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Tuesday 21 January 2020
Willimantic Heroin Trafficker Sentenced to 5 Years in Federal PrisonRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that JESUS OMAR VAZQUEZ-MARTINEZ, 35, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 60 months of imprisonment, followed by four years of supervised release, for trafficking heroin.
According to court documents and statements made in court, in May 2018, the DEA’s Hartford Task Force and Willimantic Police Department, while investigating a heroin/fentanyl overdose death that occurred in August 2017, received information that Xavier Diaz, also known as “Coco,” was operating a heroin distribution ring in Willimantic. The investigation revealed that drug purchasers called a phone shared by Diaz, Vazquez-Martinez and other members of the conspiracy to place an order for heroin. Thereafter, a “runner” would meet the purchaser to complete the transaction.
The investigation connected the August 2017 overdose death, and several non-fatal overdoses, to drugs distributed by the Diaz organization.
Diaz and other members of his organization were arrested on October 15, 2018. On that date, a search of Diaz’s residence revealed more than 100 grams of heroin, a stolen firearm, and ammunition. In addition, a search of a storage unit connected to the organization revealed more than $20,000 in cash.
Vazquez-Martinez has been detained since his arrest on state narcotics charges in April 2018. On October 28, 2019, he pleaded guilty in federal court to one count of conspiracy to distribute and to possess with intent to distribute 100 grams or more of heroin.
Diaz pleaded guilty to the same charge and, on November 25, 2019, was sentenced to five years of imprisonment.
The DEA’s Hartford Task Force includes personnel from the DEA Hartford Resident Office and the Bristol, Hartford, East Hartford, Manchester, New Britain, Rocky Hill, Wethersfield, Windsor Locks and Willimantic Police Departments.
This case is being prosecuted by Assistant U.S. Attorney Natasha M. Freismuth.
Wetzel County man sentenced for firearms violationsRead the Press Release
WHEELING, WEST VIRGINIA – Joseph Harrison, of Pine Grove, West Virginia, was sentenced today to 34 months incarceration for a firearms charges, U.S. Attorney Bill Powell announced.
Harrison, age 49, pled guilty to one count of “Unlawful Possession of a Firearm” and one count of “Possession of a Firearm with an Obliterated Serial Number” in November 2019. Harrison, who is not permitted to have a firearm because of a prior convictions, admitted to having a .45 caliber pistol with an obliterated serial number and ammunition in June 2019 in Wetzel County.
Assistant U.S. Attorney David J. Perri prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Wetzel County Sheriff’s Office investigated.
U.S. District Judge John Preston Bailey presided.
Waterloo Man Convicted after Escape from Halfway HouseRead the Press Release
A Waterloo man who escaped from a Waterloo halfway house and spent over two weeks on the lam was convicted after a half-hour bench trial in federal court in Cedar Rapids. Lonnel Porter, age 35, from Waterloo, Iowa, was convicted of one count of escape from custody. The verdict was returned on January 16, 2020.
The evidence at trial and prior court proceedings showed that, in 2009, Porter was convicted in federal court of possessing a firearm as a felon after an incident wherein he displayed an assault-rifle during a neighborhood dispute. At that time, Porter had prior convictions for burglary, domestic assault causing injury, and false imprisonment. Porter was sentenced in 2009 to nearly nine years in prison and three years of supervised release. In 2012, while an inmate in federal prison, Porter was sentenced to an additional two years of prison after assaulting a correctional officer and causing injury to the officer. When Porter was released from prison in 2019, he was required to spend time at a local halfway house, the Waterloo Residential Reentry Center (WRRC), with work-release privileges. On September 16, 2019, about six weeks after he arrived at the WRRC, Porter signed out for his job, left the WRRC, and never returned. When Porter’s probation officer called Porter on the telephone and instructed him to return to the WRRC, Porter refused to do so and would not reveal his location. On October 2, 2019, the United States Marshal’s Service arrested Porter, and Porter was returned to prison for 14 months for violating the terms of his supervised release.
Sentencing before United States District Court Judge C.J. Williams will be set after a presentence report is prepared. Porter remains in custody of the United States Marshal pending sentencing. Porter faces a possible maximum sentence of five years’ imprisonment, a $250,000 fine, and three years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Tim Vavricek and was investigated by the United States Marshal’s Service.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-CR-2069.
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Virginia man admits to role in a drug distribution operationRead the Press Release
MARTINSBURG, WEST VIRGINIA – Bryan Keith Presgraves, II, of Luray, Virginia, has admitted to his involvement in a drug distribution conspiracy, U.S. Attorney Bill Powell announced.
Presgraves, age 22, pled guilty to one count of “Sale or Transfer to a Prohibited Person.” Presgraves admitted to knowingly selling a bolt-action rifle to a person prohibited from having a firearm in March 2018 in Mineral County.
Presgraves faces up to 10 years incarceration and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Lara Omps-Botteicher is prosecuting the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives, the West Virginia State Police, and the Potomac Highlands Drug & Violent Crimes Task Force investigated.
The investigation was funded in part by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
U.S. Magistrate Judge Robert W. Trumble presided.
United States seeks forfeiture of numerous real properties and over $200,000 connected with illegal gambling operationRead the Press Release
HONOLULU, Hawaii – On September 16, 2019, the U.S. Attorney’s Office for the District of Hawaii filed a civil complaint seeking the forfeiture of two single-family residences, located at 1577 Hoolehua Street in Pearl City and 94-103 Pupupuhi Street in Waipahu, which were alleged to be operating as illegal game rooms. The next day, the U.S. Attorney for the District of Hawaii Kenji M. Price announced that 12 defendants had been charged in connection with the illegal gambling business at the two game rooms.
Today, U.S. Attorney Price announced the filing of an amended civil complaint, which seeks forfeiture of two additional real properties, over $200,000.00 in U.S. currency, and various other items connected to the illegal gambling operation.
According to the amended complaint, the additional real properties, which are located at 555 South Street and 2609 B Liliha Street in Honolulu, are residences of certain individuals involved in the illegal gambling operation. Both residences were used in the illegal gambling operation. For example, the amended complaint alleges that the Liliha Street property contained 24 illegal gaming machines, gaming machine equipment, and various ledgers, work schedules and other documents related to the illegal gambling operation. The 555 South Street property is additionally alleged to be forfeitable as it was purchased with illegal gambling proceeds.
The U.S. currency at issue includes over $70,000.00 seized from bank accounts held by Seng Cheong Lio, Seng Long Lio, Shi Hua Huang, and Shi Min Huang, which the amended complaint alleges is subject to forfeiture as property used in the illegal gambling operation, money laundering, and structuring.
The amended complaint alleges that, since at least 2016, the aforementioned individuals and others have been implicated in the operation of at least nine illegal game rooms.
U.S. Attorney Price said, “In addition to being illegal, the game rooms can bring violent crime and drugs to residential neighborhoods. We will continue to work with our law enforcement partners to curtail the presence of illegal game rooms in our community, including potentially seeking forfeiture of ownership interests in properties where such activity takes place.”
The amended complaint merely contains allegations. The United States will not own the properties unless and until a sufficient basis for forfeiture is proven in Court.
These cases are being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Federal Bureau of Investigation, Department of Homeland Security (Homeland Security Investigations), Hawaii High Intensity Drug Trafficking Area program (HIDTA), U.S. Marshals Service Hawaii Fugitive Task Force, and the Honolulu Police Department. Assistant U.S. Attorneys Micah Smith, Rachel Moriyama, Sara Ayabe, Jeremy Butler, Mohammed Khatib, and Sydney Spector are handling the cases.
United States Reaches $27,500 Settlement with Fresno Pharmacy for Controlled Substance Act ViolationsRead the Press Release
FRESNO, Calif. — The Medicine Chest Pharmacy in Fresno has agreed to pay $27,500 to resolve allegations that it violated the Controlled Substances Act, U.S. Attorney McGregor W. Scott announced today. The settlement was reached in October, the sale of the pharmacy and its assets has recently been completed.
According to the settlement agreement, the Medicine Chest Pharmacy improperly dispensed Schedule III and IV drugs and committed multiple recordkeeping violations. The Medicine Chest’s owner has also agreed to divest herself from any ownership interest in the pharmacy and will refrain from owning or operating any pharmacy for a period of five years.
The settlement relates to a Drug Enforcement Administration (DEA) investigation of the Medicine Chest beginning in Sept. 2018. A DEA administrative audit and inspection of the Medicine Chest revealed that the Pharmacy had dispensed multiple prescriptions in violation of the Controlled Substance Act and California law, including some prescriptions using the improper DEA registration number and prescriber’s name. Investigators also found that the Medicine Chest failed to complete an initial inventory when issued a DEA registration number and kept inaccurate records. The pharmacy failed to document the date on which certain controlled substances were received on invoices for Schedule III – V drugs.
“Pharmacies are a critical link in the drug distribution chain,” said U.S. Attorney Scott. “They have an obligation to ensure that controlled substances are only dispensed in accordance with the law. They also must ensure that all drug transactions are properly documented and tracked to prevent drug diversion and abuse of powerful opioids and other potentially dangerous drugs. This settlement highlights our commitment to enforcing the Controlled Substances Act and protecting our citizens.”
“Accurate recordkeeping is an important part of the accountability chain in the distribution of controlled prescription drugs. When that chain is broken, it opens the door to the diversion of potentially addictive pharmaceuticals,” stated DEA Special Agent in Charge Daniel C. Comeaux. “DEA will continue to pursue those who do not carry out their due diligence, as required by law, to ensure compliance with the Controlled Substances Act.”
This settlement resulted from a coordinated effort by the Drug Enforcement Administration and the U.S. Attorney’s Office for the Eastern District of California. It was handled by Assistant U.S. Attorney Geoffrey D. Wilson.
The claims resolved by this settlement are allegations only. There has been no determination of liability.
Two More Defendants Plead Guilty in Multi-Million Dollar Home Health Care Fraud ConspiracyRead the Press Release
PITTSBURGH, Pa. – Two residents of Pittsburgh, Pennsylvania, pleaded guilty in federal court yesterday to one count each of conspiracy to defraud the Pennsylvania Medicaid program and health care fraud, United States Attorney Scott W. Brady announced today.
Terra Dean, 46, and Larita Walls, 57, pleaded guilty in separate hearings before United States District Judge Cathy Bissoon.
During their plea hearings, Dean and Walls admitted that between 2011 and 2017 they were employees of Moriarty Consultants, Inc. (MCI), one of four related entities operating in the home health care industry. The other three entities were Activity Daily Living Services, Inc. (ADL), Coordination Care, Inc. (CCI), and Everyday People Staffing, Inc. (EPS). MCI, ADL, and CCI were approved under the Pennsylvania Medicaid program to offer certain services to qualifying Medicaid recipients ("consumers"), including personal assistance services (PAS), service coordination, and non-medical transportation, among other services. Between in and around January 2011 and in and around April 2017, MCI, ADL, and CCI, collectively, received more than $87,000,000 in Medicaid payments based on claims submitted for these services, with PAS payments accounting for more than $80,000,000 of the total amount.
During that time, Dean and Walls admitted that they participated in a wide-ranging conspiracy to defraud the Pennsylvania Medicaid program for the purpose of obtaining millions of dollars in illegal Medicaid payments through the submission of fraudulent claims for services that were never provided to the consumers identified on the claims, or for which there was insufficient or fabricated documentation to support the claims. As part of the conspiracy, Dean and Walls admitted that they fabricated timesheets to reflect the provision of in-home PAS care that, in fact, they never provided to the consumers identified on the timesheets. The defendants further admitted that they caused the submission of Medicaid claims in the name of "ghost" employees—including close relatives—for PAS care that was never provided to the consumers specified on Medicaid claims. Likewise, Dean and Walls admitted that they paid kickbacks to consumers in exchange for the consumer’s cooperation in the fraudulent billing scheme. In total, Dean and Walls each admitted causing losses to the Pennsylvania Medicaid program in excess of $150,000.
Judge Bissoon scheduled Dean’s and Walls’s sentencing hearings for 10:00 a.m. and 2:15 p.m. on May 19, 2020, respectively.
The conspiracy and health care fraud charges each carry a maximum total sentence of not more than 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendants.
To date, a total of sixteen defendants have been charged in connection with this investigation. Dean and Walls are the tenth and eleventh defendants to enter guilty pleas. The remaining defendants are presumed innocent unless and until proven guilty.
Assistant United States Attorneys Eric G. Olshan and Special Assistant United States Attorney Edward Song are prosecuting this case on behalf of the government. The Federal Bureau of Investigation, Pennsylvania Office of the Attorney General – Medicaid Fraud Control Unit, Internal Revenue Service – Criminal Investigation, U.S. Department of Health and Human Services – Office of Inspector General, and United States Postal Inspection Service conducted the investigation of the defendants.
Three South Florida Residents Sentenced to Prison for Their Roles in $21 Million Sober Homes Fraud SchemeRead the Press Release
Sober Homes Co-Owner Sentenced to Ten Years in Prison
MIAMI, FL – Three former co-owners and clinical directors of a group of purported substance abuse treatment centers and sober homes were sentenced to prison today for their roles in a conspiracy to commit health care fraud and wire fraud that resulted in an actual loss of more than $3.8 million, and through which the conspirators sought to obtain more than $21 million.
U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, and Special Agent in Charge Omar Pérez Aybar of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) made the announcement.
Ali Ahmed, 38, Hector Efrain Alvarez, 49, and Mauren Morel, 45, all of Broward and Palm Beach Counties, previously pled guilty to one count of conspiracy to commit health care fraud and wire fraud (Case No. 19cr60200). U.S. District Judge Federico A. Moreno of the Southern District of Florida sentenced Ahmed to 120 months in prison, Alvarez to 32 months in prison and Morel to 32 months in prison. In addition, the defendants were ordered to forfeit certain property and pay forfeiture money judgments, as well as to pay restitution. Specifically, Ahmed owes $4,204,336 in restitution; Alvarez owes $3,884,035; and Maurel owes $320,301 in restitution.
In recent years, South Florida has become the locus for drug and alcohol addicts seeking assistance in an effort to become and remain sober. Substance abuse treatment centers that assist such persons undergoing detoxification from an intoxicating or addictive substance are regulated under state and federal law. These substance abuse treatment centers, or detox centers, offer a continuum of care including, from most intensive to least intensive, as follows: inpatient detox, Partial Hospitalization Programs (PHP’s), Intensive Outpatient Programs (IOP’s), and Outpatient Programs (OP’s). Persons undergoing treatment on an out-patient basis, whether in PHP, IOP, or OP, typically elect to live in a “recovery residence,” also known as a “sober home” or “halfway house,” with other persons who are also in treatment and committed to a drug and alcohol-free lifestyle.
Jacob’s Well, Inc. (Jacob’s Well) was a Florida corporation, located at 7950 SW 30th Street, Suite 202, Davie, Florida. Jacob’s Well was a substance abuse treatment center licensed with the Florida Department of Children and Families that purportedly provided private insurance beneficiaries with substance abuse treatments and services.
Medi MD, LLC. (Medi MD) was a Florida corporation, located at 7950 SW 30th Street, Suite 200, Davie, Florida. Medi MD was a substance abuse treatment center licensed with the Florida Department of Children and Families that purportedly provided private insurance beneficiaries with substance abuse treatments and services.
Arnica Health was a Florida corporation, located at 7950 SW 30th Street, Suite 202, Davie, Florida. Arnica Health was a purported medical treatment center co-located with the purported substance abuse treatment centers. Together with Medi MD and Jacob’s Well, Arnica Health operated as a part of Serenity Living and was affiliated with sober homes known as Serenity Ranch.
Ali Ahmed was Treasurer of Jacob’s Well, Director of Operations for Medi MD, and co-owner of Jacob’s Well, Medi MD, and Arnica Health.
Sebastian Ahmed was the CEO and co-owner of Jacob’s Well, Medi MD, and Arnica Health.
Hector Efrain Alvarez was Clinical Director of Medi MD.
Mauren Morel was Clinical Director and co-owner of Jacob’s Well.
Medi MD, Jacob’s Well, and Arnica Health together operated as Serenity Ranch/Serenity Living.
According to court documents, from June 2016 through April 2019, Ali Ahmed, Sebastian Ahmed, and Mauren Morel, submitted and caused others to submit, via interstate wire communications, approximately $1,693,276 in claims which falsely and fraudulently represented that various health care benefits, primarily substance abuse PHP, IOP, and OP services, were medically necessary, prescribed by a doctor, and provided by Jacob’s Well to insurance beneficiaries of Aetna, BCBS, Cigna and UHC. As a result of such false and fraudulent claims, Aetna, BCBS, Cigna, and UHC made payments to the corporate bank accounts of Jacob’s Well in the approximate amount of $320,301.
Furthermore, during the same approximate time period, Ali Ahmed, Sebastian Ahmed, and Hector Efrain Alvarez submitted and caused others to submit, via interstate wire communications, approximately $21,899,439 in claims which falsely and fraudulently represented that various health care benefits, primarily substance abuse PHP, IOP, and OP services, were medically necessary, prescribed by a doctor, and provided by Medi MD to insurance beneficiaries of Aetna, BCBS, Cigna, Humana and UHC. As a result of such false and fraudulent claims, Aetna, BCBS, Cigna, Humana and UHC made payments to the corporate bank accounts of Medi MD in the approximate amount of $3,884,035.
Ali Ahmed, Sebastian Ahmed, Hector Efrain Alvarez, and Mauren Morel used the proceeds of the health care fraud for their personal use and benefit, the use and benefit of others and to further the fraud scheme.
As set forth in Court documents, the scheme involved not only financial exploitation but also sexual exploitation of vulnerable, drug-addicted patients, whom were attracted and induced to attend Serenity Ranch facilities with free flights, free housing, vapes, clothing, spa days, benzodiazepine medications, and even drugs. Indeed, the evidence showed that patients were permitted to keep using drugs, and even provided drugs – including heroin and cocaine – by conspirators such as Ali Ahmed. Ali Ahmed also engaged in sexual relationships with patients and, as a result of the destabilizing environment at the facilities, many patients did not get the treatment that they so desperately needed.
Co-defendant Sebastian Ahmed, the former CEO of Jacob’s Well, Medi MD, and Arnica, who was charged in the same indictment, has pleaded not guilty and is set for trial on February 18, 2020, before Senior U.S. District Judge James I. Cohn. He is presumed innocent of the charges.
The FBI and HHS-OIG investigated the case, with assistance from the Davie Police Department, Broward County Sheriff's Office and U.S. Drug Enforcement Administration (DEA). Assistant U.S. Attorneys Christopher J. Clark and Lisa H. Miller are prosecuting the case, and Assistant U.S. Attorneys Nicole Grosnoff and Peter A. Laserna are handling the asset forfeiture issues related to this matter.
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 at http://pacer.flsd.uscourts.gov.
Three Appear in Federal Court on Meth ChargesRead the Press Release
HUNTINGTON, W.Va. – Defendants in three separate cases appeared in federal court on meth charges, said United States Attorney Mike Stuart.
“We are prosecuting scores of meth traffickers throughout the District,” said United States Attorney Mike Stuart. “Over the past several years, we have made remarkable progress in the battle to end the chaos and destruction brought upon us by drug dealers and drug thugs. We are driven by a sense of urgency and, trust me, I not only have the backs of law enforcement but of the people of West Virginia in this righteous battle for our families and our communities.”
Walter Ray Cavender, age 50, of Leon, Mason County, was sentenced to 108 months in prison for possession with intent to distribute methamphetamine. Cavender previously admitted that on May 16, 2018, officers served a search warrant at his home on Evans Road in Leon. At the time they served the search warrant, Cavender had approximately 300 grams of methamphetamine in his home which he intended to sell. He also had digital scales and approximately $1300 in cash. The Mason County Sheriff’s Department conducted the investigation. Assistant United States Attorney Greg McVey handled the prosecution.
Johnny Belcher, Jr., 35, of Huntington, was sentenced to 42 months in prison for possession with intent to distribute methamphetamine. Belcher previously admitted that on July 17, 2019, an officer found approximately 24 grams of methamphetamine in his pockets. Belcher told the officers the substance was “ice.” The Huntington Police Department conducted the investigation. Assistant United States Attorney Stephanie Taylor handled the prosecution.
Charles Vincent Hively, Jr., 46, of Charleston pled guilty for his role in a conspiracy that involved large quantities of methamphetamine that were transported from Akron and sold in West Virginia. Hively pled guilty to possession with intent to distribute methamphetamine. Hively admitted that, on June 7, 2019, officers came to his residence at 1195 Livingston Avenue in Charleston to execute a warrant that had been issued for his arrest. When officers knocked on the door, they saw Hively look out the window and run to the rear of the residence. Hively then threw a cigarette box from a rear window. When officers recovered the box, they discovered that it contained approximately 24 grams of methamphetamine. Officers also recovered additional methamphetamine from inside the residence and Hively admitted that he intended to distribute the drugs. As part of his plea, Hively admitted that he was responsible for distributing up to 200 grams of methamphetamine in the Southern District of West Virginia. Hively faces up to 20 years in prison when sentenced on April 27, 2020. This joint investigation was spearheaded by the Federal Bureau of Investigation (FBI). Other agencies which participated and assisted in the investigation include the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Ona Violent Crime and Drug Task Force West, the Metropolitan Drug Enforcement Network Team (MDENT), the West Virginia State Police, the Drug Enforcement Administration (DEA) Task Force, the Beckley/Raleigh County Drug and Violent Crime Unit, the United States Marshals Service, the Cabell County Sheriff’s Department, the Charleston Police Department, the Putnam County Sheriff’s Department, the Ohio State Highway Patrol, the Akron, Ohio Police Department, and the Brecksville, Ohio Police Department. Assistant United States Attorney Joseph F. Adams is handling the prosecution.
United States District Judge Robert C. Chambers presided over the hearings.
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Steubenville man sentenced for drug conspiracyRead the Press Release
WHEELING, WEST VIRGINIA – Robert Leon Sullivan, of Steubenville, Ohio, was sentenced today to 46 months incarceration for a cocaine, crack cocaine, heroin, and fentanyl distribution operation, U.S. Attorney Bill Powell announced.
Sullivan, age 56, pled guilty to one count of “Conspiracy to Distribute Cocaine Hydrochloride, Cocaine Base, Heroin, and Fentanyl” in August 2019. Sullivan admitted to working with others to distribute cocaine, crack cocaine, heroin and fentanyl in Hancock County and elsewhere from February 2018 to August 2019.Assistant U.S. Attorneys Danae DeMasi-Lemon and Robert H. McWilliams, Jr. prosecuted the case on behalf of the government. The Drug Enforcement Administration; the Hancock-Brooke-Weirton Drug & Violent Crimes Task Force, a HIDTA-funded initiative; the West Virginia State Police; the Marshall County Drug & Violent Crimes task Force, a HIDTA-funded initiative; The Ohio Valley Drug & Violent Crimes task Force, a HIDTA-funded initiative; the Jefferson County, Ohio, Drug & Violent Crimes Task Force; the Hancock County Sheriff’s Office; the Brooke County Sheriff’s Office; the Weirton Police Department; and the West Virginia Division of Natural Resources Police investigated.
The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
U.S. District Judge John Preston Bailey presided.
Stanislaus County Man Sentenced to over 16 Years in Prison for Receiving Child PornographyRead the Press Release
FRESNO, Calif. — David Jahve Nin, 40, of Salida, was sentenced today by U.S. District Judge Lawrence J. O’Neill to 16 years and eight months in prison for receiving child pornography, U.S. Attorney McGregor W. Scott announced.
According to court documents, from approximately October 2014 through approximately July 2017, in Stanislaus County, Nin was found to have received through the internet over 200 videos of minors engaged in sexually explicit conduct. The videos also involved the portrayal of sadistic, masochistic, and other depictions of violence, and included depictions of minors as young as toddlers being sexually abused.
This case was the product of an investigation by both the Stockton, California and Phoenix, Arizona Offices of Homeland Security Investigations (HSI). Assistant U.S. Attorney Brian W. Enos prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by 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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.
St. Louis County Doctor Pleads Guilty to Fraudulently Obtaining Opioid Narcotic Prescription DrugsRead the Press Release
St. Louis, MO –Angela K. Williams, M.D., 34, of Brentwood, Missouri, pleaded guilty today to one felony charge of fraudulently obtaining oxycodone, a narcotic opioid prescription drug.
According to the plea agreement, Dr. Williams wanted to obtain prescription drugs that contained controlled substances for her own personal use, outside the bounds of professional medical practice and not for legitimate medical purposes. Accordingly, Dr. Williams used her own prescription pad to write and sign numerous prescriptions for controlled substances using other persons’ names, including prescriptions for the narcotic opioid pain relief drugs hydrocodone and oxycodone. Dr. Williams then went to the pharmacies and presented the prescriptions for the drugs, posing as a patient. Dr. Williams also fraudulently used another doctor’s prescription pad, name, and Drug Enforcement Administration number to write herself some additional controlled substance prescriptions.
“The DEA Diversion Control Program’s purpose is to maintain the integrity of the supply chain of prescription drugs to the American public,” said DEA St. Louis Division Special Agent in Charge William Callahan. “The diversion of prescription drugs outside the bounds of professional medical practice puts the supply chain at risk. This case showcases the far-reaching impact of opioid abuse and its destructive power.”
Dr. Williams pled guilty before Chief United States District Court Judge Rodney W. Sippel. Sentencing has been set for April 23, 2020. Dr. Williams’s crime carries a maximum penalty of four years in prison and a $250,000 fine. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case is being investigated by the Drug Enforcement Administration, the Florissant Police Department, the Town and Country Police Department, and the St. John Police Department, with assistance from the Bureau of Narcotic and Dangerous Drugs of the Missouri Department of Health & Senior Services, the Medicaid Fraud Control Unit of the Missouri Attorney General’s office, and the St. Louis County, Missouri Prosecuting Attorney’s Office.
St. Croix Man Indicted for Firearm and Related Offenses in Vicinity of a SchoolRead the Press Release
St. Croix, USVI – United States Attorney Gretchen C.F. Shappert for the District of the Virgin Islands announced the return of an indictment on January 21, 2020, charging a St. Croix man, Mario Felix, with felon in possession of a firearm, felon in possession of ammunition and possession of a firearm within a school zone. Felix will be arraigned on January 27, 2020.
According to the indictment, on November 3, 2019, Felix, a convicted felon, possessed a firearm and ammunition and did so while in the vicinity of the Alternative Education School.
The case is being investigated by the Virgin Islands Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Rhonda Williams-Henry.
An indictment is merely a formal charging document, and it is not evidence of guilt. Every defendant is presumed innocent until and unless found guilty beyond a reasonable doubt in a court of law.
St. Croix, USVI – United States Attorney Gretchen C.F. Shappert for the District of the Virgin Islands announced the return of an indictment on January 21, 2020, charging a St. Croix man, Mario Felix, with felon in possession of a firearm, felon in possession of ammunition and possession of a firearm within a school zone. Felix will be arraigned on January 27, 2020.
According to the indictment, on November 3, 2019, Felix, a convicted felon, possessed a firearm and ammunition and did so while in the vicinity of the Alternative Education School.
The case is being investigated by the Virgin Islands Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Rhonda Williams-Henry.
An indictment is merely a formal charging document, and it is not evidence of guilt. Every defendant is presumed innocent until and unless found guilty beyond a reasonable doubt in a court of law.
South Bay Man Sentenced to Seven Years in Federal Prison for Receiving, Possessing and Distributing Child PornographyRead the Press Release
LOS ANGELES – A Wilmington man was sentenced today to 84 months in federal prison for possessing child pornography and distributing the sexually explicit images of children to other Internet users.
Daniel Patrick Diaz, 35, was sentenced by United States District Judge S. James Otero. In July 2019, Diaz pleaded guilty to four counts of receipt and distribution of child pornography and one count of possession of child pornography.
Diaz admitted in his plea agreement that he used the Internet to download and transfer numerous images and videos of child pornography to various digital devices and email accounts. In April 2017, Diaz used the internet messenger application Kik to knowingly distribute files that depicted minors engaged in sexually explicit conduct. Diaz sent the illicit images to an undercover law enforcement officer.
A federal search warrant executed in May 2017 revealed that Diaz used an email address to receive and distribute child pornography, including sadistic and masochistic content.
In total, Diaz possessed at least 600 images of child pornography.
“The prolific nature of [Diaz’s] fascination with child pornography, including the types of content he possessed, shared, and distributed, is troubling,” the prosecution wrote in its sentencing memorandum, which notes that “his trading, sharing, possession, and distribution of these image and videos only served to continue the harm suffered by the victims.”
This case was investigated by Homeland Security Investigations and is part of Project Safe Childhood, the Justice Department’s ongoing initiative to combat child exploitation crimes.
This matter was prosecuted by Assistant United States Attorney Joseph D. Axelrad of the Violent and Organized Crime Section.
Sacramento Man Charged with Receipt of Child PornographyRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned an indictment on Jan, 16 against Bryan Paul Tamblyn, 36, of Sacramento, charging him with receipt of child pornography, U.S. Attorney McGregor W. Scott announced.
The indictment alleges that between July 4, 2018 and Aug. 20, 2019, Tamblyn knowingly received visual depictions of children engaging in sexually explicit conduct.
This case is the product of an investigation by the Sacramento Sheriff’s Department, and the Sacramento Internet Crimes Against Children Task Force, a federally and state-funded task force managed by the Sacramento Sheriff’s Department with agents from federal, state, and local agencies. Assistant U.S. Attorney Christina McCall is prosecuting the case.
If convicted, Tamblyn faces a maximum statutory penalty of 20 years in prison, a minimum sentence of five years in prison, up to a lifetime of supervised release following a custodial sentence, a $250,000 fine, and restitution to the victims of the offense. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Red Lake Man Sentenced to 52 Months in Prison for Assaulting Three Individuals with A FirearmRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of DILLON GEORGE TAYLOR, 21, to 52 months in prison for assaulting three individuals with a firearm and violating his supervised release conditions. TAYLOR, who pleaded guilty on October 22, 2019, was sentenced today before Chief Judge John R. Tunheim in U.S. District Court in Minneapolis, Minnesota.
According to the defendant’s guilty plea and documents filed in court, on November 22, 2018, during a confrontation with two individuals, TAYLOR pointed a firearm at one of the individuals and threatened his life. When the two individuals left the scene in a vehicle driven by a third individual, TAYLOR pursued them and shot at the vehicle multiple times. When the vehicle pulled into the parking lot of a casino located on the Red Lake Indian Reservation, TAYLOR continued his pursuit, firing a shot towards the entrance of the casino where the three individuals and casino personnel were standing.
This case is the result of an investigation conducted by the Red Lake Tribal Police Department and the FBI Headwaters Safe Trails Task Force.
Assistant United States Attorney Alexander D. Chiquoine prosecuted the case.
Defendant Information:
DILLON GEORGE TAYLOR, 21
Red Lake, Minn.
Convicted:
- Assault with a dangerous weapon, 1 count
Sentenced:
- 52 months in prison
- Three years of supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Rapid City Man Sentenced to 4 Years in Federal Prison for Attempted Possession of Child PornographyRead the Press Release
United States Attorney Ron Parsons announced that a Rapid City, South Dakota, man convicted of Attempted Possession of Child Pornography was sentenced on January 6, 2020, by Judge Jeffrey L. Viken, U.S. District Court.
Paul Heib, age 51, was sentenced to 4 years in federal prison and 5 years of supervised release and was ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Heib was one of seven men who were arrested and federally indicted as a result of an undercover sex trafficking operation conducted during the 2018 Sturgis Motorcycle Rally, targeting persons willing to pay to have sex with minors obtained through the Internet. The conviction stemmed from Heib communicating with someone he believed to be a 15-year-old boy, but who was in fact an undercover agent, for the purpose of arranging a meeting to engage in sexual acts with the minor.
The undercover operation and arrests were a joint effort between the South Dakota Division of Criminal Investigation, the Department of Homeland Security, the Federal Bureau of Investigation, the Rapid City Police Department, and the Pennington County Sheriff’s office. Assistant U.S. Attorney Sarah Collins prosecuted the case.Heib was immediately remanded to the custody of the United States Marshals Service.
Rapid City Man Indicted for Sexual Exploitation of a MinorRead the Press Release
United States Attorney Ron Parsons announced that Rapid City, South Dakota, man was charged in federal district court with Sexual Exploitation of a Minor and Possession of Child Pornography.
Vance Allan Warthen, age 29, was charged on January 15, 2020. Warthen appeared before U.S. Magistrate Judge Daneta Wollmann on January 17, 2020, and pleaded not guilty to the charges. The maximum penalty upon conviction is a mandatory minimum of 15 up to 30 years in federal prison and/or a $250,000 fine, a mandatory minimum of 5 years up to lifetime supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to Warthen sexually exploiting an underage female in August 2019 at Rapid City by producing images of child pornography. He remained in possession of the images thereafter. The charges are merely an accusation and Warthen is presumed innocent until and unless proven guilty.
The investigation is being conducted by the South Dakota Division of Criminal Investigation, the Department of Homeland Security, the Federal Bureau of Investigation, the Rapid City Police Department, and the Pennington County Sheriff’s office Assistant U.S. Attorney Sarah B. Collins is prosecuting the case.
Warthen was detained pending trial. A trial date has not yet been set.
Randolph County woman admits to meth distributionRead the Press Release
CLARKSBURG, WEST VIRGINIA – Katherine Ann Waybright, of Montrose, West Virginia, has admitted to selling methamphetamine, U.S. Attorney Bill Powell announced.
Waybright, age 48, pled guilty to one count of “Conspiracy to Distribute Methamphetamine” and one count of “Distribution of Methamphetamine.” Waybright admitted to working with others to distribute five grams or more of methamphetamine from April 2018 to April 2019 in Randolph County and elsewhere.
Waybright faces at least five years and up to 40 years incarceration and a fine of up to $5,000,000 for the conspiracy count and up to 20 years incarceration and a fine of up to $1,000,000 for the distribution count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen D. Warner is prosecuting the case on behalf of the government. The Mountain Region Drug and Violent Crimes Task Force investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Providence Man Admits to Trafficking Meth, Fentanyl, & HeroinRead the Press Release
PROVIDENCE – A Providence man arrested in November 2017 while on federal supervised release, having recently completed serving a term of imprisonment of 60 months for trafficking heroin in 2011, admitted on Friday to trafficking methamphetamine (meth), fentanyl, and heroin in 2017.
Luis Alberto Gonzalez-Ruiz, 35, was arrested by members of the Rhode Island DEA Drug Task Force and Rhode Island State Police on November 10, 2017, following an undercover investigation into his most recent drug trafficking activities.
On October 16, 2017, while under surveillance by members of the DEA Drug Task Force, Gonzalez-Ruiz delivered more than three kilograms of meth to another person. The meth was seized a short time later by DEA agents.
Additionally, on the day of his arrest, law enforcement seized from Gonzalez-Ruiz’s bedroom inside his Providence residence approximately 264 grams of fentanyl, approximately 281 grams of heroin mixed with fentanyl, cutting agents, digital scales, and other items commonly used by drug traffickers to package and distribute narcotics.
Law enforcement also seized a .380 semi-automatic pistol they located under his bedroom pillow.
Appearing Friday before U.S. District Court Chief Judge John J. McConnell, Jr., Gonzalez-Ruiz pleaded guilty to distribution of 500 grams or more of methamphetamine, possession of 100 grams or more of heroin with intent to distribute, and possession of 40 grams or more of fentanyl with intent to distribute.
Gonzalez-Ruiz’s guilty plea is announced by United States Attorney Aaron L. Weisman, Special Agent in Charge of the Drug Enforcement Administration’s New England Field Division Brian D. Boyle, and Superintendent of the Rhode Island State Police Colonel James M. Manni.
Gonzalez-Ruiz is scheduled to be sentenced on April 2, 2020.
Distribution of 500 grams or more of methamphetamine is punishable by statutory penalties of 10 years to life imprisonment to be followed by 5 years to lifetime supervised release. Possession of 100 grams or more of heroin with intent to distribute and possession of 40 grams or more of fentanyl with intent to distribute are each punishable by 5-40 years imprisonment to be followed by 4 years to lifetime supervised release.
The case is being prosecuted by Assistant United States Attorney Gerard B. Sullivan, with the assistance of Assistant United States Attorney Stacey P. Veroni.
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Propex Derivatives Pty Ltd Agrees to Pay $1 Million in Connection with Spoofing SchemeRead the Press Release
Propex Derivatives Pty Ltd (Propex), a Sydney, Australia-based proprietary trading firm, has entered into a resolution with the Department of Justice to resolve criminal charges related to a spoofing scheme involving thousands of instances of unlawful trading activity in U.S. commodities markets by a former Propex trader, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Special Agent in Charge Emmerson Buie Jr. of the FBI’s Chicago Field Office.
Propex entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed today in the Northern District of Illinois charging the company with one count of spoofing. Spoofing is the illegal practice of bidding or offering (i.e., placing an order to buy or sell) with the intent to cancel the bid or offer before execution. Under the terms of the DPA, Propex agreed to pay $1 million that is comprised of a criminal monetary penalty ($462,271), criminal disgorgement ($73,429), and victim compensation ($464,300) with the criminal monetary penalty credited for any payments made to the Commodity Futures Trading Commission (CFTC).
Propex also agreed to, among other things, conduct appropriate reviews of its internal controls, policies and procedures, and to modify its compliance program, where necessary and appropriate, to ensure it is designed to effectively detect and deter violations of the Commodity Exchange Act and commodities fraud statute.
Propex admitted as part of the DPA, that from approximately July 2012 until March 2016, a former Propex trader, Jiongsheng (Jim) Zhao, engaged in a trading strategy that involved placing thousands of large-volume orders to buy and sell E-mini S&P 500 futures contracts on the Chicago Mercantile Exchange (CME) that Zhao intended to cancel before execution (the Spoof Orders). On Dec. 26, 2018, Zhao pleaded guilty to one count of spoofing. As part of his plea, Zhao admitted that his trading strategy was intended to inject materially false and misleading liquidity and price information into the E-mini S&P 500 futures contracts market by placing the Spoof Orders in order to deceive other market participants about the existence of supply and demand. The Spoof Orders were designed to artificially move the price of E-mini S&P 500 futures contracts in a direction that was favorable to Zhao, and to the detriment of other market participants. Zhao’s sentencing is scheduled for Feb. 4, 2020, before U.S. District Judge John J. Tharp Jr. of the Northern District of Illinois.
A number of relevant considerations contributed to the department’s criminal resolution with Propex, including the company’s cooperation with the United States and Propex’s remedial efforts. In addition, the department considered the fact that in May 2014 Zhao’s trading was flagged for Propex senior management, yet he continued placing Spoof Orders through March 2016. Further, Zhao made false and misleading statements to the CME during its investigation into Zhao’s trading activity. In March 2018, Propex undertook a significant enhancement of its compliance program and internal controls after engaging an independent compliance consulting firm to conduct an assessment of the adequacy and effectiveness of Propex’s compliance program. As part of that enhancement, Propex increased the resources dedicated to compliance and contracted with a third-party vendor to provide automated trade surveillance, including surveillance for manipulative and deceptive trading such as spoofing. The department determined that the criminal monetary penalty of $462,271 imposed as part of the DPA is appropriate given the facts and circumstances of this case and given Propex’s inability to pay an amount within the range calculated under the sentencing guidelines because it would threaten the continued viability of Propex and impair its ability to make restitution to victims. As part of the agreement, the department has filed an unopposed motion, which is subject to approval by the Court, to defer for the term of the DPA any prosecution and trial of the criminal information filed against Propex.
The CFTC announced today a separate settlement with Propex in connection with a related, parallel proceeding. Under the terms of that resolution with the CFTC, Propex agreed to pay $1 million, which includes a civil monetary penalty of $462,271, as well as restitution and disgorgement that will be credited for any such payments made to the department. In addition, the CFTC order imposes upon Propex other remedial and cooperation obligations in connection with any CFTC investigation pertaining to the underlying conduct.
The FBI’s Chicago Field Office investigated this case. Trial Attorney Matthew F. Sullivan and Assistant Chief Justin Weitz of the Criminal Division’s Fraud Section prosecuted the case, which is part of the Fraud Section’s commodities enforcement program. The Australian Government's Attorney-General’s Department, the Australian Federal Police and the Criminal Division’s Office of International Affairs provided significant assistance in connection with the arrest and extradition of Zhao. The CFTC’s Division of Enforcement and the Australian Securities and Investments Commission also provided substantial assistance in this case.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website at https://www.justice.gov/criminal-vns/case/propex-derivatives-dpa or call (888) 549-3945.
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.
Pittsburgh Man Sentenced for Role in Fentanyl Analogue Packaging Operation that Sent SWAT Officers to Hospital for EvaluationRead the Press Release
PITTSBURGH, Pa. – A former resident of Pittsburgh, Pennsylvania, has been sentenced in federal court to a term of imprisonment of time served or 29 months, to be followed by three years of supervised release on his conviction on charges of conspiracy to distribute and possession with intent to distribute an analogue of fentanyl, United States Attorney Scott W. Brady announced today.
Senior United States District Court Judge David S. Cercone imposed the sentence on Anthony Lozito, age 40.
According to information presented to the court, from May 2017 to August 2017, Lozito conspired with others to distribute and possess with intent to distribute cyclopropyl fentanyl, an analogue of fentanyl. Lynell Guyton purchased large quantities of fentanyl analogues from overseas purveyors, which he distributed in Western Pennsylvania. On August 9, 2017, law enforcement executed a search warrant at Lozito’s residence on Bond Street. Guyton was found on the first floor along with Lozito and two other individuals. Large amounts of narcotics and packaging paraphernalia were present in the house. A table with powder narcotics was overturned during the initial SWAT entry into the home, causing large amounts of opioids to become airborne. SWAT officers exposed to the airborne narcotics were sent to Mercy for evaluation–everyone was medically cleared and no one was harmed. Lozito admitted to allowing Guyton to use his home to package narcotics in exchange for the anticipated receipt of opioids.
Assistant United States Attorney Shanicka L. Kennedy prosecuted this case on behalf of the government.
The Department of Homeland Security Investigations, the United States Postal Inspection Service and the Pittsburgh Bureau of Police conducted the investigation that led to the prosecution of Lozito.
Pennsylvania Doctor Pleads Guilty to Unlawfully Distributing Oxycodone to His PatientsRead the Press Release
A Pennsylvania doctor pleaded guilty today to unlawfully distributing oxycodone to his patients.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney William M. McSwain of the Eastern District of Pennsylvania and Special Agent in Charge Michael T. Harpster of the FBI’s Philadelphia Field Office made the announcement.
Timothy F. Shawl, M.D., 60, of Garnet Valley, Pennsylvania, pleaded guilty to five counts of unlawful distribution of controlled substances before U.S. District Judge R. Barclay Surrick of the Eastern District of Pennsylvania. Sentencing has been scheduled for May 5, 2020, before Judge Surrick.
As part of his guilty plea, Shawl admitted that he wrote prescriptions for controlled substances that were outside the usual course of professional practice and not for a legitimate medical purpose. He further admitted that he wrote prescriptions, usually for oxycodone, for certain patients without seeing, treating or examining them; generally, patients just picked up an envelope with their prescription from the receptionist at Shawl’s office. He further admitted that for one patient, he had not conducted a physical examination in at least five years, despite regularly prescribing controlled substances. This patient died on Jan. 7, 2019, just three days after Shawl last prescribed oxycodone for her, and the cause of death was drug intoxication.
This case was investigated by the FBI with assistance from task force officers from the Philadelphia Police Department and Pennsylvania Office of the Attorney General. Trial Attorney Debra Jaroslawicz of the Criminal Division’s Fraud Section is prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Patient Services Inc. Agrees to Pay $3 Million for Allegedly Serving as a Conduit for Pharmaceutical Companies to Illegally Pay Patient CopaymentsRead the Press Release
Patient Services Inc. (PSI), a foundation based in Midlothian, Virginia, has agreed to pay $3 million to resolve allegations that it violated the False Claims Act by acting as a conduit to enable certain pharmaceutical companies to provide kickbacks to Medicare patients taking the companies’ drugs by paying the patients’ copayments, the Department of Justice announced today. The amount of the settlement announced today was determined based on analysis of PSI’s ability to pay after review of its financial condition.
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, copays). 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, and it prohibits third parties, such as copay foundations, from acting as a conduit for such payments.
“The Department is committed to ensuring that foundations are not used as mere conduits to funnel kickbacks from pharmaceutical companies to Medicare patients and to increase company profits while avoiding an important cost-control aspect of the Medicare program,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “We will continue to combat unlawful kickback arrangements and their pernicious influence on our health care system.”
“Pharmaceutical companies cannot use foundations to funnel drug co-payments disguised as routine charitable donations, all to prop up excessive drug prices. PSI allegedly operated as a vehicle for specific pharmaceutical companies essentially to pay kickbacks at the ultimate expense of the American taxpayers who support the Medicare program,” said U.S. Attorney Andrew E. Lelling of the District of Massachusetts. “We will continue to pursue this kind of enforcement until the practice disappears.”
The government alleged that PSI coordinated with three pharmaceutical manufacturers – Insys, Aegerion, and Alexion – to enable them to pay kickbacks to Medicare patients taking their drugs. PSI allegedly worked with these companies to design and operate certain funds that funneled money from the companies to patients taking the specific drugs the companies sold. These schemes allegedly minimized the possibility that the companies’ contributions to the funds would go to patients taking competing drugs made by other companies and undermined the nature of these contributions as bona fide donations. The United States previously entered into settlement agreements with Insys, Aegerion, and Alexion covering their use of PSI as a conduit to pay their patients’ copays.
As to Insys, the government alleged that, in late 2013, PSI and Insys began discussing a potential copayment assistance fund for Subsys, a sublingual form of fentanyl, a powerful opioid painkiller, which was approved for the treatment of breakthrough cancer pain in opioid-tolerant patients. The government further alleged that PSI worked with Insys to create the “Breakthrough Cancer Pain” fund, to which Insys was the only donor. The government also alleged that PSI allowed Insys to see the status of each patient that it referred to PSI, including whether that patient had received copay assistance from PSI and the amount of the assistance. The government alleged that PSI knew that Insys was referring patients to the Breakthrough Cancer Pain fund who did not have cancer, but PSI stated that it would only prevent “off-label use…if the Donor wants us to.”
The government also alleged that, in 2013, at Aegerion’s request, PSI created a fund for homozygous familial hypercholesterolemia (HoFH), which can be treated by Juxtapid, a drug that was sold by Aegerion. The government alleged that PSI allowed Aegerion to participate in establishing the patient eligibility criteria that PSI used to cover copayment obligations of patients taking Juxtapid, and PSI’s HoFH fund allowed Aegerion to pay for Medicare patients’ copayments to eliminate any price sensitivity to physicians prescribing and patients taking Juxtapid.
The government further alleged that Alexion approached PSI in January 2010 to request that PSI create a fund to provide financial assistance to Soliris patients, including by paying patients’ Medicare copays and other medical expenses for Soliris patients. Soliris was indicated for the treatment of patients with paroxysmal nocturnal hemoglobinuria (PNH) to reduce hemolysis and for the treatment of patients with atypical hemolytic uremic syndrome (aHUS) to inhibit complement-mediated thrombotic microangiopathy. According to the government, except in rare instances, PSI provided financial assistance from the Complement Mediated Diseases (CMD) fund only if a patient was taking Soliris, and PSI reported information back to Alexion confirming the specific Soliris patients who were approved for copay or other financial assistance from PSI and through which PSI detailed payments to those patients.
“Few things undermine public confidence quite like finding out the pharmaceutical companies and non-profits they entrust with their health and financial peace of mind have been playing fast and loose with the law. Schemes like these, and the individuals and organizations who perpetrate them, are an affliction on our health care systems,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “This settlement demonstrates the FBI’s resolve to ensure that patients receive care that is based solely on sound medical judgment, and not compromised by kickbacks.”
PSI has agreed to a three-year Integrity Agreement (IA) with HHS-OIG as part of the settlement. The IA requires, among other things, that PSI implement measures designed to ensure that it operates independently and that its arrangements and interactions with pharmaceutical manufacturer donors are compliant with the law. In addition, the IA requires compliance-related certifications from PSI’s Board of Directors and detailed reviews by an independent review organization.
“Foundations operating patient assistance programs should operate with integrity and act independently from their donors,” said Gregory E. Demske, Chief Counsel to the Inspector General at the U.S. Department of Health and Human Services. “Our Integrity Agreement is designed to promote such independence and monitor the foundation to reduce the risk of future kickbacks.”
The government’s resolution of this matter 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 investigation was conducted by the Department of Justice’s Civil Division 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 claims resolved by the settlement are allegations only; there has been no determination of liability.
Oregon Man Sentenced to Prison for Sex Trafficking MinorsRead the Press Release
PORTLAND, Ore.—An Oregon man was sentenced today to 149 months and 12 days in prison, to be followed by a lifetime of supervised release, for sex trafficking minors, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Billy J. Williams of the District of Oregon announced.
Darryl Gartley, 23, pleaded guilty on Aug. 12, 2019, to two counts of sex trafficking minors before U.S. District Court Judge Michael H. Simon of the District of Oregon, who sentenced him earlier today and remanded him to the custody of the U.S. Marshals Service.
According to facts admitted by the defendant during his guilty plea, in the beginning of October 2016, he moved from California to Portland, Oregon. Shortly after moving to Oregon, the defendant met two 15 year old minor females. In or around December 2016 through January 2017, the defendant posted advertisements on Backpage and Craigslist, offering the minors to engage in sexual acts in exchange for money. The advertisements included pictures of the minors both clothed and nude.
This is the defendant’s second conviction for sex trafficking minors. On May 22, 2017, the defendant was sentenced to seven years imprisonment on a state conviction for sex trafficking minors in California.
The investigation of the case was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations with assistance from the U.S. Marshals Service and the San Diego County Sheriff’s Department. This case is being prosecuted by Trial Attorney Kaylynn Foulon of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Ravi Sinha of the U.S. Attorney’s Office in the District of Oregon.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
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.
Oregon Man Sentenced to Prison for Sex Trafficking MinorsRead the Press Release
An Oregon man was sentenced today to 149 months and 12 days in prison, to be followed by a lifetime of supervised release, for sex trafficking minors, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Billy J. Williams of the District of Oregon announced.
Darryl Gartley, 23, pleaded guilty on Aug. 12, 2019, to two counts of sex trafficking minors before U.S. District Court Judge Michael H. Simon of the District of Oregon, who sentenced him earlier today and remanded him to the custody of the U.S. Marshals Service.
According to facts admitted by the defendant during his guilty plea, in the beginning of October 2016, he moved from California to Portland, Oregon. Shortly after moving to Oregon, the defendant met two 15 year old minor females. In or around December 2016 through January 2017, the defendant posted advertisements on Backpage and Craigslist, offering the minors for commercial sexual acts. The advertisements included pictures of the minors both clothed and nude.
This is the defendant’s second conviction for sex trafficking minors. On May 22, 2017, the defendant was sentenced to seven years imprisonment on a state conviction for sex trafficking minors in California.
The investigation of the case was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations with assistance from the U.S. Marshals Service and the San Diego County Sheriff’s Department. This case is being prosecuted by Trial Attorney Kaylynn Foulon of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Ravi Sinha of the U.S. Attorney’s Office in the District of Oregon.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc.
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.
Ohio man sentenced for firearms chargeRead the Press Release
WHEELING, WEST VIRGINIA – Kenneth Tribett, of Bellaire, Ohio, was sentenced today to 18 months incarceration for a firearms charge, U.S. Attorney Bill Powell announced.
Tribett, age 47, pled guilty to one count of “Unlawful Possession of a Firearm” in November 2019. Tribett, having been previously convicted of a felony, had a .9mm pistol in January 2019 in Ohio County.
This case was brought as part of Project Safe Neighborhoods (PSN). Project Safe Neighborhoods 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.Assistant U.S. Attorney Stephen L. Vogrin prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Wheeling Police Department investigated.
U.S. District Judge John Preston Bailey presided.
New Jersey Woman Fraudulently Practicing Immigration Law in Northeast Philadelphia Pleads GuiltyRead the Press Release
PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Ana Molina, 56, of New Jersey, entered a plea of guilty before United States District Court Judge Harvey Bartle III to seven counts of mail fraud and four counts of aggravated identity theft arising from a scheme to defraud people who sought her help pursuing legitimate immigration status in the United States.
The defendant owned and operated Ana Molina & Associates, a/k/a Molina Multilegal Services, on Castor Avenue in Philadelphia, PA, through which she falsely claimed to be an attorney (or at times a paralegal) who could obtain lawful immigration status for them from United States Citizenship and Immigration Services (“USCIS”).
Molina charged her clients approximately $1,500 to register for permanent legal residency or otherwise adjust immigration status, and she charged approximately $500 to provide a “sponsor” for those applicants who did not already have one. Sponsors are typically United States citizens who have sufficient financial resources to ensure that an applicant will not likely become dependent on financial assistance from the United States government. For the alleged “sponsors,” Molina used personal identification information, including bank statements and tax returns, which belonged to former clients without their knowledge or consent. Molina prepared and mailed the applications and other forms that contained the false information about the applicants and their alleged “sponsors” to USCIS.
“This defendant took advantage of people trying to do the right thing and seek lawful status in this country,” said First Assistant U.S. Attorney Williams. “Her clients were from foreign countries, were unfamiliar with our laws and regulations, and trusted Molina to help them, rendering them vulnerable targets for her scam. We stand ready with our federal partners to investigate and prosecute fraud offenses like this one that prey on law abiding victims.”
"Ms. Molina was entrusted with sensitive personal information to assist her clients, and instead, chose to betray that trust and enrich herself,” said William S. Walker, Acting Special Agent in Charge for Homeland Security Investigations, Philadelphia. “We will continue to work with the U.S. Attorney’s Office to ensure that scams like this are thoroughly investigated and prosecuted.”
The case was investigated by the U.S. Department of Homeland Security, Homeland Security Investigations, and is being prosecuted by Assistant United States Attorney Anita Eve.
New England U.S. Attorneys Urge Congress to Extend Ban on Fentanyl AnaloguesRead the Press Release
In 2017, almost 50,000 Americans died from opioid overdoses. It’s a sad reality that New England as a whole has been particularly hard hit by opioids. In fact, per capita, of the 12 states across the country with the most opioid overdose fatalities, all six of our states make the list. Much of that is due to illicitly produced fentanyl.
To maintain and build upon a recent decline in opioid overdose deaths nationwide, law enforcement must have all the necessary tools at their disposal. One such tool is the Drug Enforcement Administration’s (DEA) 2018 order making all fentanyl-related drugs illegal in the United States. Unfortunately, that order was temporary and will expire in just a few weeks. The Senate recently passed bipartisan legislation approving a 15-month extension of the temporary order. While this is a step in the right direction and the House should follow suit and pass the Senate’s bill, a longer term solution is needed. A permanent ban on all fentanyl analogues would send a strong message to the cartels and sophisticated drug operations that pedal illicit fentanyl that the United States is serious about addressing this crisis and their actions will not be tolerated.
Illicit fentanyl is manufactured in labs in China and Mexico. It is 50 times more powerful than heroin and 100 times more powerful than morphine. So powerful, in fact, that only a couple milligrams – the size of a few grains of salt – can kill the average person.
Fentanyl, however, is unique. Because it is made in labs using chemicals, its structure is easily manipulated. And the drug cartels that manufacture and traffic this poison into our neighborhoods understand American laws and know how to exploit them. They know that by changing a single molecule in the chemical structure of fentanyl, they have essentially created a new drug. One that, unlike fentanyl, is not illegal in the United States. These drugs, known as “fentanyl analogues,” do as fentanyl does: create more addicts and kill more Americans. Yet, the analogues – which can be up to 100 times more potent than fentanyl and 10,000 times more potent than morphine – will all become legal if Congress fails to act.
The DEA’s 2018 decision to temporarily schedule – that is, to make illegal – all fentanyl-related substances was a response to the extraordinary legal loophole exploited by drug traffickers. In April 2019, China also outlawed all fentanyl-related substances. This is extraordinary progress, with one caveat. Unlike China’s law, the United States’ has an expiration date.
On Feb. 6, 2020, the DEA’s temporary order expires, and all drugs seized by U.S. investigators over the past two years that have tested positive as fentanyl analogues will no longer be illegal. If Congress fails to pass the SOFA legislation it will have a dramatic impact not just on the prosecutors and law enforcement officers who spend their lives investigating and prosecuting drug dealers, but on communities already hard hit by the opioid epidemic, many of which are right here in New England.
Despite recent reductions in opioid deaths across New England for the first time in decades, prosecuting drug dealers – particularly those who peddle heroin and fentanyl – remains a top priority for each of our offices. But our federal resources are not infinite; we need all the help we can get. Passing this legislation would provide invaluable support to us as prosecutors and the entire law enforcement community as we continue to combat the opioid crisis in New England and all throughout America.
A number of organizations have voiced opposition to the proposed legislation, arguing that the bill does not “embrace public health approaches to the overdose crisis.” We agree that a comprehensive approach to the crisis is needed, and a permanent fentanyl analogue ban should be viewed as part of a holistic effort. But time is running out: there is no doubt that drug traffickers are eagerly awaiting the temporary order’s expiration to start flooding our communities with these dangerous drugs. The passage of this legislation is quite literally a matter of life and death.
There should be nothing partisan about declaring fentanyl analogues illegal, any more than there is partisanship about the dangers of ricin or cyanide. And there is certainly nothing partisan about saving lives and bringing justice to those who profit from addiction and even death. For the safety of our New England communities, we urge Congress to pass legislation making permanent the DEA’s temporary scheduling of all fentanyl-related drugs.
Christina E. Nolan is the United States Attorney for the District of Vermont
Aaron L. Weisman is the United States Attorney for the District of Rhode Island
Scott W. Murray is the United States Attorney for the District of New Hampshire
Andrew E. Lelling is the United States Attorney for the District of Massachusetts
Halsey B. Frank is the United States Attorney for the District of Maine
John H. Durham is the United States Attorney for the District of ConnecticutNDTX Round-Up January 21Read the Press Release
GUILTY PLEA – RAMON MENDOZA-VILLEGAS
On January 16, Ramon Mendoza-Villegas, 44, pled guilty to possession with the intent to distribute a controlled substance, aiding and abetting. When Dallas Police Officers conducted a traffic stop on a vehicle in which Mendoza was a passenger, they found methamphetamine and heroin. While executing a search warrant on Mendoza’s home, law enforcement found heroin, methamphetamine, cocaine and three firearms within the apartment. In a similar search of a storage unit used by Mendoza, officers found methamphetamine, heroin, a shotgun, and the upper receiver of an assault rifle. Mendoza faces up to 20 years in federal custody. This case was investigated by the Drug Enforcement Administration and the Dallas Police Department and prosecuted by AUSA Linda Requenez.
GUILTY PLEA – ISIDRO AMAYA
On January 15, Isidro Amaya, 22, was sentenced to 7 years and 6 months in federal custody for possession with the intent to distribute methamphetamine and possession of a firearm by a convicted felon. A law enforcement officer stopped the car that Amaya was driving. When the officers conducted a Terry search, they located a firearm and two plastic baggies containing methamphetamine. Amaya admitted that the methamphetamine was for distribution and not personal consumption. He faces up to 8 years and 9 months in federal custody. This case was investigated by the Bureau of Alcohol, Firearms, Tobacco, and Explosives, and the Irving Police Department and was prosecuted by AUSA Danielle Jones.
SENTENCING – MICHAEL WRIGHT AND RICKEY CHERRY
On January 15, Michael Wright, 29, and Rickey Cherry, 29, were sentenced to 36 years and 25 years, respectively, in federal custody. They were sentenced on multiple counts of interference with commerce by robbery and brandishing a firearm during and in relation to a crime of violence. Wright was involved in an armed robbery of an AT&T retail store in Ennis, where he stole $30,000 of inventory. He was arrested after a dangerous, high-speed pursuit, but posted bond the following day. Only twenty days later, Wright and Cherry robbed a RadioShack at gunpoint, and then another AT&T store in a similar fashion. This case was investigated by the Federal Bureau of Investigation, the Ennis Police Department, the Duncanville Police Department, the Grand Prairie Police Department, and the Dallas Police Department and prosecuted by AUSA Keith Robinson, AUSA Brian McKay, and AUSA Gary Tromblay. Click here to read more about this case.
Minnesota Couple Sentenced to Prison for Long-Running Fraud SchemeRead the Press Release
Detloff Marketing and Asset Management Inc. (Detloff Marketing), a real estate company based in Hopkins, Minnesota; its owner, Jeffrey J. Detloff; and its accountant, Lori K. Detloff, were sentenced today in the U.S. District Court in St. Paul, Minnesota, for their participation in a long-running fraudulent bidding and kickback scheme in connection with foreclosed properties, the Department of Justice announced.
Jeffrey Detloff was sentenced to 16 months’ imprisonment and two years of supervised release. Lori Detloff was sentenced to seven months’ imprisonment and one year of supervised release. Detloff Marketing was sentenced to a pay a $593,000 criminal fine. The defendants were also sentenced to pay full restitution to the victims of the scheme.
“Today’s sentences reflect the significant harm caused by the defendants’ years long scheme that lined their pockets by defrauding lenders and undermining competition,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “The Antitrust Division and its partners are committed to rooting out anticompetitive conduct, whatever its form, and holding companies and executives accountable.”
“The defendants created a scheme to squeeze as much money as they could from these properties with no regard for the victim,” said FBI Special Agent in Charge Jill Sanborn of the Minneapolis Division. “These scams victimize a large number of people and the FBI along with our law enforcement partners will continue to work these schemes and hold accountable those responsible for defrauding the system.”
According to court documents, from September 2007 and continuing until June 2015, Jeffrey Detloff, of Minnetonka, Minnesota, conspired to defraud mortgage lenders and guarantors who had hired Detloff, a realtor, to oversee maintenance and repairs on foreclosed homes in the Minneapolis-St. Paul area. Jeffrey Detloff steered maintenance and repair contracts to contractors who would pay a kickback to Detloff Marketing. Unbeknownst to his customers, Jeffrey Detloff and Detloff Marketing included the kickbacks within bids and invoices sent to the lender or guarantor for reimbursement on maintenance and repairs. Lori Detloff, also of Minnetonka, Minnesota, was an accountant responsible for ensuring the kickbacks were paid by contractors to Detloff Marketing. In all, Detloff Marketing received over $291,505 in kickbacks.
Detloff Marketing and Jeffery Detloff pleaded guilty to Count 1 of the Indictment, which charged a conspiracy to commit mail and wire fraud affecting a financial institution. Lori Detloff pleaded guilty to aiding and abetting the principal offense described in Count 4 of the indictment, mail fraud affecting a financial institution. As part of their plea agreements, the Antitrust Division agreed to move to dismiss the remaining counts against Detloff Marketing, Jeffery Detloff, and Lori Detloff upon sentencing.
The underlying investigation of housing repair contracts in the Minneapolis area is being conducted by the Antitrust Division’s Chicago Office and the FBI’s Minneapolis Division. Anyone with information on customer allocation, bid rigging, price fixing, or other anticompetitive conduct related to the real estate industry in Minnesota should contact the Antitrust Division’s Chicago Office at 312-984-7200 or visit www.justice.gov/atr/contact/newcase.html.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Member of Navajo Nation pleads guilty to federal charges of assaulting two victims in Indian Country causing serious bodily injuryRead the Press Release
ALBUQUERQUE, N.M. – Matthew Ramone, 32, of Thoreau, New Mexico pleaded guilty in federal court in Albuquerque today to two charges of assault resulting in serious bodily injury.
In Ramone’s plea agreement, he admitted to committing the offenses on the Navajo Nation in McKinley County on Oct. 16, 2019. The assault began when Ramone struck one victim in the head with a three-foot metal bar. When the second victim tried to stop the attack, Ramone hit the second victim with the metal bar two or three times. Both victims suffered serious bodily injury. Ramone is an enrolled member of the Navajo Nation.
Ramone is currently in custody pending sentencing. Under the plea agreement, he faces up to 20 years in prison.
The Gallup office of the FBI investigated this case with the the Crownpoint office of the Navajo Nation Division of Public Safety. Assistant U.S. Attorney Allison Jaros is prosecuting the case.
Member of Large Drug Trafficking Operation Sentenced to Federal Prison for Drug TraffickingRead the Press Release
United States Attorney Brandon J. Fremin announced today the sentencing of Byron A. Lawson, age 40, of Baton Rouge, Louisiana, as part of Operation Hidden Fee, an extensive federal, state, and local investigation by the Middle District Organized Crime and Drug Enforcement Task Force (OCDETF) aimed at a drug trafficking network based and operating in Baton Rouge.
Chief Judge Shelly D. Dick sentenced Lawson to 125 months in federal prison following his convictions of conspiracy to distribute and to possess with the intent to distribute heroin, methamphetamine, and cocaine base; distribution of methamphetamine and crack cocaine; and unlawful use of a communications facility. Lawson must also serve five years of supervised release following his term of imprisonment.
According to admissions Lawson made as part of his guilty plea, in 2017, the Drug Enforcement Administration and East Baton Rouge Parish Sheriff’s Office were investigating the drug trafficking activities of James C. Hull. During this investigation, they learned that Lawson was one of Hull’s suppliers of methamphetamine. Investigators gathered information that, on the average, Lawson supplied Hull, four to six ounces of methamphetamine on a weekly basis. Law enforcement agents also identified Michael Nelson, another customer, who received ounce amounts of methamphetamine from Lawson. During this investigation, agents identified Travis James as a source of cocaine and crack cocaine for Lawson. In one instance, James supplied Lawson over 500 grams of cocaine, which Lawson distributed later to two customers from Mississippi.
Nelson has pending methamphetamine and cocaine trafficking charges in the Middle District of Louisiana. Trial has not yet been set. A grand jury indicted Travis James for various cocaine and heroin related violations and his trial is set in April 2020.
U.S. Attorney Fremin stated, “Stopping organized drug dealers who spread their poison throughout our community is among the highest priorities of this office and the United States Department of Justice. Convictions and jail sentences such as this are made possible through the dedicated teamwork of our federal, state, and local partners. I want to thank them all for their efforts in this case.”
"With this conviction and sentencing, DEA and its federal, state, and local law enforcement partners have taken down a member of a drug trafficking organization responsible for distributing large quantities of methamphetamine, heroin, and cocaine in the Middle District of Louisiana. These illegal dangerous drugs are destructive poisons that threaten the health and safety of our communities. We will continue to work together to target criminal organizations to ensure that drug traffickers are held responsible for the harm they cause," said DEA Assistant Special Agent in Charge Michael R. Sader.
“The East Baton Rouge Sheriff’s Office is grateful for the U.S. Attorney’s commitment to prosecuting these cases on the federal level,” Sheriff Sid Gautreaux said. “We will continue to dedicate our personnel and resources to initiatives that ensure the safety of our community.”
The investigation is yet another effort by the Organized Crime Drug Enforcement Task Force (OCDETF) Program, which was established in 1982 to mount a comprehensive attack against organized drug traffickers. Today, the OCDETF Program is the centerpiece of the United States Attorney General’s drug strategy to reduce the availability of drugs by disrupting and dismantling major drug trafficking organizations and money laundering organizations and related criminal enterprises. The OCDETF Program operates nationwide and combines the resources and unique expertise of numerous federal, state, and local agencies in a coordinated attack against major drug trafficking and money laundering organizations.
This investigation was led by the Drug Enforcement Administration with invaluable assistance from the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), the East Baton Rouge Parish Sheriff’s Office, the Baton Rouge City Police Department, and the Louisiana State Police. Other agencies also assisted in apprehending the defendants, including the U.S. Marshal’s Service, and the Sheriffs’ Offices in Ascension, Iberville, and West Baton Rouge Parishes.
These cases were being prosecuted by Assistant U.S. Attorneys Robert Piedrahita and Lyman E. Thornton III, and former Assistant U.S. Attorney Cal Leipold.
Medical Doctor Settles Civil Fraud Allegations in Adult Homes InvestigationRead the Press Release
Dr. Rajendra Bhayani, an otolaryngologist, has agreed to pay the United States $1,109,000 to resolve civil allegations that he and his practice – New York Otolaryngology & Aesthetic Surgery, P.C. in Brooklyn and Queens – paid kickbacks and submitted false claims to federal healthcare programs for services provided to residents in adult homes in violation of the False Claims Act.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the settlement.
“The disabled and elderly residents of adult homes are among the most vulnerable members of our society, and doctors who treat these residents as commodities by paying kickbacks so they can administer medically unnecessary services at taxpayer expense will be held accountable by this Office,” stated United States Attorney Donoghue. Mr. Donoghue expressed his grateful appreciation to the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), for their assistance with the case.
“Elderly citizens without the means to care for themselves should be given the best treatment possible by everyone involved in their care. Exposing them to unnecessary medical testing and services because they’re deemed an easy target is disgraceful behavior,” stated FBI Assistant Director-in-Charge Sweeney. “Putting one’s self interests above the welfare of others isn’t the way to do business, and in this case it came with a hefty penalty.”
Adult homes are privately owned residential facilities licensed by the State of New York to provide long-term care and supervision to adults with disabilities or mental illnesses. An investigation by the FBI revealed that from 2012 through 2016, Bhayani allegedly paid cash tips, excessive rent and other improper remuneration to medical management companies in adult homes in the Eastern District of New York to obtain exclusive access to bill for allergy testing and other medical services to residents in violation of the Anti-Kickback Statute. Bhayani then obtained payment for these services from Medicare and the Federal Employees’ Health Benefits Program, although the services were actually performed by his nurse practitioner, and some of the services performed were medically unnecessary.
HHS-OIG has concurrently entered into an Integrity Agreement with Bhayani and New York Otolaryngology & Aesthetic Surgery, P.C. Among other things, the Integrity Agreement requires compliance training that specifically addresses the Anti-Kickback Statute and a quarterly claims review to be conducted by an Independent Review Organization.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
The government’s case is being handled by Assistant United States Attorney Lisa Kutlin of the Office’s Civil Division.
Maryland man admits to firearms and drug violationsRead the Press Release
CLARKSBURG, WEST VIRGINIA – Steven Somers, of Clinton, Maryland, has admitted to drug and firearms charges, U.S. Attorney Bill Powell announced.
Somers, age 25, pled guilty to one count of “Unlawful Possession of a Firearm as Drug User” and one count of “Possession with Intent to Distribute Marijuana.” Somers admitted having marijuana in July 2019 in Monongalia County, and admitted to illegally having a 5.7x28mm caliber pistol in June 2018 in Lewis County.
Somers faces up to 10 years incarceration and a fine of up to $250,000 for the firearms count and faces up to 10 years incarceration and a fine of up to $500,000 for the drug count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Traci M. Cook is prosecuting the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Martin County Man Sentenced to 30 Years in Prison for Producing Videos of Child Sexual ExploitationRead the Press Release
U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, and Sheriff William D. Snyder of the Martin County Sheriff’s Office announced that Torrie Chermaine Austin, 35, of Stuart, Florida, was sentenced today to 360 months in prison and a lifetime of supervised release by U.S. District Judge Robin L. Rosenberg in Ft Pierce, Florida after previously pleading guilty to producing visual depictions of the sexual exploitation of a minor.
According the court documents, between April and Nov. 2018, Austin produced video recordings of his sexual exploitation and abuse of an 11 year old child.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, 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 the Project Safe Childhood initiative and for information regarding Internet safety, please visit www.justice.gov/psc.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI and Martin County Sheriff’s Office in this matter. The case was prosecuted by Assistant U.S. Attorney Carmen M. Lineberger.
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 at http://pacer.flsd.uscourts.gov.
Marshall County man sentenced to more than 12 years for drug chargeRead the Press Release
WHEELING, WEST VIRGINIA – Joshua R. Sipe, of Moundsville, West Virginia, was sentenced today to 147 months incarceration for distributing cocaine, U.S. Attorney Bill Powell announced.
Sipe, age 31, pled guilty to one count of “Possession with Intent to Distribute Cocaine” in October 2019. Sipe admitted to having cocaine in March 2019 in Marshall County.
Assistant U.S. Attorney Robert H. McWilliams, Jr. prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Marshall County Drug & Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
U.S. District Judge John Preston Bailey presided.
Man Sentenced for Threatening to Kill Employees and Residents of a Veterans NonprofitRead the Press Release
ALBANY, NEW YORK – Fred Hood, a/k/a “Taylor Taylor,” age 57, was sentenced today to time served (about 10.5 months in jail) for threatening to kill employees and residents of a Massachusetts veterans services program.
The announcement was made by United States Attorney Grant C. Jaquith and Chief Thomas Gibbons of the U.S. Department of Veterans Affairs Police in Albany.
As part of his guilty plea on September 20, 2019, Hood admitted that he sent multiple electronic messages from a VA facility in Albany to individuals at a nonprofit veterans services organization, threatening to commit a shooting attack at the organization’s residence on the campus of the Northampton VA Medical Center in Leeds, Massachusetts.
United States District Judge Mae A. D’Agostino sentenced Hood – who has been in custody since March 2, 2019 – to time-served and to a 3-year term of post-imprisonment supervised release.
This case was investigated by the VA Police with assistance from the Federal Bureau of Investigation, and was prosecuted by Assistant U.S. Attorney Joshua R. Rosenthal.
Las Vegas Tax Preparer Pleads Guilty to Filing False Tax ReturnsRead the Press Release
LAS VEGAS, Nev. – Martha L. Williams, 42, of Las Vegas, pleaded guilty today to two counts of aiding and assisting in the preparation and filing of a false tax return, announced U.S. Attorney Nicholas A. Trutanich for the District of Nevada.
According to court documents, Williams owns and operates MJW and Associated (formerly known as Across the Board Management), a tax preparation business in Las Vegas. Between 2009 and 2014, Williams prepared thousands of tax returns on behalf of clients of MJW and Associates. For more than 75% of her clients, Williams prepared a false tax return that inflated the taxpayer’s refund by including fictitious deductions related to businesses that did not actually exist. To make these businesses appear legitimate, Williams used the IRS’s website to apply for and receive Employer Identification Numbers for fictitious businesses. As a result of these fictitious tax returns, Williams caused at least $529,782 in tax loss by filing false returns on behalf of her clients.
This case was the product of an investigation by the IRS-Criminal Investigation. Assistant U.S. Attorney Jared Grimmer is prosecuting the case.
Williams is scheduled to be sentenced by U.S. District Judge Larry R. Hicks on May 13, 2020. Williams faces a maximum statutory penalty of three years in prison on each count, and a $250,000 fine, or twice the gross gain or gross loss resulting from the offenses, whichever is greatest. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
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Justice Department, EPA and State of Colorado Announce Settlement with K.P. Kauffman Co. to Reduce Emissions from Oil and Gas Operations by More Than 500 Tons per YearRead the Press Release
The Justice Department, the U.S. Environmental Protection Agency (EPA) and the state of Colorado today announced a settlement with Denver-based K.P. Kauffman Company Inc. (KPK) resolving alleged violations of the federal Clean Air Act and Colorado air quality regulations. The settlement, set forth in a consent decree lodged with the U.S. District Court for the District of Colorado, requires KPK to implement pollution control measures at 67 well production facilities – for a total estimated expenditure of $2.5 million. The company will also pay a $1 million civil penalty.
Today’s settlement resolves allegations made in an Oct. 5, 2018, complaint that KPK violated requirements to minimize volatile organic compound (VOC) emissions from its oil and natural gas production operations in the Denver-Julesburg Basin. VOCs are a key component in the formation of ground-level ozone, a pollutant that irritates the lungs, exacerbates diseases such as asthma, and can increase susceptibility to respiratory illnesses, such as pneumonia and bronchitis.
The well production facilities covered by this settlement are in an area that does not meet National Ambient Air Quality Standards established under the Clean Air Act for ground-level ozone: the Denver Metro/Northern Front Range ozone nonattainment area. Today’s action will contribute to the improvement of air quality in communities across the Front Range by reducing the emissions of VOCs that lead to the formation of ground-level ozone.
“Oil and gas production fuels our economy, but it must be done responsibly,” said Jeffrey Bossert Clark, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “We will continue to take action where operators fail to comply with our nation’s clean air laws.”
“This is the fourth joint settlement EPA has completed with the State of Colorado to secure compliance and reduce emissions from storage tanks at oil and gas operations,” said EPA Regional Administrator Gregory Sopkin. “The EPA continues to enforce the Clean Air Act, and our partnership with the State continues to deliver cleaner, healthier air for Colorado’s communities.”
This settlement covers 67 KPK oil and gas production facilities in Colorado’s Denver-Julesburg Basin. As part of the agreement, KPK will implement measures to improve operation and maintenance practices and ensure the vapor control systems on its storage tanks are adequately designed and sized. These improvements, including monthly or quarterly inspections using infrared cameras and the installation of pressure monitors to detect and respond to excess emissions, are expected to reduce VOC emissions from KPK’s operations by approximately 424 tons per year.
KPK will also implement three environmental mitigation projects to further reduce VOC emissions. First, KPK will install rod lifts at 12 oil and gas wells to reduce or eliminate the need to unload the well – a procedure used to increase well production during which emissions are vented to the atmosphere. Second, KPK will use a Boreal Laser to scan for methane emissions at all well production facilities covered by the consent decree, and if necessary, will follow up with corrective actions to address the emissions. Third, KPK will implement operation and maintenance requirements, including increased inspections, at four production facilities not covered by air pollution regulations due to their small size. KPK estimates that these mitigation projects will reduce VOC emissions by an additional 131 tons per year.
The settlement also requires KPK to pay the United States and the state of Colorado a $1 million civil penalty, split evenly between the governments.
Today’s action is based on inspections of KPK operations conducted from 2013 to 2018 by EPA and the Colorado Department of Public Health and Environment, which found VOC emissions from many of KPK’s storage tanks. Through these inspections and information requests, EPA and the state of Colorado identified alleged violations of Colorado’s Regulation Number 7, including undersized vapor control systems and inadequate operation and maintenance practices. These alleged violations include federally enforceable requirements of Colorado’s State Implementation Plan to improve air quality in the Denver Metro/Northern Front Range non-attainment area.
This settlement represents the latest in a series of EPA and state actions to secure compliance and reduce emissions from oil and gas sources in the nonattainment area, including recent settlements with Noble Energy Inc. (2015), PDC Energy Inc. (2017), and HighPoint Operating Co. (2019). With today’s action, a total of 3,141 well production facilities in the area are now subject to compliance requirements mandated by joint federal/state consent decrees. In addition, when combined with state-issued compliance orders, 93 percent of production facilities with condensate storage tanks in the Denver ozone nonattainment area are currently subject to enhanced design or maintenance requirements, or both.
The consent decree, lodged in the U.S. District Court for the District of Colorado, is subject to a 30-day public comment period and final court approval. The consent decree will be available for viewing at: https://www.justice.gov/enrd/consent-decrees.
For more information about the settlement, visit https://www.epa.gov/enforcement/kp-kauffman-company-settlement.
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.
Jackson County Man Sentenced to 130 Months for Possession of a Firearm in Furtherance of Drug TraffickingRead the Press Release
LONDON, Ky.- A Gray Hawk, Kentucky, man, Mitchell Peters, 36, who previously admitted to possessing methamphetamine with the intent to distribute and possession of a firearm in furtherance of drug trafficking, was sentenced to 130 months on Tuesday by U.S. District Court Judge Robert E. Wier.
According to his plea agreement, Peters admitted that on April 6, 2018, he was stopped by Kentucky State Police personnel in Jackson County, and found in possession of approximately 100 grams of a methamphetamine mixture, scales, baggies, and a loaded .380 caliber pistol. Peters is a convicted felon and was prohibited from possessing a firearm.
Peters pleaded guilty in September 2019.
Under federal law, Peters must serve 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for five years.
“Methamphetamine trafficking and firearms are a recipe for violence,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “Prosecuting armed methamphetamine dealers, like the defendant, helps protect the public and is a focused priority for our Office.”
United States Attorney Duncan; Commissioner Rodney Brewer, Kentucky State Police; and Tommy Estevan, Acting Special Agent in Charge for ATF, jointly announced the sentence.
The investigation was conducted by ATF and Kentucky State Police. The U.S. Attorney’s Office was represented by Assistant U.S. Attorney Jason Parman.
This is another case prosecuted as part of the Department of Justice’s “Project Safe Neighborhoods” Program (PSN), which is a nationwide, crime reduction strategy aimed at decreasing violent crime in communities. It involves a comprehensive approach to public safety — one that includes investigating and prosecuting crimes, along with prevention and reentry efforts. In the Eastern District of Kentucky, U.S. Attorney Robert Duncan Jr., coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. Click here for more information about Project Guardian.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
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Irwin Man Pleads Guilty to Cocaine Conspiracy ChargeRead the Press Release
PITTSBURGH, PA- A resident of Irwin, Pennsylvania pleaded guilty in federal court to a charge of drug trafficking, United States Attorney Scott W. Brady announced today.
Bernard Wilkins, 57, pleaded guilty to one count of conspiracy to distribute and possess with the intent to distribute cocaine before United States District Judge Arthur J. Schwab.
In connection with the guilty plea, the court was advised that the Greater Pittsburgh Safe Streets Task Force conducted a long-term investigation of drug trafficking occurring in and around the Braddock section of Pittsburgh, PA. In January of 2019, investigators obtained authorization to conduct a federal wiretap investigation, which continued through May of 2019. Intercepted communications confirmed that Wilkins obtained distributor quantities of cocaine from another member of the conspiracy. In addition to intercepted communications, the Court was further informed that Wilkins was observed at a stash house located on Seddon Avenue in Braddock, PA, which was used by members of the conspiracy to facilitate their drug-trafficking activity, by law enforcement conducting surveillance. In conjunction with his guilty plea, Wilkins accepted responsibility for the distribution of at least 50 but less than 100 grams of cocaine.
Judge Schwab scheduled sentencing for July 28, 2020 at 9:00 a.m. The law provides for a total sentence of not more than 20 years in prison, a fine of not more than $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant. Wilkins remains on bond pending sentencing.
Assistant United States Attorney Rebecca L. Silinski is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation led the multi-agency investigation of this case, which also included the Drug Enforcement Administration, Bureau of Alcohol Tobacco Firearms and Explosives, United States Marshals Fugitive Task Force, Allegheny County Sheriff’s Office, Allegheny County Police Department, Pennsylvania State Police, Pennsylvania Attorney General’s Office Bureau of Narcotics, and the Pittsburgh Bureau of Police. Other assisting agencies include the Monroeville Police Department, Penn Hills Police Department, Wilkinsburg Police Department, and Allegheny County Adult Probation.
The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
Indiana Man Sentenced to 51 Months in Prison for Defrauding Former Owners of Duluth-Based Trucking CompanyRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of DOUGLAS RAY THOMAS, 49, to 51 months in prison for perpetrating a fraud scheme against a Duluth-based trucking company. THOMAS, who pleaded guilty to one count of wire fraud and one count of failing to account for and pay over employment taxes on May 17, 2019, was sentenced on January 17, 2020, before Joan N. Ericksen in U.S. District Court in Minneapolis, Minnesota.
According to the defendant’s guilty plea and documents filed in court, from September 2013 through June 2014, THOMAS devised and executed a fraud scheme to gain control over the assets and revenue of Northwoods Trucking, Inc., a transportation company located in Duluth, Minnesota. On October 18, 2013, THOMAS and the former owners of Northwoods Trucking entered into a stock purchase agreement in which THOMAS agreed to purchase all outstanding shares of the company for $730,000. As part of the agreement, THOMAS agreed to make an initial payment within five days of closing. Despite failing to make the initial payment, as well as subsequent payments pursuant to the purchase agreement, THOMAS assumed control of the company in December of 2013 and, shortly thereafter, began transferring Northwoods Trucking’s business revenue into a bank account that THOMAS alone controlled.
According to the defendant’s guilty plea and documents filed in court, while he owned and operated the company, THOMAS repeatedly failed to pay many of the company’s liabilities, including fuel and insurance for the company’s trucks, payroll to employees and employment taxes due to the Internal Revenue Service (IRS). Instead, THOMAS used a significant portion of Northwoods Trucking’s business revenue to pay personal expenses and debts, including housing, furniture and a family vacation. The total loss caused by THOMAS’s fraud scheme is approximately $730,000, in addition to $57,792.13 in employment taxes that he failed to pay to the IRS.
This case was the result of an investigation conducted by the FBI and the Internal Revenue Service-Criminal Investigation Division.
Assistant U.S. Attorney Michelle E. Jones and former Assistant U.S. Attorney John Kokkinen prosecuted the case.
Defendant Information:
DOUGLAS RAY THOMAS, 49
Bloomington, Ind.
Convicted:
- Wire fraud, 1 count
- Failure to account for and pay over employment taxes, 1 count
Sentenced:
- 51 months in prison
- Two years of supervised release
- $692,457.13 in restitution
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Huntington Man Sentenced to Prison for Role in Federal Drug ConspiracyRead the Press Release
HUNTINGTON, W.Va. – A Huntington man was sentenced to prison for his role in a federal drug conspiracy, announced United States Attorney Mike Stuart. Tremayne Swanson, 28, was sentenced to 21 months in prison for conspiracy to distribute heroin and fentanyl.
“Another peddler of deadly heroin and fentanyl is headed to federal prison,” said United States Attorney Mike Stuart. “It was the fine work of law enforcement that put Swanson and his co-conspirators out of business. Our partnerships among federal, state and local law enforcement have never been stronger. Our intentional collaboration has resulted in tremendous success in our offensive against drug dealers and drug thugs.”
Swanson previously admitted that between December 2018 and May 2019 he sold heroin for George Lockhart in Huntington, West Virginia.
Operation Free Market was a long-term drug investigation in the Huntington area. The investigation was the result of a joint effort by the Drug Enforcement Administration and the Violent Crime and Drug Task Force West.
United States District Judge Robert C. Chambers imposed the sentence. Assistant United States Attorney Stephanie S. Taylor handled the prosecution.
This case is being prosecuted as part of Operation Synthetic Opioid Surge (S.O.S.), an enforcement surge that seeks to reduce the supply of deadly synthetic opioids in high impact areas.
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Huntington Man Sentenced for Illegally Accessing Veterans' RecordsRead the Press Release
HUNTINGTON, W.Va. – A Huntington man was sentenced to six months in prison for illegally accessing the medical records of six veterans, announced United States Attorney Mike Stuart. Jeffrey Miller, 40, a former Veterans Benefits Administration employee, was also sentenced to one year of supervised release.
“We must protect our veterans. Miller used his position with the Veterans Benefits Administration to illegally access the medical records of veterans,” said United States Attorney Mike Stuart. “Medical records are protected information and veterans have an expectation and right of privacy. We will prosecute anyone who violates our veterans.”
Miller previously admitted that he illegally accessed the medical records of six veterans between January and May of 2018. Miller further admitted that he took a picture of the medical records of former West Virginia State Senator Richard Ojeda, and then sent the picture to an acquaintance.
The Department of Veterans Affairs – Officer of the Inspector General and the Federal Bureau of Investigation (FBI) conducted the investigation. United States District Judge Robert C. Chambers presided over the hearing. Assistant United States Attorney Stefan Hasselblad handled the prosecution.
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Honolulu man charged with robberies, use of firearm during robbery, and carjackingRead the Press Release
HONOLULU, Hawaii – Kenji M. Price, U.S. Attorney for the District of Hawaii, announced that Moahengi Pakileata, 19, of Honolulu, Hawaii, made his initial appearance in federal court today after a criminal complaint filed on Friday, January 17, 2020, charged him with two robberies that interfered with commerce, the use a firearm during of one of the robberies, and a carjacking. A federal magistrate judge ordered him detained pending a detention hearing on January 24.
According to the criminal complaint, Pakileata and a second unidentified male robbed a 7-Eleven convenience store at gunpoint on August 11, 2019, and Pakileata robbed a second 7-Eleven convenience store on January 12, 2020. The criminal complaint further alleges that in the evening after the second robbery, on January 13, 2020, Pakileata committed a carjacking. As alleged, Pakileata, while wearing a security guard uniform, brandished a knife to take the vehicle of a student at the University of Hawaii at Manoa.
The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty. The robbery and carjacking charges carry maximum terms of 20 and 15 years imprisonment, respectively, and maximum fines of $250,000 each. The firearm charge carries a seven-year mandatory minimum term of imprisonment, which must run consecutively to any other sentence imposed.
The case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Honolulu Police Department (HPD). Assistant U.S. Attorney Sean Van Demark is handling the prosecution.
This prosecution is part of Project Safe Neighborhoods (PSN), a program that brings together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the ATF when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. The United States Attorney’s Office has prosecuted this case with support from the following Project Guardian partners: the ATF, the HPD, and the City and County of Honolulu Department of the Prosecuting Attorney. For more information about Project Guardian, please see https://www.justice.gov/opa/pr/attorney-general-william-p-barr-announces-launch-project-guardian-nationwide-strategic-plan
Gwynn Oak Man Sentenced to over Seven Years in Federal Prison for Stealing Firearms from a Halethorpe Federal Firearms LicenseeRead the Press Release
Baltimore, Maryland – U.S. District Judge Deborah K. Chasanow today sentenced Byron Keith Goines, age 25, of Gwynn Oak, Maryland, to 90 months in federal prison, followed by three years of supervised release, for the federal charge of theft of firearms from a federal firearms licensee’s inventory, in connection with the burglary of a Halethorpe, Maryland gun dealer on January 21, 2019.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Acting Special Agent in Charge Toni Crosby of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; and Chief Melissa R. Hyatt of the Baltimore County Police Department.
According to his guilty plea, on January 21, 2019, at 1:08 a.m., Baltimore County police officers were dispatched to a licensed gun dealer, located on Hollins Ferry Road in Halethorpe, in response to a break-in. When the officers arrived, they found a hole in the roof leading into the vault where the guns were stored. Surveillance footage indicated that the suspect, later identified as Byron Keith Goines, had used a saw to cut a hole in the roof before dropping into the vault. The suspect then filled a white trash bag with firearms. After several failed attempts to remove the trash bag of guns from the vault, the suspect exited through the roof carrying several guns on his person. When police arrived, a total of six guns had been removed from the vault, littered on the ground behind the store.
Immediately after the theft, responding officers saw Goines fleeing in the direction of and then hiding inside a nearby warehouse; Goines’ flight was also captured on surveillance video footage. K9 officers similarly traced a human smell from the direction of the firearms dealer to the warehouse. Officers eventually entered the warehouse and found Goines inside. The next day, warehouse employees found two soiled sweatshirts, a soiled pair of pants, and a crowbar in the area where Goines had been hiding.
Although Goines had successfully disabled one of the firearms dealer’s rear cameras, the neighboring business’s cameras and the cameras inside the vault were still operable. The footage shows that the shoes worn by the suspect were distinctive high-top Air Jordans. Those sneakers match the sneakers worn by Goines when he was caught several hours later. Surveillance video footage captured an individual bearing a tattoo on his wrist attempting to cut the surveillance camera’s wires. That tattoo also matched a tattoo on Goines’ wrist. Officers also recovered trash bags that matched those used by Goines in the robbery in the back of the vehicle used to transport Goines to the police station, as well as in the U-Haul that he used that was parked near the firearms dealer.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
United States Attorney Robert K. Hur commended the ATF and the Baltimore County Police Department for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorney Michael A. Goldsticker, who prosecuted the case.
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Fourth Foundation Resolves Allegations that it Conspired with Pharmaceutical Companies to Pay Kickbacks to Medicare PatientsRead the Press Release
BOSTON – The U.S. Attorney’s Office announced today that Patient Services, Inc. (“PSI”), a foundation based in Midlothian, Va., has agreed to pay $3 million to resolve allegations that it violated the False Claims Act by enabling certain pharmaceutical companies to pay kickbacks to Medicare patients taking the companies’ drugs.
The government alleged that PSI worked with various pharmaceutical companies to design and operate certain funds that funneled money from the companies to patients taking the specific drugs the companies sold. These schemes enabled the pharmaceutical companies to ensure that Medicare patients did not consider the high costs that the companies charged for their drugs. The schemes also minimized the possibility that the companies’ money would go to patients who were not taking the companies’ 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. The law further prohibits third parties, such as co-pay foundations, from conspiring with pharmaceutical companies to violate the Anti-Kickback Statute.
“Pharmaceutical companies cannot use foundations to funnel drug co-payments disguised as routine charitable donations, all to prop up excessive drug prices. PSI allegedly operated as a vehicle for specific pharmaceutical companies essentially to pay kickbacks at the ultimate expense of the American taxpayers who support the Medicare program,” said United States Attorney Andrew E. Lelling. “We will continue to pursue this kind of enforcement until the practice disappears.”
“The Department is committed to ensuring that foundations are not used as mere conduits to funnel kickbacks from pharmaceutical companies to Medicare patients and to increase company profits while avoiding an important cost-control aspect of the Medicare program,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “We will continue to combat unlawful kickback arrangements and their pernicious influence on our health care system.”
“Few things undermine public confidence quite like finding out the pharmaceutical companies and non-profits they entrust with their health and financial peace of mind have been playing fast and loose with the law. Schemes like these, and the individuals and organizations who perpetrate them, are an affliction on our health care systems,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “This settlement demonstrates the FBI’s resolve to ensure that patients receive care that is based solely on sound medical judgment, and not compromised by kickbacks.”
“Foundations operating patient assistance programs should operate with integrity and act independently from their donors,” said Gregory E. Demske, Chief Counsel to the Inspector General. “Our Integrity Agreement is designed to promote such independence and monitor the foundation to reduce the risk of future kickbacks.”
The United States alleged that PSI conspired with three pharmaceutical manufacturers – Insys, Aegerion, and Alexion – to enable them to pay kickbacks to Medicare patients taking their drugs. Details of the alleged conduct can be found in attached addendum.
The amount of the settlement announced today was determined based on analysis of PSI’s ability to pay after review of its financial condition.
PSI entered a three-year Integrity Agreement (IA) with HHS-OIG as part of the settlement. The IA requires, among other things, that PSI implement measures designed to ensure that it operates independently and that its arrangements and interactions with pharmaceutical manufacturer donors are compliant with the law. In addition, the IA requires compliance-related certifications from PSI's Board of Directors and detailed reviews by an independent review organization.
PSI is the fourth foundation to settle allegations of kickbacks. In total, the four foundations (PSI, The Assistance Fund, Chronic Disease Fund, and Patient Access Network Foundation) have paid $13 million. In addition, the U.S. Attorney’s Office has collected more than $840 million in total from eight pharmaceutical companies (United Therapeutics, Pfizer, Actelion, Jazz, Lundbeck, Alexion, Astellas and Amgen) to resolve allegations that they used third-party foundations as instruments for kickbacks.
U.S. Attorney Lelling, HHS-OIG Chief Counsel Demske and FBI 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. Attorney Gregg Shapiro, of Lelling’s Affirmative Civil Enforcement Unit, and Trial Attorneys Sarah Arni and Augustine Ripa, of the Department of Justice’s Civil Division.
ADDENDUM
PSI’s Breakthrough Cancer Pain Fund. In late 2013, PSI and Insys began discussing a potential copayment assistance fund for Subsys, a sublingual form of fentanyl, a powerful opioid painkiller. Subsys was approved for the treatment of breakthrough cancer pain in opioid-tolerant patients. PSI worked with Insys to create a budget for the “Breakthrough Cancer Pain” fund. Insys was the only donor to the fund. PSI provided Insys, through the Insys Reimbursement Center, with access to a “referral portal,” where Insys could see the status of each patient that it referred to PSI, including whether that patient had received copay assistance from PSI and the amount of the assistance. PSI did not provide access to the referral portal to other manufacturers of fentanyl products that did not donate to the fund. PSI knew that Insys was referring patients to the Breakthrough Cancer Pain fund who did not have cancer, but PSI stated that it would only prevent “off-label use…if the Donor wants us to.” PSI provided Insys with monthly “invoices” to cover the patients who had received assistance from PSI. PSI worked to avoid covering patients taking fentanyl products other than Subsys, noting that PSI “cannot allow them to deplete funds from INSYS.”
PSI’s HoFH Fund. Aegerion sold Juxtapid, which is approved to treat patients with homozygous familial hypercholesterolemia (“HoFH”). In 2013, at Aegerion’s request, PSI created a fund, supported only by Aegerion donations, for HoFH. PSI represented to Aegerion that “it makes more sense to have industry provide a very small amount of funding [in the form of donations for copayment coverage] to gain a reimbursement vehicle rather than give compassionate product.” PSI’s HoFH fund allowed Aegerion to pay for Medicare patients’ copayments to eliminate any price sensitivity to physicians prescribing and patients taking Juxtapid. Aegerion participated in establishing the patient eligibility criteria that PSI used to cover the copayment obligations of patients taking Juxtapid.
PSI’s CMD Fund. Alexion sells Soliris, an intravenously administered complement inhibitor. From Jan. 1, 2010, through June 30, 2016, Soliris was indicated for the treatment of patients with paroxysmal nocturnal hemoglobinuria (“PNH”) to reduce hemolysis and for the treatment of patients with atypical hemolytic uremic syndrome (“aHUS”) to inhibit complement-mediated thrombotic microangiopathy. Alexion approached PSI in January 2010 to request that PSI create a fund to provide Soliris patients with financial assistance, such as coverage for Medicare copays for Soliris, health insurance premiums, infusion and nursing services, and travel expenses. Over the next several months, Alexion and PSI discussed the coverage parameters that Alexion desired for the fund, including Alexion’s desire that PSI “not support a patient with any of these diagnoses for other reasons tha[n] Soliris therapy.” PSI opened an orphan disease fund entitled Complement Mediated Diseases (“CMD”) to provide assistance to patients taking Soliris. Except in rare instances, PSI provided financial assistance from the CMD fund only if a patient was taking Soliris. PSI provided Alexion with access to PSI’s referral portal software, through which PSI reported information back to Alexion confirming the specific Soliris patients who were approved for copay or other financial assistance from PSI and through which PSI detailed payments to those patients.
Fort Thompson Man Charged with Carjacking, Assault with a Dangerous Weapon, and RobberyRead the Press Release
United States Attorney Ron Parsons announced that a Fort Thompson, South Dakota, man has been indicted by a federal grand jury for Carjacking, Assault with a Dangerous Weapon, and Robbery.
AbuBarker Shabbaz-Evans, a/k/a Abu Barker Evans, age 24, was indicted on January 14, 2020. He appeared before U.S. Magistrate Judge Mark A. Moreno on January 17, 2020, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 40 years in federal prison and/or a $750,000 fine, 3 years of supervised release, and $300 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on September 15, 2019, Shabbaz-Evans took a motor vehicle from an individual with the intent to cause death and serious bodily injury and further assaulted the victim with a metal object shaped like a pistol. The indictment further alleges that on January 1, 2020, Shabbaz-Evans attempted to take pre-paid gasoline and United States Currency from the presence of 2 individuals.
The charges are merely accusations and Shabbaz-Evans is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Shabbaz-Evans was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Former Vice President of Synergy Concepts Sentenced for Stealing FundsRead the Press Release
St. Louis, MO – Steven Walters, 52, of St. Peters, Missouri, was sentenced to six months in prison, 90 days of home confinement and three years of supervised release in prison for embezzling from an employee benefit plan. Walters appeared in federal court today before U.S. District Judge Rodney Sippel.
According to court documents, Walters began his employment with Synergy Concepts Inc. on or about August 2001. In 2014, Walters was the Vice-President and Secretary of Synergy Concepts Inc. Walters, on behalf of Synergy Concepts Inc., acted as the co-trustee for a company retirement plan that was funded from voluntary contributions by the employees. From May of 2015 through August 2016, Walters, as an officer of Synergy Concepts, Inc., failed to transfer withheld funds destined for the retirement plan and instead diverted the funds for other purposes, including his own personal use. Walters did knowingly embezzle, steal and unlawfully and willfully abstract and convert to his own use the money, funds, securities, premiums, properties and other assets of the employee pension plan that resulted in a total loss of $72,817.27.
“Prosecuting those who misuse funds from employee benefit plans is a vital aspect of this agency’s mission to protect the rights of America’s workers,” said Jim Purcell, Employee Benefits Security Administration (EBSA) Regional Director in Kansas City. “EBSA will continue to aggressively investigate such crimes on behalf of workers nationwide.”
“Steven Walters embezzled employee contributions and loan repayments from the Synergy Concepts Retirement Plan for his own personal use. We will continue to work with our law enforcement partners and the U.S. Department of Labor’s Employee Benefits Security Administration to protect the integrity of employee benefit plans,” stated Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.
The case was investigated by the Department of Labor, Office of Inspector General. Assistant U.S. Attorney Gwendolyn Carroll handled the case for the U.S. Attorney’s Office.