. Kessler of the U.S. Secret Service. “The U.S. Secret Service and our partners are always willing to take prompt and coordinated actions to hold these telemarketers and medical professionals responsible for placing personal greed above the good of the public, particularly in light of our nation’s current struggles with the COVID-19 pandemic.”
This investigation is ongoing. As telemedicine becomes an increasing part of our healthcare system, vigilance in ensuring that fraud and kickbacks do not usurp the legitimate practice of medicine by electronic means is more important than ever. If you are aware of any fraud or kickbacks relating to telemedicine, including COVID-19 fraud, please call the FBI hotline at 1-800-CALL-FBI.
This particular prosecution resulted from a joint investigation of multiple agencies and offices. U.S. Attorney Christine acclaimed the hard work of the investigatory team, led by FBI - Savannah, the Department of Health and Human Services Office of Inspector General, and the United States Secret Service.
Assistant U.S. Attorney Jonathan A. Porter is prosecuting this case on behalf of the United States.
Selling Two Pounds of Methamphetamine Results in over a Dozen Years in Federal PrisonRead the Press Release
A man who sold at least two pounds of meth was sentenced July 8, 2020, to more than twelve years in federal prison.
Paul Gensley, age 52, from Victor, Iowa, received the prison term after a December 2, 2019 guilty plea to conspiracy to distribute drugs. In a plea agreement, Gensley admitted he agreed to work with at least one other person to distribute drugs in northern Iowa. Testimony during previous hearings in the case showed that Gensley’s source of meth was arrested and jailed, but continued to participate in the conspiracy. While in jail, the source provided a pound of meth to Gensley. Gensley was captured on jail phone recordings talking to his source and later sold methamphetamine to a confidential informant. Evidence showed Gensley sold at least two pounds of meth overall and provided a gun to another participant in the conspiracy. Gensley has multiple previous felony convictions involving stolen property. Law enforcement recently recovered a stolen motorcycle and golf cart from his house.
Gensley was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Gensley was sentenced to 150 months’ and 20 days imprisonment. He must also serve a five-year term of supervised release after the prison term. There is no parole in the federal system. Gensley 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 Emily K. Nydle and through a cooperative effort of the Iowa Division of Narcotics Enforcement and the Iowa County Sheriff’s Office.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 19-cr-86.
Follow us on Twitter @USAO_NDIA.
San Diego, California Man Sentenced to Federal Prison for His Role in Million Dollar Scheme Targeting Thousands of U.S. Servicemembers and VeteransRead the Press Release
In San Antonio, a federal judge sentenced 33-year-old Trorice Crawford of San Diego, California, to 46 months in federal prison for his role in an identity-theft and fraud scheme that victimized thousands of U.S. servicemembers and veterans, announced U.S. Attorney John F. Bash and Director Gustav Eyler of the Department of Justice’s Consumer Protection Branch.
In addition to the prison term, Chief U.S. District Judge Orlando Garcia ordered that Crawford pay $103,700 in restitution and be placed on supervised release for a period of three years after completing his prison term.
“The Department of Justice will not tolerate fraud on America’s warfighters and veterans,” said Acting Assistant Attorney General Ethan P. Davis of the Department’s Civil Division. “Working with our partners and using all tools available, we are committed to protecting those who protect us.”
On December 5, 2019, Crawford pleaded guilty to one count of conspiracy to launder monetary instruments. By pleading guilty, Crawford admitted that from May 2017 to July 2019, he conspired with Robert Wayne Boling, Jr. (a U.S. citizen), and others to steal money belonging to U.S. Servicemembers and veterans. By pleading guilty, Crawford admitted to recruiting at least 30 individuals (aka “money mules”) who provided their bank account information to receive funds stolen from military affiliated individuals. On average, each unauthorized transfer from a victim’s accounts ranged from between $8,000 to $13,000. Crawford kept a percentage of the withdrawn funds for himself and oversaw the transmission of the remaining amounts by means of international money remittance services to Boling and others in the Philippines.
In October, co-defendant Frederick Brown, age 38 of Las Vegas, NV, pleaded guilty to federal charges in connection with this scheme. Brown, a former civilian medical records administrator for the U.S. Army at the 65th Medical Brigade, Yongsan Garrison, South Korea, admitted that while logged into the Armed Forces Health Longitudinal Technology Application, he illegally captured on his cell phone personal identifying information (PII) of thousands of military members, including names, social security numbers, DOD ID numbers, dates of birth, and contact information. Brown further admitted that he subsequently provided that stolen data to Boling so that Boling and others could exploit the information in various ways to access Department of Defense and Veterans Affairs benefits sites and steal millions of dollars.
As asserted in the federal grand jury indictment, Boling, together with his Philippines-based co-defendants Allan Albert Kerr (Australian citizen) and Jongmin Seok (South Korean citizen), specifically used the stolen information to compromise a Department of Defense portal designed to enable military members to access benefits information online. Once through the portal, the defendants are alleged to have accessed benefits information. Access to these detailed records enabled the defendants to steal or attempt to steal millions of dollars from military members’ bank accounts. The defendants also stole veterans’ benefits payments. Evidence of the defendants’ scheme was detected earlier this year, advancing the investigation that led to the indictment.
The Departments of Defense and Veterans Affairs are coordinating with the Department of Justice to notify and provide resources to the thousands of identified victims.
Boling, Kerr and Seok are charged with multiple counts of conspiracy, wire fraud, and aggravated identity theft. Boling, Kerr and Seok remain in the Philippines. Measures are being taken to effect their transfer to the Western District of Texas. Brown remains in federal custody awaiting sentencing scheduled for 10:30am on September 17, 2020, before Judge Garcia in San Antonio.
It is important to note that an indictment merely alleges that crimes have been committed. All defendants are presumed innocent until proven guilty beyond a reasonable doubt.
The United States is represented by Trial Attorneys Ehren Reynolds and Yolanda McCray Jones of the Department of Justice’s Consumer Protection Branch and Assistant U.S. Attorney Joseph Blackwell of the U.S. Attorney’s Office for the Western District of Texas. The matter was investigated by agents of the Defense Criminal Investigative Service, and counsel Matthew Freund, along with substantial investigative support from the U.S. Postal Inspection Service, the U.S. Army Criminal Investigation Command, and the Veterans Benefits Administration’s Benefits Protection and Remediation Division. The U.S. Department of State’s Diplomatic Security Service, Philippine law enforcement partners, and the U.S. Attorneys’ Offices for the District of Nevada, the Southern District of California, and the Eastern District of Virginia also provided assistance. Resources from the Department of Justice’s Servicemembers and Veterans Initiative and its Transnational Elder Fraud Strike Force aided in the matter’s investigation and prosecution.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. In particular, in March 2020, the Department announced the largest elder fraud enforcement action in American history, charging more than 400 defendants in a nationwide elder fraud sweep. The Department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
Additional information about the Consumer Protection Branch and its enforcement efforts can be found at www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Western District of Texas, visit its website at https://www.justice.gov/usao-wdtx. Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice; information on the Servicemember and Veterans Initiative is at https://www.justice.gov/servicemembers.
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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.
San Diego, California Man Sentenced to Federal Prison for His Role in Million Dollar Scheme Targeting Thousands of U.S. Servicemembers and VeteransRead the Press Release
A federal judge in San Antonio sentenced 32-year-old Trorice Crawford of San Diego, California, to 46 months in federal prison for his role in an identity-theft and fraud scheme that victimized thousands of U.S. servicemembers and veterans, the Department of Justice announced today.
In addition to the prison term, Chief U.S. District Judge Orlando Garcia ordered that Crawford pay $103,700 in restitution and be placed on supervised release for a period of three years after completing his prison term.
On December 5, 2019, Crawford pleaded guilty to one count of conspiracy to launder monetary instruments. By pleading guilty, Crawford admitted that from May 2017 to July 2019, he conspired with Robert Wayne Boling, Jr. (a U.S. citizen), and others to steal money belonging to U.S. Servicemembers and veterans. By pleading guilty, Crawford admitted to recruiting at least 30 individuals (aka “money mules”) who provided their bank account information to receive funds stolen from military affiliated individuals. On average, each unauthorized transfer from a victim’s accounts ranged from between $8,000 to $13,000. Crawford kept a percentage of the withdrawn funds for himself and oversaw the transmission of the remaining amounts by means of international money remittance services to Boling and others in the Philippines.
“The Department of Justice will not tolerate fraud on America’s warfighters and veterans,” said Acting Assistant Attorney General Ethan P. Davis of the Department’s Civil Division. “Working with our partners and using all tools available, we are committed to protecting those who protect us.”
In October, Crawford’s co-defendant Frederick Brown, age 38 of Las Vegas, NV, pleaded guilty to federal charges in connection with this scheme. Brown, a former civilian medical records administrator for the U.S. Army at the 65th Medical Brigade, Yongsan Garrison, South Korea, admitted that while logged into the Armed Forces Health Longitudinal Technology Application, he illegally captured on his cell phone personal identifying information (PII) of thousands of military members, including names, social security numbers, DOD ID numbers, dates of birth, and contact information. Brown further admitted that he subsequently provided that stolen data to Boling so that Boling and others could exploit the information in various ways to access Department of Defense and Veterans Affairs benefits sites and steal millions of dollars.
As asserted in the federal grand jury indictment, Boling, together with his Philippines-based co-defendants Allan Albert Kerr (Australian citizen) and Jongmin Seok (South Korean citizen), specifically used the stolen information to compromise a Department of Defense portal designed to enable military members to access benefits information online. Once through the portal, the defendants are alleged to have accessed benefits information. Access to these detailed records enabled the defendants to steal or attempt to steal millions of dollars from military members’ bank accounts. The defendants also stole veterans’ benefits payments. Evidence of the defendants’ scheme was detected earlier this year, advancing the investigation that led to the indictment.
The Departments of Defense and Veterans Affairs are coordinating with the Department of Justice to notify and provide resources to the thousands of identified victims.
Boling, Kerr, and Seok are charged with multiple counts of conspiracy, wire fraud, and aggravated identity theft. Boling, Kerr, and Seok remain in the Philippines. Measures are being taken to effect their transfer to the Western District of Texas. Brown remains in federal custody awaiting sentencing scheduled for 10:30 am on September 17, 2020, before Judge Garcia in San Antonio.
It is important to note that an indictment merely alleges that crimes have been committed. All defendants are presumed innocent until proven guilty beyond a reasonable doubt.
The United States is represented by Trial Attorneys Ehren Reynolds and Yolanda McCray Jones of the Department of Justice Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Joseph Blackwell of the U.S. Attorney’s Office for the Western District of Texas. The matter was investigated by agents of the Defense Criminal Investigative Service, and counsel Matthew Freund, along with substantial investigative support from the U.S. Postal Inspection Service, the U.S. Army Criminal Investigation Command, and the Veterans Benefits Administration’s Benefits Protection and Remediation Division. The U.S. Department of State’s Diplomatic Security Service, Philippine law enforcement partners, and the U.S. Attorneys’ Offices for the District of Nevada, the Southern District of California, and the Eastern District of Virginia also provided assistance. Resources from the Department of Justice’s Servicemembers and Veterans Initiative and its Transnational Elder Fraud Strike Force aided in the matter’s investigation and prosecution.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. In particular, in March 2020, the department announced the largest elder fraud enforcement action in American history, charging more than 400 defendants in a nationwide elder fraud sweep. The department has likewise conducted hundreds of training's and outreach sessions across the country since the passage of the Act.
Additional information about the Consumer Protection Branch and its enforcement efforts can be found at www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Western District of Texas, visit its website at https://www.justice.gov/usao-wdtx. Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice; information on the Servicemember and Veterans Initiative is at https://www.justice.gov/servicemembers.
Romanian Programmer Admits that He Helped Create Bitclub Network, a Fraud Scheme Worth at Least $722 MillionRead the Press Release
NEWARK, N.J. – A Romanian man arrested in Germany admitted today to conspiring to engage in wire fraud and offering and selling unregistered securities in connection with his role in the BitClub Network, a cryptocurrency mining scheme worth at least $722 million, U.S. Attorney Craig Carpenito announced.
Silviu Catalin Balaci, 35, a Romanian citizen who was living in Germany, pleaded guilty by videoconference before U.S. District Judge Claire C. Cecchi to a superseding information charging him with one count of a dual-object conspiracy to commit wire fraud and to offer and sell unregistered securities. Balaci and four co-defendants – Matthew Brent Goettsche, Russ Albert Medlin, Jobadiah Sinclair Weeks, and Joseph Frank Abel – were charged previously by indictment in December 2019 in connection with the scheme.
According to documents filed in this case and statements made in court:
From April 2014 through December 2019, the BitClub Network was a fraudulent scheme that solicited money from investors in exchange for shares of purported cryptocurrency mining pools and rewarded investors for recruiting new investors into the scheme. Balaci assisted Goettsche and Medlin in creating and operating the BitClub Network and served as a programmer for the BitClub Network.
As a part of the scheme, Balaci and Goettsche discussed that the target audience for the BitClub Network would be “dumb” investors, referred to them as “sheep,” and plotted that they would be “building this whole model on the backs of idiots.” The BitClub Network told investors that they could invest in three different bitcoin mining pools; however, Balaci admitted that, at no point during the conspiracy was he aware of the BitClub Network operating three separate bitcoin mining pools. Balaci admitted that he, at Goettsche’s behest, changed the figures displayed as bitcoin mining earnings to make it appear that the BitClub Network was earning more than what was actually being mined. For example, in February 2015, Goettsche directed Balaci to “bump up the daily mining earnings starting today by 60%,” to which Balaci warned “that is not sustainable, that is ponzi teritori [sic] and fast cash-out ponzi . . . but sure.” In connection with his plea, Balaci confirmed that during the course of the scheme, the BitClub Network took at least $722 million worth of bitcoin from investors.
The charge to which Balaci pleaded guilty carries a maximum penalty of five years in prison and a fine of $250,000, or twice the pecuniary gain to the defendant or loss to the victims. A sentencing date has not been set.
U.S. Attorney Carpenito credited special agents and task force officers of the FBI Los Angeles Division’s West Covina Resident Agency, under the direction of Assistant Director in Charge Paul D. Delacourt; special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; special agents of the IRS Los Angeles Field Office, under the direction of Special Agent in Charge Ryan L. Korner; and the FBI Criminal Investigative Division, under the supervision of Assistant Director Calvin A. Shivers and the Financial Crimes Section, under the leadership of Section Chief Steven Merrill, with the investigation leading to today’s guilty plea. He also thanked the Department of Justice’s Office of International Affairs and German authorities for their assistance.
Anyone who believes they may be a victim may visit www.justice.gov/usao-nj/bitclub or the Department of Justice’s large case website www.justice.gov/largecases. There, victims can find more information about the case, including a questionnaire for victims to fill out and submit.
The government is represented by Unit Chief David W. Feder, Assistant U.S. Attorneys Jamie L. Hoxie and Anthony P. Torntore of the Cybercrime Unit, and Unit Chief Sarah Devlin and Assistant U.S. Attorney Joseph Minish of the Asset Recovery and Money Laundering Unit, of the U.S. Attorney’s Office in Newark.
Ridgeland Man Pleads Guilty to Illegally Possessing a Machine GunRead the Press Release
Jackson, Miss – Timothy Lakendrick Liddell, 25, of Ridgeland, pled guilty yesterday before U.S. District Court Judge Carlton W. Reeves to illegally possessing a machine gun, announced U.S. Attorney Mike Hurst and Kurt Thielhorn, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
On October 11, 2018, Ridgeland Police officers and Mississippi Bureau of Narcotics agents searched Liddell’s apartment pursuant to a search warrant. In addition to finding illegal narcotics, investigators and agents discovered a Glock model 19 handgun that had been converted to a machine gun. The gun was also equipped with a high-capacity magazine capable of holding 31 rounds.
On July 10, 2019, Liddell was charged in a federal criminal indictment with possessing a machine gun and possessing a firearm that was not registered to him in the National Firearms Registration and Transfer Record.
Liddell will be sentenced by Judge Reeves on October 7, 2020 at 9:00 a.m. He faces a statutory penalty of up to 10 years in prison and a $250,000 fine.
This case was investigated by the Ridgeland Police Department, the Mississippi Bureau of Narcotics, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. It is being prosecuted by Assistant United States Attorney Bert Carraway.
Researcher charged with illegally using U.S. grant funds to develop scientific expertise for ChinaRead the Press Release
COLUMBUS, Ohio – A rheumatology professor and researcher with strong ties to China has been ordered held without bond to face a charge of grant fraud for not disclosing that he was engaged in a sophisticated scheme to use approximately $4.1 million in grants from the National Institutes of Health (NIH) to develop China’s expertise in the areas of rheumatology and immunology. He is also charged with making false statements about maintaining employment in China at the same time he was employed at universities in the United States, including The Ohio State University.
Song Guo Zheng, 57, was arrested Friday, May 22, 2020, after he arrived in Anchorage, Alaska, aboard a charter flight and as he prepared to board another charter flight to China. When he was arrested, he was carrying three large bags, one small suitcase and a briefcase containing two laptops, three cellular telephones, several USB drives, several silver bars, expired Chinese passports for his family, deeds for property in China and other items.
“Yet again, we are faced with a professor at a U.S. University, who is a member of a Chinese Talent Plan, allegedly and deliberately failing to disclose his relationship with a Chinese university and receipt of funds from the Chinese Government in order to obtain millions of dollars in U.S. grant money designed to benefit the health and well-being of the people of the United States — not to be hijacked to supplement the research goals of the Chinese Communist Party,” said Assistant Attorney General for National Security John C. Demers. “This case, like too many others, should serve as a reminder that the United States Government takes seriously the obligation of truthfulness and transparency on grant applications, and those who violate the law to benefit China or any other foreign nation will be held accountable.”
"This case highlights another example of a Chinese Talent Plan member allegedly using U.S. taxpayer funds for the benefit of the Chinese government," said Alan E. Kohler, Jr, Assistant Director of the FBI's Counterintelligence Division. "According to the criminal complaint, Zheng violated laws concerning the use of federal research funds and did not disclose his employment in China. The FBI will continue to work with our partners to stop such illegal activity and protect U.S. research."
“We allege that Zheng was preparing to flee the country after he learned that his employer had begun an administrative process into whether or not he was complying with rules governing taxpayer-funded grants,” said David M. DeVillers, U.S. Attorney for the Southern District of Ohio. “This is our office’s third recent case involving the illegal transfer of intellectual property and research to China. This underscores our commitment to work with the FBI, the Department of Health and Human Services, and our research institutions to protect our country’s position as a global leader in research and innovation, and to punish those who try to exploit and undermine that position.”
"The taxpayers of the United States are the real victims when researchers defraud our government and exploit our system to benefit China,” stated FBI Cincinnati Special Agent in Charge Chris Hoffman. “The cutting-edge technologies that are being developed in our country must be carefully protected from our foreign adversaries and the FBI will continue to work with our partners to safeguard these important innovations.”
A criminal complaint filed May 23 and unsealed following today’s detention hearing charges Zheng with one count of fraud or bribery concerning programs receiving federal funds, a crime punishable by up to ten years in prison, and one count of making false statements, which is punishable by up to five years in prison. Magistrate Judge Elizabeth Preston Deavers ordered Zheng held without bond because he is a flight risk. The case will be presented to a federal grand jury for possible indictment. The investigation is continuing.
An affidavit filed with the complaint alleges that, since 2013, Zheng has been participating in a Chinese Talent Plan, a program established by the Chinese government to recruit individuals with knowledge or access to foreign technology intellectual property. Since then, Zheng has used research conducted in the U.S. to benefit the People’s Republic of China. Zheng allegedly failed to disclose conflicts of interest or his foreign commitments to his U.S. employers or to the NIH.
Assistant Attorney General for National Security John C. Demers, U.S. Attorney DeVillers, and Christopher Hoffman, Special Agent in Charge, FBI, Cincinnati Field Division announced the criminal complaint, and acknowledged the assistance of the Anchorage FBI Division who arrested Zheng, interviewed him and executed multiple warrants while he was detained, and the assistance provided by the U.S. Attorney's Office for the District of Alaska. Assistant U.S. Attorneys Douglas W. Squires and Courter Shimeall, Special Assistant U.S. Attorney Christopher St. Pierre, and Trial Attorney Matthew J. McKenzie with the Department of Justice National Security Division are representing the United States in this case.
A criminal complaint merely contains allegations. All defendants are presumed innocent unless proven guilty in a court of law.
# # #
Researcher Charged with Illegally Using U.S. Grant Funds to Develop Scientific Expertise for ChinaRead the Press Release
A rheumatology professor and researcher with strong ties to China has been ordered held without bond to face a charge of grant fraud for not disclosing that he was engaged in a sophisticated scheme to use approximately $4.1 million in grants from the National Institutes of Health (NIH) to develop China’s expertise in the areas of rheumatology and immunology. He is also charged with making false statements about maintaining employment in China at the same time he was employed at universities in the United States, including The Ohio State University.
Song Guo Zheng, 57, was arrested Friday, May 22, 2020, after he arrived in Anchorage, Alaska, aboard a charter flight and as he prepared to board another charter flight to China. When he was arrested, he was carrying three large bags, one small suitcase and a briefcase containing two laptops, three cellular telephones, several USB drives, several silver bars, expired Chinese passports for his family, deeds for property in China and other items.
“Yet again, we are faced with a professor at a U.S. University, who is a member of a Chinese Talent Plan, allegedly and deliberately failing to disclose his relationship with a Chinese university and receipt of funds from the Chinese Government in order to obtain millions of dollars in U.S. grant money designed to benefit the health and well-being of the people of the United States — not to be hijacked to supplement the research goals of the Chinese Communist Party,” said Assistant Attorney General for National Security John C. Demers. “This case, like too many others, should serve as a reminder that the United States Government takes seriously the obligation of truthfulness and transparency on grant applications, and those who violate the law to benefit China or any other foreign nation will be held accountable.”
"This case highlights another example of a Chinese Talent Plan member allegedly using U.S. taxpayer funds for the benefit of the Chinese government," said Alan E. Kohler, Jr, Assistant Director of the FBI's Counterintelligence Division. "According to the criminal complaint, Zheng violated laws concerning the use of federal research funds and did not disclose his employment in China. The FBI will continue to work with our partners to stop such illegal activity and protect U.S. research."
“We allege that Zheng was preparing to flee the country after he learned that his employer had begun an administrative process into whether or not he was complying with rules governing taxpayer-funded grants,” said David M. DeVillers, U.S. Attorney for the Southern District of Ohio. “This is our office’s third recent case involving the illegal transfer of intellectual property and research to China. This underscores our commitment to work with the FBI, the Department of Health and Human Services, and our research institutions to protect our country’s position as a global leader in research and innovation, and to punish those who try to exploit and undermine that position.”
"The taxpayers of the United States are the real victims when researchers defraud our government and exploit our system to benefit China,” stated FBI Cincinnati Special Agent in Charge Chris Hoffman. “The cutting-edge technologies that are being developed in our country must be carefully protected from our foreign adversaries and the FBI will continue to work with our partners to safeguard these important innovations.”
A criminal complaint filed May 23 and unsealed following today’s detention hearing charges Zheng with one count of fraud or bribery concerning programs receiving federal funds, a crime punishable by up to ten years in prison, and one count of making false statements, which is punishable by up to five years in prison. Magistrate Judge Elizabeth Preston Deavers ordered Zheng held without bond because he is a flight risk. The case will be presented to a federal grand jury for possible indictment. The investigation is continuing.
An affidavit filed with the complaint alleges that, since 2013, Zheng has been participating in a Chinese Talent Plan, a program established by the Chinese government to recruit individuals with knowledge or access to foreign technology intellectual property. Since then, Zheng has used research conducted in the U.S. to benefit the People’s Republic of China. Zheng allegedly failed to disclose conflicts of interest or his foreign commitments to his U.S. employers or to the NIH.
Assistant Attorney General for National Security John C. Demers, U.S. Attorney DeVillers, and Christopher Hoffman, Special Agent in Charge, FBI, Cincinnati Field Division announced the criminal complaint. Assistant U.S. Attorneys Douglas W. Squires and Courter Shimeall, Special Assistant U.S. Attorney Christopher St. Pierre, and Trial Attorney Matthew J. McKenzie with the Department of Justice National Security Division are representing the United States in this case.
A criminal complaint merely contains allegations. All defendants are presumed innocent unless proven guilty in a court of law.
Recent Federal Tax Prosecutions in Minnesota Serve as Reminder to File and Pay Taxes by July 15 DeadlineRead the Press Release
The U.S. Attorney’s Office and the Internal Revenue Service’s Criminal Investigation Division reminds all Minnesotans that this year’s deadline for filing federal income tax returns is Wednesday, July 15. Due to COVID-19, the original filing deadline and tax payment due date was postponed from April 15 to July 15. For people facing hardships, including those affected by COVID-19, who cannot pay in full, the IRS has several options available on IRS.gov/payments. IRS Criminal Investigation also encourages Minnesotans to be cautious of scam artists who are looking for ways to steal money and personal information. Stay alert! The IRS will not contact you by phone, email, or social media to ask for personal information.
“Although we are living through unprecedented times, Americans must still meet their tax obligations by filing returns accurately and timely,” stated U.S. Attorney Erica MacDonald. “Minnesotans must also be aware of wrongdoers who are looking for ways to exploit individuals, steal money, and cheat the system. Those individuals will be held accountable.”
“As the tax filing deadline quickly approaches, I am asking all citizens to file correct and accurate tax returns and to pay their share of taxes,” states Kathy A. Enstrom, Special Agent in Charge of the IRS Criminal Investigation Division who oversees the state of Minnesota. “We all pay when others cheat the government. IRS Criminal Investigation, together with the U.S. Attorney’s Office, works year-round to make certain that those who willfully defy the tax laws will be investigated and criminally prosecuted. Taxpayers are encouraged to visit the IRS.gov website for tips on filing a tax return accurately and searching for a reputable return preparer.”
As the tax filing season winds down next week, the U.S. Attorney’s Office and IRS Criminal Investigation encourage taxpayers to think before filing a false or fraudulent tax return and to be wary of any schemes that falsify income or deductions. The following court actions have occurred in the District of Minnesota over the last nine months.
In October 2019, LESSIE BEATRICE LINDSEY was sentenced to a year and a day in federal prison for filing a false claim and ordered to pay $995,966 in restitution to the IRS. From 2013 to 2016, LINDSEY submitted approximately 192 false and fraudulent income tax returns acting as a knowledgeable tax preparer and illegally demanding a share of the tax refunds from her clients. Over $200,000 of her false tax refunds were designed to benefit herself, her boyfriend, or her relatives. This case was prosecuted by Assistant U.S. Attorney Matthew S. Ebert.
In December 2019, RICHARD PETER HENTGES was sentenced on charges of aiding and assisting in the filing of a false tax return and ordered to pay $55,634 in restitution to the IRS. While employed as the Chief Financial Officer of a business located in Chaska, Minnesota, HENTGES was responsible for all aspects of operations and finances, including filing and paying payroll taxes. During 2013 and 2014, HENTGES failed to pay over the payroll taxes for some of the employees resulting in a $72,672.01 tax loss to the United States. This case was prosecuted by Assistant U.S. Attorney Amber M. Brennan.
In January 2020, WORAPHAK VANG was sentenced to 18 months in prison for tax evasion and was ordered to pay $1,351,985.05 in restitution to the IRS. While operating her temporary staffing agency that provided temporary workers to companies in the manufacturing field in and around Saint Paul, VANG committed payroll and income tax fraud totaling $1,351,985.05 over a period of four years. VANG failed to collect and pay over payroll taxes from her employees and underreported her own income on her personal tax returns. This case was prosecuted by Assistant U.S. Attorney Robert M. Lewis.
In January 2020, RANDAL SCOT BRINKMAN was sentenced to 46 months in prison and was ordered to pay $945,316 in restitution to the IRS. On July 25, 2019, following a four-day jury trial, BRINKMAN was found guilty on six counts of tax evasion. From 1999 through 2018, BRINKMAN, owner of a Roseville construction company, took steps to hide his income and actively evade the assessment of taxes, including using sham businesses, closing his personal bank accounts, using money orders and cash to pay for daily expenses, and creating a fake religious organization in order to hide his income and assets. This case was prosecuted by Assistant U.S. Attorneys Joseph H. Thompson and Alexander D. Chiquione.
In February 2020 and March 2020, MUHUMED ALI and FAYSAL SAYID each pleaded guilty to one count of income tax evasion. SAYID and ALI were co-owners of a company that provided adult day care services to individuals enrolled in the Minnesota Medicaid program. Between 2012 and 2014, SAYID and ALI removed approximately $1.3 million from the company’s operating accounts and used those funds to pay for personal, non-business expenses, such as clothing, rent for personal residences, vehicles, funds transfers to other parties, and international wire transfers. SAYID and ALI willfully attempted to evade and defeat income taxes due and owing on that money for tax years 2012, 2013, and 2014. SAYID and ALI are awaiting sentencing. This case is being prosecuted by Assistant U.S. Attorney Matthew S. Ebert.
In May 2020, RUSLAN FURMAN was sentenced to two years in prison for aggravated identity theft and ordered to pay $298,644 in restitution to the IRS. From 2013 through 2016, FURMAN, a salesperson at a vehicle dealership, conspired with VLADIMIR CHEVTAYEV, THOMAS POPLAR, and others to defraud financial institutions out of money through an elaborate auto-financing scheme. FURMAN and others committed the fraud by applying for financing using deceased buyer’s names, stolen identities, or by paying people for the use of their information to buy luxury vehicles. After receiving the loan proceeds, the conspirators laundered the funds through an auto financing company to make the transactions appear legitimate. Co-conspirators CHEVTAYEV and POPLAR have pleaded guilty and are awaiting sentencing. This case is being prosecuted by Assistant U.S. Attorney Julie E. Allyn.
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Queens Man Sentenced to 70 Months for Trafficking Heroin and Oxycodone in the Capital RegionRead the Press Release
ALBANY, NEW YORK – Eric Soto, age 38, of Queens County, New York, was sentenced today to 70 months in prison for distributing and possessing with intent to distribute over 800 grams of heroin, and oxycodone pills, in June 2018 in various locations in Albany County.
The announcement was made by United States Attorney Grant C. Jaquith and Special Agent in Charge Ray Donovan of the U.S. Drug Enforcement Administration (DEA), New York Division.
Soto was also ordered to serve a 4-year term of supervised release following his release from prison, and to forfeit $19,960 in proceeds from his drug trafficking activity.
In imposing sentence, the Court found that in June 2018, Soto travelled from New York City to the Capital Region on three occasions for the purpose of distributing both heroin and oxycodone at various locations in Albany County, including in Colonie, Guilderland and Watervliet. On June 22, 2018, he was arrested in a mall parking lot in possession of 583 grams of heroin and 99 oxycodone pills, which he intended to sell. He has remained in custody since his arrest.
This case was investigated by the DEA, with assistance from the Albany County Sheriff’s Office, and the Police Departments of Colonie, Guilderland and Watervliet. The case was prosecuted by Assistant U.S. Attorney Emmet O’Hanlon.
Proposed Settlement with United States and Major Fertilizer Producer will Reduce Acidic Wastewater Generation and Enhance Phosphate RecoveryRead the Press Release
The U.S. Department of Justice and U.S. Environmental Protection Agency (EPA) today announced a settlement with J.R. Simplot Company and its subsidiary, Simplot Phosphates LLC (Simplot), involving Simplot’s Rock Springs, Wyoming, manufacturing facility.
This settlement resolves allegations under the Resource Conservation and Recovery Act (RCRA) at the facility, including that Simplot failed to properly identify and manage certain waste streams as hazardous wastes. The settlement requires Simplot to implement process modifications designed to enable greater recovery and reuse of phosphate, a valuable resource. The settlement also requires Simplot to ensure that financial resources will be available when the time comes for environmentally sound closure of the facility.
Simplot’s Rock Springs facility manufactures phosphate products for agriculture and industry, including phosphoric acid and phosphate fertilizer, through processes that generate large quantities of acidic wastewater and a solid material called phosphogypsum. The phosphogypsum is deposited in a large pile known as a gypstack, and acidic wastewater is also routed to the gypstack. The gypstack at the Wyoming facility is fully lined and has a capacity to hold several billion gallons of acidic wastewater.
This settlement also resolves alleged violations of the Emergency Planning and Community Right-to-Know Act (EPCRA) for Simplot’s failure to report certain quantities of toxic chemicals in accordance with EPCRA standards.
Under the settlement, Simplot agrees to implement specific waste management measures valued at nearly $20 million. Significantly, these measures include extensive new efforts to recover and reuse the phosphate content within these wastes and avoid their disposal in the gypstack. The settlement also includes a detailed plan setting the terms for the future closure and long-term care of the gypstack. The settlement requires Simplot to immediately secure and maintain approximately $126 million in dedicated financing to ensure that funding for closure and long-term care will be available when the facility is eventually closed.
Simplot also agrees to submit revised EPCRA Form R reports (Toxic Release Inventory) for 2004 to 2013 to include estimates of certain metal compounds manufactured, processed, or otherwise used at the facility. Simplot will also pay a $775,000 civil penalty to resolve both the RCRA and EPCRA claims.
The agency previously has required through judicial and administrative settlements that 12 phosphate fertilizer facilities complete extensive injunctive relief and bring their operations into compliance with RCRA.
A consent decree formalizing the settlement was lodged today in the U.S. District Court for the District of Wyoming, and is subject to a 30-day public comment period and approval by the federal court. The consent decree can be viewed at the Department of Justice website: www.justice.gov/enrd/Consent_Decrees.html
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.
Prolific Small-Town Meth Dealer Faces Prison Time in Larger Wiretap CaseRead the Press Release
ALBANY, Ga. – A prolific small-town methamphetamine dealer involved in a larger wiretap investigation into methamphetamine trafficking in South Georgia has pleaded guilty for his crime, said Charlie Peeler, the U.S. Attorney for the Middle District of Georgia. Phil Grim, 43, of Cairo, Georgia, pleaded guilty to conspiracy to possess with intent to distribute controlled substances before U.S. District Judge Leslie Gardner on Tuesday, July 7. Grim is facing a minimum mandatory ten years in prison to a maximum life sentence, a maximum fine of $1,000,000 and five years supervised release. Sentencing has not been scheduled. There is no parole in the federal system.
Grim was first arrested in Thomas County, Georgia on March 14, 2019 in possession of drug paraphernalia. Grim told investigators that he was regularly obtaining large quantities of methamphetamine for several years from Joseph “Bae Bae” Jones, 30, of Cairo, including four days prior to the interview at 159 Alison Drive, Cairo, Georgia. Grim, who was on probation, was released and told to have no further contact with Jones. Three days later, on March 17, 2019, agents conducting a legal wiretap on phones used by Jones intercepted Grim placing an order with Jones for a large quantity of methamphetamine. Agents continued to intercept multiple calls placed by Grim to Jones seeking methamphetamine. On April 26, 2019, agents intercepted a final call by Grim to Jones to purchase methamphetamine at 159 Alison Drive. Under camera and physical surveillance, Grim was seen traveling to 159 Alison Drive and departing. Officers pulled Grim over and found him with one ounce of methamphetamine. Grim told officers he “shopped with Jones” up to 20 times in the 44 days since he was first interviewed by agents. Jones is charged with a total of twelve counts listed in the indictment, including conspiracy to possess with intent to distribute methamphetamine, distribution of methamphetamine and possession of a firearm in furtherance of a drug trafficking crime. Jones faces a maximum life imprisonment for his crimes. An indictment is only an allegation of criminal conduct, and the defendants are presumed innocent until and unless proven guilty in a court of law beyond a reasonable doubt. Jones is detained pending his trial. A court date has not been scheduled.
“Law enforcement is cracking down on suppliers and dealers of methamphetamine across the Middle District of Georgia. Those caught trafficking meth will be prosecuted and will face severe punishment for choosing to push this deadly drug in our communities,” said U.S. Attorney Charlie Peeler. “I want to thank the DEA, GBI, Grady County Sheriff's Office, Thomas County Sheriff's Office, Thomas Vice/Narcotics Squad and the Cairo Police Department for their excellent work investigating methamphetamine trafficking in our region.”
“The successful results of this investigation should let criminals, who flood our communities with methamphetamine, know that DEA and its law enforcement partners will use all its resources to destroy their drug distribution networks. This defendant will no longer be able to distribute this poison in the community of Cairo,” said Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Division.
“Illegal drugs are dangerous on the streets of Georgia. The GBI is committed to getting these drugs off of the streets by bringing to justice all those that take part in the illegal drug trade, from the supplier down to the dealer,” said GBI Director Vic Reynolds.
This case was investigated by the Drug Enforcement Agency (DEA), the Georgia Bureau of Investigations (GBI), Grady County Sheriff's Office, Thomas County Sheriff's Office, Thomas Vice/Narcotics Squad and Cairo Police Department Assistant U.S. Attorney Leah McEwen is prosecuting the case for the Government. Questions can be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603 or Melissa Hodges, Public Affairs Director (Contractor), United States Attorney’s Office, at (478) 765-2362.
Project Guardian Update: Two Felons Appear in Federal Court on Gun ChargesRead the Press Release
CHARLESTON, W.Va. – Two Charleston men appeared in federal court this week on gun charges, according to United States Attorney Mike Stuart.
Kali Eusi Young, 42, was sentenced to eight years in prison, followed by three years of supervised release, for being a felon in possession of a firearm. Young previously admitted that that on December 16, 2019, he was riding as the backseat passenger in a vehicle that was stopped by law enforcement officers in South Charleston. Officers discovered during the course of the traffic stop that Young was in possession of a loaded 9mm semi-automatic pistol along with a stash of controlled substances. Young admitted that he was in possession of the firearm and that he knew he was prohibited from possessing firearms due to a previous felon in possession of a firearm conviction in the Southern District of Ohio. The Metropolitan Drug Enforcement Network Team (MDENT) conducted the investigation. Senior United States District Judge John T. Copenhaver, Jr. imposed the sentence. Assistant United States Attorney Negar M. Kordestani handled the prosecution.
Jymere Alan Pratt, 22, pled guilty to being a felon in possession of a firearm. Pratt admitted that he possessed a Smith and Wesson M&P Shield 9mm pistol in the early morning hours of May 24, 2019, near the intersection of Tennessee Avenue and Randolph Street on Charleston’s West Side. Law enforcement responded to the location after learning that a vehicle was parked across the sidewalk and into the bushes of a nearby business with all of the occupants unconscious. Once officers arrived, they were able to observe Pratt, the driver, wearing a bag with a shoulder strap which he placed in the back seat prior to exiting the vehicle. Officers later searched the vehicle, finding a pistol and several rounds of ammunition inside the bag. Pratt was prohibited by law from possessing firearms due to a previous conviction for robbery in the second degree in Monongalia County Circuit Court on August 14, 2017. Pratt was still on probation from that conviction when this incident occurred. Pratt faces up to 10 years in prison when sentenced on November 10, 2020. The Charleston Police Department conducted the investigation with the assistance of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). United States District Judge Irene Berger presided over the hearing. Assistant United States Attorney Jeremy B. Wolfe is handling the prosecution.
These cases are 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 (ATF) when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. The United States Attorney’s Office has prosecuted these cases with support from the Project Guardian partners noted above. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian.
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President’s Commission on Law Enforcement and the Administration of Justice Holds Hearing on Trust and Respect for Law Enforcement via TeleconferenceRead the Press Release
Yesterday, the President’s Commission on Law Enforcement and the Administration of Justice held a hearing on community trust and respect for law enforcement. The hearing was conducted via teleconference and featured expert witnesses who provided testimony and answered questions from the commissioners.
On Wednesday, July 8, 2020, the commission received testimony from Brian Marvel, President of the Peace Officers Research Association of California (PORAC); Dr. Paul Lilly, Judge, Brown County, Texas; Mick McHale, President of the National Association of Police Organizations (NAPO); and Lieutenant Christopher Cook, Arlington (Texas) Police Department.
The hearing focused on community trust and respect for law enforcement. The panelists discussed the importance of building relationships between law enforcement and communities; consideration for tactical gear choices; adding the presence of social workers or mental health professionals to certain types of emergency calls; the importance of public messaging, especially after a critical incident; and consideration for rewarding positive policing rather than relying on, for instance, the quota system, such as traffic stops, to measure success.
For more information on the commission, please visit: https://www.justice.gov/ag/presidential-commission-law-enforcement-and-administration-justice.
Audio recordings and transcripts of the hearings will be posted online once available.
Pomona Park Man Indicted for Sex Trafficking Children and Online Enticement to Engage in Unlawful Sex Acts with ChildrenRead the Press Release
Jacksonville, Florida – United States Attorney Maria Chapa Lopez announces the return by a grand jury of an indictment charging Edward Alan Hardin (33, Pomona Park) with two counts of sex trafficking children and four counts of using a cellular phone to entice children to engage in unlawful sex acts. Hardin faces a mandatory minimum penalty of 10 years, and up to life, in federal prison, for each count, followed by a term of 5 years, and up to a lifetime, of supervised release. The indictment also notifies Hardin that the United States intends to forfeit assets used in the offense.
According to the indictment, beginning by at least some date in 2016, Hardin began soliciting a child victim to engage in commercial sex acts, knowing that the victim was less than 18 years old. In 2020, Hardin allegedly used a cellular telephone to entice the victim to engage in unlawful sexual activity, including unlawful sexual activity with a minor and custodial sexual battery, in violation of Florida statutes, and attempted production of child pornography in violation of federal law.
The indictment further alleges that, at least from July 21, 2018, and through a date in March 2020, Hardin used a cellular telephone to entice a second child victim to engage in unlawful sexual activity, including unlawful sexual activity with a minor, in violation of Florida statutes; statutory rape, in violation of Georgia Code; and production of child pornography, in violation of federal law.
It is further alleged that on a date in late 2017, or early 2018, Hardin engaged in sex trafficking of a third child, and caused that victim to engage in a commercial sex act.
An indictment is merely a formal charge that a defendant has violated one or more of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by Homeland Security Investigations, the Clay County Sheriff’s Office, and the Putnam County Sheriff’s Office. It will be prosecuted by Assistant United States Attorney Laura Cofer Taylor.
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.
Pittsburgh Man, 21, Sentenced to 5 Years in Federal Prison for Running Drugs for DS44 Neighborhood GangRead the Press Release
PITTSBURGH, PA - A former resident of Pittsburgh has been sentenced in federal court to five years’ imprisonment followed by four years of supervised release on his conviction of conspiracy to distribute or possess with intent to distribute 40 grams or more of heroin and fentanyl, United States Attorney Scott W. Brady announced today.
United States District Judge William S. Stickman IV imposed the sentence on Keevan Jackson, 21.
According to information presented to the court, in 2017, the Greater Pittsburgh Safe Streets Task Force initiated an investigation primarily targeting the Darccide/Smash 44, or DS44, neighborhood gang, and its drug-trafficking activity, in and around the South Side area of Pittsburgh. As part of this large-scale narcotics and firearms investigation, in February of 2019, the United States received authorization to conduct a federal wire investigation, which continued through June of 2019. Intercepted communications as well as physical and electronic surveillance revealed that Mr. Jackson was involved in the distribution of heroin and fentanyl, including serving as a runner for co-conspirator Christopher Highsmith. Mr. Jackson accepted responsibility for distributing or possessing with intent to distribute 45 grams of fentanyl and heroin.
Assistant United States Attorney Christy C. Wiegand prosecuted this case on behalf of the government.
The Federal Bureau of Investigation led the multi-agency investigation of this case, which also included the Bureau of Alcohol Tobacco Firearms and Explosives, Allegheny County Adult Probation, Allegheny County Police Department, Allegheny County Sheriff’s Office, Pennsylvania Attorney General’s Office Bureau of Narcotics, Pittsburgh Bureau of Police, and the Wilkinsburg Police Department. Other assisting agencies include the Green Tree Police Department, New York City Police Department, Mount Oliver Police Department, Pennsylvania State Police, Yonkers Police Department, United States Marshals Fugitive Task Force, and the United States Postal Inspection Service.
This case is part of the Organized Crime Drug Enforcement Task Force program, known as OCDETF. OCDETF was established in 1982 to support comprehensive investigations and prosecutions of major drug trafficking and money laundering organizations. It is the keystone of the drug reduction strategy of the Department of Justice. By combining the resources and expertise of federal agencies and their state and local law enforcement partners, OCDETF identifies, disrupts, and dismantles the most serious drug trafficking, money laundering, and transnational criminal organizations.
Philadelphia man admits to heroin and fentanyl distributionRead the Press Release
MARTINSBURG, WEST VIRGINIA – Richard Gaines, of Philadelphia, Pennsylvania, has admitted to opioid distribution, U.S. Attorney Bill Powell announced.
Gaines, age 45, pled guilty today to one count of “Possession with Intent to Distribute Heroin and Fentanyl.” Gaines admitted to having heroin and fentanyl in June 2017 in Berkeley County.
Gaines faces up to 20 years of incarceration and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
These charges are the result of investigations supported by the Organized Crime Drug Enforcement Task Force (OCDETF) under the Attorney General-led Synthetic Opioid Surge (SOS)/Special Operations Division (SOD) Project Clean Sweep. This initiative seeks to reduce the supply of synthetic opioids in “hot spot” areas previously identified by the Attorney General of the United States, thereby reducing drug overdoses and drug overdose deaths, and identify wholesale distribution networks and sources of supply operating nationally and internationally.
Assistant U.S. Attorney Lara Omps-Botteicher is prosecuting the case on behalf of the government. The Eastern Panhandle Drug & Violent Crimes Task Force, a HIDTA-funded initiative, the West Virginia State Police, and the Martinsburg Police Department investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Pendleton County mail carrier admits to attempted election fraudRead the Press Release
ELKINS, WEST VIRGINIA – Thomas Cooper, a mail carrier in Pendleton County, has admitted to attempted election fraud, U.S. Attorney Bill Powell announced.
Cooper, age 47, of Dry Fork, West Virginia, pled guilty to one count of “Attempt to Defraud the Residents of West Virginia of a Fair Election” and one count of “Injury to the Mail.” Cooper held a U.S. Postal Service contract to deliver mail in Pendleton County. In April 2020, the Clerk of Pendleton County received “2020 Primary Election COVID-19 Mail-In Absentee Request" forms from eight voters on which the voter's party-ballot request appeared to have been altered.
The clerk reported the finding to the West Virginia Secretary of State’s office, which began an investigation. The investigation found five ballot requests that had been altered from “Democrat” to “Republican.” On three other requests, the party wasn’t changed, but the request had been altered.
Cooper was responsible for the mail delivery of the three towns from which the tampered requests were mailed: Onego, Riverton, and Franklin, West Virginia. Cooper admitted today to altering some of the requests.
Assistant U.S. Attorney Stephen D. Warner is prosecuting the case on behalf of the government. The West Virginia Secretary of State’s Office, the West Virginia Attorney General’s Office, and the U.S. Postal Service Office of Inspector General investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Owner of Auto Warranty Sales Company Indicted for Failure to Pay Personal and Corporate Income TaxesRead the Press Release
St. Louis, MO –Gary D. Primm, Jr., 39, of Wentzville, Missouri, was indicted by a federal grand jury on one count of willful failure to file return or pay tax and two counts of tax evasion.
According to the Indictment, Primm owned and operated United Auto Defense, LLC located in St. Charles, Missouri which operated as a call center marketing auto warranties. Primm received over a million dollars in income from United for tax years 2014 and 2015, and did not pay any personal income taxes. Primm took steps to evade assessment of his taxes by diverting United funds to a nominee bank account instead of his personal bank account and filing false forms with the IRS. Primm used funds from the nominee bank account to pay personal expenses, including his mortgage payments, jewelry purchases, automobile purchases, and gambling expenses. Primm also failed to file corporate income tax on behalf of United in 2014.
If convicted, Primm faces a maximum penalty of 5 years in prison and a $100,000 fine. Restitution is also mandatory. In determining the actual sentence, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
The Internal Revenue Service Criminal Investigation is investigating this case. Assistant U.S. Attorney Lindsay McClure-Hartman is handling the case for the U.S. Attorney’s Office.
North Suburban Man Charged in Federal Court with Illegal Sports Bookmaking and Tax OffensesRead the Press Release
CHICAGO — The U.S. Attorney’s Office in Chicago today charged a north suburban man with illegal sports bookmaking and filing a false federal income tax return.
From 2014 to 2018, DOMINIC POETA, 63, of Highland Park, unlawfully operated a business that provided sports betting and wagering services, both domestically and abroad, according to a criminal information filed in U.S. District Court in Chicago. The information also charges Poeta with filing a false federal income tax return for the calendar year 2016 that falsely reported his total income was $81,609, knowing his actual income substantially exceeded that amount.
Poeta will be arraigned in federal court in Chicago on a future date to be set by the Court.
The information was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kathy A. Enstrom, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and John Crawford, Special Agent-in-Charge of the Chicago Regional Office of the Federal Deposit Insurance Corporation, Office of Inspector General. The government is represented by Assistant U.S. Attorney Patrick King.
The public is reminded that an information is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The tax charge is punishable by up to three years in federal prison, while the bookmaking charge is punishable by up to two years. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
New Haven Woman Pleads Guilty to Role in Heroin, Cocaine and Crack ConspiracyRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that JENNA DEFELICE, 35, of New Haven, pleaded guilty today before U.S. District Judge Alvin W. Thompson to conspiring to distribute heroin, cocaine and crack cocaine.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the court proceeding occurred via videoconference.
According to court documents and statements made in court, an investigation conducted by the DEA’s New Haven Tactical Diversion Squad revealed that Defelice’s associate, Musa Hill, was obtaining cocaine from a source in the Bronx, New York, and heroin from a source in New Haven. He converted some of the cocaine he received into crack cocaine, and then sold the narcotics to customers. He also provided narcotics to Defelice who distributed them to customers on his behalf.
During the investigation, law enforcement made controlled purchases of crack, heroin and hundreds of counterfeit oxycodone pills from Hill. The vast majority of the counterfeit pills contained fentanyl.
Defelice was arrested on June 25, 2019, and is currently released on a $100,000 bond.
Defelice pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, controlled substances, an offense that carries a maximum term of imprisonment of 20 years. Judge Thompson scheduled sentencing for October 1, 2020.
On November 20, 2019, Hill pleaded guilty to the same offense. On March 5, 2020, Judge Thompson sentenced him to 72 months of imprisonment.
This case has been investigated by the DEA Tactical Diversion Squad, which includes officers from the Bristol, Hamden, Meriden, Monroe, New Britain, New Haven, Wallingford, Watertown and West Haven Police Departments. The case is being prosecuted by Assistant U.S. Attorneys Jennifer R. Laraia and H. Gordon Hall.
Mountain Village Man Pleads Guilty to Possession of Child PornographyRead the Press Release
DENVER – United States Attorney Jason R. Dunn announced that Jason Van Hoesen, age 46, of Mountain Village, Colorado, near Telluride, Colorado, pleaded guilty earlier this week to the possession of child pornography. Investigators recovered more than 10,500 files, including 281 videos depicting child pornography.
According to the stipulated facts contained in the plea agreement, the investigation into Van Hoesen was initiated by Colorado’s Internet Crimes Against Children (ICAC) Task Force. On December 14, 2018, a specific web search engine reported to the National Center for Missing and Exploited Children (NCMEC) that on November 15, 2018, an individual using a specific IP address uploaded a file of suspected child pornography.
NCMEC analysts reviewed and attempted to determine the jurisdiction for the incident reported. Once the analysis was complete, a cybertip was securely transmitted to Colorado’s ICAC Task Force. The Colorado Springs Police Department (CSPD) is the lead agency for this task force.
Cybertips are received and then securely transmitted to the agency affiliated with the image for further investigation. Upon receipt of this cybertip, CSPD reviewed the uploaded image, which depicted a nude prepubescent minor boy approximately 6 to 10 years old. A check through the American Registry for Internet Numbers reflected the IP address in question was registered to Mountain Village Metro Cable under the parent company of Centurylink.
An administrative summons was served on Mountain Village Metro Cable for subscriber information. Mountain Village Metro Cable provided an address on Mountain Village Boulevard. The Mountain Village Police Department (MVPD) was notified of this information. They in turn requested assistance with the investigation. As such, a joint CSPD and MVPD ICAC investigation was initiated.
On February 8, 2019, MVPD executed a state search warrant at the Mountain View residence where Van Hoesen and his roommate were contacted. Law enforcement conducted a search of the roommate’s cell phone and computer, which revealed no child pornography.
Van Hoesen confirmed to law enforcement his name and email address. He also confirmed that he used the identified web search engine to upload a photo of a naked boy in November 2018.
Numerous digital storage devices were located and seized within the Mountain Village premises. They were later transported to the Colorado Springs Police Department for further review. A computer forensic review of the devices revealed that Van Hoesen had downloaded child pornography on several occasions and possessed more than 10,500 files depicting child pornography. Van Hoesen had extensively organized his collection into folders, including folders containing images of infants and toddlers.
Copies of all of the files depicting child pornography were provided to NCMEC, which reported that more than 4,400 files possessed by the defendant depict minor victims previously identified by law enforcement. According to the plea agreement, Van Hoesen has agreed to pay restitution to 20 minor victims who requested restitution.
This case was investigated by the Colorado Internet Crimes Against Children (ICAC) Task Force, in conjunction with the Mountain Village Police Department. The case was prosecuted by Assistant United States Attorneys Alecia L. Riewerts and Jeffrey K. Graves.
Jason Van Hoesen was charged by Indictment on May 3, 2019, and pleaded guilty to the charge on July 6, 2020. The change of plea was conducted before U.S. Magistrate Judge James M. Candelaria and is pending acceptance by U.S. District Court Judge Robert E. Blackburn. Van Hoesen’s sentencing hearing is tentatively set for October 5, 2020.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and 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.justice.gov/psc.
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 19-cr-0208.
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.
Mother and daughter from Evansville charged with COVID-19 related wire fraudRead the Press Release
EVANSVILLE – United States Attorney Josh J. Minkler announced today, Rose Ann Azzarello, 60, Ft. Branch, Ind., and Andrea Renee Pytlinski, 38, Ft. Branch, Ind., were arrested and charged with wire fraud.
"With any crisis, comes criminals looking for the opportunity to cash in for their own benefit. The coronavirus health crisis has not been immune from their fraudulent schemes" said Minkler. "These fraudsters steal money that does not belong to them for their greedy purposes, which strains the programs that are meant to help those most in need."
On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This legislation provides emergency assistance and health care response for individuals, families, and businesses affected by the COVID-19 pandemic
The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways. The CARES Act includes a provision of temporary benefits for individuals who have exhausted their entitlement to regular unemployment compensation, as
well as coverage for individuals who are not eligible for regular unemployment compensation, are self-employed, or have limited recent work history.
On 5/15/2020, the Fort Branch Police Department received a complaint from Field and Main Bank in Evansville, regarding account transactions in which Washington State Unemployment benefits were being ACH transferred into Indiana bank accounts held by Azzarello and Pytlinski.
Those accounts were funded with Washington State unemployment benefits and the proceeds of an alleged check scam. For more than a year, Azzaarello and Pytlinski participated in a wire fraud scheme by receiving and sending funds via wire and common courier as directed by someone only known as "William Lewis". As the illicit funds are deposited into their accounts, Azzarello and Pytlinski would withdraw the funds prior to the detection of any fraud and then transmit a portion of the ill-gotten funds to a third party while retaining their share.
The United States Secret Service has received reports about a well-organized fraud ring exploiting the COVID-19 crisis to commit large-scale fraud against state unemployment insurance programs. The primary state targeted so far is Washington.
This fraud network is believed to consist of hundreds, if not thousands, of money mules with potential losses in the millions of dollars. The financial institutions targeted have been at all levels including local banks, credit unions and large national banks.
This case was the result of an investigation by the United States Secret Service, Federal Bureau of Investigation, and the Ft. Branch Police Department.
"Today’s announcement illustrates the Secret Service’s commitment to combating COVID-19 unemployment fraud," said Eric Reed, Special Agent in Charge, Secret Service Indianapolis Field Office. "The immediate investigative actions taken by the Secret Service and our local, state and federal law enforcement partners as well as the U.S. Attorney’s Office, prevented legitimate unemployment funds from getting into the wrong hands. The Secret Service will continue to work closely with our law enforcement partners and the U.S. Attorney’s Office to investigate and arrest criminals who attempt to defraud the critical COVID-19 relief programs and the American taxpayer."
"Criminals profiting off this crisis and targeting programs meant to help Americans when they are at their most vulnerable is unacceptable," said Special Agent in Charge Paul Keenan, FBI Indianapolis. "Those who would perpetrate such illegal activity during these unprecedented times should know that the FBI and our law enforcement partners haven’t been sitting idly by. We have continued to aggressively identify and pursue those who fraudulently profit from the pandemic to quickly reduce the threat from these scams."
According to Assistant United States Attorney Todd Shellenbarger who is prosecuting this case for the government, each defendant faces up to 20 years’ imprisonment, 3 years of supervised release, and a maximum fine of $250,000.
A charge is not evidence of guilt. All parties are presumed innocent until proven otherwise in federal court.
This prosecution is an example of the Department of Justice’s strong commitment to combating fraud and criminal activity related to COVID-19, which is reflected in the creation of a Coronavirus Fraud Task Force in the Southern District of Indiana. If you receive any forms of suspicious communication related to the COVID-19 crisis, or become aware of family and friends that have received suspicious communications, I ask that you don’t respond directly but instead report the activity to the National Center for Disaster Fraud (NCDF) Hotline at 1-866-720-5721, or to the NCDF e-mail address [email protected]."
Mexican National Sentenced to 10 years in Prison for Poly-Drug Distribution ConspiracyRead the Press Release
FRESNO, Calif. — Francisco Alcantar-Miranda, aka Paquin, 31, of Mexico, was sentenced today to 10 years in prison for conspiring to manufacture, to distribute and to possess with intent to distribute methamphetamine, cocaine, heroin, and marijuana, U.S. Attorney McGregor W. Scott announced. U.S. District Judge Dale A. Drozd, who sentenced Alcantar, also ordered the forfeiture of a handgun and approximately $18,000 in cash.
On Feb. 2, Alcantar pleaded guilty and acknowledged that he assisted in manufacturing methamphetamine and storing large quantities of other drugs at an unoccupied residence in Madera. At the end of January 2019, detectives of the Madera County Sheriff’s Office Narcotic Enforcement Team (MADNET) executed a search warrant at the residence and found Alcantar, along with two other men, Oscar Rene Marrot-Garcia, 27, of Chowchilla, and Jose Monge-Ponce, 31, of Mexico. The detectives also found over 10 pounds of methamphetamine, 1 pound of heroin, 1 pound of cocaine, and 25 pounds of marijuana.
Marrot-Garcia pleaded guilty on June 12, and is scheduled for sentencing on Sept. 4. He faces a mandatory minimum statutory penalty of 10 years in prison and a maximum statutory penalty of life in prison, along with a $10 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Charges are pending against Monge-Ponce, and he is scheduled for a jury trial on Oct. 26. The charges are only allegations; Monge-Ponce is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case is the product of an investigation by MADNET detectives and agents of the High Intensity Drug Trafficking Area (HIDTA) High Impact Investigation Team (HIIT), consisting of agents of Homeland Security Investigations; California Department of Justice; California Highway Patrol; Fresno, Tulare, and King Counties Sheriffs’ Offices; and Fresno Police Department. Assistant U.S. Attorney Karen A. Escobar is prosecuting the case.
Massachusetts Man Guilty of Receiving Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y.- U.S. Attorney James P. Kennedy, Jr. announced today that Frank Salerno, 30, of Pittsfield, Massachusetts, pleaded guilty, before U.S. Chief Judge Frank P. Geraci, Jr., to receiving child pornography The charge carries a minimum penalty of 5 years imprisonment, a maximum penalty of 20 years imprisonment, and a $250,000 fine.
Assistant U.S. Attorney Kyle Rossi, who is handling the case, stated that in 2019, Salerno engaged in sexually explicit online conversations with a 14 year-old minor who lived in Western New York. In the conversations, Salerno induced the minor to produce and send Salerno child pornography. Salerno was ultimately reported to police, and he was arrested in Massachusetts in December 2019.
The plea is the result of an investigation by the Federal Bureau of Investigation, Child Exploitation Task Force, under the direction of Special Agent-in-Charge Stephen Belongia.
Sentencing is scheduled for October 7, 2020, before Judge Geraci.# # # #
Mapleton Man Sentenced for Possession of FentanylRead the Press Release
Portland, Maine: A Mapleton man was sentenced today in federal court in Portland for possession of fentanyl with intent to distribute, U.S. Attorney Halsey B. Frank announced.
Chief U.S. District Judge Jon D. Levy sentenced Christopher Myshrall, 35, to two years in prison and three years of supervised release. Myshrall pleaded guilty on November 19, 2019.
According to court records, on November 1, 2018, Myshrall was a passenger in a vehicle pulled over by the Maine State Police for a traffic violation. A narcotics detection dog alerted to the presence of illegal drugs in the vehicle. Troopers located over 700 glassine envelopes of fentanyl in hidden compartments in the vehicle’s engine area. Further investigation revealed that Myshrall and the vehicle’s operator had obtained the fentanyl in Massachusetts for distribution in Maine.
The Maine State Police and the U.S. Drug Enforcement Administration investigated the case. The U.S. Attorney’s Office prosecuted the case as part of the Department of Justice’s Operation Synthetic Opioid Surge, a program designed to reduce the supply of deadly synthetic opioids.
Madison Man Sentenced to 20 Years for Producing Child PornographyRead the Press Release
MADISON, WIS. - Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that Jeremy Schenck, 25, Madison, Wisconsin, was sentenced today by Chief U.S. District Judge James D. Peterson to 20 years in federal prison, to be followed by 25 years of supervised release, for producing child pornography. Schenck pleaded guilty to this charge on February 5, 2020.
The investigation began in December 2018, when a social worker with Dane County Human Services contacted the Madison Police Department after learning of an allegation of sexual abuse against Schenck. The law enforcement investigation led to the issuance of a search warrant for Schenck’s apartment in February 2019. A search of computers seized from Schenck’s apartment revealed images of child pornography. Schenck was initially charged with possession of child pornography in Dane County on February 21, 2019. After further investigation revealed that Schenck had taken sexually explicit pictures of a toddler, he was indicted on charges of production of child pornography in federal court.
At sentencing, Judge Peterson stated that the sentence was appropriate due to the vulnerability of the minor victim, because Schenck distributed the image of the minor victim, and because Schenck committed a hands-on offense against the child. Judge Peterson found that Schenck had demonstrated that he was a threat to all vulnerable victims and the community at large, and stated that he imposed this sentence because he was very keenly concerned with protecting the community from Schenck.
The charge against Schenck was the result of an investigation conducted by the Madison Police Department and the Wisconsin Department of Justice Division of Criminal Investigation. The prosecution of the case has been handled by Assistant U.S. Attorney Julie Pfluger.