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1 July 2020
Weld County Man Pleads Guilty to Smuggling Gun Parts Out of the United States and Possessing Unregistered FirearmsRead the Press Release
DENVER – United States Attorney Jason R. Dunn today announced that Michael John Suppes, age 46, of Weld County, Colorado, pleaded guilty earlier this week to smuggling gun parts out of the United States and possessing unregistered firearms. Homeland Security Investigations (HSI) joined in this announcement.
According to the stipulated facts contained in the Suppes’ plea agreement, Suppes, who was not a licensed firearm dealer or manufacturer, willfully engaged in the business of manufacturing and dealing in firearms. He exported firearm parts to buyers in other countries without obtaining an export license. Furthermore, he possessed short-barreled rifles that were not registered under the National Firearms Registration and Transfer Record as required by law.
Suppes operated a business, MJS Performance LLC, that sold firearm parts and motorcycle muffler parts. Between January 25, 2015, and November 5, 2018, he, through his business, shipped over 1,200 domestic and international packages. The defendant came to the attention of Homeland Security Investigations (HSI) after it learned of multiple packages that contained concealed gun parts destined for other countries, including Saudi Arabia, India, and Cambodia. The gun parts required an export license, which Suppes did not obtain.
Between December 2018 and April 2019, Suppes communicated with individuals who said they wanted to smuggle firearms into Mexico. In April 2019, he agreed to sell one of the individuals 30 AR-15 and 20 AK-47 rifles as well as magazines and ammunition. Suppes was arrested on his way to meet with the individual; he had the 50 rifles, magazines, and ammunition with him. Most of the firearms were short-barreled rifles.
Suppes also agreed to a substantial forfeiture of assets that totaled nearly $300,000. He also agreed to forfeit 123 firearms as well as firearm parts and ammunition.
He faces not more than 10 years in federal prison, followed by up to 3 years on supervised release. He also faces up to a $250,000 fine.
Suppes was prosecuted by Assistant U.S. Attorney Emily Treaster. Assistant U.S. Attorney Tonya Andrews handled the asset forfeiture portion of this prosecution. This case was investigated by Homeland Security Investigations (HSI), with assistance from the United States Postal Inspection Service (USPIS), the Weld County Sheriff’s Office, and the Colorado State Patrol (CSP).
This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities.
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-291.
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.
Wyoming’s Largest Drug Bust Leads to Two Decades in PrisonRead the Press Release
Chief Federal District Court Judge Scott W. Skavdahl sentenced ARNOLD DEVONNE BUTLER, 54, today in Casper. Butler was convicted on January 17, 2020 after a 4-day jury trial and found guilty on all counts, including possession with intent to distribute and conspiracy to distribute methamphetamine, heroin, cocaine, and fentanyl. Butler received two hundred forty months of imprisonment, to be followed by one hundred twenty months of supervised release, and was ordered to pay a $500.00 special assessment.
Butler was initially stopped for a commercial vehicle inspection by the Wyoming Highway Patrol on Interstate 80 in Laramie County on May 15, 2019. He was driving a rollback style commercial tow truck and transporting a sedan. During the inspection, the Trooper became suspicious of Butler’s activities and called for a drug detection dog. The dog alerted on the towed vehicle and officers found 46 pounds of methamphetamine, two and a half kilograms of cocaine, a kilogram of synthetic fentanyl, and three kilograms of heroin hidden in a compartment built between the rear seat and trunk of the vehicle.
Further investigation of this case following Butler’s arrest led agents to uncover connections with other drug trafficking activity outside Wyoming. “The Butler investigation has been and continues to be a multi-agency, multi-jurisdictional investigation that identified, disrupted and dismantled a drug trafficking organization that has been responsible for the importation and distribution of hundreds of pounds of illegal narcotics across the United States.”, stated DEA Resident Agent in Charge, David A. Tyree. “The outstanding investigative efforts from the Wyoming Highway Patrol and the Wyoming Division of Criminal Investigation, working with the DEA and FBI in Wyoming and California developed a highway interdiction of illegal drugs into an investigation that resulted in several arrests and additional drug seizures in California and elsewhere.”
“While I am gratified with the result and commend the great detection and investigative effort of our Troopers and agents, we know that Mr. Butler is just the tip of the iceberg. Every day across Wyoming and elsewhere, drug couriers like Mr. Butler are using our highways to move these dangerous substances across the country and into our communities,” said US Attorney Mark Klaassen. “We will continue to do what we can as law enforcement to identify and stop these criminals, but our communities must also work to find ways to reduce demand and address the addiction that drives this criminal activity.”
Villanova Businessman Sentenced to a Year and a Day in Prison for False Statements, Concealment of Assets in Bankruptcy FilingsRead the Press Release
PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Scott Korn, 57, of Villanova, Pennsylvania, was sentenced to one year and one day in prison, three years of supervised release and a $50,000 fine by United States District Judge Eduardo C. Robreno for false statements and financial fraud.
In August 2019, Korn pleaded guilty to an Indictment charging him with concealment of assets in a bankruptcy proceeding, and swearing a false oath or account. Those charges arose from the following set of facts. In 2009, a lawsuit was filed against the defendant and several of his companies for breach of contract among other issues. In April 2014, the case proceeded to trial in the Philadelphia Court of Common Pleas and the jury returned a verdict against Korn and his companies in the amount of approximately $2.4 million.
Over the course of the next few days following the verdict, Korn purchased a BMW X3, a Porsche 911, a Porsche Cayman, charging all three luxury vehicles to his American Express credit card. Additionally, Korn purchased a cashier’s check for almost $200,000, payable to himself, drawn on his personal bank account. The defendant cashed this check the following day at a check casher, receiving approximately $196,000 in cash and paying a check cashing fee of about $4,000. He then filed for Chapter 11 bankruptcy.
Under the bankruptcy code, debtors must complete financial Schedules, including a schedule listing all of their personal property (assets) , and a Statement of Financial Affairs which discloses all financial data. Debtors must also file a Declaration, under penalty of perjury, that they have read the schedules and summary they are submitting and that all are true and correct to the best of their knowledge. In Korn’s filings, he did not list the recently purchased luxury vehicles among his assets or in his schedule of personal property, but he did include American Express in his schedule of creditors, along with the total debt that he owed American Express – an amount that included the purchase price of the cars – without revealing what was purchased on this credit card. The defendant also did not disclose the recent liquidation of nearly $200,000 in cash from his bank account, instead listing that bank account with an approximate balance of only $9,300. Korn also omitted other assets from his bankruptcy statements including a 21-foot ski boat and two wave runners. At a later proceeding in the bankruptcy, Korn swore an oath under penalty of perjury and testified that he did not own any carsand only had an old motorcycle and a leased Honda.
“Mr. Korn abused the bankruptcy court system in an effort to enrich himself while cheating his creditors,” said First Assistant U.S. Attorney Williams. “He tried to play games to avoid fulfilling his fiduciary obligations, but the dedicated investigators on this case uncovered his lies. Today’s sentence provides justice to those Mr. Korn attempted to swindle.”
“Perjury and concealment of assets in a bankruptcy case are serious crimes,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Scott Korn sought to use the federal courts to defraud his creditors and today’s sentence holds him accountable. It should also serve as a warning to anyone else looking to game the system. Expect to be caught and prosecuted.”
The case was investigated by Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Karen Grigsby.
Vanderburgh County Receives High Intensity Drug Trafficking Area (HIDTA) DesignationRead the Press Release
EVANSVILLE – United States Attorney Josh J. Minkler and High Intensity Drug Trafficking Area Director Chuck Porucznik announce the addition of Vanderburgh County to the Indiana HIDTA.
Created by Congress in 1988, the HIDTA task force program, which is under the Office of National Drug Control Policy (ONDCP), creates a mechanism for coordination of federal, state, local and tribal resources to combat drug trafficking in designated regions of the country.
The HIDTA designation for Vanderburgh County will allow access to federal resources to combat drug distribution and increase enforcement efforts. Law enforcement agencies will now access drug trafficking issues and create Vanderburgh County specific initiatives that will laser focus on outcomes and performance. HIDTA provides unprecedented national connectivity to access drug threats and trends throughout the country.
"The HIDTA program in Indiana is another tool available to law enforcement for the purpose of reducing the terrible effects of illicit drugs on our Hoosier communities." said Minkler. "Adding Vanderburgh County to the Indiana HIDTA, will aid law enforcement officers
in southern Indiana by helping to reduce drug distribution networks and other violent crimes associated with illicit drugs."
HIDTA Director Chuck Porucznik said, "The addition of Vanderburgh County to the Indiana HIDTA allows 6 counties in the more populated areas of the state to gain focused attention and federal resources to reduce drug related activity and violence. The goal of the HIDTA program is simple, disrupt the market for illegal drugs by dismantling and disrupting drug trafficking and money laundering organizations through law enforcement coordination."
Assistant Special Agent in Charge Michael Gannon said, "It is an honor for the DEA to oversee the HIDTA initiative for Vanderburgh County. The DEA is committed to working with their state, local and federal counterparts to utilize all available resources provided by the HIDTA to target and dismantle the most violent and dangerous drug trafficking and money laundering organizations in Vanderburgh County and the surrounding area."
U.S. Seeks to Recover Approximately $96 Million Traceable to Funds Allegedly Misappropriated from Malaysian Sovereign Wealth FundRead the Press Release
The Justice Department announced today the filing of civil forfeiture complaints seeking the forfeiture and recovery of approximately $96 million in assets allegedly associated with an international conspiracy to launder funds misappropriated from 1Malaysia Development Berhad (1MDB), a Malaysian sovereign wealth fund. Combined with earlier civil forfeiture complaints filed beginning in July 2016, the United States has sought the forfeiture of more than $1.8 billion in assets traceable to funds embezzled from 1MDB. To date, as a result of these actions, the United States has recovered or assisted Malaysia in recovering nearly $1.1 billion in assets associated with the 1MDB international money laundering and bribery scheme. This case represents the largest action brought under the department’s Kleptocracy Asset Recovery Initiative as well as the largest civil forfeiture action in the Justice Department’s history.
The complaints filed today in the Central District of California identify additional assets traceable to the 2012 and 2013 bond offerings. These assets include luxury real estate in Paris, artwork by Claude Monet and Andy Warhol, and accounts maintained at financial institutions in Luxembourg and Switzerland.
According to the complaints, from 2009 through 2015, more than $4.5 billion in funds belonging to 1MDB were allegedly misappropriated by high-level officials of 1MDB and their associates. 1MDB was created by the government of Malaysia to promote economic development in Malaysia through global partnerships and foreign direct investment, and its funds were intended to be used for improving the well-being of the Malaysian people.
“The complaint filed today seeks to forfeit a range of luxury items — including real estate in Paris, artwork by Monet, Warhol, and Basquiat, and international bank accounts — all of which were allegedly acquired with funds stolen from Malaysia’s sovereign wealth fund,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “Today’s action is just the latest demonstration of the Criminal Division’s longstanding commitment to tracing, seizing, and forfeiting assets acquired through grand corruption and, wherever possible, returning those assets to the people from whom they were stolen.”
“The FBI will relentlessly pursue international corruption investigations,” said FBI Assistant Director Calvin Shivers of the Criminal Investigative Division. “As efforts in this case have shown, our dedicated investigators will pursue corruption, uncover proceeds of illicit activity, and return ill-gotten gains to the rightful owners. In this case, to the people of Malaysia.”
“These seemingly endless civil forfeiture complaints associated with the 1MDB scandal are representative of the seemingly endless schemes used to hide and launder money as part of the sophisticated efforts to steal from the Malaysian people,” said Don Fort, Chief, IRS Criminal Investigation. “This latest civil forfeiture complaint would return an extraordinary sum of money to the people of Malaysia where it belongs and where it can finally be used for its original intended purpose - to improve the lives of everyday Malaysians.”
As alleged in the complaints, the members of the conspiracy – which included officials at 1MDB, their relatives and other associates – diverted more than $4.5 billion in 1MDB funds. Using fraudulent documents and representations, the co-conspirators allegedly laundered the funds through a series of complex transactions and shell companies with bank accounts located in the United States and abroad. These transactions allegedly served to conceal the origin, source and ownership of the funds, and ultimately passed through U.S. financial institutions to then be used to acquire and invest in assets located in the United States and overseas.
As alleged in the earlier complaints, in 2009, 1MDB officials and their associates embezzled approximately $1 billion that was supposed to be invested to exploit energy concessions purportedly owned by a foreign partner. Instead, the funds were allegedly transferred through shell companies and were used to acquire a number of assets, as set forth in the complaints. The complaints also allege that the co-conspirators misappropriated close to $1.4 billion in funds raised through bond offerings in 2012, and more than $1.2 billion following another bond offering in 2013. The complaints also allege that in 2014, the co-conspirators misappropriated approximately $850 million in 1MDB funds under the guise of repurchasing certain options that had been given in connection with a guarantee of the 2012 bonds.
The FBI’s International Corruption Squads in New York City and Los Angeles and the IRS-CI are investigating the case. Deputy Chief Woo S. Lee and Trial Attorneys Barbara Levy and Joshua L. Sohn of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case. Assistant U.S. Attorneys John Kucera and Michael Sew-Hoy of the U.S. Attorney’s Office for the Central District of California provided substantial assistance. The trial team also expresses its gratitude and appreciation to the Criminal Division’s Office of International Affairs for their continued assistance in this matter.
The department also expresses its deep appreciation for the significant assistance provided by the Office of the Attorney General and the Federal Office of Justice of Switzerland, the judicial investigating authority of the Grand Duchy of Luxembourg and the Criminal Investigation Department of the Grand-Ducal Police of Luxembourg, the Attorney General’s Chambers of Singapore, the Singapore Police Force-Commercial Affairs Division, and the Attorney General’s Chambers of Malaysia, the Royal Malaysian Police, and the Malaysian Anti-Corruption Commission.
The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in the Criminal Division’s Money Laundering and Asset Recovery Section, in partnership with federal law enforcement agencies, and often with U.S. Attorney’s Offices, to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office. In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to [email protected] (link sends e-mail) or https://tips.fbi.gov/.
A civil forfeiture complaint is merely an allegation that money or property was involved in or represents the proceeds of a crime. These allegations are not proven until a court awards judgment in favor of the United States.
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.
U.S. Attorney J. Douglas Overbey Announces $142,578 Award to Address Covid-19 Pandemic in TennesseeRead the Press Release
KNOXVILLE, Tenn. – U.S. Attorney J. Douglas Overbey of the Eastern District of Tennessee today announced that Knox County received $142,578 in Department of Justice grants to respond to the public safety challenges posed by the outbreak of COVID-19.
The grant is available under the Coronavirus Emergency Supplemental Funding program, authorized by the recent stimulus legislation signed by President Trump. Other jurisdictions can determine if they are eligible for funds and may apply immediately by visiting this website. The Justice Department is moving quickly, awarding grants on a rolling basis and aiming to have funds available for drawdown as soon as possible after receiving applications.
“As this country continues to fight COVID-19, our office remains committed to deterring, investigating, and prosecuting those who seek to take advantage of the COVID-19 pandemic. This funding will help many of the communities struggling in these trying times and provide some much-needed relief to our district,” said U.S. Attorney Overbey.
“The outbreak of COVID-19 and the public health emergency it created are sobering reminders that even the most routine duties performed by our nation’s public safety officials carry potentially grave risks,” said Katharine T. Sullivan, Principal Deputy Assistant Attorney General for the Office of Justice Programs. “These funds will provide hard-hit communities with critical resources to help mitigate the impact of this crisis and give added protection to the brave professionals charged with keeping citizens safe.”
The law gives jurisdictions considerable latitude using these funds for dealing with COVID-19. Potential uses include hiring personnel, paying overtime, purchasing protective equipment, distributing resources to hard-hit areas and addressing inmates’ medical needs.
Agencies eligible for the fiscal year 2019 State and Local Edward Byrne Memorial Justice Assistance Grant Program are candidates for the emergency funding. Local units of government and tribes will receive direct awards separately according to their jurisdictions’ allocations.
The Office of Justice Programs, directed by Principal Deputy Assistant Attorney General Katharine T. Sullivan, provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal and juvenile justice systems. More information about OJP and its components can be found at www.ojp.gov.
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Three Former Hilo Correctional Officers Indicted for Assaulting an Inmate and Attempting to Cover it UpRead the Press Release
A federal grand jury in Honolulu, Hawaii, returned a six-count indictment against three former correctional officers — Jason Tagaloa, 29, Craig Pinkney, 36, and Jonathan Taum, 48 — for their roles in assaulting an inmate housed at the Hawaii Community Correctional Center and for attempting to cover up their misconduct.
The indictment from June 25, was announced Tuesday by U.S. Attorney Kenji M. Price for the District of Hawaii, Assistant Attorney General Eric Dreiband for the Department of Justice’s Civil Rights Division, and FBI Honolulu Special Agent in Charge Eli S. Miranda.
The indictment alleges that, on June 15, 2015, defendants Tagaloa, Pinkney, and Taum, along with a fourth correctional officer designated “Officer A,” physically assaulted an inmate in the jail’s recreation yard, that Tagaloa later assaulted the same inmate in a holding cell, and that both assaults resulted in bodily injury. The indictment further alleges that the defendants and Officer A conspired to cover up their misconduct by engaging in a variety of obstructive acts, including devising a false cover story to justify their use of force, documenting that false cover story in official reports, and repeating that false cover story when questioned during the ensuing investigation and disciplinary proceedings arising out of the assault.
The maximum penalties for the charged crimes are 10 years of imprisonment for each of the deprivation-of-rights offenses, 20 years of imprisonment for each of the false report offenses, and 5 years of imprisonment for the conspiracy offense.
An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty.
The Federal Bureau of Investigation conducted the investigation. Assistant U.S. Attorney Craig Nolan of the District of Hawaii is prosecuting the case in partnership with Special Litigation Counsel Christopher J. Perras and Trial Attorney Thomas Johnson of the Civil Rights Division.
Statement by Attorney General William P. Barr on the Restoration of Law and Order in SeattleRead the Press Release
Attorney General William P. Barr has issued the following statement:
“I commend Police Chief Carmen Best for her courage and leadership in restoring the rule of law in Seattle. For the past several weeks, the Capitol Hill area of Seattle was occupied by protesters who denied access to police and other law enforcement personnel. Unsurprisingly, the area became a haven for violent crime, including shootings that claimed the lives of two young people, assaults, and robberies. As Chief Best made clear throughout the process, there is a fundamental distinction between discussion of substantive issues — including addressing distrust of law enforcement by many in the African-American community — and violent defiance of the law. Chief Best has rightly committed to continue the substantive discussion while ending the violence, which threatens innocent people and undermines the very rule-of-law principles that the protesters profess to defend. Thanks to the Seattle Police Department, Capitol Hill parks, streets, and businesses are again accessible to the people of Seattle, who may travel throughout their city without fear of violence. The people of Seattle should be grateful to Chief Best and her Department for their professional and steadfast defense of the rule of law. The message of today’s action is simple but significant: the Constitution protects the right to speak and assemble freely, but it provides no right to commit violence or defy the law, and such conduct has no place in a free society governed by law.”
Statement from Assistant Attorney General Eric Dreiban and U.S. Attorney Steven D. Weinhoeft on the Federal Court's Decision That Legal Challenge to Illinois Governor's Sweeping Covid-19 Orders Belongs in State CourtRead the Press Release
WASHINGTON – Assistant Attorney General for Civil Rights Eric Dreiband and U.S. Attorney for the Southern District of Illinois Steven D. Weinhoeft issued the following statement on yesterday’s ruling, agreeing with the Justice Department, that a legal challenge to Governor J.B. Pritzker’s COVID-19 orders belongs in Illinois state court rather than federal court:
“It is now up to the Illinois courts to decide if Governor Pritzker’s continuing COVID-19 executive orders are lawful. These sweeping proclamations affect more than 12.5 million Americans, restrict their freedom to associate, practice their faith, and engage in commerce. And, these orders appear to reach far beyond the scope of the 30-day emergency authority granted to the governor under Illinois law.
The United States Constitution requires that every state in this nation establish and maintain a Republican Form of Government. This means that governors cannot restrict our freedom by issuing unlawful edicts.
Governors do not rule us. We are self-governing, and governors answer to the people through the democratic process. For that reason, all public officials, including governors, must comply with the law. Even in the face of a pandemic, states must follow their own laws and make these sensitive policy choices in a manner responsive to the people. Doing so, both respects and serves the goals of our broader federal structure.
The Department of Justice remains committed to defending the rule of law and the American people at all times, especially during the COVID-19 pandemic.”
Background
On May 22, 2020, the Department of Justice filed a statement of interest in an Illinois federal court in support of a lawsuit filed by Illinois state representative Darren Bailey challenging certain actions of Governor J.B. Pritzker in response to the COVID-19 pandemic. In its statement of interest, the United States explained that this dispute belongs in Illinois state court, and that Representative Bailey has raised substantial questions as to whether the governor’s current response to COVID-19 is lawful.
Yesterday, the Illinois federal court agreed with the Department of Justice that the dispute belongs in state court, ruling that “in the interest of federalism, the court finds that the amended complaint does not give rise to federal jurisdiction and that this action is best committed to the courts of the State of Illinois for further consideration.”
The statement of interest was part of Attorney General William P. Barr’s April 27, 2020 initiative directing Assistant Attorney General Eric Dreiband for the Civil Rights Division, and the U.S. Attorney for the Eastern District of Michigan, Matthew Schneider, to review state and local policies to ensure that civil liberties are protected during the COVID-19 pandemic.
In response to the COVID-19 pandemic, the Governor of Illinois has, for the past several months, sought to rely on authority under the Illinois Emergency Management Agency Act to impose sweeping limitations on nearly all aspects of life for citizens of Illinois. According to the lawsuit, the governor’s actions are not authorized by state law, as they extend beyond the 30-day time period imposed by the Illinois legislature for the governor’s exercise of emergency powers granted under the act.
Representative Bailey brought his case in Illinois state court and elected only to assert state law claims. In May, the presiding state court judge ordered Bailey to file his motion for summary judgment and instructed the governor to respond to it. Instead of responding to Bailey’s motion for summary judgment, on May 21, the governor removed the case to federal district court.
On June 29, the federal district court remanded the case to the circuit court for the Fourth Judicial Circuit, Clay Court, Illinois.
The federal case is Bailey v. Pritzker, No. 3:20-cv-474.
The department’s previous statement of interest in this case can be found here: https://www.justice.gov/opa/press-release/file/1278636/download
The department’s press release on its previous statement of interest in this case can be found here: https://www.justice.gov/opa/pr/department-justice-files-statement-interest-challenging-legality-illinois-governors-sweeping
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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Rockland Man Charged with Unlawfully Possessing a FirearmRead the Press Release
BOSTON – A Rockland man was charged yesterday with being a felon in possession of a firearm and ammunition.
Lamont Boswell, 35, was charged by criminal complaint with one count of unlawfully possessing a firearm and ammunition while being a convicted felon. Boswell was detained pending a detention hearing set for July 14, 2020, following an initial appearance today via videoconference in federal court in Worcester.
According to the criminal complaint, in the early morning hours of March 5, 2020, police officers were dispatched to a Hanover convenience store. As officers approached the vehicle, they noticed the engine was revving and the occupant, later identified as Boswell, appeared to be sleeping, laying in the driver’s seat with a sweatshirt pulled up over his head. Plainly visible on Boswell’s lap was a black revolver handgun. Officers were able to secure the firearm without incident. The revolver, a .38 Special caliber Smith & Wesson, was loaded with five rounds of .38 caliber special ammunition in the cylinder. It is alleged that Boswell could not produce any documentation for the firearm or a license to carry, and was subsequently arrested.
It is further alleged that Boswell was also in possession of quantities of suspected heroin and cocaine packaged individually in 10 small, clear plastic bags at the time of his arrest. According to court documents, Boswell revealed during booking that he is a member of the Latin Kings gang. Due to previous state drug convictions punishable by more than one year of incarceration, Boswell is prohibited from possessing a firearm and ammunition.
The charging statute provides for a sentence of up to 10 years in prison, up to three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the United States Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Kelly D. Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; Plymouth County District Attorney Timothy Cruz; and Hanover Police Chief Walter Sweeney made the announcement today. Assistant U.S. Attorney Fred M. Wyshak, III of Lelling’s Major Crimes Unit is prosecuting the case.
The details in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Rochester Not for Profit Employee Pleads Guilty in Federal Court to Defrauding the NYS Dormitory AuthorityRead 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 Shirley Boone, 61, of Rochester, NY, pleaded guilty before U.S. District Judge Elizabeth A. Wolford to conspiracy to commit wire fraud. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorneys Richard A. Resnick and Melissa M. Marangola, who are handling the case, stated that the defendant was the Chief of Staff at NEAD, a not-for-profit neighborhood tax-exempt organization, governed by a volunteer board of directors with day-to-day operations overseen by an Executive Director. Volunteers and staff worked with city officials and agencies to revitalize and stabilize the Sector 8 neighborhood in the northeast quadrant of Rochester. Boones’ duties included securing grants for NEAD, which was funded primarily by grants.
On February 23, 2018, NEAD paid Freedom Community Enterprise Inc. $45,000 to make it falsely appear that Freedom Community had replaced NEAD’s roof and worked on other rehabilitation projects. Freedom Community was a for-profit subsidiary of NEAD and was established to further NEAD’s objective of providing affordable economic opportunities for neighborhood residents. Freedom Community also operated a convenience store located in the Northeast quadrant of Rochester. Freedom Community was not a construction company, nor did it replace NEAD’s roof or perform other rehabilitation projects for NEAD.
Subsequently, the defendant sent documentation to the Dormitory Authority of the State of New York (DASNY) indicating that Freedom Community had in fact replaced NEAD’s roof and performed other rehabilitation services, along with documentation of the $45,000 payment. As a result, NEAD fraudulently received a $45,000 grant from DASNY on July 16, 2018.
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Acting Special Agent-in-Charge Robert Guyton, and the Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent-in-Charge Brad Geary.
Sentencing is scheduled for December 9, 2020, before Judge Wolford.
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Rochester Felon Charged with Gun PossessionRead 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 Jean Green-Alvarez, 33, of Rochester, NY, was arrested and charged by criminal complaint with being felon in possession of a firearm. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.
Assistant U.S. Attorney Cassie M. Kocher, who is handling the case, stated that at approximately 12:30 a.m. on January 15, 2020, Rochester Police Department officers responded to 46 Backus Street in Rochester for a menacing call. According to the complaint, the victim was knocking on doors on nearby Emerson Street attempting to get assistance with charging his cellular telephone. As the victim approached 108 Emerson Street, he observed a male, later identified as the defendant, and a female in the doorway of the residence. As the victim approached, the female handed the defendant what appeared to be a black rifle. The defendant approached the victim and demanded his backpack. The victim told officers that he complied with Green-Alvarez’s demands and handed him the backpack. Surveillance footage at 108 Emerson corroborated the victim’s summary of the events. Officers later searched the residence and located a rifle in the basement of 108 Emerson Street. On March 9, 2020, Green-Alvarez was arrested by police. In September 2009, the defendant was convicted of conspiracy to possess with intent to distribute cocaine within a protected location in the District of Puerto Rico, and is legally prohibited from possessing a firearm.
Green-Alvarez made an initial appearance before U.S. Magistrate Judge Mark W. Pedersen and was detained.
The criminal complaint is the result of an investigation by the Rochester Police Department, under the direction of Chief La’Ron Singletary; the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division; and the U.S. Probation Department, under the director of Chief Probation Officer Anthony SanGiacomo.
The case was brought by the U.S. Attorney’s Office as part of its Project Safe Neighborhoods (PSN) initiative. 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.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Retired Postal Worker Sentenced to over 8 Years in Prison for Bribery Scheme Involving Bulk Mail that Caused $11.7 Million in LossesRead the Press Release
LOS ANGELES – A former employee of the United States Postal Service was sentenced today to 100 months in federal prison for accepting bribes from business customers in exchange for falsely approving unpaid or underpaid bulk mail shipments, causing more than $11.7 million in total losses to his employer.
Juan Enrique Caudillo, 60, of Lakewood, was sentenced by United States District Judge R. Gary Klausner. Judge Klausner also ordered Caudillo, who has been in federal custody since December 2018, to pay $11,745,608 in restitution to the U.S. Postal Service. Caudillo pleaded guilty in March 2019 to one count of conspiracy to commit mail fraud.
Caudillo, who retired from the U.S. Postal Service last year, also agreed to surrender his pension as restitution, as well as the full balance – approximately $140,000 – of his Thrift Savings Plan, a 401(k)-type account available to federal employees.
Since at least 2012, Caudillo, while working as a bulk mail clerk at the Paramount post office, took bribes in exchange for approving unpaid or underpaid bulk mail shipments as fully paid. In one scheme, the owner of Premier Mailing, Inc., a Paramount-based company, paid Caudillo bribes in return for Caudillo falsely listing certain mailings as prepaid, resulting in no postage being paid for them. In a separate scheme, Caudillo accepted bribes to allow another business mailer to underreport information, resulting in reduced payment to the Postal Service for mailings.
“[Caudillo] took advantage of his special training and detailed knowledge of postal procedures to make his fraud nearly impossible to detect: He directed his co-conspirators to use the more cumbersome manual mailing forms rather than the more modern digital ones, exactly the opposite of Postal Service policy,” prosecutors wrote in their sentencing memorandum. “As a result, [Caudillo’s] fraud was buried in a mountain of paper rather than exposed by a computer system that can easily cross-check the number of pieces of mail sent from one post office with those received at another.”
Caudillo has agreed to forfeit almost $700,000 in cash seized from his residence during a November 2018 search warrant. Caudillo also agreed to forfeit approximately $50,000 seized from various bank accounts he maintained, and a Eureka, California residence that he purchased with the scheme’s proceeds of the schemes.
“Mr. Caudillo defrauded the Postal Service and abused his position of public trust by accepting bribes from businesspeople who didn’t want to pay to use the mails,” said United States Attorney Nick Hanna. “Public corruption is a priority for my office, and today’s sentence reflects our determination to aggressively prosecute wrongdoing by any public official.”
Two co-defendants, Ramon Arribeno, 61, of Hacienda Heights, and Armando Lopez-Torres, 63, of the El Sereno neighborhood of the City of Los Angeles, the owner and manager, respectively, of Premier Mailing, each pleaded guilty in 2019 to charges for their roles in the conspiracy and received federal prison sentences.
“The public must have confidence that Postal Service employees will conduct their work in an honest manner,” said Special Agent in Charge Brian Washington, U.S. Postal Service Office of Inspector General. “When employees commit serious offenses, such as taking bribes to overlook large amounts of potential Postal Service revenue, they will be aggressively investigated and prosecuted.”
“Today’s sentencing is a victory for law enforcement in the ongoing battle against people who commit crimes through our nation’s mail system,” said Patricia Armstrong, Inspector in Charge of the Los Angeles Division of the U.S. Postal Inspection Service. “Corrupt employees, like Juan Caudillo, are especially troubling because their actions undermine trust in great public institutions.”
These matters were investigated jointly by the U.S. Postal Service Office of Inspector General and the U.S. Postal Inspection Service.
This case was prosecuted by Assistant United States Attorney Andrew G. Brown of the Major Frauds Section.
Project Guardian Update: Two Felons Appear in Federal Court on Gun ChargesRead the Press Release
CHARLESTON, W.Va. – Two felons appeared in federal court this week on gun charges, according to United States Attorney Mike Stuart.
Deandre Donte Coleman, 28, of Nitro, was sentenced to 36 months in prison for being a felon in possession of a firearm. Coleman’s prison sentence will be followed by three years of supervised release, and he also surrendered to law enforcement authorities any ownership interest that he may have had in the firearm involved in this offense. Coleman previously admitted that on September 2, 2019, he was riding as the front passenger in a vehicle that was stopped by law enforcement officers along MacCorkle Avenue in Jefferson. Officers discovered during the course of this traffic stop that Coleman was in possession of a 9mm semi-automatic pistol along with 11.4 grams of methamphetamine and 8.5 grams of a mixture containing fentanyl, heroin, and methamphetamine. Coleman admitted that he was in possession of the firearm, that he intended to sell the controlled substances found in his possession, and that he knew at the time he possessed the pistol that he had been previously convicted of the felony offense of distribution of cocaine base in the United States District Court in Charleston. The St. Albans Police Department and the Nitro Police Department conducted the investigation, with assistance from the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). Senior United States District Judge John T. Copenhaver, Jr., imposed the sentence. Assistant United States Attorney Jeremy B. Wolfe handled the prosecution.
Matthew Thacker, 39, of Huntington, pled guilty to being a felon in possession of a firearm. On November 14, 2018, officers with the Huntington Police Department executed a search warrant at Thacker’s residence at 315 Oak Street in Huntington. Officers located two firearms in the home. Thacker told officers he knew he could not legally possess the firearms. Thacker was prohibited from possessing a firearm under federal law because of a 2014 conviction for the felony offenses of aggravated battery and aggravated assault in Pinellas County, Florida. Thacker faces up to 10 years in prison when he is sentenced on September 28, 2020. The Huntington Police Department conducted the investigation. United States District Judge Robert C. Chambers presided over the plea hearing. Assistant United States Attorney Stephanie S. Taylor prosecuted the case on behalf of the government.
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 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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Previously convicted felon from Santa Ana Pueblo pleads guilty to illegally possessing firearm possession in Indian CountryRead the Press Release
ALBUQUERQUE, N.M. – Jose Rueben Garcia, 37, of Santa Ana Pueblo, New Mexico, pleaded guilty in federal court today to being a felon in possession of a firearm.
According to public court documents, Garcia committed the offense in Sandoval County on June 22, 2019. Garcia ran into his neighbor’s house carrying a firearm while appearing to be under the influence of drugs. Garcia was sweating and wearing no shirt or shoes. He claimed two assailants were pursuing him and needed to fire his weapon to ward them off. Garcia attempted to point out the assailants from a neighbor’s window but no one was there. Santa Ana Police responded to the scene and arrested Garcia, who could not lawfully possess any firearms due to a previous felony conviction for aggravated battery.
Garcia is currently in custody awaiting sentencing. He faces 10 years in prison.
The Pueblo of Santa Ana Police Department and the Bureau of Indian Affairs Office of Justice Services – Branch of Criminal Investigations investigated the case. Assistant U.S. Attorney Thomas J. Aliberti is prosecuting the case.
Novartis Pays over $642 Million to Settle Allegations of Improper Payments to Patients and PhysiciansRead the Press Release
Pharmaceutical company Novartis Pharmaceuticals Corporation (Novartis), based in East Hanover, New Jersey, has agreed to pay over $642 million in separate settlements resolving claims that it violated the False Claims Act (FCA). The first settlement pertains to the company’s alleged illegal use of three foundations as conduits to pay the copayments of Medicare patients taking Novartis’s drugs Gilenya and Afinitor. The second settlement resolves claims arising from the company’s alleged payments of kickbacks to doctors.
“Through this settlement and others, the government has demonstrated its commitment to ensuring that drug companies do not use kickbacks to influence the drugs prescribed by doctors or purchased by patients,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “We will continue to safeguard the Medicare program from kickbacks and their pernicious effects, including the undermining of important cost-control mechanisms instituted by Congress.”
The Anti-Kickback Statute prohibits anyone from offering or paying, directly or indirectly, any remuneration — which includes money or any other thing of value — to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs. This prohibition extends not only to improper payments to providers, but also to the improper payment of patients’ copay obligations.
In the first settlement, Novartis has agreed to pay $51.25 million to resolve allegations that it illegally paid the copay obligations for patients taking its drugs. When a Medicare beneficiary obtains a prescription drug covered by Medicare, the beneficiary may be required to make a partial payment, which may take the form of a copayment, coinsurance, or a deductible (collectively “copays”). Congress included copay requirements in the Medicare program, in part, to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs.
Novartis sells Gilenya, which is approved for treatment of relapsing forms of multiple sclerosis (MS). The government alleged that, in October 2012, Novartis learned from the contractor managing Novartis’s free drug program for Gilenya that over 300 patients who were receiving free drugs would be eligible for Medicare in 2013. Novartis and the contractor transitioned those patients to Medicare Part D so that, in the future, Novartis would obtain revenue from Medicare when those patients filled prescriptions for Gilenya. Knowing those patients could not afford the copay for Gilenya, Novartis developed a plan with a foundation so that Novartis could cover the copays for those patients. Specifically, at the same time Novartis made a payment to the foundation, Novartis arranged for the foundation to open its MS fund at 6:00 pm on a Friday and for the contractor to have personnel working overtime to submit applications for those patients who had been receiving free Gilenya. Novartis knew that this coordination would result in a disproportionate share of its funding going to Gilenya patients for 2013.
Novartis also sells Afinitor, which is a second-line treatment for advanced renal cell carcinoma (RCC) and a treatment for progressive neuroendocrine tumors of pancreatic origin (PNET). The government alleged that Novartis learned that, for the 2010 donation year, it would be the only donor to an RCC copay assistance fund operated by a charitable foundation. The government alleged that Novartis told the foundation that it would be willing to donate to the fund only if the eligibility definition was narrowed in a way that ensured that a greater amount of the copay assistance would support patients taking Afinitor. The government alleged that, as a result of narrowing the fund definition, the fund disproportionately assisted patients taking Afinitor compared to its overall usage rate among RCC drugs.
The government further alleged that, in 2012, Novartis asked another foundation to open a copay assistance fund to pay copays for PNET patients, which Novartis knew would be used only to pay the copays of Afinitor patients.
“According to the allegations in today’s settlement, Novartis coordinated with three co-pay foundations to funnel money through the foundations to patients taking Novartis’ own drugs,” said U.S. Attorney Andrew E. Lelling for the District of Massachusetts. “As a result, the Novartis’ conduct was not ‘charitable,’ but rather functioned as a kickback scheme that undermined the structure of the Medicare program and illegally subsidized the high costs of Novartis’s drugs at the expense of American taxpayers. At the same time, we recognize that Novartis’ current management has taken constructive steps to address the government’s concerns with the company’s prior relationships with co-pay foundations.”
In the second matter, Novartis will pay $591,442,008 to resolve FCA claims that it paid kickbacks to doctors to induce them to prescribe the Novartis drugs Lotrel, Valturna, Starlix, Tekturna, Tekturna HCT, Tekamlo, Diovan, Diovan HCT, Exforge, and Exforge HCT. In addition, Novartis will forfeit $38.4 million under the Civil Asset Forfeiture Statute. Novartis also made extensive factual admissions in the settlement and agreed to strict limitations on any future speaker programs, including reductions to the amount it may spend on such programs.
In a case pending in the Southern District of New York, the United States alleged that Novartis hosted tens of thousands of speaker programs and related events under the guise of providing educational content, when in fact the events served as nothing more than a means to provide bribes to doctors. Novartis paid physicians honoraria, purportedly as compensation for delivering a lecture regarding a Novartis medication, but, as Novartis knew, many of these programs were nothing more than social events held at expensive restaurants, with little or no discussion about the Novartis drugs. Indeed, some of the so-called speaker events never even took place; the speaker was simply paid a fee in order to induce the speaker to prescribe Novartis drugs.
“For more than a decade, Novartis spent hundreds of millions of dollars on so-called speaker programs, including speaking fees, exorbitant meals, and top-shelf alcohol that were nothing more than bribes to get doctors across the country to prescribe Novartis’s drugs,” said Acting U.S. Attorney Audrey Strauss for the Southern District of New York. “Giving these cash payments and other lavish goodies interferes with the duty of doctors to choose the best treatment for their patients and increase drug costs for everyone. This office will continue to be vigilant in cracking down on kickbacks, however they may be dressed up, throughout the pharmaceutical industry.”
The government’s complaint further alleged that Novartis sales representatives, on the instruction of their managers, selected high-volume prescribers to serve as the paid “speakers” at these events with the intent to induce them to write more — or keep writing many — Novartis prescriptions. The sales representatives then pressured the speakers to increase their prescriptions of Novartis drugs, and often dropped doctors from the speaker program if they failed to do so. Further, the government alleged that this widespread kickback scheme was the result of decisions made by top management at Novartis’s North American headquarters in New Jersey.
This settlement resolves a lawsuit captioned United States ex rel. Bilotta v. Novartis Pharmaceuticals Corp., No. 11-Civ.-0071-PGG (S.D.N.Y.) initially filed under the whistleblower provision of the FCA, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The FCA permits the United States to intervene in such a lawsuit, as it did in the whistleblower case filed against Novartis. The amount to be recovered by the private whistleblower, Oswald Bilotta, has not yet been determined. As part of the settlement, Novartis will also pay an additional $48,151,273 to resolve state Medicaid claims.
Contemporaneous with the settlement of the FCA claims in these matters, Novartis entered into a corporate integrity agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The five-year CIA addresses the conduct at issue in both matters. Among other things, the CIA requires Novartis to significantly reduce the number of paid speaker programs and the amounts spent on such programs. Under the CIA, Novartis speaker programs may only occur under limited circumstances and in a virtual format. In addition, the CIA requires Novartis to implement measures designed to promote independence from any patient assistance programs to which it contributes. The CIA also requires multi-faceted monitoring of Novartis’s operations and obligates company executives and Board members to certify about compliance.
“OIG will continue to work closely with the Department of Justice to investigate and pursue kickbacks regardless of the form they take,” said Gregory E. Demske, Chief Counsel to the Inspector General, HHS-OIG. “To address Novartis’s conduct and the widely-recognized compliance risks associated with paid speaker programs, the CIA requires Novartis to make fundamental changes to its speaker program practices. Under the CIA, Novartis must significantly reduce the number of programs and the number of paid physicians, and can no longer pay for inherently-risky in-person programs.”
The government’s resolution of these matters illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The copay investigation was conducted by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of Massachusetts, in conjunction with the Department of Health and Human Services, Office of Inspector General and the Federal Bureau of Investigation. The Bilotta matter was litigated by the Southern District of New York, with assistance from the Civil Division’s Commercial Litigation Branch, the Federal Bureau of Investigation, the Department of Health and Human Services, Office of Inspector General, and the Department of Defense, Office of Inspector General.
The claims resolved by the settlements are allegations only; there has been no determination of liability.
Novartis Agrees to Pay over $51 Million to Resolve Allegations that It Paid Kickbacks Through Co-Pay FoundationsRead the Press Release
BOSTON – Novartis Pharmaceuticals Corporation (Novartis) has agreed to pay $51.25 million to resolve allegations that it violated the False Claims Act by illegally paying the Medicare co-pays for its own drugs.
When a Medicare beneficiary obtains a prescription drug covered by Medicare Part B or Part D, the beneficiary may be required to make a partial payment, which may take the form of a co-payment, co-insurance, or deductible (collectively, co-pays). Congress included co-pay requirements in these programs, in part, to encourage market forces to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs. The Anti-Kickback Statute prohibits pharmaceutical companies from offering or paying, directly or indirectly, any remuneration – which includes money or any other thing of value – to induce Medicare patients to purchase the companies’ drugs.
“According to the allegations in today’s settlement, Novartis coordinated with three co-pay foundations to funnel money through the foundations to patients taking Novartis’ own drugs,” said United States Attorney Andrew E. Lelling. “As a result, the Novartis’ conduct was not ‘charitable,’ but rather functioned as a kickback scheme that undermined the structure of the Medicare program and illegally subsidized the high costs of Novartis’ drugs at the expense of American taxpayers. At the same time, we recognize that Novartis’ current management has taken constructive steps to address the government’s concerns with the company’s prior relationships with co-pay foundations.”
“Through this settlement and others, the government has demonstrated its commitment to ensuring that drug companies do not use kickbacks to influence the drugs prescribed by doctors or purchased by patients,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “We will continue to safeguard the Medicare program from kickbacks and their pernicious effects, including the undermining of important cost-control mechanisms instituted by Congress.”
“Improper coordination between pharmaceutical manufacturers and foundations operating patient assistance programs harms Medicare by increasing costs and distorting the prescription drug market,” said Gregory E. Demske, Chief Counsel to the Inspector General. “This CIA promotes independence in those relationships and accountability on the part of manufacturer Boards of Directors and senior management.”
“Novartis tried to game the system to boost its bottom line at the expense of sick patients facing economic hardship, and the hard-working taxpayers who fund the Medicare program,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Today’s settlement is a warning to all pharmaceutical companies that if they pay kickbacks, like Novartis did in this case, our health care fraud task force will do everything it can to make sure they are held accountable.”
The government’s allegations in the settlement announced today are as follows:
At certain intervals during the period from Jan. 1, 2010, through Dec. 31, 2014, Novartis used The Assistance Fund (TAF) as a conduit to pay kickbacks to Medicare patients taking Gilenya, a Novartis drug for multiple sclerosis (MS), and used the National Organization for Rare Disorders (NORD) and Chronic Disease Fund (CDF) as conduits to pay kickbacks to Medicare patients taking Afinitor, a Novartis drug for renal cell carcinoma (RCC) and progressive neuroendocrine tumors of pancreatic origin (PNET).
With respect to TAF, in October 2012, Novartis learned from Express Scripts, which then was managing Novartis’ free drug program for Gilenya, that Novartis was providing free Gilenya to 364 patients who would become eligible for Medicare the following year. Novartis and Express Scripts transitioned these patients to Medicare Part D so that, in the future, Novartis would obtain revenue from Medicare when the patients filled their prescriptions for Gilenya. Knowing that these patients could not afford co-pays for Gilenya, Novartis developed a plan for it to cover their co-pays through TAF, which operated a fund that, ostensibly, offered to cover co-pays for any MS patient who met TAF’s financial eligibility criteria, regardless of which MS drug the patient was taking. Specifically, just after it made a payment to TAF, Novartis arranged for TAF to open its MS fund at 6:00 p.m. on Friday, Dec. 14, 2012, and for Express Scripts to have personnel working overtime that night and the following morning submitting applications to TAF on behalf of patients who previously had been receiving free Gilenya from Novartis. Novartis knew that the timing of the opening of the fund and the readiness of Express Scripts to submit applications on behalf of Gilenya patients at that time would result in Gilenya patients receiving a disproportionate share of the grants from the fund while it was open. After the fund closed on Saturday, Dec. 15, 2012, Novartis confirmed that, during the brief period the fund had been open, TAF used Novartis’ money to provide 374 Gilenya patients with grants to cover their Medicare co-pays in 2013. Novartis subsequently made further payments to TAF, and TAF provided many of these same Gilenya patients with grants to cover their Medicare co-pays in 2014.
With respect to NORD, Novartis learned that, as of the 2010 donation year, no other manufacturer of RCC medications would be contributing to a pre-existing NORD RCC co-pay assistance fund. Novartis knew that Afinitor was approved for use as a second-line RCC treatment only, and only when certain first-line products had failed. Novartis also knew, therefore, that any co-pays NORD covered for initial RCC treatments would not be used to cover co-pays for Afinitor. Novartis informed NORD that it would be willing to donate to its RCC fund if NORD narrowed the fund’s eligibility definition so as not to cover co-pays for first line treatments. Novartis wanted the definition narrowed to ensure that a greater amount of its donations would subsidize its product, as opposed to others. NORD then created a new fund entitled “Advanced Renal Cell Carcinoma Second Line Co-Payment Assistance Program.” This fund excluded any patients seeking co-pay coverage for first-line RCC treatments and disproportionately funded patients taking Afinitor compared to its overall usage rate among all RCC drugs. Novartis financed this NORD fund through 2014.
With respect to CDF, in 2012, after Afinitor was approved to treat PNET, Novartis asked CDF to open a fund to cover Afinitor co-pays for PNET patients. At that time, Novartis knew that the FDA had approved a competing drug to treat PNET. Nonetheless, with Novartis’ knowledge, CDF launched a fund labeled “PNET” that covered co-pays only for Afinitor and did not cover co-pays for the other PNET drug. Novartis continued with this understanding as the sole financial backer of this supposed “PNET” fund through 2014.
Novartis entered into a five-year corporate integrity agreement (CIA) with OIG as part of this settlement and a simultaneous settlement being announced today by the United States Attorney’s Office for the Southern District of New York. The CIA requires Novartis to implement measures, controls, and monitoring designed to promote independence from any patient assistance programs that it finances. In addition, Novartis agreed to implement risk assessment programs and to obtain compliance-related certifications from company executives and Board members.
To date, the Department of Justice has collected over $900 million from ten pharmaceutical companies (United Therapeutics, Pfizer, Actelion, Jazz, Lundbeck, Alexion, Astellas, Amgen, Sanofi, and Novartis) that allegedly used third-party foundations as kickback vehicles. The Department also has reached settlements with four foundations (Patient Access Network Foundation, Chronic Disease Fund, The Assistance Fund, and Patient Services, Inc.) that allegedly conspired or coordinated with these pharmaceutical companies.
U.S. Attorney Lelling, Assistant Attorney General Hunt, HHS Chief Counsel to the Inspector General Demske, and FBI Boston SAC Bonavolonta made the announcement today. The U.S. Postal Inspection Service also assisted with the investigation. The matter was handled by Assistant U.S. Attorneys Gregg Shapiro and Abraham George, of Lelling’s Affirmative Civil Enforcement Unit, and by Trial Attorneys Sarah Arni and Augustine Ripa of the Justice Department’s Civil Division.
Next Step Recovery Owner Pleads to Distributing Heroin to His Rehab Clients and Preparing False Returns for Customers of His Tax FirmRead the Press Release
PITTSBURGH – David Francis of McKees Rocks, PA, pleaded guilty in federal court to a charge of conspiracy to distribute 100 grams or more of heroin. He also waived prosecution by indictment and entered a plea of guilty to a five-count Information charging him with assisting in the filing of fraudulent federal income tax returns, United States Attorney Scott W. Brady announced today.
Francis, 69, pleaded guilty to one drug count and five tax counts before United States District Judge Joy Flowers Conti.
In connection with the guilty plea, the court was advised that Francis was the owner and operator of Next Step Recovery Housing, LLC, a purported drug rehabilitation center, located in McKees Rocks, PA. While operating Next Step Recovery Housing, the defendant also conspired to distribute more than 100 grams of heroin with suppliers from New York City from November 2016 through February 2017. Francis redistributed the heroin that he obtained from the New York suppliers to his own customers, many of whom were current or former clients of Next Step Recovery Housing. During the same timeframe, Francis was also the owner and operator of All Personal Matters, an income tax return preparation business. Through All Personal Matters, Francis aided in the preparation and filing of fraudulent federal income tax returns on behalf of clients of All Personal Matters, resulting in a loss to the Internal Revenue Service of $1,681,607.54.
Judge Conti scheduled sentencing for November 4, 2020. For the drug charge, the law provides for a total sentence of not less than five years and not more than 40 years in prison, a fine of not more than $5,000,000, or both. For the tax charges, the law provides for a total sentence at each count of not more than three years in prison and a fine of not more than $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history of the defendant.
Pending sentencing, the court continued the defendant’s detention.
Assistant United States Attorney Tonya Sulia Goodman is prosecuting this case on behalf of the government.
The Drug Enforcement Administration, Internal Revenue Service – Criminal Investigation, Monroeville Police Department, Stowe Township Police Department, Ingram Borough Police Department, Pennsylvania State Police, and Monaca Police Department conducted the investigation that led to the prosecution of Francis.
New York Woman Admits Role in Counterfeit Check Bank Fraud SchemeRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that MEEM JANNAT, 24, of Brooklyn, New York, formerly of Waterbury, pleaded guilty today before U.S. Magistrate Judge William I. Garfinkel to one count of one count of conspiracy to commit bank fraud stemming from her role in a counterfeit check scheme.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the court proceeding occurred via videoconference.
According to court documents and statements made in court, between approximately December 2017 and January 2019, Jannat and her co-conspirators, including Jonell Bonilla, Tania Cruz and Lilibeth Perez, obtained access to bank accounts by recruiting individuals through social media and persuading the individuals to share their account information, including debit cards and associated PIN numbers. The account holders were paid for providing access to their bank accounts. Jannat and her co-conspirators misrepresented to the account holders that U.S. Postal Service money orders or authentic checks would be deposited into their accounts. After the co-conspirators had access to the accounts, they deposited counterfeit checks into those accounts, and withdrew money from the accounts before the banks discovered the checks to be counterfeit.
Through this scheme, the co-conspirators defrauded at least 12 banks of a total of approximately $240,000. In pleading guilty, Jannat agreed that the loss attributable to her role in the scheme is $50,389.05.
Jannat is scheduled to be sentenced by U.S. District Judge Vanessa L. Bryant on October 21, 2020, at which time she faces a maximum term of imprisonment of 30 years.
Jannat was arrested on January 14, 2019. She is released on a $100,000 bond pending sentencing.
Bonilla, Cruz and Perez previously pleaded guilty to related charges and await sentencing.
This matter is being investigated by the U.S. Postal Inspection Service and the U.S. Secret Service. The case is being prosecuted by Assistant U.S. Attorney John T. Pierpont, Jr.
New Jersey Residents Sentenced for Smuggling Portuguese CitizenRead the Press Release
UTICA, NEW YORK – Oscar Manuel Grego Costa, age 46, a Portuguese citizen living in Newark, New Jersey, was sentenced today to 36 months in prison, to be followed by a 3-year period of supervised release, for bringing an illegal alien into the United States from Canada and attempting to bring the alien to Newark. Maria Jose Carvalho, age 47, of Newark, was sentenced today to time served (4 days in jail), followed by 2 years of supervised release, for conspiring to transport an illegal alien within the United States.
The announcement was made by United States Attorney Grant C. Jaquith; Steven Bronson, Area Port Director, United States Custom and Border Protection (CBP); and Robert N. Garcia, Chief Patrol Agent, United States Border Patrol, Swanton Sector.
On November 17, 2018, Carvalho drove from Newark to Canada, where she met with and picked up Fabio De Soussa Barbosa. Barbosa was a citizen of Portugal, who had been a long-time resident of New Jersey. Barbosa was not authorized to enter the United States. After meeting Barbosa in Canada, Carvalho drove to a remote location on the Canadian side of the border during the early morning of November 18, 2018, and dropped off Barbosa, who then walked across the border into the United States. Barbosa entered the United States undetected and Carvalho then drove to the Champlain Port of Entry and attempted to return to the United States. Royal Canadian Mounted Police (RCMP) officers had observed Carvalho drop off someone near the border and RCMP, in turn, contacted Border Patrol.
Border Patrol responded and encountered a Chevrolet Tahoe, with a New Jersey license plate, registered to Maria Carvalho. The vehicle, which was near Mooers, New York, had four men inside. The driver was Christopher Boals and the three passengers were Daniel Costa, Antonio Nieves, and Fabio De Sousa Barbosa. Christopher Boals, Daniel Costa and Antonio Nieves had been hired by Oscar Manuel Grego Costa to meet with and pick up Barbosa on the United States side of the border, and then drive him away from the border so that Barbosa could be transported to Newark.
Oscar Manuel Grego Costa was found by Border Patrol at the Rouses Point train station later that morning and arrested. Immigration inspection of Oscar Manuel Grego Costa, including a check of his fingerprints, revealed that he had been removed from the United States to Portugal in 1994 and that he had not secured permission to return to the United States following the removal. Costa was also sentenced today to 12 months in prison for the offense of re-entry into the United States of a previously removed alien. The court directed that the 12-month sentence run concurrent to Costa’s 36-month sentence for alien smuggling.
Christopher Boals, age 41, of Newark, was sentenced on December 11, 2019 to 15 months in prison, to be followed by a 3-year period of supervised release, for bringing an illegal alien into the United States from Canada and attempting to bring the alien to Newark.
Antonio Nieves, age 46, of Newark, was sentenced on December 11, 2019 to 15 months in prison, to be followed by a 3-year period of supervised release, for bringing an illegal alien into the United States from Canada and attempting to bring the alien to Newark.
Daniel Costa, age 24, a citizen of Portugal residing in Newark, was sentenced on January 8, 2020 to time served (13 months in prison), for bringing an illegal alien into the United States from Canada and attempting to bring the alien to Newark.
Fabio De Soussa Barbosa, age 24, a citizen of Portugal residing in Newark, was convicted of the misdemeanor offense of entry without inspection by an alien, on December 18, 2018 and sentenced to time served (30 days in jail), and to pay a $5,000 fine.
This case was investigated by U.S. Customs and Border Protection (CBP) and Border Patrol, and was prosecuted by Assistant U.S. Attorneys Edward P. Grogan and Ashlyn Miranda.
Mexican man sentenced for role in smuggling attempt that led to rollover accidentRead the Press Release
LAREDO, Texas – A 30-year-old Mexican national has been ordered to federal prison for his involvement in a conspiracy to transport undocumented aliens, announced U.S. Attorney Ryan K. Patrick.
Ruben Ernesto Mendoza-Zapata pleaded guilty Jan. 7.
Today, U.S. District Judge Marina Garcia Marmolejo handed Mendoza-Zapata a 41-month term of imprisonment. Not a U.S. citizen, he is expected to face removal proceedings after serving his sentence.
On Oct. 7, 2019, authorities observed a group of individuals crossing from the Mexican side of Falcon Lake via boat and entering a red Ford Explorer in the United States. They located the SUV and attempted to get behind it. However, the driver - later identified as Mendoza-Zapata - fled the scene at a high rate of speed. During the pursuit, Mendoza-Zapata tried rounding a curve, but rolled the vehicle several times.
Law enforcement secured the scene and rescued the occupants, one of whom was pinned underneath the vehicle. At the time of the rollover, a 6-year-old boy was also in the SUV.
Mendoza-Zapata has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of Border Patrol. Assistant U.S. Attorney David Fawcett prosecuted the case.
Mexican Man Sentenced for Illegally Reentering the United States after DeportationRead the Press Release
A man who illegally re-entered the United States after being previously deported as a felon was sentenced March 5, 2020, to more than 1 year in federal prison.
Alejandro Garcia-Sanchez, age 38, from Mexico, received the prison term after a November 4, 2019, guilty plea to one count of re-entry of a removed alien after a felony.
In a plea agreement, Garcia-Sanchez admitted he had illegally entered the United States from Mexico on an unknown dated after previously being deported in February of 2019, following a conviction for re-entry of a removed alien in the United States District Court for the District of New Mexico.
Garcia-Sanchez was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Garcia-Sanchez was sentenced to 15 months’ imprisonment. He must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
Garcia-Sanchez is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Kevin C. Fletcher and investigated by Enforcement and Removal Office of the Immigration and Customs Enforcement Bureau.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 10-CR-3041.
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Mexican Citizen Illegally in the United States Sentenced as Methamphetamine DistributorRead the Press Release
United States Attorney Joe Kelly announced that Daniel Chona-Romero, 34, was sentenced today by United States District Judge Robert F. Rossiter, Jr. to 60 months’ imprisonment for distributing methamphetamine. Chona-Romero was also sentenced to a 3-year term of supervised release following his release from the Bureau of Prisons. There is no parole in the federal prison system. Chona-Romero will be deported from the United States to Mexico after serving his prison term.
Chona-Romero sold methamphetamine to an FBI Confidential Human Source on two occasions, October 24, and November 1, 2018, yielding one ounce and two ounces, respectively. A forensic laboratory analysis showed the methamphetamine sold to be 95% pure. Chona-Romero was subsequently arrested by agents in Omaha.
This case was investigated primarily by the Federal Bureau of Investigation.
Mason City Woman to Prison for Federal Meth ConvictionRead the Press Release
A woman who conspired to distribute methamphetamine was sentenced June 30, 2020, to more than 5 years in federal prison.
Amanda Adams, age 30, from Mason City, Iowa, pled guilty on February 14, 2020, to one count of conspiracy to distribute methamphetamine and one count of possession with intent to distribute methamphetamine.
At the plea and sentencing hearings, evidence showed that from about May 2019 through October 2019, Adams and others conspired to distribute at least 35 grams of actual (pure) methamphetamine in Northwest Iowa. In June 2019, Adams and a co-conspirator sold “fake” methamphetamine to an individual cooperating with law enforcement. In October 2019, Adams and her co-conspirator agreed to sell more methamphetamine to the same cooperator and make good on the previous transaction. After a high speed vehicle pursuit, Adams and her co-conspirator were caught with two ounces of methamphetamine intended for the same cooperator. Officers also seized a sawed-off shotgun and an axe during a search of the vehicle.
Sentencing was held before United States District Court Chief Judge Leonard T. Strand. Adams was sentenced to 64 months’ imprisonment and must serve a term of 4 years of supervised release following the imprisonment. There is no parole in the federal system. Adams remains in custody of the United States Marshal Service until she can be transferred to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by the Iowa Department of Narcotics Enforcement, Dickinson County Sheriff’s Office, Arnold’s Park Police Department, and Iowa Division of Criminalistics Investigation.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-4079.
Follow us on Twitter @USAO_NDIA.
Man Sentenced to Prison for $7 Million Options Trading SchemeRead the Press Release
RICHMOND, Va. – A Richmond man was sentenced today to over 10 years in prison for his execution of a $7 million investment fraud scheme he operated for nearly a decade.
According to court documents, Leonard J. Cipolla, 71, was the founder, owner, and operator of Tate Street Trading, Inc., in Richmond. Between 2009 and 2019, Cipolla solicited more than $7 million in investment funds from more than 40 individuals located in Virginia, New York, and Washington, D.C. Cipolla convinced these individuals to provide him with their savings by assuring the investors that he was a highly experienced, highly successful trader in commodity futures and options. Cipolla promised his investors that he could guarantee them significant fixed rates of return on their investments, and that Cipolla’s management fee would be drawn only from the profits that Cipolla made over and above each investor’s promised rate of return. He also assured investors that Cipolla was qualified to manage tax-deferred retirement accounts, and that he would roll the investor’s existing Individual Retirement Account (IRA) into a Tate Street-managed, tax-deferred IRA. As time passed, Cipolla provided many of his investors with account statements that purported to show the investor’s principal was safely intact, and growing at the promised rate of return.
In reality, Cipolla pooled his investors’ savings as soon as those individuals’ personal checks, IRA roll-overs, and wires were deposited into his bank accounts. Cipolla used only a fraction of those pooled investment funds to trade in the futures market, and he ultimately lost nearly the entire amount of investor funds that he actually invested. Cipolla further dissipated the remainder of his investors’ savings on unauthorized expenses, to include making payments to earlier investors, and paying his own personal expenses.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; David Archey, Special Agent in Charge of the FBI’s Richmond Field Office; and Peter R. Rendina, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement after sentencing by U.S. District Judge John A. Gibney, Jr. Assistant U.S. Attorneys Katherine Lee Martin and Thomas A. Garnett prosecuted the case.
As part of a parallel regulatory investigation, the Commodity Futures Trading Commission has filed a civil complaint alleging that Cipolla violated the Commodity Exchange Act (Case No. 3:19-cr-690).
Man Sentenced for Causing Opioid Overdose Resulting in DeathRead the Press Release
ALEXANDRIA, Va. – A former Northern Virginia resident was sentenced today to 20 years in prison for the distribution of heroin that resulted in the death of a Leesburg man in March 2016.
According to court documents, John Jacob Stapleton, 33, who most recently resided in Fort Pierce, Florida, regularly obtained illegal opioids from sources of supply that he and others distributed to customers within Loudoun County and the greater Washington, D.C. Metropolitan area. In March 2016, Stapleton distributed heroin that resulted in the death of E.L., a former Loudoun County resident. A forensic toxicologist determined that E.L.’s blood and vitreous humor each contained a combination of morphine and 6-acetylmorhpine, and a forensic pathologist determined that E.L. died of heroin poisoning. Further investigation by law enforcement officials revealed that E.L. overdosed on heroin that another individual obtained directly from Stapleton.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; James A. Dawson, Special Agent in Charge, Criminal Division, FBI Washington Field Office; Michael L. Chapman, Loudoun County Sheriff; and Gregory C. Brown, Leesburg Chief of Police, made the announcement after sentencing by U.S. District Judge Anthony J. Trenga. Assistant U.S. Attorneys David A. Peters and Raj Parekh prosecuted the case.
This matter was investigated by the FBI Washington Field Office’s Safe Streets/HIDTA Task Force which is composed of Agents and Task Force Officers from the Leesburg PD, the Loudoun County Sheriff’s Office, the Fairfax County Police, the Prince William County Police, the Alexandria City Police, the Vienna Police Department, the Herndon Police Department, the Fauquier County Sheriff’s Office, the Department of Homeland Security, and in cooperation with the DEA, ATF and USMS.
The task force’s mission is to effectively identify, disrupt and dismantle the most egregious gangs and criminal enterprises engaged in violence and narcotics distribution within Northern Virginia.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:19-cr-340.
Lutheran Pastor Arrested in Godfrey, Charged with Distributing Child PornographyRead the Press Release
A federal criminal complaint was filed late on Friday, June 19, against a Madison County pastor.
Steven P. Tibbetts, 61, was charged with one count of knowingly distributing child pornography in
December 2019. At the time the complaint was filed, Tibbetts was employed as the head pastor at
Resurrection Lutheran Church in Godfrey, Illinois. His attorney, Bill Lucco, told prosecutors this afternoon that on account of the charge pending against him, Tibbetts has been “released of all duties, pastoral or otherwise, at Resurrection Lutheran.”According to the complaint, the investigation of Tibbetts began in August 2019 when the photo-sharing website, Tumblr, provided a cyber tip line report about one of its user accounts to the National Center for Missing and Exploited Children (NCMEC). The account was searched by law enforcement and allegedly found to contain images and videos of nude minors engaging in sexually explicit conduct. The complaint alleges that NCMEC also received a tip from Twitter in February
2020 that one of its users had uploaded two images of suspected child pornography.Investigators were allegedly able to trace the Tumblr and Twitter accounts back to Tibbetts’ home, where a federal search warrant was executed on June 18. An initial review of Tibbetts’ computer allegedly revealed the presence of additional child pornography images and videos, and agents subsequently arrested Tibbetts at his home without incident.
This afternoon, Tibbetts made his initial appearance at the federal courthouse in East St. Louis.
After holding a preliminary hearing, United States Magistrate Judge Mark Beatty found probable cause to support the complaint and ordered Tibbetts to be placed on electronic monitoring and released on a $10,000 unsecured bond pending trial. A trial date has not been set.Distributing child pornography over the internet is a federal crime that as a first offense carries a maximum punishment of 5-20 years in prison, a $250,000 fine, and a lifetime term of supervised release.
A complaint is merely a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proven guilty beyond a reasonable doubt to the satisfaction of a jury.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.
Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and
Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”The ongoing investigation is being conducted by the FBI. Significant assistance was provided in the early stages of the investigation by the Peoria (I linois) Police Department.
Assistant U.S. Attorney Christopher R. Hoell is prosecuting the case.Justice Department Congratulates T-Mobile and Dish for Closing the Boost DivestitureRead the Press Release
T-Mobile US Inc. (T-Mobile) and Dish Network Corporation (Dish) announced today that they closed T-Mobile’s divestiture of Boost Network (Boost) to Dish. Boost was legacy Sprint Corporation’s prepaid wireless brand, and the transaction was completed pursuant to the remedies imposed by the Department of Justice and the Federal Communications Commission.
“I congratulate T-Mobile and Dish for closing the Boost divestiture as required under the Final Judgment,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “This deal is a significant milestone in realizing the Department of Justice’s remedy, which is designed to strengthen competition for high-quality 5G networks and benefit American consumers nationwide.”
The Antitrust Division filed a civil antitrust lawsuit on July 26, 2019, in the U.S. District Court for the District of Columbia along with the settlement that resolves the department’s competitive concerns. Judge Kelly entered final judgment in that matter on April 1, 2020. The attorneys general for the states of Arkansas, Colorado, Florida, Kansas, Louisiana, Nebraska, Ohio, Oklahoma, South Dakota, and Texas each joined in this settlement. Separately, Judge Marrero in the Southern District of New York denied the request of a minority group of states to enjoin the transaction nationwide. Judge Marrero’s opinion relied, in part, on the federal remedies designed to protect against the competitive harms that may otherwise have occurred.
The FCC also approved the transaction after a thorough examination, with certain commitments as a condition of approval.
T-Mobile US Inc. is a Delaware corporation headquartered in Bellevue, Washington. In 2019, T-Mobile posted revenues of $45 billion. Deutsche Telekom AG, a German corporation headquartered in Bonn, Germany, is the controlling shareholder of T-Mobile US Inc.
Judge Sentences New Jersey Drug Dealer to 15 Years in Federal PrisonRead the Press Release
JOHNSTOWN, Pa. – A resident of Camden, New Jersey, has been sentenced in federal court to 15 years in prison and four years’ supervised release on his conviction of violating federal narcotics laws, United States Attorney Scott W. Brady announced today.
United States District Judge Kim R. Gibson imposed the sentence on Jamel T. Brown, 38.
According to information presented to the court, on October 25, 2018, Brown and a co-conspirator distributed more than 28 grams of cocaine base, commonly known as "crack," and possessed with intent to distribute more than 50 grams of methamphetamine and a quantity of fentanyl.
Assistant United States Attorney Maureen Sheehan-Balchon prosecuted this case on behalf of the government.
Mr. Brady commended the Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Cambria County Drug Task Force for the investigation that led to the successful prosecution of Brown.
Jeffory Jaelyn Lee of Wilmington Receives 9 Years in Federal PrisonRead the Press Release
WILMINGTON, N.C. – A Wilmington man was sentenced to 108 months in prison for methamphetamine distribution and firearm charges.
According to court documents, Jeffory Jaelyn Lee, 31, was named in a Criminal Information filed on March 6, 2020 charging him with conspiracy to distribute and possess with the intent to distribute 500 grams or more of a mixture and substance containing a detectable amount of methamphetamine and a quantity of cocaine; possession with the intent to distribute 50 grams or more of actual methamphetamine, aiding and abetting; possession with the intent to distribute 50 grams or more of a mixture and substance containing a detectable amount of methamphetamine; and, possession of a firearm in furtherance of a drug trafficking crimes. On March 31, 2020, Lee pled guilty to all four counts of the Criminal Information.
According to the investigation, on August 28, 2019, a trooper with the North Carolina State Highway Patrol investigated a traffic accident on the shoulder of I-40 in Pender County, NC. Lee was a passenger in one of the vehicles involved in the accident. A search of Lee’s vehicle found a case containing approximately 74.63 grams of actual methamphetamine. On February 14, 2020, law enforcement officers in Wilmington searched Lee’s residence and found 205 grams of methamphetamine and other narcotics. In addition, a Glock .45 caliber firearm was found in close proximity to the narcotics.
This case is part of an extensive Organized Crime Drug Enforcement Task Force (OCDETF) investigation led by the Drug Enforcement Administration entitled “Operation Jellyfish.” This investigation is focused on a drug trafficking organization operating in Eastern North Carolina and including New Hanover County.
This case is part of the Take Back North Carolina Initiative of The United States Attorney’s Office for the Eastern District of North Carolina. This initiative emphasizes the regional assignment of federal prosecutors to work with law enforcement and District Attorney’s Offices on a sustained basis in those communities to reduce the violent crime rate, drug trafficking, and crimes against law enforcement.
Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge Richard E. Myers II. The Drug Enforcement Administration, New Hanover County Sheriff’s Office, Pender County Sheriff’s Office and North Carolina Highway Patrol investigated the case and Special Assistant U.S. Attorney Murphy Averitt prosecuted the case.
A copy of this press release is located on our website. Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 7:20-cr-00038-M.
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The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Inmate Visitor Sentenced for Introducing Heroin and Buprenorphine to USP LeeRead the Press Release
ABINGDON, VIRGINIA – Shauntae Crummer, a visitor at United States Penitentiary [USP] Lee in Jonesville, Virginia was sentenced yesterday in U.S. District Court for introducing heroin and buprenorphine into the penitentiary. United States Attorney Thomas T. Cullen announced the sentence today.
Crummer, 29, of Lakeland, Florida, was sentenced to 36 months in prison. Crummer previously pleaded guilty to providing narcotics to an inmate at USP Lee and conspiracy to possess and possess with the intent to distribute heroin.
Co-defendant Tylan Lucas is scheduled to be sentenced July 15, 2020, for his role in the conspiracy.
The investigation of the case was conducted by the Federal Bureau of Prisons. Special Assistant United States Attorney Debbie Stevens prosecuted the case for the United States.
Indicted young Laredoan charged with federal firearms violationsRead the Press Release
LAREDO, Texas – A federal grand jury has returned an indictment against a 19-year-old Laredo resident for illegally possessing a firearm while under an active domestic violence protection order and possessing a firearm while under indictment, announced U.S. Attorney Ryan K. Patrick.
Mario Alberto Salazar is expected to appear for his arraignment next week before a U.S. magistrate judge in Laredo.
The criminal complaint originally filed in the case alleges Salazar was under an active protective order which prohibited him from possessing a firearm. However, he allegedly assaulted a woman March 31, 2020 – striking her in the left arm and hip with the firearm. The charges also allege he pointed a firearm at her feet while threatening to shoot her.
According to the allegations, authorities test fired the weapon and entered the casings into the National Integrated Ballistic Information Network (NIBIN) which led to a match to a shooting incident in Laredo on March 23. On that date, Salazar allegedly discharged a firearm at a vehicle as it was driving through an intersection. He was still subject to the domestic violence order at that time, according to the charges.
“NIBIN is the only national network that allows for the capture and comparison of ballistic evidence to aid in solving and preventing violent crimes involving firearms,” said Special Agent in Charge Fred Milanowski of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
The criminal complaint also alleges Salazar is under indictment in Webb County for engaging in organized criminal activity and unlawful restraint and is prohibited under federal law from possessing a firearm.
If convicted of either charge, Salazar faces up to 10 years in federal prison and a possible $250,000 maximum fine.
ATF conducted the investigation with the assistance of the Laredo Police Department. Assistant U.S. Attorney April Ayers-Perez is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Houston-area cardiologist settles allegationsRead the Press Release
HOUSTON – Advanced Cardiovascular Care Center P.A. and its owner and administrator have agreed to pay $400,000 to resolve allegations they violated the False Claims Act (FCA), announced U.S. Attorney Ryan K. Patrick.
Owner Dr. Annie T. Varughese, 57, and administrator Babu Varughese, 64, both of Spring, conducted business in three clinics located in Houston, Conroe and The Woodlands.
From June 4, 2013, through June 4, 2016, the company submitted claims to Medicare for cardiology services. These included cardiac external counterpulsation treatments, transthoracic echocardiography studies and duplex scans that were not reasonable and medically necessary. Therefore, they failed to meet the Medicare coverage and documentation requirements.
Further, patient files lacked documentation that Varughese directly supervised the cardiology services as Medicare requires. The company billed Medicare for services under Varughese’s provider number when she was not in the office and, at times, not even in the United States.
“Putting financial gain ahead of medical necessity undermines the integrity of the Medicare program,” said Special Agent in Charge Miranda Bennett of the Department of Health and Human Services – Office of Inspector General (DHHS-OIG). “We will continue investigate and hold accountable those who submit false claims to federal health care programs.”
“The largest area of fraud committed against the federal government today is by unethical healthcare providers who inflate or fabricate Medicare or Medicaid bills,” said Special Agent in Charge Perrye K. Turner of the FBI. “Billing Medicare for services that are not necessary and/or not provided constitutes fraud. American taxpayers are the ones who ultimately bear the financial burden created by this, as healthcare fraud translates into higher premiums and out-of-pocket expenses for consumers. We ask for the public's help in reporting and exposing dishonest healthcare providers."
The investigation began in 2016 after a former cardiologist filed a sealed lawsuit under the qui tam provisions of the FCA. It allows private citizens with knowledge of fraud to bring a lawsuit on behalf of the United States. They may be entitled to a share of the proceeds of the action or any settlement.
DHHS-OIG and FBI conducted the investigation. Assistant U.S. Attorney Julie Redlinger handled the matter.
The claims resolved by this agreement are allegations only, and there has been no determination of liability.
Hollygrove Man Sentenced to 36 Months for Selling NarcoticsRead the Press Release
NEW ORLEANS, LOUISIANA – United States District Judge Jane Triche Milazzo sentenced LANCE COLLINS, age 31, a resident of New Orleans, to 36 months in the Bureau of Prisons for conspiring to distribute and possess with the intent to distribute a quantity of heroin, in violation of Title 18, United States Code, Sections 841 and 846. COLLINS will be on four (4) years of Supervised Release following his release from prison.
COLLINS pleaded guilty on January 10, 2020, to conspiring to distribute heroin with members of a drug trafficking organization based in the Hollygrove neighborhood of New Orleans, Louisiana, that operated in and around a corner grocery store. COLLINS was intercepted on an FBI wiretap arranging to sell heroin to his co-conspirators.
This case was brought as part of Project Safe Neighborhoods (PSN), which is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
The U.S. Attorney’s Office praised the work of the Federal Bureau of Investigation’s New Orleans Gang Task Force. The prosecution is being handled by Assistant United States Attorneys Myles Ranier and Kathryn McHugh.
* * *
Georgia Man Pleads Guilty to Making False Threats against Schools in East Alabama and West GeorgiaRead the Press Release
Montgomery, Alabama – On Tuesday, June 30, 2020, Levi Calhoun, III, a 28-year-old man from Georgetown, Georgia, pleaded guilty to making threats against schools and conveying false information, announced United States Attorney Louis V. Franklin, Sr. and FBI Special Agent in Charge James Jewell.
According to court documents, on November 7, 2018, Calhoun created and used a fake Facebook account to spread several threats that someone would attack one or more Eufaula, Alabama and Quitman County, Georgia schools with firearms and explosive devices. When creating the fake social media account, Calhoun utilized images from another Facebook user causing him a great deal of distress when law enforcement contacted him to verify he was not actually making the threats. Fortunately, agents quickly traced the fake account back to Calhoun. On March 12, 2019, Calhoun was indicted by a federal grand jury on one count of making threats by mail or telephone and one count of conveying false information.
Following his guilty plea to both counts, Calhoun is facing up to ten years in prison. A sentencing date will be scheduled in the next few months.
“We will not tolerate domestic terrorism in any form, but especially when it is directed against our children,” stated U.S. Attorney Louis V. Franklin, Sr. “Students should be able to get an education without fear or the threat of violence. Mr. Calhoun’s actions were unacceptable, and I hope this prosecution sends the message that we will not abide any threats of violence against a school.”
"The FBI will continue to support our state and local partners in the realm of online threats to life and property,” stated FBI Special Agent in Charge James Jewell. “The safety and well-being of our students and teachers comes first and will always be a priority to the FBI."
The Federal Bureau of Investigation (FBI), the Eufaula Police Department, the Georgia Bureau of Investigation, the Georgetown Police Department, and the Enterprise Police Department investigated this case, with assistance from the Alabama Law Enforcement Agency (ALEA) and the Alabama Fusion Center. Assistant United States Attorney Eric M. Counts is prosecuting the case.
Fourteen Members of Methamphetamine Trafficking Ring Are Charged with Drug Conspiracy and Related ChargesRead the Press Release
CHARLOTTE, N.C. – Fourteen members of a methamphetamine trafficking ring have been charged with federal drug conspiracy and related drug and firearms offenses, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. The federal indictment was unsealed in court today.
Seven of those charged have been arrested by federal, state and local law enforcement, and the remaining seven defendants are currently incarcerated on unrelated charges. The arrests are the result of a multi-agency investigation targeting the trafficking of methamphetamine from Georgia into Western North Carolina.
“With methamphetamine trafficking on the rise, it is crucial that we continue to team up with our law enforcement counterparts to stem the flow of this dangerous drug, disrupt drug pipelines, and prosecute traffickers who plague our neighborhoods and imperil our communities,” said U.S. Attorney Murray.
“Methamphetamine poses a clear and present danger to the health and safety of communities,” said Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Field Division. “Because of the unified effort of all law enforcement agencies involved and the subsequent prosecution by the U.S. Attorney’s Office, we have dismantled this alleged drug conspiracy, and these defendants will no longer be able to distribute this toxic drug that destroys lives and communities.”
“The trafficking of methamphetamine into our country and its spread through our communities is a national crisis. Together, through our partnerships with the DEA and the United States Attorney’s Office, we are fighting this battle as a united front,” said Sheriff Donald G. Brown II, of the Catawba County Sheriff’s Office.
According to allegations contained in the criminal indictment unsealed today in federal court, from 2018 through April 2019, the 14 defendants were involved in a drug conspiracy that trafficked and distributed methamphetamine in Catawba, Lincoln, Caldwell, and Alexander Counties and elsewhere in Western North Carolina. Over the course of the investigation, law enforcement seized at least 23 firearms, and more than $250,000 in drug proceeds. The 14 defendants charged are:
- Thomas Dewayne Simmons, Jr., 34, of Snellville, Georgia.
- Ruth Marie Duggar, 36, of Claremont, N.C.
- Kimberly Deann Bumgarner, 55, of Claremont, N.C.
- Cynthia Roxanne Shook, 34, of Catawba, N.C.
- Lowell Thomas Messer, 32, of Sherrills Ford, N.C.
- Samantha Jean Taylor, 26, of Newton, N.C.
- Jason Keith Reichard, 38, of Newton, N.C.
- Aaron Douglas Goodson, 29, of Maiden, N.C. (in custody on state charges)
- Priscilla Chapman Lambert, 33, of Hickory, N.C. (in custody on state charges)
- Jonathan Corey Daniel, 31, currently incarcerated in the Georgia Department of Corrections.
- Tiffany Christmas Hirani, 33, currently incarcerated at the Clayton County Sheriff’s Office Detention Center in Jonesboro, Georgia.
- James Kristoffer Cantley, 38, currently incarcerated at the Robert A. Detention Center in Lovejoy, Georgia.
- Brian Duane Martz, 40, currently incarcerated in the Georgia Department of Corrections.
- Michael James Notheisen, 34, currently incarcerated in the North Carolina Department of Corrections.
All 14 defendants are charged with conspiracy to traffic methamphetamine, which carries a statutory minimum prison term of ten years and a maximum term of life in prison, and a $10 million fine. Some defendants face additional drug possession and distribution charges and/or related firearms offenses. (See chart below for a breakdown of federal charges and maximum penalties for each defendant).
The charges contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
In making today’s announcement U.S. Attorney Murray thanked the following agencies for their investigative efforts which led to federal charges: the DEA in Charlotte, Asheville, and Atlanta; the North Carolina State Bureau of Investigation; the North Carolina State Highway Patrol; the Catawba County Sheriff’s Office; the Newton Police Department; the Conover Police Department; the Maiden Police Department; the Hickory Police Department; the Longview Police Department; the Caldwell County Sheriff’s Office; the Granite Falls Police Department; the Lincoln County Sheriff’s Office; the Cleveland County Sheriff’s Office; the Huntersville Police Department; the Cornelius Police Department; the Mint Hill Police Department; the Pineville Police Department; the Charlotte Mecklenburg Police Department; the Monroe Police Department; the Taylorsville Police Department; the Gaston County Police Department; the Georgia Highway Patrol; the Franklin County Sheriff’s Office in Georgia; the Georgia Bureau of Investigation; the Georgia Department of Corrections; the Clayton County Sheriff’s Office in Georgia; and the Commerce Police Department in Georgia.
Assistant U.S. Attorney Christopher Hess, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.
DEFENDANT
COUNTS
CHARGE
STATUTORY PENALTIES
Jonathan Corey Daniel
a/k/a “Ambush”
a/k/a “Ambush Newage”
a/k/a “Orion Bls Newage”
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
23, 25
Distribution and Possess with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
Tiffany Christmas Hirani
a/k/a “Tiffany Christmas”
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
11
Distribution and Possess with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
James Kristoffer Cantley
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
2, 8, 14
Possess a Firearm in Furtherance of a Drug Trafficking Crime
5 years to life in prison, consecutive to a sentence imposed on a drug count, maximum fine of $250,000
3, 9, 15
Possess Firearms by Felon
0 to 10 years in prison, maximum fine of $250,000
6, 10
Possess with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
7
Possess with Intent to Distribute Heroin
0 to 20 years in prison, maximum fine of $1,000,000
13
Possess with Intent to Distribute Methamphetamine
5 to 40 years in prison, maximum fine of $5,000,000
Aaron Douglas Goodson
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
10, 11, 18
Possess with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
12, 19
Possess Firearms in Furtherance of a Drug Trafficking Crime
5 years to life in prison, consecutive to a sentence imposed on a drug count, maximum fine of $250,000
Cynthia Roxanne Shook
a/k/a “Roxi Johnson”
a/k/a “Roxi Shook
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
4
Distribution and Possess with Intent to Distribute Methamphetamine
0 to 20 years in prison, maximum fine of $1,000,000
5
Possession with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
Brian Duane Martz
a/k/a “B”
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
Priscilla Chapman Lambert
a/k/a “Priscilla Sweetp Chapman”
a/k/a “Sweet Pea”
a/k/a “Sweet P”
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
Thomas Dewayne Simmons, Jr
a/k/a “Tommy”
a/k/a “Tommy Simons”
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
23, 25
Distribution and Possess with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
Ruth Marie Duggar
a/k/a “White Girl”
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
24, 26
Possess with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
Kimberly Deann Bumgarner
a/k/a “Momma”
a/k/a “Momma Kim”
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
24, 26
Possess with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
Michael James Notheisen
a/k/a “Mike Bebollin”
a/k/a “BE BAllin”
a/k/a “B Ballin”
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
20, 28
Possess with Intent to Distribute Controlled Substances
5 to 40 years in prison, maximum fine of $5,000,000
21, 31
Possess with Intent to Distribute Heroin
0 to 20 years in prison, maximum fine of $1,000,000
22, 29, 32
Possess Firearms in Furtherance of a Drug Trafficking Crime
5 years to life in prison, consecutive to a sentence imposed on a drug count, maximum fine of $250,000
27
Possess with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
33
Possess Firearms by Felon
0 to 10 years in prison, maximum fine of $250,000
Lowell Thomas Messer, Jr.
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
16
Possess with Intent to Distribute Methamphetamine
5 to 40 years in prison, maximum fine of $5,000,000
17, 34
Possess with Intent to Distribute Methamphetamine
10 years to life in prison, maximum fine of $10,000,000
Samantha Jean Taylor
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
Jason Keith Reichard
1
Methamphetamine Conspiracy
10 years to life in prison, maximum fine of $10,000,000
30
Possess with Intent to Distribute Methamphetamine
5 to 40 years in prison, maximum fine of $5,000,000
Former Wheeler High School TeacherRead the Press Release
HAMMOND – Brian Kunze, age 31, of Valparaiso, Indiana, was charged by criminal Complaint with receiving child pornography, announced U.S. Attorney Thomas L. Kirsch II.
According to documents in the case, Mr. Kunze, a former Wheeler High School teacher, used his position of authority at the school to coax one of his minor students into taking and sending him sexually explicit photos of herself. Digital forensic examination of devices seized by federal law enforcement agents from Mr. Kunze’s home also revealed that he knowingly obtained sexually explicit photos of other minor girls who attended the school.
“Use of a position of authority to betray the trust placed in a teacher by his student is a very serious offense for which my office will hold all perpetrators accountable,” said U.S. Attorney Kirsch. “Individuals who seek out sexually explicit images of minor children, will be investigated and prosecuted by my office.”
The United States Attorney’s office emphasizes that a Complaint is merely an allegation and that the United States is required to prove the allegation before a defendant can be found liable.
If convicted, any specific sentence to be imposed will be determined by the Judge after consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
This case is being investigated by the Federal Bureau of Investigation with the assistance of the Porter County Sheriff’s Department and Michigan City Police Department. The case is being prosecuted by Assistant U.S. Attorney Jill Koster.
Anyone with information about Mr. Kunze or his alleged crime is encouraged to call the Merrillville office of the FBI’s GRIT Task Force at (219) 942-4900.
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Former Cooperstown Teacher Sentenced to 200 Months in Prison for Sexually Exploiting Three ChildrenRead the Press Release
BINGHAMTON, NEW YORK – Justin Hobbie, age 42, of Springfield Center, New York, was sentenced today to 200 months in prison for persuading three girls between the ages of 14 and 17 to engage in sexual activity and transmit live depictions of that activity to him.
The announcement was made by United States Attorney Grant C. Jaquith and Kevin Kelly, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI).
Hobbie was a gym and health teacher in Cooperstown, New York. In pleading guilty, he admitted that from 2015 to 2018, he persuaded three girls to engage in sexually explicit conduct and live-stream that conduct to him over the internet. These sexually explicit acts and images were recorded by Hobbie so that he could look at them again.
“While working as a teacher, Justin Hobbie preyed on teenage girls he met online by pretending to be a teenage boy and pressuring victims to make and send him sexually explicit video,” said United States Attorney Grant C. Jaquith. “Hobbie has now been held accountable for egregiously exploiting those children over a three year period.”
HSI Special Agent in Charge Kevin Kelly stated: “Child exploitation is an egregious crime especially when children are victimized by a teacher, or anyone in a position of trust. Today's sentencing hopefully begins the healing process and marks a final chapter in a painful period for those affected.”
Hobbie also admitted to amassing a large collection of child pornography using peer-to-peer file sharing software. The collection included videos depicting the rape of toddlers.
Senior United States District Judge Thomas J. McAvoy also imposed a 15-year term of supervised release, to begin after Hobbie is released from prison, and restitution in the amount of $9,999.99. Hobbie will also be required to register as a sex offender upon his release from prison.
This case was investigated by HSI Albany with assistance from the New York State Police Computer Crimes Unit, the Internet Crimes Against Children Task Force, and U.S. Customs and Border Protection, and was prosecuted by Assistant U.S. Attorney Geoffrey J. L. Brown.
This case was prosecuted as part of Project Safe Childhood. Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), and is designed to marshal federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
There are numerous Internet-based tools that assist parents and guardians in protecting children from online predators. More information is available at the iGuardians web site, operated by the U.S. Department of Homeland Security (https://www.ice.gov/topics/iGuardians), and the NetSmartzKids web site, operated by the National Center for Missing & Exploited Children (https://www.netsmartzkids.org/).
Dominican National Pleads Guilty to Fentanyl TraffickingRead the Press Release
BOSTON – A Dominican national who previously resided in Lawrence pleaded guilty today in connection with drug trafficking activities involving fentanyl.
Robinson Guzman, 38, pleaded guilty to three counts of distribution of and possession with intent to distribute fentanyl, one count of distribution of and possession with intent to distribute more than 40 grams of fentanyl, and one count of possession with intent to distribute more than 40 grams of fentanyl. U.S. Senior District Court Judge Mark L. Wolf scheduled sentencing for Sept. 23, 2020. Guzman has been in custody since he was arrested and charged by criminal complaint on March 19, 2019.
Between November 2018 and March 2019, prior to his arrest, Guzman allegedly engaged in 10 separate drug sales of fentanyl powder and pills to an undercover law enforcement agent.
The charges of distribution of and possession with intent to distribute fentanyl each provide for a sentence of up to 20 years in prison, a minimum of three years of supervised release and a fine of up to $1 million. The charges involving more than 40 grams of fentanyl carry a mandatory minimum sentence of five years and up to 40 years in prison, a minimum of four years of supervised release and a fine of up to $5 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division made the announcement today. Valuable assistance was provided by the Methuen, Lawrence and Melrose Police Departments. Assistant U.S. Attorney Stephen W. Hassink of Lelling’s Narcotics and Money Laundering Unit is prosecuting the case.
Developer Charged with Conspiracy to Defraud First NBC Bank Out of over $123 MillionRead the Press Release
NEW ORLEANS – The United States Attorney’s Office announced that GARY R. GIBBS (“GIBBS”), age 66, a resident of Niceville, Florida, was charged today with conspiracy to defraud First NBC Bank, the New Orleans-based bank that failed in April 2017.
According to the Bill of Information, from in or around 2010 through April 2017, GIBBS had a banking relationship with First NBC Bank, individually and through various corporate entities he controlled. During that time, GIBBS and his entities were regularly unable to pay existing loans or overdrafts on First NBC Bank accounts. Bank President A, Bank Officer B, and Bank Officer C disguised GIBBS’s and his entities’ true financial condition by making new loans to pay GIBBS’s existing loans and to cover his overdrafts. They falsely stated in loan documents that GIBBS was able to pay his loans with cash generated by his businesses, and they hid from the First NBC Bank Board of Directors, auditors, and examiners that GIBBS was only making his existing loan payments by getting new loans from First NBC Bank. Bank President A, Bank Officer B, and Bank Officer C hid the fact that they actually made loans to GIBBS to keep him and his entities off of month-end reports to the Board, auditors, and examiners. These month-end reports listed borrowers who were not paying their loans or whose accounts were overdrawn. By keeping GIBBS and his entities off of those reports, Bank President A, Bank Officer B, and Bank Officer C were able to hide their scheme to keep lending to GIBBS despite his inability to pay his loans.
When GIBBS told Bank President A and Bank Officer C that he was considering filing bankruptcy or not paying his loans, Bank President A told GIBBS that First NBC Bank could not afford for GIBBS to default on the loans. After that, Bank President A and Bank Officer C continued to make false statements and material omissions in loan documents to hide from the Board, auditors, and examiners that the purpose of the new loans was to keep GIBBS and his entities from defaulting and that, in reality, GIBBS was not able to make his payments to the bank without receiving proceeds from new loans. Neither Bank President A nor Bank Officer C ever disclosed to the Board, auditors, or examiners that GIBBS was considering defaulting on his loans or filing bankruptcy, because that would have revealed that GIBBS did not generate enough cash to pay his loans.
To hide their scheme, Bank President A directed GIBBS to inflate certain financial statements that GIBBS provided to First NBC Bank, by falsely increasing the income of GIBBS’s entities to hide the amount of money these entities were losing. Bank President A did not tell the Board, auditors, or examiners that GIBBS inflated his financial statements at Bank President A’s direction. Bank Officer C also made false statements to First NBC Bank’s external auditors about GIBBS and the GIBBS loans. By the time First NBC Bank failed in April of 2017, GIBBS and his entities owed the bank over $123 million.
GIBBS is charged in the Bill of Information with one count of conspiracy to commit bank fraud, in violation of Title 18, United States Code, Sections 1344 and 1349. The maximum penalties that may be imposed upon conviction are thirty years in prison; a fine of $250,000, or the greater of twice the gain to GIBBS or twice the loss to any victim; up to five years of supervised release; and a $100 mandatory special assessment.
The United States Attorney’s Office stated that a Bill of Information is merely an accusation and that the guilt of the defendant must be proven beyond a reasonable doubt.
This case is being investigated by the Federal Bureau of Investigation; the Federal Deposit Insurance Corporation, Office of Inspector General; and the Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau, Office of Inspector General. Assistant U.S. Attorneys Sharan E. Lieberman, Nicholas D. Moses, Matthew R. Payne, and J. Ryan McLaren are in charge of the prosecution.
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Crossett Man Sentenced to over 5 Years in Federal Prison for Being A Felon in Possession of A FirearmRead the Press Release
El Dorado, Arkansas – David Clay Fowlkes, Acting United States Attorney for the Western District of Arkansas, announced that Tracy Wright Jr., age 25, of Crossett, Arkansas, was sentenced on June 30, 2020 to 70 months in federal prison followed by three years of supervised release for one count of being a Felon In Possession of a Firearm. The Honorable Chief Judge Susan O. Hickey presided over the sentencing hearing in the United States District Court in El Dorado.
On or about July 27, 2019, deputies with the Ashley County Sheriff’s Department and officers with the Crossett Police Department encountered Wright, a convicted felon. Upon contact with law enforcement, Wright was immediately recognized by law enforcement, who were aware of an active warrant that had been issued for Wright’s arrest. After Wright was taken into custody, a search of his persons resulted in officer’s locating two handguns in his pants pocket.
Wright was indicted by a federal grand jury in October 2019, and entered a guilty plea in January of 2020.
This case was prosecuted as a part of the Department of Justice=s Project Safe Neighborhoods Initiative, which is aimed at reducing gun and gang violence, deterring illegal possession of firearms and improving the safety of residents in the Western District of Arkansas. Participants in the initiative include federal, state and local law enforcement agencies.
This case was investigated by the Ashley County Sheriff’s Office, the Crossett Police Department and the Bureau of Alcohol, Fire, Tobacco, and Explosives (ATF). Assistant United States Attorney Bryan Achorn prosecuted the case for the United States.
Convicted Sex Offender Sentenced to 10 Years in Federal Prison for Attempting to Entice A Minor to Engage in Sexual ActivityRead the Press Release
Tampa, Florida – U.S. District Judge Steven D. Merryday today sentenced Richard Stephen Terry (56) to 10 years in federal prison, followed by a lifetime of supervised release, for attempting to entice a child to engage in sexual activity. Terry also possessed child pornography and has agreed to pay restitution to the victims depicted. Terry had pleaded guilty on February 27, 2020.
According to court documents, Terry used the internet to entice adult women to allow him to engage in sexual activities with their minor children. Agents identified Terry in multiple online chat rooms designed for individuals who are interested in the sexual exploitation of children, and he used the chat rooms to meet and discuss their interests and tactics. Terry communicated online and via text message with multiple undercover law enforcement agents located in various parts of the country between 2015 and 2017.
Between November 2016 and April 2017, Terry communicated with a woman he believed to be a single mother of a 10-year-old girl. In reality, he was talking to an undercover officer from the Polk County Sheriff’s Office. In his conversations, Terry proposed meeting with the child and discussed, in graphic detail, the sex acts he wished to engage in with the child when they met. In order to add more credibility and persuade the undercover officer, Terry made up a story that he had been in an incestuous relationship with his two stepdaughters when they were minors and was looking to engage in a “fam life” sexual relationship with the single mom and her daughter. Terry stated that he ultimately did not travel to meet with the undercover officer because he was “scared it’s a set up.”
In June 2017, law enforcement agents executed a search warrant at Terry’s home and found him in possession of more than 400 images and videos of child sex abuse material depicting young children being subjected to sadistic abuse and bondage. To date, the National Center for Missing and Exploited Children has identified 54 victims depicted in the child sex abuse material.
“This predator tried to entice a minor to engage in sexual activity,” said HSI Tampa Assistant Special Agent in Charge Michael B. Cochran. “Thanks to the investigative work of HSI special agents and our law enforcement partners at the Polk County Sheriff’s Office, this criminal will now be behind bars.”
“Our top priority is protecting our children from those who would harm them,” said Polk County Sheriff Grady Judd. “The United States Attorney’s Office for the Middle District of Florida and Homeland Security share this priority. Mr. Terry is not going to hurt any children while in prison. We are proud to have been a part of this investigation.”
This case was investigated by Homeland Security Investigations and the Polk County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Lisa M. Thelwell.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Convicted Felon Charged with Federal Drug and Firearms CrimesRead the Press Release
St. Louis – Gary Dewayne Willard, 48, of St. Louis, MO, was charged by a federal complaint on Tuesday. Willard was charged with possession with intent to distribute a controlled substance, felon in possession of one or more firearms, and possession of a firearm in furtherance of a drug trafficking crime.
According to the complaint, Willard was previously the subject of a federal investigation and was indicted on May 2, 2019, along with his co-Defendant Paul Garcia, for conspiracy to distribute over 50 grams of methamphetamine and possession of a firearm in furtherance of a drug trafficking crime. On March 3, 2020, Willard pleaded guilty to conspiracy to distribute methamphetamine in that case, and was allowed to remain on bond, subject to conditions of pretrial release. Willard’s sentencing in that case is currently set for July 9, 2020.
After learning that Willard was involved in the continued distribution of methamphetamine while on pre-trial release, on June 26, 2020, federal law enforcement officers obtained a search warrant for Willard’s residence.
On June 30, 2020, the officers executed the warrant at Willard’s residence where Willard was present, along with three (3) other individuals. Officers found and seized three (3) firearms, including an H&K 9mm semi-automatic handgun loaded with 12 live cartridges at the foot of Willard’s bed, a Taurus Judge .45 Long Colt/410 revolver loaded with five live cartridges within a large safe located at the foot of Willard’s bed, and an unloaded Davis Industries .380 caliber semi-automatic handgun bearing a defaced serial number, which was located within a small, open safe sitting on top of the larger safe. Officers also located over 500 rounds of miscellaneous ammunition on a shelf in the living room.
Also located within in the larger safe were clear plastic bags containing over 140 grams of suspected methamphetamine, as well as clear plastic bags containing various pills and powders also suspected to be controlled substances. The Officers also recovered a total of $72,003.00 in United States Currency in the bedroom. Throughout the living room and kitchen, Officers recovered materials commonly used in the manufacture and production of methamphetamine.
These current charges are being investigated by the Federal Bureau of Investigation, Jefferson County Sheriff’s Department and the St. Louis County Police Department.
A criminal complaint is merely an accusation. The defendant is presumed innocent until proven guilty in a court of law.
Connecticut Man Arrested, Charged, and Detained for Distributing Child Pornography Videos to Online GroupRead the Press Release
WASHINGTON – Edward Galpin was detained yesterday pending trial on charges of conspiracy to distribute and distribution of child pornography, announced Acting United States Attorney Michael R. Sherwin and Special Agent in Charge James A. Dawson of the Federal Bureau of Investigation (FBI) Washington Field Office’s Criminal Division. This case was investigated by special agents of the Federal Bureau of Investigation’s Washington Field Office and the Metropolitan Police Department's Child Exploitation and Human Trafficking Task Force with assistance from the Federal Bureau of Investigation’s New Haven Field Office.
Galpin, age 38, of Stratford, Connecticut, was arrested after he was charged in a criminal complaint filed in the District of Columbia last week. The complaint alleges that, in October of 2019, Galpin joined an online messaging group devoted to the exchange of child pornography and shared numerous sexually explicit videos of young children with the group. The complaint alleges that Galpin also had private conversations with an undercover officer working in the District of Columbia, sending the undercover officer a video of a female (under age 18) undressing. Galpin told the undercover that he had used a spy camera to make this recording.
The complaint further alleges that, in June, Galpin reached out to a different undercover officer, who was in a Connecticut-based teen chatroom. The undercover officer told Galpin s/he was a 14-year old female. Galpin set up a meeting with this purported 14-year old on June 25, 2020. When asked whether he had done this before, Galpin responded, “twice.” Galpin arrived at the arranged meeting place, went through a drive-through in the area, and then drove to a nearby store.
Galpin was arrested later that same day and made an initial appearance on the complaint in the District of Connecticut. At a hearing yesterday, United States Magistrate Judge Sarah A.L. Merriam detained Galpin pending trial. He has a preliminary hearing in the District of Connecticut set for July 9, 2020.
A criminal complaint is a formal accusation of criminal conduct for purposes of establishing probable cause, not evidence of guilt. A defendant is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law.
The case is being prosecuted by Assistant U.S. Attorney April Russo with paralegal contractor Kenny Nguyen and with assistance from the U.S. Attorney’s Office in the District of Connecticut.
Chief Operating Officer Sentenced for $25 Million Investment FraudRead the Press Release
NORFOLK, Va. – A Florida woman was sentenced today to 10 years in prison and ordered to pay over $25 million in restitution for engaging in an investment fraud conspiracy that victimized over 300 investors and caused approximately $25 million in losses.
“Raeann Gibson and her co-conspirators orchestrated and facilitated a massive scheme to defraud mostly elderly investors of approximately $25 million,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia. “In the end, Gibson and her co-conspirators left a wake of financial devastation that wiped out hundreds of vulnerable victims located throughout the country, including massive losses to victims located here in Hampton Roads.”
According to court documents, Gibson, 48, of Palm City, along with codefendant Daryl Bank and others, engaged in a conspiracy by which they operated an investment fraud scheme from approximately January 2012 through July 2017 in the Tidewater area and across the country. Gibson, who served as Chief Operating Officer of Dominion Investment Group, and her conspirators engaged in a nationwide fraudulent investment scheme that deceived hundreds of unsuspecting investors – most at or near retirement age – by convincing them to invest in companies owned and controlled by Daryl Bank. At Bank’s direction, Gibson then stole outright significant portions of investment funds to fund their criminal enterprise and Bank’s lavish lifestyle. For example, Bank caused numerous material misrepresentations and omissions to be made to several investors, including BC, who was blind and in his late 70s at the time he invested $20,000 of his retirement funds in an investment fraud called Prime Spectrum. Immediately upon receipt of BC’s funds, Bank and Gibson misappropriated 70 percent of the investment funds.
Gibson facilitated and supported this scheme in a variety of ways including creating numerous shell companies, laundering investment funds through multiple accounts, and speaking with, and often calming, uncomfortable investors who called with questions about their investments. At Bank’s direction, she stole millions of dollars from investors to pay herself and to support Bank’s lavish lifestyle. Gibson routinely wired funds to pay for Bank’s $100,000 monthly American Express bills and, in one instance, facilitated Bank’s purchase of an 8-carat diamond ring for Bank’s wife. This scheme was vast in its scope and defrauded over 300 investors and caused approximately $25 million in losses.
Combatting elder abuse and financial fraud targeted at seniors is a key priority of the Department of Justice. Elder abuse is an intentional or negligent act by any person that causes harm or a serious risk of harm to an older adult. It is a term used to describe five subtypes of elder abuse: physical abuse, financial fraud, scams and exploitation, caregiver neglect and abandonment, psychological abuse, and sexual abuse. Elder abuse is a serious crime against some of our nation’s most vulnerable citizens, affecting at least 10 percent of older Americans every year. Together with our federal, state, local and tribal partners, the Department of Justice is steadfastly committed to combatting all forms of elder abuse and financial exploitation through enforcement actions, training and resources, research, victim services, and public awareness. This holistic and robust response demonstrates the Department’s unwavering dedication to fighting for justice for older Americans.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; Martin Culbreth, Special Agent in Charge of the FBI’s Norfolk Field Office; Kelly R. Jackson, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI); and Peter R. Rendina, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement after sentencing by U.S. District Judge Raymond A. Jackson. Assistant U.S. Attorneys Melissa E. O’Boyle, Andrew C. Bosse, and Elizabeth M. Yusi prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:17-cr-126.
Carthage Couple Pleads Guilty to Embezzling from Joplin BusinessesRead the Press Release
SPRINGFIELD, Mo. – A Carthage, Missouri, husband and wife have pleaded guilty in federal court to their involvement in a four-year-long scheme to embezzle from a Joplin, Missouri, business owner.
Jeanine A. Poe, 51, and William Poe, 57, pleaded guilty before U.S. Magistrate Judge David P. Rush on Tuesday, June 30, in separate but related cases. Jeanine Poe pleaded guilty to one count of wire fraud. William Poe pleaded guilty to one count of misprision of a felony.
Jeanine Poe was hired to manage two Doc Stop convenience stores in Joplin. The owner had little to do with the businesses, according to the plea agreements, except to invest his money into both to ensure their financial success. In 2015, Jeanine Poe told the owner the businesses weren’t doing well financially and asked him to invest even more money. The owner invested much of his salary to financially support the businesses.
In October 2019, after the businesses continued to lose money, the owner asked a friend to review the financial affairs of the businesses and learned that Jeanine Poe was embezzling money from his businesses. She had obtained at least seven credit cards in the name of the businesses, conducted transactions on the credit cards, and paid for such transactions with funds from the businesses. All of the credit cards opened by Jeanine Poe had reached their maximum allowable credit limit, and many times were used by Jeanine and William Poe for expenses that were entirely unrelated to the operation of the businesses (such as trips and personal expenses). One of the credit cards was in William Poe’s name. The owner also discovered that large amounts of cash were being fraudulently electronically transferred from his businesses’ bank account to Jeanine Poe’s personal bank account.
William Poe admitted that he was aware of his wife’s embezzlement. He concealed these thefts by convincing the owner his wife was not embezzling, when he knew she was stealing from him. His concealment allowed Jeanine Poe to continue to conduct fraudulent credit card transactions and withdrawals from the business accounts.
Under federal statutes, Jeanine Poe is subject to a sentence of up to 20 years in federal prison without parole. William Poe is subject to a sentence of up to three years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the FBI.
California man pleads guilty to threats during Ohio State football gameRead the Press Release
COLUMBUS, Ohio – Daniel Lee Rippy, 29, of Livermore, California pleaded guilty today to threatening a shooting at The Ohio State University and vowing to hurt football players. He sent the online threat during the 2018 football game between Ohio State and Michigan, which was played in Columbus.
According to court documents, Rippy sent a message over Facebook stating that the school was going to get shot up and “I’m seriously going to hurt the students and all the players from the football team.” He sent several other threats to injure or kill players, their family members and the head coach.
Law enforcement officials at the stadium were placed on high alert and re-allocated resources to investigate the threat, ultimately determining that Rippy was in California at the time he made the threat and did not pose an immediate danger.
“Graphic threats of violence against anyone, but especially threats during high-profile events, are taken seriously and will be prosecuted,” said David M. DeVillers, United States Attorney for the Southern District of Ohio.
“Threats of violence are very dangerous and can divert law enforcement resources from local emergencies,” stated FBI Cincinnati Special Agent in Charge Chris Hoffman. “I commend The Ohio State University Police Division, the Joint Terrorism Task Force, and our law enforcement partners who aggressively investigated this case and work each day to keep the community safe.”
FBI agents arrested Rippy in California in December 2019 and he was released on bond, but he was re-arrested and U.S. Marshals transported him to Columbus after he failed to appear for a scheduled appointment with the court. Rippy today pleaded guilty to one count of Threat in Interstate Communications, which carries a maximum statutory penalty of five years in prison and a $250,000 fine. The court will conduct a pre-sentence investigation and determine an appropriate sentence according to federal sentencing guidelines and the defendant’s acceptance of responsibility, among other factors. He remains in custody pending sentencing.
Joining Mr. DeVillers and SAC Hoffman in announcing the plea was Ohio State University Police Chief Kimberly Spears-McNatt. The plea was entered before U.S. Magistrate Judge Norah McCann King. Assistant U.S. Attorney Jessica Knight represented the United States in the case which was investigated by the FBI Joint Terrorism Task Force.
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California Woman Sentenced for Fraud Scheme Against ImmigrantsRead the Press Release
NORFOLK, Va. – A California woman was sentenced today to two years in prison for running a scheme to defraud Iranian nationals out of over $120,000 in exchange for guaranteed United States immigration benefits.
According to court documents, Helen Kennedy, 61, of Santa Ana, a naturalized United States citizen of Iranian descent, advertised her immigration business in Iranian publications, Iranian television, and in online advertisements. Kennedy’s ads were all placed in Farsi, the language of Iran, and she used her Iranian maiden name to advertise her business. Promising citizenship, green cards, and work authorization, Kennedy enticed Iranian nationals to become her clients in exchange for thousands of dollars in fees.
Court documents indicate that Kennedy also falsely indicated she was an immigration attorney. Kennedy was neither an attorney, nor did she have authorization to file any application on behalf of another person with the U.S. Citizenship and Immigration Service (USCIS). In fact, Kennedy never even attempted to file a single application with the USCIS for any of her clients. Instead, Kennedy strung her clients along promising them the benefits would soon be coming, all while continuing to collect fees from them.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Raymond Villanueva, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE), made the announcement after sentencing by Senior U.S. District Judge Rebecca Beach Smith. Assistant U.S. Attorney Joseph L. Kosky prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:19-cr-158.
California Man Sentenced to 30 Years in Federal Prison for Child Pornography CrimesRead the Press Release
Ft. Lauderdale, FL. – U.S. District Judge James I. Cohn sentenced Adrian Fierros, 22, from California, to 30 years in federal prison, followed by a lifetime of supervised release, for coercing young girls into taking and sending him sexually explicit photographs and videos of themselves. Making good on a threat to one of his victims, Fierros shared nude photographs of the 11-year-old girl with six of her school friends, one of whom was nine-years-old.
Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida, and, George L. Piro, Special Agent in Charge, FBI, Miami Field Office, make the announcement.
According to court records, Fierros contacted his victims on social media. Most of the children were under 14-years-old. Fierros’ tactic with the young girls was to “friend” them on social media, tell them they were pretty, and have the girls send him suggestive photographs of themselves. Then, Fierros would extort the minors into taking and sending him nude photographs, in poses that he selected. Defendant threatened the minors with sharing their nude pictures with their family and friends if the minors stopped sending him increasingly explicit sexual images. When one of his 11-year-old victims stopped communicating with Fierros, he did just that. He sent nude pictures of the minor to her school friends, whom he identified through the victim’s social media contacts.
One of Fierros’ victims told her parents about Fierros’ demands. This prompted a South Florida law enforcement investigation. Officers located Fierros in California and arrested him. On January 8, 2020, Fierros pled guilty in South Florida federal court to producing child pornography, distributing child pornography, and on-line extortion.
U.S. Attorney Fajardo-Orshan commends the investigative efforts of FBI, and, in particular, FBI’s Child Exploitation and Human Trafficking Task Force who worked in partnership with the Coral Springs Police Department on the matter. The U.S. Attorney also thanks FBI Los Angeles, and FBI Headquarters, Operation Rescue Me for their assistance. Special Assistant United States Attorney M. Katherine Koontz prosecuted this case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
California Genetic Testing Company Agrees to Pay $8.25 Million to Resolve False Claims Allegations; Paducah, Ky, Area Hospital Also SettlesRead the Press Release
LOUISVILLE, Ky. – United States Attorney Russell Coleman today announced an $8.25 million settlement with Agendia, Inc., a molecular diagnostics testing company based in Irvine, California, for an alleged nationwide scheme to bill Medicare for Agendia’s flagship genetic test, MammaPrint. The MammaPrint test analyzes the activity of certain genes within a breast cancer tumor to predict the risk of breast cancer recurrence in patients.
“When all the legal jargon is stripped away, this was about delaying the submission of breast cancer screening tests at the expense of our vitally important Medicare program,” said U.S. Attorney Russell Coleman. “From our largest urban hospitals to medical facilities in the Purchase Region, this conduct will not be tolerated in the Western District of Kentucky.”
The allegations resolved by this settlement were first brought in a lawsuit filed by former employee of Lourdes Hospital, located in Paducah, Kentucky, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery. The qui tam case is captioned United States ex rel. Flick v. Agendia, Inc. and Mercy Health Partners – Lourdes, Inc. (3:15-cv-050-JRW). The United States intervened in the Civil Action for purposes of settlement in May 2020.
The United States contends that Agendia conspired with hospitals to artificially delay ordering the MammaPrint genetic assay in order to circumvent Medicare’s 14-Day Rule (which establishes who may bill Medicare for certain lab service). During the time period covered by the settlement, Medicare’s 14-Day Rule prohibited laboratories from separately billing Medicare for tests performed on specimens if a physician ordered the test within 14 days of the patient’s discharge from a hospital, regardless as to whether the patient was in an outpatient or inpatient setting. However, if the test was performed 14 days after discharge, then Medicare’s 14-Day Rule permitted laboratories to bill Medicare directly for the test.
The United States alleges Agendia engaged in a nationwide scheme to circumvent Medicare’s 14-Day Rule so that it could inappropriately bill Medicare directly for its MammaPrint tests that were ordered within 14 days. The United States contends that Agendia perpetrated this scheme in one of two ways:
- One way involved Agendia frequently refusing to perform MammaPrint tests if a Medicare patient had been discharged less than 14 days earlier. Agendia would cancel the order and then ask a physician to resubmit the order after the 14-day period had lapsed.
- A second way used what Agendia employees coined a “Medicare hold” system, whereby Agendia automatically held orders for Medicare patients at the time they were received, refusing to test the specimens until 14 days after the patient’s discharge. For orders placed in this “Medicare hold,” Agendia personnel set calendar reminders for the fourteenth day after the patient had been discharged. Agendia personnel then contacted the doctor who had ordered testing, and asked the doctor to “confirm” the order. Agendia then used the “confirmed” date for purposes of billing Medicare instead of the date the test was originally ordered.
In a separate settlement, the United States contended that Mercy Health – Lourdes Hospital in Paducah, Kentucky, worked in concert with Agendia to circumvent the date of service rules. Following breast biopsy procedures, Lourdes Hospital held tissue specimens for 14 days or longer after patients were discharged before sending them to Agendia for testing. Despite knowing the specimen should be immediately sent to Agendia, Lourdes held the test orders for 14 days or longer in order to allow Agendia to separately bill Medicare for the test. This also meant that Lourdes avoided paying Agendia for the testing. In 2017, Lourdes Hospital paid the United States $211,039.28 to settle these false claims allegations.
The matter was handled by Assistant United States Attorneys Hannah C. Choate and Benjamin S. Schecter. The investigation was conducted by the Office of Inspector General Health and Human Services.
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