Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
27 January 2020
Federal Jury in San Antonio Convicts Two Relatives for Scheme to Steal Oil from Energy Companies Operating in the South Texas’ Eagle Ford ShaleRead the Press Release
In San Antonio this afternoon, a federal jury convicted 49–year-old Luis Valencia of San Antonio, and his nephew, 34-year-old Mauricio Valencia of San Antonio, for their scheme to steal oil from oil companies and oilfield service companies operating in the South Texas’ Eagle Ford Shale, announced U.S. Attorney John F. Bash and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
Jurors convicted Luis Valencia of ten counts of theft from interstate shipments, ten counts of wire fraud, ten counts of money laundering and four counts of transportation of stolen goods. Jurors convicted Mauricio Valencia of ten counts of theft from interstate shipments, one count of wire fraud and four counts of transportation of stolen goods. Evidence presented during trial revealed that from September 2013 through February 2016, the defendants engaged in a scheme with others to steal approximately 33,000 barrels of crude oil valued in excess of $1.8 million. In 2013, Luis Valencia and others began using Houston-based Andra Energy, LLC, to serve as a collection point in Cotulla, TX, for oil stolen from nearby oil storage facilities. To conceal their criminal actions, the defendants filed false documents with the Texas Railroad Commission to make it appear that the stolen oil was derived from legitimate transactions.
Following the verdict, Senior U.S. District Judge Royce Lamberth remanded both defendants to the custody of the U.S. Marshals Service. Theft of interstate shipment calls for up to ten years in federal prison. Wire fraud calls for up to 20 years in federal prison. Money laundering calls for up to ten years in federal prison. Transportation of stolen goods call for up to ten years in federal prison. Sentencing has yet to be scheduled.
The FBI, IRS-Criminal Investigation and Texas Attorney General’s Office investigated this case. Assistant U.S. Attorney William F. Lewis, Jr., is prosecuting this case on behalf of the government.
#####
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150YearsFederal Court Permanently Shuts Down Georgia Tax Return PreparersRead the Press Release
A federal court in Columbus, Georgia, permanently barred Stacy Lee and Heather Lee from preparing tax returns for others and from owning, operating, or franchising a tax return preparation business, the Justice Department announced today. The court also ordered Stacy Lee and Heather Lee to close their tax return preparation stores. Stacy Lee and Heather Lee consented to the relief.
According to the complaint, Stacy Lee operated two tax return preparation stores under the names Fast Track Tax Service in Talbotton, Georgia, and TimeLee Tax Service in Columbus, Georgia. Stacy Lee’s daughter, Heather Lee, allegedly prepared tax returns at the two stores as well. From 2013 to 2018, Stacy Lee prepared 3,728 tax returns and Heather Lee prepared 1,116 tax returns, the complaint alleges.
The government further claimed that Stacy and Heather Lee prepared false federal income tax returns, understated federal income tax liabilities, and improperly claimed tax credits in order to obtain inflated tax refunds for customers. In particular, according to the complaint, the defendants fabricated deductions for charitable contributions, unreimbursed employee business expenses, and medical expenses; reported profits and losses for fictitious businesses; and claimed false education credits, energy credits, and childcare credits.
“The Tax Division will work with its IRS partners to shut down return preparers who claim improper or illegal deductions and credits for their clients,” said Principal Deputy Assistant Attorney General Zuckerman. “Taxpayers should be vigilant so they do not file tax returns claiming false deductions.”
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams. The IRS has information on its website for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Fairfield Man Indicted for Bank Fraud and Aggravated Identity TheftRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a 10-count indictment against Reginald Lamont Thomas, 44, of Fairfield, charging him with bank fraud and aggravated identity theft, U.S. Attorney McGregor W. Scott announced.
According to court documents, Thomas used a victim’s personally identifiable information to take over the victim’s checking and savings account and make various unauthorized transactions, including incurring $112,874 in debit card charges.
This case is the product of an investigation by the U.S. Postal Inspection Service. Assistant U.S. Attorneys Tanya B. Syed and Matthew Morris are prosecuting the case.
If convicted of bank fraud, Thomas faces a maximum statutory penalty of 30 years in prison and a $1 million fine. If convicted of aggravated identity theft, Thomas faces a mandatory statutory penalty of two years in prison consecutive to any other sentence imposed and a fine of up to $250,000. 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.
Electronic Health Records Vendor to Pay $145 Million to Resolve Criminal and Civil InvestigationsRead the Press Release
Practice Fusion Inc. (Practice Fusion), a San Francisco-based health information technology developer, will pay $145 million to resolve criminal and civil investigations relating to its electronic health records (EHR) software, the Department of Justice announced today.
As part of the criminal resolution, Practice Fusion admits that it solicited and received kickbacks from a major opioid company in exchange for utilizing its EHR software to influence physician prescribing of opioid pain medications. Practice Fusion has executed a deferred prosecution agreement and agreed to pay over $26 million in criminal fines and forfeiture. In separate civil settlements, Practice Fusion has agreed to pay a total of approximately $118.6 million to the federal government and states to resolve allegations that it accepted kickbacks from the opioid company and other pharmaceutical companies and also caused its users to submit false claims for federal incentive payments by misrepresenting the capabilities of its EHR software.
“Across the country, physicians rely on electronic health records software to provide vital patient data and unbiased medical information during critical encounters with patients,” said Principal Deputy Assistant Attorney General Ethan Davis of the Department of Justice’s Civil Division. “Kickbacks from drug companies to software vendors that are designed to improperly influence the physician-patient relationship are unacceptable. When a software vendor claims to be providing unbiased medical information – especially information relating to the prescription of opioids – we expect honesty and candor to the physicians making treatment decisions based on that information.”
The resolution announced today addresses allegations that Practice Fusion extracted unlawful kickbacks from pharmaceutical companies in exchange for implementing clinical decision support (CDS) alerts in its EHR software designed to increase prescriptions for their drug products. Specifically, in exchange for “sponsorship” payments from pharmaceutical companies, Practice Fusion allowed the companies to influence the development and implementation of the CDS alerts in ways aimed at increasing sales of the companies’ products. Practice Fusion allegedly permitted pharmaceutical companies to participate in designing the CDS alert, including selecting the guidelines used to develop the alerts, setting the criteria that would determine when a healthcare provider received an alert, and in some cases, even drafting the language used in the alert itself. The CDS alerts that Practice Fusion agreed to implement did not always reflect accepted medical standards. In discussions with pharmaceutical companies, Practice Fusion touted the anticipated financial benefit to the pharmaceutical companies from increased sales of pharmaceutical products that would result from the CDS alerts. Between 2014 and 2019, health care providers using Practice Fusion’s EHR software wrote numerous prescriptions after receiving CDS alerts that pharmaceutical companies participated in designing.
Practice Fusion executed a deferred prosecution agreement with the U.S. Attorney’s Office for the District of Vermont based on its solicitation and receipt of kickbacks from a major opioid company to arrange for an increase in prescriptions of extended release opioids by healthcare providers who used Practice Fusion’s EHR software. As detailed in the criminal Information made public today, Practice Fusion solicited a payment of nearly $1 million from the opioid company to create a CDS alert that would cause doctors to prescribe more extended release opioids. That payment was financed by the opioid company’s marketing department, and the CDS was designed with input from the marketing department. Practice Fusion and the opioid company entered the CDS sponsorship because they believed that the CDS would influence doctors’ prescriptions of extended release opioids. In marketing the “pain” CDS alert, Practice Fusion touted that it would result in a favorable return on investment for the opioid company based on doctors prescribing more opioids.
“Practice Fusion’s conduct is abhorrent. During the height of the opioid crisis, the company took a million-dollar kickback to allow an opioid company to inject itself in the sacred doctor-patient relationship so that it could peddle even more of its highly addictive and dangerous opioids,” said Christina E. Nolan, U.S. Attorney for the District of Vermont. “The companies illegally conspired to allow the drug company to have its thumb on the scale at precisely the moment a doctor was making incredibly intimate, personal, and important decisions about a patient’s medical care, including the need for pain medication and prescription amounts. This recovery is commensurate to the nature of Practice Fusion’s misconduct, represents the largest criminal fine in the history of this District, and requires Practice Fusion to admit to its wrongs. It is another example of pioneering healthcare fraud enforcement by the talented Assistant U.S. Attorneys and staff of this U.S. Attorney’s Office, working with their partners in law enforcement. We cannot — and will not — tolerate technology companies influencing patient treatment merely because a pharmaceutical company provided a kickback.”
The criminal Information charges Practice Fusion with two felony counts for violating the Anti-Kickback Statute (AKS), 42 U.S.C. § 1320a-7b(b)(1), and for conspiring with its opioid company client to violate the AKS, 18 U.S.C. § 371. This case is the first ever criminal action against an EHR vendor and the unique Deferred Prosecution Agreement imposes stringent requirements on Practice Fusion to ensure acceptance of responsibility and transparency as to its underlying conduct, and to invest heavily in compliance overhauls and an independent oversight organization. The Deferred Prosecution Agreement requires Practice Fusion to pay a criminal fine of $25,398,300 and forfeit criminal proceeds of nearly $1 million. In addition, the company will cooperate in any ongoing investigations of the kickback arrangement and report any evidence of kickback violations by any other EHR vendors. To ensure transparency and public awareness of the company’s activities while the nation continues to battle an epidemic of opioid addiction, the Deferred Prosecution Agreement requires Practice Fusion to make documents relating to its unlawful conduct available to the public through a website. Additionally, the Deferred Prosecution Agreement mandates that Practice Fusion retain an independent oversight organization that is required to review and approve any sponsored CDS before Practice Fusion may implement the CDS, and create a comprehensive compliance program designed to ensure such abuses are not repeated.
The civil settlement with the United States resolves Practice Fusion’s civil liability arising from the submission of false claims to federal healthcare programs tainted by the kickback arrangement between Practice Fusion and the opioid company. It also resolves allegations of kickbacks relating to thirteen other CDS arrangements where Practice Fusion agreed with pharmaceutical companies to implement CDS alerts intended to increase sales of their products. The $118.6 million settlement amount includes approximately $113.4 million to the federal government and up to $5.2 million to states that opt to participate in separate state agreements.
“Prescription decisions should be based on accurate data regarding a patient’s medical needs, untainted by corrupt schemes and illegal kickbacks,” said U. S. Attorney David L. Anderson of the Northern District of California. “In deciding what is best for patients, electronic health records software is an important tool for care providers. It is critically important that technology companies do not cheat when certifying that software.”
In addition to the kickback allegations, the civil settlement with the United States resolves allegations relating to two intersecting Department of Health and Human Services (HHS) programs, one at the Office of the National Coordinator for Health Information Technology (ONC) that regulates the voluntary health IT certification program, and one at the Centers for Medicare & Medicaid Services that oversees EHR incentive programs. Specifically, the United States alleged that Practice Fusion falsely obtained ONC certification for several versions of its EHR software by concealing from its certifying entity, known as an ONC-Authorized Certification Body, that the EHR software did not comply with all of the applicable requirements for certification. ONC’s certification criteria were designed to promote enhanced functionality, utility, and security of health information technology, and access to patient medical information across the care continuum. HHS implemented the certification criteria for EHR software in multiple stages, known as editions. To be certified under the 2014 Edition certification criteria, EHR software was required to allow users to electronically create a set of standardized export summaries for all patients. When Practice Fusion sought certification of this 2014 Edition criteria, Practice Fusion falsely represented to the certifying body that its software met this data portability requirement, when several versions of its software did not. The civil settlement resolves allegations that, at the time these versions of Practice Fusion’s software were certified, its software was unable to permit a user to create a set of standardized export summaries. Additionally, after obtaining certification of the 2014 Edition criteria, Practice Fusion disabled access to this feature altogether. Instead, Practice Fusion required users to contact it separately to request export of this critical patient data.
In addition to failing to satisfy the data portability requirement, Practice Fusion’s software allegedly did not incorporate standardized vocabularies as required for certification. The United States alleged that by fraudulently obtaining certification for its products, Practice Fusion knowingly caused eligible healthcare providers who used certain versions of its 2014 Edition EHR software to falsely attest to compliance with HHS requirements necessary to receive incentive payments from Medicare during the reporting periods for 2014 through 2016 and from Medicaid during the reporting periods for 2014 through 2017.
“As new technologies continue to develop and evolve, so too do new and innovative fraud schemes,” said Shimon R. Richmond, Assistant Inspector General for Investigations of the U.S. Department of Health and Human Services. “We will continue to be vigilant in detecting and investigating these schemes in order to protect the safety of patients in federal health programs and to ensure the appropriate use of electronic health records in providing their care.”
“Today's announcement shows that Practice Fusion exploited technology to profit at the expense of a vulnerable population – patients seeking medical advice," said Timothy M. Dunham, Special Agent in Charge of the FBI's Washington Field Office, Criminal Division. "The FBI is committed to working with our partners to bring to justice the perpetrators of healthcare fraud in all its forms, especially one that fans the flames of the already rampant opioid epidemic.”
The U.S. Attorney’s Office for the District of Vermont handled the criminal investigation and resolution. The civil investigation was jointly handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorneys’ Offices for the District of Vermont and the Northern District of California. The investigation was supported by the HHS Office of Inspector General and multiple HHS agencies and components. The FBI’s field office in Washington, DC, also provided significant investigative support.
Except for the conduct admitted in connection with the criminal resolution, the civil claims resolved by the settlement are allegations only, and there has been no determination of liability as to such civil claims.
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.
Electrical Contractor Sentenced to 20 Months in Prison for Stealing $3.3 Million from EmployeesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that LEE FERGUSON, 62, of Farmington, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 20 months of imprisonment, followed by one year of supervised release, for stealing more than $3.3 million from his employees.
Judge Shea also ordered Ferguson to pay a $200,000 fine.
According to court documents and statements made in court, Ferguson owns and operates Ferguson Electric and Ferguson Mechanical, both headquartered in Plainville. Between approximately 2013 and 2017, Ferguson caused to be deducted approximately $1.60 to $3.15 per hour from each of his employee’s fringe benefits package as a “third party administrator fee” for the employees’ pension plans. Ferguson knew that the funds were not used to cover any administrative fees for the employees’ pension plans. Instead, this “third party administrator fee” was paid over to TPA of Connecticut, a company that Ferguson established and controlled. TPA of Connecticut, in turn, sent the monies to DJS Associates, a Florida company that Ferguson formed for the purported purpose of performing business-consulting services for him and his companies. However, no such services were performed and Ferguson used the funds for personal expenses.
Through this scheme, Ferguson stole a total of $3,357,516 from more than 300 employees. He has made full restitution.
On July 31, 2019, Ferguson pleaded guilty to one count of money laundering.
Ferguson, who is released on a $50,000 bond, is required to report to prison on April 28.
This investigation was conducted by the Internal Revenue Service – Criminal Investigation Division, U.S. Department of Labor – Office of Inspector General, and U.S. Department of Labor – Employee Benefits Security Administration, Boston Regional Office. The case was prosecuted by Assistant U.S. Attorney Douglas P. Morabito.
Eight defendants sentenced in India-based call center fraud scheme involving elderly victimsRead the Press Release
ATLANTA – Eight defendants have been sentenced for their roles in an Indian based call center fraud scheme that victimized thousands in the United States resulting in over $3.7 million in losses. The sentences ranged from six months to four years and nine months in prison.
“IRS and payday loan phone schemes seek to profit by exploiting United States citizens, including the elderly and most vulnerable members of our community,” said U.S. Attorney Byung J. “BJay” Pak. “As this case shows, we will prosecute companies and individuals in India and in this country who choose to steal from vulnerable victims.”
“Victimizing taxpayers by impersonating Internal Revenue Service employees is a serious crime,” said J. Russell George, the Treasury Inspector General for Tax Administration. “TIGTA will do everything within its power to ensure that those involved in the impersonation of IRS employees are prosecuted to the fullest extent of the law. These significant sentences should serve as notice to those who engage in this type of criminal activity that they will be held accountable.”
According to U.S. Attorney Pak, the charges, and other information presented in court: These defendants were involved in a sophisticated scheme organized by co-conspirators in India, including a network of call centers in Ahmedabad, India. Using information obtained from data brokers and other sources, call center operators called potential victims while impersonating officials from the Internal Revenue Service or individuals offering fictitious payday loans.
The call center operators would then threaten potential victims with arrest, imprisonment, or fines if they did not pay taxes or penalties to the government. If the victims agreed to pay, the call centers would immediately turn to a network of U.S.-based co-conspirators to liquidate and launder the extorted funds by purchasing prepaid debit cards or through wire transfers, including through MoneyGram and Western Union, to the attention of fictitious names and U.S.-based defendants and their co-conspirators.
Eight defendants have been sentenced as part of this case. U.S. District Judge Michael L. Brown sentenced the following individuals:
- Mohamed Kazim Momin, 33, of Norcross, Georgia, was sentenced to four years and nine months in prison to be followed by three years of supervised release. The amount of restitution will be determined at a later hearing.
- Rodrigo Leon-Castillo, 46, of Katy, Texas, was sentenced to four years and three months in prison to be followed by three years of supervised release, and ordered to pay $833,938.20 in restitution.
- Mohmed Sozab Momin, 23, of Lawrenceville, Georgia, was sentenced to two years and six months in prison to be followed by three years of supervised release. The amount of restitution will be determined at a later hearing.
- Drue Kyle Riggins, 24, of Stone Mountain, Georgia, was sentenced to one year, one month in prison, three years of supervised release, and ordered to pay $49,640.36 in restitution.
- Nicholas Alexander Deane, 26, of Tucker, Georgia, was sentenced to one year and one day in prison, three years of supervised release, and ordered to pay $49,640.36 in restitution.
- Palak Kumar Patel, 30, Clarkston, Georgia, was sentenced to ten months in prison, three years of supervised release, and ordered to pay $19,142.60 in restitution.
- Jantz Parrish Miller, 25, Stone Mountain, Georgia, was sentenced to eight months in prison, three years of supervised release, and ordered to pay $49,640.36 in restitution.
- Devin Bradford Pope, 25, of Chamblee, Georgia, was sentenced to six months in prison, three years of supervised release, and ordered to pay $49,640.36 in restitution.
These eight defendants were charged along with five Indian call centers and seven Indian nationals in a 27-count indictment with conspiracy to commit wire fraud, wire fraud and conspiracy to commit money laundering. The government is seeking extradition of Indian nationals.
The U.S. Treasury Inspector General for Tax Administration investigated this case.
Assistant U.S Attorney Jeffrey A. Brown, Deputy Chief of the Complex Frauds Section, and Assistant U.S. Attorney Jolee Porter prosecuted the case.
The U.S. Attorney’s Office for the Northern District of Georgia is part of the Department of Justice Transnational Elder Fraud Strike Force. The Strike Force focuses on investigating and prosecuting defendants associated with foreign-based fraud schemes that disproportionately affect American seniors. These include romance scams, phone scams, mass-mailing fraud schemes, and tech-support fraud schemes. For further information on these scams, see https://www.justice.gov/elderjustice/senior-scam-alert.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Electronic Health Records Vendor to Pay Largest Criminal Fine in Vermont History and a Total of $145 Million to Resolve Criminal and Civil InvestigationsRead the Press Release
UPDATE
The website containing links to over four hundred (400) documents is available at:
https://www.pfdatabasedistrictofvermontsettlement.net/
ELECTRONIC HEALTH RECORDS VENDOR TO PAY LARGEST CRIMINAL FINE IN VERMONT HISTORY AND A TOTAL OF $145 MILLION TO RESOLVE CRIMINAL AND CIVIL INVESTIGATIONS
Practice Fusion, Inc. Admits to Kickback Scheme Aimed at Increasing Opioid Prescriptions
Practice Fusion, Inc. (Practice Fusion), a San Francisco-based health information technology developer, will pay $145 million to resolve criminal and civil investigations relating to its electronic health records (EHR) software, the Department of Justice announced today.
As part of the criminal resolution, Practice Fusion admits that it solicited and received kickbacks from a major opioid company in exchange for utilizing its EHR software to influence physician prescribing of opioid pain medications. Practice Fusion has executed a deferred prosecution agreement and agreed to pay over $26 million in criminal fines and forfeiture. In separate civil settlements, Practice Fusion has agreed to pay a total of approximately $118.6 million to the federal government and states to resolve allegations that it accepted kickbacks from the opioid company and other pharmaceutical companies and also caused its users to submit false claims for federal incentive payments by misrepresenting the capabilities of its EHR software.
“Practice Fusion’s conduct is abhorrent. During the height of the opioid crisis, the company took a million-dollar kickback to allow an opioid company to inject itself in the sacred doctor-patient relationship so that it could peddle even more of its highly addictive and dangerous opioids,” said Christina E. Nolan, United States Attorney for the District of Vermont. “The companies illegally conspired to allow the drug company to have its thumb on the scale at precisely the moment a doctor was making incredibly intimate, personal, and important decisions about a patient’s medical care, including the need for pain medication and prescription amounts. This recovery is commensurate to the nature of Practice Fusion’s misconduct, represents the largest criminal fine in the history of this District, and requires Practice Fusion to admit to its wrongs. It is another example of pioneering healthcare fraud enforcement by the talented Assistant U.S. Attorneys and staff of this U.S. Attorney’s Office, working with their partners in law enforcement. We cannot—and will not—tolerate technology companies influencing patient treatment merely because a pharmaceutical company provided a kickback.”
The resolution announced today addresses allegations that Practice Fusion extracted unlawful kickbacks from pharmaceutical companies in exchange for implementing clinical decision support (CDS) alerts in its EHR software designed to increase prescriptions for their drug products. Specifically, in exchange for “sponsorship” payments from pharmaceutical companies, Practice Fusion allowed the companies to influence the development and implementation of the CDS alerts in ways aimed at increasing sales of the companies’ products. Practice Fusion allegedly permitted pharmaceutical companies to participate in designing the CDS alert, including selecting the guidelines used to develop the alerts, setting the criteria that would determine when a healthcare provider received an alert, and in some cases, even drafting the language used in the alert itself. The CDS alerts that Practice Fusion agreed to implement did not always reflect accepted medical standards. In discussions with pharmaceutical companies, Practice Fusion touted the anticipated financial benefit to the pharmaceutical companies from increased sales of pharmaceutical products that would result from the CDS alerts. Between 2014 and 2019, health care providers using Practice Fusion’s EHR software wrote numerous prescriptions after receiving CDS alerts that pharmaceutical companies participated in designing.
Practice Fusion executed a deferred prosecution agreement with the U.S. Attorney’s Office for the District of Vermont based on its solicitation and receipt of kickbacks from a major opioid company to arrange for an increase in prescriptions of extended release opioids by healthcare providers who used Practice Fusion’s EHR software. As detailed in the criminal Information made public today, Practice Fusion solicited a payment of nearly $1 million from the opioid company to create a CDS alert that would cause doctors to prescribe more extended release opioids. That payment was financed by the opioid company’s marketing department, and the CDS was designed with input from the marketing department. Practice Fusion and the opioid company entered the CDS sponsorship because they believed that the CDS would influence doctors’ prescriptions of extended release opioids. In marketing the “pain” CDS alert, Practice Fusion touted that it would result in a favorable return on investment for the opioid company based on doctors prescribing more opioids.
The criminal Information charges Practice Fusion with two felony counts for violating the Anti-Kickback Statute (AKS), 42 U.S.C. § 1320a-7b(b)(1), and for conspiring with its opioid company client to violate the AKS, 18 U.S.C. § 371. This case is the first ever criminal action against an EHR vendor and the unique Deferred Prosecution Agreement imposes stringent requirements on Practice Fusion to ensure acceptance of responsibility and transparency as to its underlying conduct, and to invest heavily in compliance overhauls and an independent oversight organization. The Deferred Prosecution Agreement requires Practice Fusion to pay a criminal fine of $25,398,300 and forfeit criminal proceeds of nearly $1 million. In addition, the company will cooperate in any ongoing investigations of the kickback arrangement and report any evidence of kickback violations by any other EHR vendors. To ensure transparency and public awareness of the company’s activities while the nation continues to battle an epidemic of opioid addiction, the Deferred Prosecution Agreement requires Practice Fusion to make documents relating to its unlawful conduct available to the public through a web site. Additionally, the Deferred Prosecution Agreement mandates that Practice Fusion retain an independent oversight organization that is required to review and approve any sponsored CDS before Practice Fusion may implement the CDS, and create a comprehensive compliance program designed to ensure such abuses are not repeated.
“Across the country, physicians rely on electronic health records software to provide vital patient data and unbiased medical information during critical encounters with patients,” said Principal Deputy Assistant Attorney General Ethan Davis of the Department of Justice’s Civil Division. “Kickbacks from drug companies to software vendors that are designed to improperly influence the physician-patient relationship are unacceptable. When a software vendor claims to be providing unbiased medical information – especially information relating to the prescription of opioids – we expect honesty and candor to the physicians making treatment decisions based on that information.”
The civil settlement with the United States resolves Practice Fusion’s civil liability arising from the submission of false claims to federal healthcare programs tainted by the kickback arrangement between Practice Fusion and the opioid company. It also resolves allegations of kickbacks relating to thirteen other CDS arrangements where Practice Fusion agreed with pharmaceutical companies to implement CDS alerts intended to increase sales of their products. The $118.6 million settlement amount includes approximately $113.4 million to the federal government and up to $5.2 million to states that opt to participate in separate state agreements.
“Prescription decisions should be based on accurate data regarding a patient’s medical needs, untainted by corrupt schemes and illegal kickbacks,” stated United States Attorney David L. Anderson of the Northern District of California. “In deciding what is best for patients, electronic health records software is an important tool for care providers. It is critically important that technology companies do not cheat when certifying that software.”
In addition to the kickback allegations, the civil settlement with the United States resolves allegations relating to two intersecting Department of Health and Human Services (HHS) programs, one at the Office of the National Coordinator for Health Information Technology (ONC) that regulates the voluntary health IT certification program, and one at the Centers for Medicare & Medicaid Services that oversees EHR incentive programs. Specifically, the United States alleged that Practice Fusion falsely obtained ONC certification for several versions of its EHR software by concealing from its certifying entity, known as an ONC-Authorized Certification Body, that the EHR software did not comply with all of the applicable requirements for certification. ONC’s certification criteria were designed to promote enhanced functionality, utility, and security of health information technology, and access to patient medical information across the care continuum. HHS implemented the certification criteria for EHR software in multiple stages, known as editions. To be certified under the 2014 Edition certification criteria, EHR software was required to allow users to electronically create a set of standardized export summaries for all patients. When Practice Fusion sought certification of this 2014 Edition criteria, Practice Fusion falsely represented to the certifying body that its software met this data portability requirement, when several versions of its software did not. The civil settlement resolves allegations that, at the time these versions of Practice Fusion’s software were certified, its software was unable to permit a user to create a set of standardized export summaries. Additionally, after obtaining certification of the 2014 Edition criteria, Practice Fusion disabled access to this feature altogether. Instead, Practice Fusion required users to contact it separately to request export of this critical patient data.
In addition to failing to satisfy the data portability requirement, Practice Fusion’s software allegedly did not incorporate standardized vocabularies as required for certification. The United States alleged that by fraudulently obtaining certification for its products, Practice Fusion knowingly caused eligible healthcare providers who used certain versions of its 2014 Edition EHR software to falsely attest to compliance with HHS requirements necessary to receive incentive payments from Medicare during the reporting periods for 2014 through 2016 and from Medicaid during the reporting periods for 2014 through 2017.
“Today's announcement shows that Practice Fusion exploited technology to profit at the expense of a vulnerable population -- patients seeking medical advice," said Timothy M. Dunham, Special Agent in Charge of the FBI's Washington Field Office, Criminal Division. “The FBI is committed to working with our partners to bring to justice the perpetrators of healthcare fraud in all its forms, especially one that fans the flames of the already rampant opioid epidemic.”
“As new technologies continue to develop and evolve, so too do new and innovative fraud schemes,” said Shimon R. Richmond, Assistant Inspector General for Investigations of the U.S. Department of Health and Human Services. “We will continue to be vigilant in detecting and investigating these schemes in order to protect the safety of patients in federal health programs and to ensure the appropriate use of electronic health records in providing their care.”
The criminal investigation and resolution was handled by Assistant United States Attorneys Michael P. Drescher and Owen C.J. Foster of the United States Attorney’s Office for the District of Vermont. The civil investigation was jointly handled by the United States Attorney’s Offices for the District of Vermont and the Northern District of California, and Edward Crooke, Kelley Hauser, and Christelle Klovers of the Civil Division’s Commercial Litigation Branch. The investigation was supported by the HHS Office of Inspector General and multiple HHS agencies and components. The Federal Bureau of Investigation’s field office in Washington, DC, and New York also provided significant investigative support to the investigations. Vermont Heath Care Fraud Investigators George Thabault and Richard Lewis provided significant and critical investigative resources to the Vermont-based team.
Except for the conduct admitted in connection with the criminal resolution, the civil claims resolved by the settlement are allegations only, and there has been no determination of liability as to such civil claims.
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
# # #
Downey Man Sentenced to 10 Years in Federal Prison for Spree of GameStop Store Armed Robberies in L.A. and Orange CountiesRead the Press Release
LOS ANGELES – A Downey man was sentenced today to 120 months in federal prison for committing four armed robberies of GameStop video game stores in Los Angeles and Orange counties that resulted in the theft of more than $132,000 in merchandise and cash.
Frederick Lopez Jr., 28, was sentenced by United States District Judge Stephen V. Wilson, who also ordered him to pay $132,300 in restitution.
Lopez pleaded guilty in August 2019 to one count of interference with commerce by robbery and one count of brandishing a firearm in furtherance of a crime of violence.
Between August 2018 and October 2018, Lopez robbed GameStop stores in Lynwood, Rowland Heights, West Covina and Brea. Lopez entered the stores at night, sometimes accompanied by another suspect, pulled a handgun from his waistband and used it to threaten store employees. Lopez then would order GameStop employees to load game consoles and video games into store bags.
During the West Covina robbery on October 24, 2018, Lopez and his co-conspirator ordered the GameStop store clerks into the store’s back room, demanded their cell phones and destroyed the store’s telephone. Lopez then ordered one of the store’s clerks to help carry stolen items out to a nearby minivan. Lopez used a .40-caliber handgun during this robbery.
In total, Lopez stole $131,000 in merchandise and $1,300 in cash during the four robberies. Lopez was arrested in this matter in March 2019.
“The serious nature of [Lopez’s] offenses can hardly be overstated,” prosecutors wrote in their sentencing memorandum. “Armed robberies such as these, where firearms are brandished at victims, also leave lasting substantial stress and trauma that victims remember for years, some for their entire lives.”
The Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Brea Police Department investigated this matter.
This case was prosecuted by Assistant United States Attorneys Jeffrey M. Chemerinsky and Bruce K. Riordan of the Violent and Organized Crime Section.
Dorchester Man Convicted by Federal Jury for Being a Felon in Possession of FirearmRead the Press Release
BOSTON – A Dorchester man was convicted on Thursday, Jan. 23, 2020, in federal court in Boston for illegally possessing a firearm.
Joquentz Constant, 23, was convicted by a federal jury of one count of being a felon in possession of a firearm. U.S. Senior District Court Judge Douglas P. Woodlock scheduled sentencing for May 26, 2020. Constant was arrested and charged in January 2019 and has been in custody since.
Constant was found to be in possession of a black Regent. 32 caliber revolver bearing obliterated model and serial numbers and containing five rounds of PPU .32 caliber ammunition and one round of WIN .32 caliber ammunition. Due to prior convictions punishable by more than one year in jail, Constant is prohibited from possessing a firearm.
The charging statute provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Kelly Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; Suffolk County District Attorney Rachael Rollins; and Boston Police Commissioner William Gross made the announcement today. Assistant U.S. Attorneys David J. D’Addio and Mackenzie A. Queenin of Lelling’s Criminal Division prosecuted the case.
Dominican National Sentenced for Identity TheftRead the Press Release
BOSTON – A Dominican national formerly residing in Lawrence was sentenced on Friday, Jan. 24, 2020, in federal court in Boston for Social Security fraud and aggravated identity theft.
Freddy Tejada-Diaz, 50, was sentenced by U.S. District Court Judge Richard G. Stearns to two years and one day in prison. Tejada-Diaz will be subject to deportation proceedings upon completion of his sentence. In August 2019, Tejada-Diaz pleaded guilty to one count of false representation of Social Security number and one count of aggravated identity theft.
On Aug, 1, 2016, Tejada-Diaz applied for a Massachusetts identification card using the name, date of birth and Social Security number of a Puerto Rican born United States citizen. At the time of his arrest in April 2019, Tejada-Diaz had an arrest warrant out of Plymouth Superior Court for drug charges and a warrant of removal issued out of a New York immigration court. Tejada-Diaz was identified, among other things, from a fingerprint match to his immigration file bearing his photo, which showed that he was previously ordered removed on Sept. 5, 1996, but did not report to his scheduled immigration hearing. Instead, on Sept. 30, 1996, Tejada-Diaz obtained a Massachusetts identification card in the name of the United States citizen and, until his recent arrest, had been using that identity ever since.
United States Attorney Andrew E. Lelling; Jason Molina, Acting Special Agent in Charge of Homeland Security Investigations in Boston; and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement today. Assistant U.S. Attorney Lindsey E. Weinstein of Lelling’s Major Crimes Unit prosecuted the case.
District Man Sentenced to 120 Months for Federal Carjacking and Firearms Charge Related to Kidnapping of NJ ManRead the Press Release
WASHINGTON – Trevonta Barnes, 24, of Washington, D.C., was sentenced today to 120 months’ imprisonment and five years of supervised release for a federal carjacking and related firearms charge stemming from the kidnapping of a New Jersey man last year in Southeast Washington, announced U.S. Attorney Jessie K. Liu and Peter Newsham, Chief of the Metropolitan Police Department (MPD).
Barnes pled guilty in the U.S. District Court for the District of Columbia to one count of federal carjacking and one count of using, carrying, possessing, and brandishing a firearm during and in relation to a crime of violence on October 28, 2019. He was sentenced by the Honorable Senior Judge Ellen Segal Huvelle.
According to the government’s evidence, on Jan. 19, 2019, at approximately 10:30 p.m., Barnes, while masked, attempted to steal the victim’s car that was left unattended while he ran into a store to make a quick transaction. When the victim heard his car engine revving, he came out to investigate and encountered Barnes, who then brandished a firearm and forced the victim into his own car. Barnes directed the victim to drive and turn on various streets. Along the way, Barnes struck the victim on the back of the head with the firearm and took several items from the victim, including his cell phone and keys to his rental property.
Barnes then directed the victim to stop under an underpass and the victim managed to run away and get help. Barnes was spotted wearing the same clothing approximately 90 minutes later. When approached by MPD officers, Barnes fled on foot until he was apprehended shortly thereafter. Barnes was still in possession of the victim’s property at the time.
Barnes was arrested on Jan. 20, 2019, and has been in custody ever since. At the time of his arrest, Barnes was on supervised release following his release from prison three months earlier for unlawfully possessing a firearm. He was also on supervised probation for an earlier Maryland burglary. He now faces formal revocation of his supervised release and additional incarceration separate and apart from the sentence that he faces for the carjacking and brandishing the loaded firearm on Jan. 19, 2019.
In announcing the sentence, U.S. Attorney Liu and Chief Newsham commended the work of the MPD officers who investigated the case, including lead Detective David Adams. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office for the District of Columbia, including former Assistant U.S. Attorney Stephen Gripkey, Assistant U.S. Attorney Kaitlin Vaillancourt, as well as Paralegal Candace Battle.
Detroit-Area Man Sentenced to 63 Months in Prison for Drug CrimeRead the Press Release
BECKLEY, W.Va. – A Detroit-area man was sentenced to federal prison for aiding and abetting the distribution of oxymorphone, announced United States Attorney Mike Stuart. D’Andre Lee Mathis, 29, of Mount Clemons, Michigan was sentenced to 63 months in prison and a three year term of supervised release.
“A Detroit-area pill dealer operating in Greenbrier County,” said United States Attorney Mike Stuart. “If you think we only find Detroit drug dealers in Charleston and Huntington, guess again. We are finding out-of-state drug dealers in every county in the District. The work of our task forces is critical to identifying and investigating these poison peddlers so we can send them packing.”
Mathis previously admitted that on June 9, 2017, he distributed three oxymorphone pills to a confidential informant in Alderson after his co-defendant, Cody Reed Godfrey, helped set up the deal. Mathis admitted that he was responsible for distributing, or possessing with intent to distribute, dozens of oxymorphone pills in Greenbrier County. Godfrey was sentenced to 18 months in prison for his role in the scheme.
The Greenbrier Valley Drug and Violent Crime Task Force conducted the investigation. United States District Judge Frank W. Volk presided over the hearing. Assistant United States Attorney John File handled the prosecution.
Follow us on Twitter: SDWVNews and USAttyStuart
###
Convicted Felon Sentenced for Armed Robberies in the Central West EndRead the Press Release
St. Louis, MO – Brandon Mardell Woods, 35, of St. Louis, was sentenced to 15 years in prison for his involvement in two robberies in the Central West End. Woods appeared before U.S. District Judge Henry E. Autrey.
According to court documents, on June 17, 2018, a victim was walking to her vehicle when Woods approached her, pointed a firearm at her, and ordered her into her vehicle. Woods entered the driver’s seat and directed the victim into the passenger seat. The victim complied and Woods drove the victim’s vehicle to an ATM where he withdrew $500.00 from the victim’s bank account.
On June 19, 2018, two victims were seated in their vehicle when Woods entered the backseat, pointed a firearm at them, and ordered one of the victims to drive him to an ATM. Once at the ATM, Woods directed one of the victims to withdraw money from her bank account. She withdrew $200.00 from her account and gave it to Woods.
On June 20, 2018, officers of the St. Louis Metropolitan Police Department arrested Woods and found him to be in possession of a firearm.
“The continued collective effort among the St Louis Police Department, FBI, Circuit Attorney’s Office and U.S. Attorney’s office will definitely hold violent criminals accountable,” said Chief John W. Hayden, St. Louis Metropolitan Police Department.
The St. Louis Metropolitan Police Department and the Federal Bureau of Investigation investigated the case, with the assistance of the Central West End Neighborhood Security Initiative. Assistant United States Attorney Jennifer Roy is handling the case for the U.S. Attorney’s Office.
Converse Man Sentenced to Prison and Ordered to Pay over $3 Million in RestitutionRead the Press Release
FORT WAYNE – Fredrick D. McCracken, age 62, of Converse, Indiana was sentenced before U.S. District Court Judge Holly A. Brady for wire fraud and making a false statement on an income tax return, announced U.S. Attorney Kirsch.
McCracken was sentenced to 46 months in prison followed by 2 years of supervised release and was ordered to pay over $3 million in restitution to his former employer and the IRS.
According to documents in this case, McCracken worked as an accountant for an industrial construction company located in Marion, Indiana. Because of his role as the accountant for the business, McCracken had access to the company’s bank accounts. From October 2012 through July 2018, McCracken wrote over 100 unauthorized checks drawn on the company’s business account and made payable to his personal business. From March 2016 through July 2018, McCracken used the company’s bank accounts to pay his personal credit card obligations more than 50 times. To avoid detection, McCracken concealed his activities in the company’s accounting records system. In total, his fraud scheme resulted in the theft of $2,440,490.46 from his employer. McCracken also failed to as income on his personal tax returns the funds that he stole, causing a $612,500.00 tax loss to the Internal Revenue Service.
The case was investigated by the Federal Bureau of Investigation, United States Postal Inspection Service and the Internal Revenue Service Criminal Investigation Division. The case was prosecuted by Assistant United States Attorney Sarah E. Nokes.
###
Citizen of Mexico Pleads Guilty to Reentering U.S. after Being Removed Multiple TimesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that EDGAR MANDUJANO-AGUILAR, 31, a citizen of Mexico, pleaded guilty today before U.S. District Judge Kari A. Dooley in Bridgeport to one count of reentry of a removed alien.
According to court documents and statements made in court, Mandujano-Aguilar had encounters with the U.S. Border Patrol on two occasions in 2006, both of which resulted in his voluntary return to Mexico.
In December 2010, U.S. Border Patrol encountered Mandujano-Aguilar in Yuma, Arizona. He was charged and convicted in the District of Arizona with illegal entry, sentenced to time served and, on December 29, 2010, was removed to Mexico.
In February 2011, March 2011 and October 2011, U.S. Border Patrol encountered Mandujano-Aguilar at locations close to the southern border of the U.S. He was returned to Mexico after each encounter.
On March 16, 2016, U.S. Immigration and Customs Enforcement (ICE) arrested Mandujano-Aguilar in Massachusetts. He was charged and convicted in the District of Massachusetts with illegal reentry of a removed alien, sentenced to time served and, on June 9, 2016, was removed to Mexico.
On November 15, 2019, Mandujano-Aguilar was arrested in Waterbury for interfering with an officer. He has been detained in federal custody since December 18, 2019.
Judge Dooley scheduled sentencing for April 20, 2020, at which time Mandujano-Aguilar faces a maximum term of imprisonment of 10 years.
The investigation was conducted by the U.S. Department of Homeland Security, Immigration and Customs Enforcement. The case was prosecuted by Assistant U.S. Attorney Deborah R. Slater.
Camden County Man Sentenced to 37 Months in Prison for Role in Conspiracy to Distribute OxycodoneRead the Press Release
CAMDEN, N.J. – A Camden County, New Jersey, man was sentenced today to 37 months in prison for his role in conspiring to distribute oxycodone, U.S. Attorney Craig Carpenito announced.
Daniel Watson, 41, of Bellmawr, New Jersey, previously pleaded guilty to an information charging him with one count of conspiracy to distribute and possess with intent to distribute oxycodone. U.S. District Judge Robert B. Kugler imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:From December 2017 through June 26, 2018, Watson and others engaged in a conspiracy which resulted in the trafficking of 1,180 oxycodone pills – 680 of which were unadulterated oxycodone and 500 of which were pressed pills mixed with hydrocodone, codeine, and methylphenidate. As part of the investigation, law enforcement observed Watson’s participation in eight controlled purchases. Three of these controlled transactions were carried out by the defendants in front of the major Philadelphia hospital where co-defendant Anthony Pepe was employed as the chief surgical technologist and while he was dressed in his hospital scrubs. Pepe was sentenced Nov. 20, 2019, to 30 months in prison.
In addition to the prison term, Judge Kugler sentenced Watson to three years of supervised release.
The government is represented by Assistant U.S. Attorney Christina O. Hud of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: Christopher O’Malley Esq., Assistant Federal Public Defender, Camden
California Woman Sentenced to 3½ Years in Prison for Operating Wholesaler of Synthetic CannabinoidsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that JANELL THOMPSON, the former vice president, chief financial officer, and co-owner of a consumer products wholesaler based in California, was sentenced today by United States District Judge Naomi Reice Buchwald to 42 months in prison for using her business to distribute massive wholesale quantities of smokeable synthetic cannabinoids throughout the U.S. and to laundering the proceeds of that scheme. THOMPSON previously pled guilty before Judge Buchwald to one count of conspiracy to distribute a controlled substance and a controlled substance analogue and one count of conspiracy to commit money laundering.
U.S. Attorney Geoffrey S. Berman said: “Janell Thompson held herself out as a company CFO and vice president, but she was actually a drug trafficker and money launderer. Through her wholesale company, Thompson distributed massive quantities of illegal and potentially dangerous synthetic cannabinoids throughout the U.S. Thompson will now serve time in prison for her crimes.”
According to the allegations in the Superseding Information, other documents filed in the case, and statements made in court:
From February 2014 until February 2019, THOMPSON was the vice president, chief financial officer, and co-owner of JK Wholesale LLC, a consumer products retailer based in Carlsbad, California. During that time period, THOMPSON used JK Wholesale LLC and its affiliated corporate entities to operate a scheme to distribute large quantities of smokeable synthetic cannabinoids (“SSC”), containing controlled substances and controlled substance analogues, throughout the U.S. SSC, colloquially referred to as “K2” or “Spice,” can be addictive, but are often marketed as safe, legal alternatives to marijuana. In fact, SSC are not safe and may affect the brain much more powerfully than marijuana; their actual effects can be unpredictable and, in some cases, more dangerous or even life-threatening.
Some of the SSC distributed by THOMPSON’s scheme were branded with colorful graphics and distinctive names, including “Yolo.” The branded SSC sometimes were misleadingly marketed as “herbal incense.” Other of the SSC were distributed in bulk quantities.
* * *
In addition to a term of imprisonment, THOMPSON, 42, was also sentenced to two years of supervised release and ordered to forfeit $1,000,000.
Mr. Berman praised the outstanding investigative work of the New York City Police Department, the United States Postal Inspection Service, and Homeland Security Investigations. He also thanked the Wilmington, North Carolina, Resident Office of the Drug Enforcement Administration, the Naval Criminal Investigative Service, and the United States Attorney’s Office for the Eastern District of North Carolina for their assistance. The long-term investigation of this case was partially funded by the New York/New Jersey High Intensity Drug Trafficking Area, a federal grant program that invests in law enforcement partnerships to build safe and healthy communities.
The prosecution is being handled by the Office’s Narcotics Unit. Assistant United States Attorneys Daniel G. Nessim and Robert B. Sobelman are in charge of the prosecution.
Bowie County Booster Club Treasurer Sentenced for Wire FraudRead the Press Release
TEXARKANA, Texas – A 42-year-old Texarkana, Texas woman has been sentenced to federal prison for violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.
Nikki Diane May pleaded guilty on Sep. 12, 2019 to wire fraud and was sentenced to 23 months in federal prison today by U.S. District Judge Robert W. Schroeder III.
According to information presented in court, during 2017 and 2018, May served as the treasurer of the Pleasant Grove High School Showstoppers Booster Club, in Texarkana, Texas. The club exists primarily to support the educational enrichment of the Showstoppers dance team by raising funds that allow them to participate in events across Texas and the United States. To further that goal, the club solicits the public for charitable donations and participation for the benefit of the students involved. As treasurer of the organization, May was entrusted with all funds received by the club and was responsible for depositing cash and checks received through various fundraising sources. May was also responsible for maintaining appropriate records of the funds received and expenditures made on behalf of the club. As treasurer, May was also entrusted with a debit card attached to the club’s bank account to be used for club business. However, from June 2017 to around November 2018, May defrauded the club by stealing cash that had been received as donations to the club and using the debit card to withdraw funds from the club’s bank account all for her own personal use. May prepared treasurer reports that falsely stated the club’s bank balances in order to hide her scheme from club officers and members. May’s fraudulent scheme resulted in the theft of more than $60,000 from the booster club.
This case was investigated by the Federal Bureau of Investigation’s Texarkana Resident Agency of the Dallas Field Office and prosecuted by Assistant U.S. Attorney Jonathan R. Hornok.
Bay Area Residents Sentenced to Five Years for Counterfeit Currency and Credit Card Fraud SchemesRead the Press Release
SAN FRANCISCO – Nicole Dunlap and Marcus Smith were sentenced to approximately five years in prison for their roles in a currency counterfeiting and credit card fraud scheme, announced United States Attorney David L. Anderson and United States Secret Service Special Agent in Charge Thomas C. Edwards. Defendant Nicole Dunlap was sentenced to 57 months imprisonment; and defendant Marcus Smith was sentenced to 63 months imprisonment. The sentences were handed down by the Honorable Susan Illston, Senior United States District Judge.
Dunlap, 36, and Smith, 37, pleaded guilty to the charges on November 6, 2019. According to their plea agreements, Dunlap and Smith each took part in a conspiracy to manufacture and pass counterfeit one hundred dollar bills. The bills were manufactured in San Francisco and passed or used for payment around the Bay Area. For example, Dunlap admitted to using counterfeit currency at a business in San Francisco, and Smith admitted to carrying counterfeit one hundred dollar bills in Oakland; and each admitted doing so with the intent to defraud. Dunlap and Smith also acknowledged that the conspiracy involved the manufacture of more than 950 counterfeit one hundred dollar bills.
In addition, Dunlap and Smith admitted in their plea agreements to a credit card fraud scheme, involving the possession and use of hundreds of fraudulent credit and identification cards in the identities of numerous victims, as well as card-making equipment in the furtherance of their fraud. In their plea agreements, the defendants stated that they obtained personal information for victims from the Internet and created fraudulent access devices to rent cars, book hotel rooms, rent high-end purses for sale, and make other fraudulent purchases. For example, when Dunlap was arrested, she had in her possession more than one hundred fraudulent cards with various victims’ identities, as well as multiple pieces of access device-making equipment. Upon Smith’s arrest, he also had more than 1500 fraudulent cards with various victims’ identities, as well as multiple pieces of access device-making equipment. The defendants each acknowledged that the total losses from their credit card fraud conspiracy were no less than $250,000.
A federal grand jury indicted Dunlap and Smith in a superseding indictment on June 18, 2019, charging each of them with one count of conspiracy to counterfeit obligations of the United States, in violation of 18 U.S.C. § 371; one count of passing and possessing counterfeit obligations of the United States, in violation of 18 U.S.C. § 472; one count of conspiracy to commit access device fraud, in violation of 18 U.S.C. § 1029(b)(2); one count of fraudulent possession of fifteen or more counterfeit or unauthorized access devices, in violation of 18 U.S.C. § 1029(a)(3); one count of fraudulent possession of device-making equipment, in violation of 18 U.S.C. § 1029(a)(4); and one count of aggravated identity theft, in violation of 18 U.S.C. § 1028A. Dunlap and Smith pleaded guilty on all counts, except the aggravated identity theft counts, which were dismissed.
In addition to the prison terms, Judge Illston sentenced Dunlap and Smith to a three-year period of supervised release and ordered them to pay restitution to the victims of their crimes in amounts to be determined. Dunlap and Smith are in federal custody and will begin serving their sentences immediately.
Four additional co-conspirators have pleaded guilty to related charges for their roles in the counterfeiting conspiracy and await their sentences as indicated in the following chart:
Name Charges Sentence Joshua Barnes Conspiracy to Counterfeit Obligations of the United States, 18 U.S.C. § 371; Counterfeiting Obligations of the United States, 18 U.S.C. § 472; Passing and Possessing Counterfeit Obligations of the United States, 18 U.S.C. § 472 Sentencing pending Erasto Campos a/k/a Eric Campos Conspiracy to Counterfeit Obligations of the United States, 18 U.S.C. § 371; Passing and Possessing Counterfeit Obligations of the United States, 18 U.S.C. § 472 Sentencing scheduled for January 28, 2020 Michael Okeefe Conspiracy to Counterfeit Obligations of the United States, 18 U.S.C. § 371; Passing and Possessing Counterfeit Obligations of the United States, 18 U.S.C. § 472 Sentencing scheduled for April 10, 2020 Michael Suderman Conspiracy to Counterfeit Obligations of the United States, 18 U.S.C. § 371; Passing and Possessing Counterfeit Obligations of the United States, 18 U.S.C. § 472 Status conference regarding sentencing scheduled for February 14, 2020Assistant U.S. Attorney Eric Cheng is prosecuting the case with the assistance of Morgan Byrne. The prosecution is the result of an investigation by the U.S. Secret Service.
Baton Rouge Man Sentenced to Federal Prison for Transferring More than $4.6 Million in Criminal Proceeds as Part of an Unlicensed Money Transmitting BusinessRead the Press Release
United States Attorney Brandon J. Fremin announced today that U.S. District Judge John W. deGravelles sentenced Donovan J. Barker, age 61, of Baton Rouge, Louisiana, to 57 months in federal prison following his conviction for operating an unlicensed money transmitting business. The Court further sentenced Barker to three years of supervised release following his term of imprisonment, and the United States anticipates that the Court will soon order forfeiture in the amount of $642,373.
According to admissions made during Barker’s plea, between September of 2012 and May of 2016, individuals known to Barker conspired to distribute carisoprodol, tramadol, and other substances, by shipping the pills in bulk into the United States, to be broken down into smaller quantities that would then be shipped to individual purchasers. For a time, Barker helped the individuals by accepting the bulk drug shipments at his home and mailing the drugs out to individual purchasers. In January of 2013, law enforcement agents seized more than 50,000 dosage units of tramadol and carisoprodol from Barker’s residence and advised him to stop assisting the effort to import the substances into the United States.
Following the January 2013 seizure, Barker began operating as a money transmitter for the individuals involved in the scheme. As drug sales were generated, Barker would receive the proceeds of the sales (i.e., accept payments for the drugs from the individual buyers) and wire the proceeds to other individuals and businesses. Barker formed and operated several business entities, including Quantum Information Technologies, Caring Partners 1, LLC, Don Western Sky, LLC, Life Positive Services, LLC, and Healthy Life 1, LLC that he used to assist the scheme.
In total, from October 2012 through February 2016, Barker through his businesses, received more than $4.6 million in payments from individuals all across the United States. This included more than $1.3 million in credit card payments made to him via electronic transfer, and more than $750,000 in checks and money orders, from individuals all across the United States who had purchased controlled substances and other substances over the internet. As Barker received the money, he wired the vast majority of the money out to other individuals and businesses, through hundreds of transactions. For instance, he paid the shipping charges incurred by members of the conspiracy, which exceeded $100,000. Moreover, on more than two hundred (200) different occasions, Barker transmitted proceeds from the operation to foreign bank accounts in the Philippines, India, China, and Canada. Accordingly, Barker was unlawfully and knowingly operating an unlicensed money transmitting business, in violation of federal criminal statutes enacted to combat the use of money transmitting businesses to transfer the proceeds of criminal activity.
U.S. Attorney Brandon J. Fremin stated, “In our effort to stop sophisticated criminals who facilitate and finance the illegal distribution of controlled substances, we will use every legal tool at our disposal, including long-term financial investigation and the money laundering and money transmitting statutes. I commend the collaborative efforts of all of the agents and prosecutors who worked on this case and made this unique prosecution a success.”
“The sentencing of Donovan Barker for his role in smuggling funds from illegal drug transactions in and out of the United States is a victory for the American public and a defeat to drug traffickers everywhere. The special agents of IRS Criminal Investigation continue in their mission to disrupt the flow of ill-gotten gains that is the life-blood for these criminals,” said Special Agent in Charge Thomas J. Holloman III, Atlanta Field Office, IRS Criminal Investigation. “We will continue to be relentless in our mission to dismantle these drug trafficking organizations and bring the criminals who run them to justice.”
DEA Assistant Special Agent in Charge Michael R. Sader said, “Criminals who attempt to thwart the efforts of law enforcement through money laundering schemes and businesses will not triumph. The DEA, along with our law enforcement partners, will continue to pursue all avenues to deny drug traffickers and money launderers the one thing they value the most – their profit. The sentencing of this individual should put on notice those who engage in this type of illegal activity.”
“The U.S. Postal Inspection Service is committed to ensuring the U.S. Mails are not used as a tool to distribute narcotics to our communities,” said Adrian Gonzalez, U.S. Postal Inspector in Charge of the Houston Division. “The sentence handed down today should serve as a reminder to other perpetrators engaged in this type of criminal behavior that we will work closely with our law enforcement partners to bring them to justice.”
This matter is being investigated by the Internal Revenue Service-Criminal Investigations, the Drug Enforcement Administration, and the U.S. Postal Inspection Service, with critical assistance from the Louisiana Office of Financial Institutions. The matter is being prosecuted by Assistant United States Attorneys Alan A. Stevens, Kashan Pathan and Robert Piedrahita. The investigation received valuable assistance from the Baton Rouge Police Department, the East Baton Rouge Parish Sheriff’s Office, U.S. Immigration and Customs Enforcement—Homeland Security Investigations, and the Louisiana State Police, and other federal, state, and local agencies.
The investigation is another effort by the Organized Crime Drug Enforcement Task Force (OCDETF) Program that 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.
Bakersfield Man Pleads Guilty to Possession with Intent to Distribute Methamphetamine and HeroinRead the Press Release
FRESNO, Calif. — Hacel Alfredo Alvarez, 35, of Bakersfield, pleaded guilty today to possessing with intent to distribute methamphetamine and heroin, U.S. Attorney McGregor W. Scott announced.
According to court documents, Alvarez admitted that he was storing for the purpose of distribution 21 pounds of methamphetamine and over 1 pound of heroin that officers found at his residence in Bakersfield during the execution of a search warrant. The officers also found $8,980 in cash under the mattress in his bedroom.
This case is the product of an investigation by the Southern Tri-County High Intensity Drug Trafficking Area (HIDTA) task force, which consists of agents from Homeland Security Investigations and the Kern County Sheriff’s Office. Assistant U.S. Attorney Karen A. Escobar is prosecuting the case.
Alvarez is scheduled to appear in federal court in Fresno for sentencing on May 18. He faces a mandatory minimum statutory penalty of 10 years and a maximum penalty of life in prison, and a $10 million fine. 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.
As Tax Filing Season Opens, IRS Criminal Investigation Highlights Tax Fraud ProsecutionsRead the Press Release
As tax filing season opens this week, the IRS Criminal Investigation Dallas Field Office and the U.S. Attorney’s Office for the Northern District of Texas remind citizens that falsely preparing tax returns and evading taxes are crimes.
Tax payers can view the most current tax tips, forms and scams at www.irs.gov.
“As a new tax filing season begins this week, IRS Criminal Investigation wants to remind people to file accurate tax returns and to choose their tax preparers carefully,” said Tamera Cantu, Special Agent in Charge of the Dallas Field Office. “Those who might consider preparing false and fraudulent tax returns should be aware of the extremely negative consequences that could result in prison time and large tax bills, including substantial fines, interest and penalties.”
“The U.S. Attorney’s Office is committed to prosecuting tax crimes,” said U.S. Attorney Erin Nealy Cox. “We are grateful to our partners at IRS Criminal Investigation for rooting out tax fraud.”
To underscore federal law enforcement’s commitment to pursue those who fail to pay their taxes or otherwise defraud the tax system, below are several tax and tax-related fraud prosecutions that were sentenced in 2019 in the Northern District of Texas:
- Juana Gabriela Ortiz worked for Ebenezer Olayiwola, who owned and operated Peak Insurance and Tax Service. Between 2010 and 2013, Olayiwola and his preparers filed thousands of tax returns claiming more than $35 million in fraudulent tax refunds. Olayiwola admitted to training his preparers to prepare fraudulent tax returns by adding fraudulent Schedules C forms and education credits. Olayiwola’s organization generated approximately millions of dollars in tax preparation fees during that period. Olayiwola was sentenced to 60 months confinement, 3 years supervised release and restitution totaling $30,670,438.98. Ortiz prepared a significant number of false tax returns, and was ordered to pay restitution totaling $3,992,080.
- Francisco Ventura owned numerous tax preparation businesses located in Texas. Subject assisted in teaching training classes for new tax return preparers, supervised other tax return preparers, and reviewed and submitted returns prepared at the business to the IRS. Ventura instructed employees to prepare false income tax returns utilizing false items such as Schedules C and false education credits. Ventura was sentenced to 63 months confinement, 2 years of supervised release and restitution totaling $8,310,261.
- Idrissa Traore and Josseline Cazun-Menendez participated in a stolen identity refund fraud scheme to defraud the IRS. Cazun-Menendez opened at least 66 bank accounts using false identification documents in at least 18 different alias names and Traore opened at least 3 bank accounts in at least 2 alias names also using false identification. Traore maintained organized files of his and Cazun-Menendez’s alias bank account records, debit cards, and fraudulent identification cards. A total of 159 fraudulent tax returns for tax years 2014 through 2017 were associated with fraudulent refunds deposited to the alias accounts. Traore was sentenced to 121 months confinement, 3 years of supervised release and restitution totaling $2,044,547. Cazun-Menendez was sentenced to 60 months confinement, 3 years of supervised release and restitution totaling $1,017,999.
- Mario Antonio Melendez worked for a return preparer who owned numerous tax preparation businesses in the Dallas area. The defendant conspired with the owner to teach return preparation classes instructing employees to prepare fraudulent returns in exchange for a percentage of the owner’s profits. The returns included false education credits and false American Opportunity Tax Credits and resulted in inflated refunds to be paid by the IRS. Melendez was sentenced to 51 months confinement, 1 year of supervised release and restitution totaling $3,885,456.
- Sandra Cantu owned two tax preparation businesses in Dallas and prepared, filed, and caused to be filed income tax returns containing false Schedules A and C. During the period of 2013-2016, her scheme resulted in 1,705 fraudulent returns, 626 of which refunds were paid out. Cantu was sentenced to 48 months confinement, 1 year of supervised release and restitution totaling $1,761,189.12.
The Better Business Bureau is a non-profit that upholds standards for trustworthiness and ethics in business. BBB accepts consumer complaints against businesses and monitors the marketplace for substandard business practices.
In 2019, BBB processed approximately 1,582 reportable complaints against tax return preparers. Approximately 65 of those complaints were for preparers headquartered in the DFW area.
Consumers alleged to BBB that theft of refunds, theft of personal information and identifiers, loss or misappropriation of sensitive data, and late and inaccurate filings are the possible outcomes of choosing the wrong tax preparer.
BBB advises taxpayers to be cautious when choosing a tax preparer. You can check BBB Business Profiles at www.bbb.org. BBB provides the following tips to help you find a tax preparer you can trust:
- Get referrals.
- Choose a preparer that is properly registered. A tax preparer must obtain a PTIN from the IRS.
- Look for credentials. Anyone with a PTIN can prepare your tax forms for you, but some tax preparers have more training and qualifications than others. Learn about tax preparer credentials on the IRS website.
- Keep a watchful eye for promises. Be wary of any tax preparation service that promises larger refunds than the competition and avoid tax preparers who base their fee on a percentage of the refund.
- Search for free tax programs. There are several free government programs that prepare taxes free of charge if you meet an income requirement. Visit the IRS’s Free File page for more information.
Timely and accurate filing, in addition to thorough research on a reputable tax preparer will help north Texans navigate the new tax season with ease and confidence.
2 men guilty of trafficking troubled teenagerRead the Press Release
HOUSTON – Two Houstonians have admitted to recruiting a teenager on social media and trafficking her for sex, announced U.S. Attorney Ryan K. Patrick.
In 2017, Demetrius Delaan White, 28, and Deonte Danquise Bailey-Roach, 27, recruited a troubled teenager on social media. They then brought her from her home in Stephenville to Houston to engage in commercial sex acts.
For three days, they posted the minor victim on internet advertisements for commercial sex, during which time more than 300 people expressed an interest. They rented motel rooms for the sex acts, drove her to clients’ homes and took her to a truck stop. They also had her walk on Bissonnet Street, an area commonly known for an open and rampant sex trade.
To induce the minor victim into continuing to engage in the activity, both men gave her ecstasy drugs before the commercial sex acts. They also kept all the cash proceeds.
U.S. District Judge Kenneth M. Hoyt accepted the pleas and will impose sentencing April 13. At that time, White and Bailey-Roach faces up to life in prison and a possible $250,000 maximum fine.
They have been and will remain in custody pending that hearing.
The FBI and the Houston Police Department, both part of the Human Trafficking Rescue Alliance (HTRA), conducted the investigation.
HTRA law enforcement includes members of the Houston Police Department, FBI, Immigration and Customs Enforcement’s Homeland Security Investigations, Texas Attorney General’s Office, IRS-Criminal Investigation, Department of Labor, Department of State, Texas Alcoholic and Beverage Commission, Texas Department of Public Safety, Coast Guard and Sheriff’s Offices in Harris and Montgomery counties in coordination with District Attorney’s offices in Harris, Montgomery and Fort Bend Counties.
Established in 2004, the United States Attorney’s office in Houston formed HTRA to combine resources with federal, state and local enforcement agencies and prosecutors, as well as non-governmental service organizations to target human traffickers while providing necessary services to those that the traffickers victimized. Since its inception, HTRA has been recognized as both a national and international model in identifying and assisting victims of human trafficking and prosecuting those engaged in trafficking offenses.
Assistant U.S. Attorneys Kate Suh and Sebastian Edwards are prosecuting the case.
26 January 2020
Todd County Man Indicted for Felon in Possession of a Firearm and AssaultRead the Press Release
United States Attorney Ron Parsons announced that a Todd County, South Dakota, man has been indicted by a federal grand jury for Felon in Possession of a Firearm and Assault by Striking, Beating, and Wounding.
Tyler Reagle, age 37, was indicted on January 22, 2020. He appeared before U.S. Magistrate Judge Mark A. Moreno on January 24, 2020, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in federal prison and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on January 8, 2020, in Todd County, Reagle, having previously been convicted of a felony, knowingly possessed multiple firearms. The Indictment further alleges that, on the same date, Reagle assaulted his domestic partner.
The charges are merely accusations and Reagle is presumed innocent until and unless proven guilty.
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. 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 local communities 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 Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services and the Todd County Sheriff’s Office. Assistant U.S. Attorney Kirk Albertson is prosecuting the case.
Reagle was released on bond pending trial. A trial date has been set for March 23, 2020.
Statement from United States Attorney Jay E. Town on the Shooting of Birmingham Police Department Detective John FinkeRead the Press Release
BIRMINGHAM, Ala. – “This tragedy is a heartbreaking reminder of the dangers all law enforcement face. While they keep us safe. While they do the job. Our thoughts and prayers are with Detective Finke, his family, and all of Birmingham PD. We should never forget that the line of duty is endowed by sacrifice, selflessness, and courage.”
Statement from United States Attorney Jay E. Town on the Shooting of Birmingham Police Department Detective John FinkeRead the Press Release
BIRMINGHAM, Ala. – “This tragedy is a heartbreaking reminder of the dangers all law enforcement face. While they keep us safe. While they do the job. Our thoughts and prayers are with Detective Finke, his family, and all of Birmingham PD. We should never forget that the line of duty is endowed by sacrifice, selflessness, and courage.”
Sioux Falls Man Indicted for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Ron Parsons announced that a Sioux Falls, South Dakota, man has been indicted by a federal grand jury for Conspiracy to Distribute a Controlled Substance.
Adam Michael Tanner, age 46, was indicted on September 10, 2019. He appeared before U.S. Magistrate Judge Mark A. Moreno on January 23, 2020, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to life in federal prison and/or a $10,000,000 fine, up to life of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between March 1, 2018, and September 10, 2019, Tanner knowingly and intentionally, combined, conspired, confederated, and agreed with others to knowingly and intentionally distribute and possess with the intent to distribute 500 grams or more of methamphetamine, a schedule II controlled substance.
The charge is merely an accusation and Tanner is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Northern Plains Safe Trails Drug Enforcement Task Force and the Pierre Police Department. Assistant U.S. Attorney Meghan Dilges is prosecuting the case.
Tanner was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Rosebud Man Indicted for Threatening a Federal OfficerRead the Press Release
United States Attorney Ron Parsons announced that a Rosebud, South Dakota, man has been indicted by a federal grand jury for Influencing a Federal Officer by Threat.
Anthony One Star, Jr., a/k/a Tony One Star, a/k/a Sonny One Star, age 32, was indicted on January 22, 2020. He appeared before U.S. Magistrate Judge Mark A. Moreno on January 24, 2020, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in federal prison and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on December 15, 2019, One Star threatened to murder a law enforcement officer who was employed by the Rosebud Sioux Tribe.
The charge is merely an accusation and One Star is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Kirk Albertson is prosecuting the case.
One Star was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Rapid City Men Sentenced for Armed RobberyRead the Press Release
United States Attorney Ron Parsons announced that two Rapid City, South Dakota, men convicted of Interference with Commerce by Robbery and Conspiracy were sentenced by U.S. District Judge Karen E. Schreier.
Corbin Conroy, age 41, was sentenced on January 23, 2020, to 7 years in federal prison on each count, to run concurrent, followed by 3 years of supervised release, and was ordered to pay a $200 special assessment to the Federal Crime Victims Fund.
Wesley Dillon, age 19, was sentenced on November 22, 2019, to 4 years in federal prison on each count, to run concurrent, followed by 3 years of supervised release, and was ordered to pay a $200 special assessment to the Federal Crime Victims Fund.
The convictions stem from Conroy and Dillon brandishing a firearm and forcibly taking money from a casino employee at Rapid City in March 2019.
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. 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 local communities 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 Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Rapid City Police Department. Assistant U.S. Attorney Benjamin Patterson prosecuted the case.
Rapid City Man Charged with Illegal Possession of FirearmRead the Press Release
United States Attorney Ron Parsons announced that a Rapid City, South Dakota, man was charged in federal district court with Possession of a Firearm by a Prohibited Person.
Knel-Philip Chery, age 38, was charged on December 17, 2019. Chery appeared before U.S. Magistrate Judge Daneta Wollmann on January 22, 2020, and pleaded not guilty to the charge. The maximum penalty upon conviction is 10 years in federal prison and/or a $250,000 fine, 3 years of supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge relates to Chery, a previously convicted felon, being in possession of a Smith & Wesson 9mm semi-automatic pistol in October 2019 at Rapid City. The charge is merely an accusation and Chery is presumed innocent until and unless proven guilty.
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. 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 local communities 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 Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian.
The investigation is being conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Benjamin Patterson is prosecuting the case.
Chery was detained pending trial. A trial date has not been set.
Physician Pleads Guilty to Acquiring Controlled Substances by Fraud and Using A Means of Identification of Another to Acquire Controlled Substances by FraudRead the Press Release
PENSACOLA, FLORIDA – Michael T. Harris, 45, of Gulf Breeze, Florida, entered a guilty plea to the charges of acquiring controlled substances by fraud, and using a means of identification of another person in connection to the offense of acquiring controlled substances by fraud. The guilty plea was announced by Lawrence Keefe, United States Attorney for the Northern District of Florida.
Documents introduced at the time of the guilty plea allege that between November 4, 2015, and
August 11, 2016, on at least 24 separate occasions, Harris presented fraudulent prescriptions to various pharmacies in the Santa Rosa County area to obtain methadone, morphine sulfate, oxycodone, and alprazolam. During that time, Harris worked as a physician at a medical facility in Gulf Breeze and shared office space with other physicians. Harris forged another physician’s signature or used the physician’s pre-signed prescriptions without the physician’s authorization. On each occasion, Harris used a means of identification of the physician without the physician’s authorization, namely, the physician’s specifically assigned Drug Enforcement Administration Registration number, to acquire methadone, morphine sulfate, oxycodone, and alprazolam. In total, between the above-mentioned dates, Harris used fraudulent prescriptions to acquire approximately 1622 methadone pills, approximately 570 morphine sulfate pills, approximately 120 oxycodone pills, and approximately 40 alprazolam pills using fraudulent prescriptions.Harris faces up to four years’ imprisonment for the charge of acquiring controlled substances by fraud, and up to twenty years’ imprisonment for the charge of using a means of identification of another person in connection to the offense of acquiring controlled substances by fraud. Harris is scheduled to be sentenced on April 14, 2020.
“Society places a large measure of trust in the hands of licensed physicians, and it’s profoundly disturbing when a respected professional abuses that trust to illegally obtain controlled substances,” U.S. Attorney Keefe said. “In addition, this doctor’s actions undermined the trust placed in him by his fellow physicians, pharmacists, and others in the medical profession.”
This case resulted from an investigation by the Drug Enforcement Administration, the Santa Rosa
County Sheriff’s Office, and the Gulf Breeze Police Department. Assistant United States Attorney J.
Ryan Love is prosecuting the case.“The DEA Miami Field Division is committed to bringing to justice any medical professional who violates the law and the trust placed in them by society,” said Kevin W. Carter, Acting Special
Agent in Charge of the DEA Miami Field Division.”The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of
Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.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.
Pensacola Executive Sentenced to 40 Months in Federal Prison for Conspiring with Foreign Nationals to Ship Technology to IranRead the Press Release
PENSACOLA, FLORIDA – United States Attorney Lawrence Keefe, of the Northern District of Florida, today announced that Pensacola business owner James P. Meharg, 60, was sentenced to 40 months in prison on federal charges of conspiring to sell and export power generating equipment to a recipient in Iran, and concealing the scheme, as well as having payments routed to Meharg via a foreign country. Meharg, CEO and president of Turbine Resources International, LLC, in Pensacola, conspired with citizens of the United Kingdom and Iran to export a large turbine and parts from the
United States to an Iranian recipient, in violation of the Iranian Transactions and Sanctions
Regulations as well as federal criminal law.Meharg, a U.S. citizen, conspired from October 1, 2017, to June 12, 2019, to violate the Iranian embargo by attempting to export a Solar Mars 90 S turbine core engine and parts from the United
States, for delivery to an end user in Iran. Evidence revealed that on April 25, 2018, Meharg sent an invoice for $500,000 to a conspirator in the United Kingdom and received two partial payments of
$124,950 each, on May 7 and May 24, 2018, at least one of which was routed through a company in
Dubai. In total, Meharg received approximately $250,000 in funds laundered through foreign accounts as payment for having the turbine sent to Iran. Law enforcement authorities, however, were able to seize the turbine before its transatlantic journey to the end user in Iran. That end user, a conspirator in Iran, is linked to an Iranian energy company. Meharg also falsified documents used to lawfully export items from the United States.“Exporting technology to Iran is prohibited by law in order to protect the national security interests of the United States of America, and this defendant chose to put his own self-interest and greed above such interests,” Keefe said. “Federal imprisonment should send a clear signal that the United States cannot and will not look the other way when one of its citizens endangers the safety of our nation.”
“Today’s sentence sends a strong message that trade with Iran in violation of U.S. export control laws and regulations will not be tolerated,’ said Deputy Assistant Secretary for Export
Enforcement, Douglas Hassebrock. ‘The Bureau of Industry and Security will vigorously pursue parties that seek to profit from illegally supplying materials to Iran.’Assistant United States Attorney David L. Goldberg, who is a National Security Cyber Specialist, prosecuted the case following a joint investigation by the United States Department of Commerce’s
Bureau of Industry and Security along with the Federal Bureau of Investigation.“This case serves as a reminder to anyone who acts as an agent of the Iranian government in the
United States, that American law enforcement is relentless in our efforts to protect the national security of this country and the freedoms of our citizens,” said Rachel L. Rojas, Special Agent in
Charge of the FBI Jacksonville Division. “The FBI was proud to support our partners at the
Department of Commerce – Bureau of Industry and Security in this case, and we are committed to disrupting any similar actions by individuals on behalf of Iran in the future.”Meharg’s prison sentence will be followed by three years of federal supervised release. He was also ordered to forfeit a monetary judgment in the amount of $250,000.00.
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of
Florida website. For more information about the U.S. Attorney’s Office, Northern District of
Florida, visit http://www.justice.gov/usao/fln/index.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.
Hartford Man Sentenced for Unlicensed Receipt of Explosive MaterialsRead the Press Release
United States Attorney Ron Parsons announced that a Hartford, South Dakota, man convicted of Unlicensed Receipt of Explosive Materials was sentenced on January 7, 2020, by U.S. District Judge Karen E. Schreier.
Gerald “Jerry” Eldon Gosmire, age 60, was sentenced to 18 months in federal prison, followed by 2 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Gosmire was indicted by a federal grand jury on July 9, 2019. He pled guilty on November 1, 2019.
On November, 27, 2018, law enforcement officers searched Gosmire's property pursuant to a search warrant. During the search, 37 explosive devices were found. A permit was required to possess explosive devices of that nature and Gosmire did not have one.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Minnehaha County Sheriff's Office, and the U.S. Secret Service. Assistant U.S. Attorney Jeffrey C. Clapper prosecuted the case.
Gosmire was immediately turned over to the custody of the U.S. Marshals Service.
Flandreau Man Charged with Aggravated Sexual Abuse of a ChildRead the Press Release
United States Attorney Ron Parsons announced that a Flandreau, South Dakota, man has been indicted by a federal grand jury for Aggravated Sexual Abuse of a Child.
Cecil Long, age 67, was indicted on January 7, 2020. He appeared before U.S. Magistrate Judge Veronica L. Duffy on January 10, 2020, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to life in federal prison and/or a $250,000 fine, life of supervised release, and up to $300 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between August 31, 2010, and August 30, 2013, and between August 31, 2015, and August 30, 2016, Long knowingly engaged in, and attempted to engage in, sexual acts with a child who had not attained the age of 12.
The charges are merely accusations and Long is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Ann M. Hoffman is prosecuting the case.
Long was released on bond pending trial, which has been set for March 17, 2020.
Eagle Butte Woman Indicted on Firearm ChargeRead the Press Release
United States Attorney Ron Parsons announced that an Eagle Butte, South Dakota, woman has been indicted by a federal grand jury for Possession of a Firearm by a Prohibited Person.
Carlee Lucia Condon, age 22, was indicted on January 14, 2020. She appeared before U.S. Magistrate Judge Mark A. Moreno on January 16, 2020, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in federal prison and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on July 2, 2019, Condon, being an unlawful user of and addicted to methamphetamine, knowingly possessed a handgun.
The charge is merely an accusation and Condon is presumed innocent until and unless proven guilty.
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. 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 local communities 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 Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see: https://www.justice.gov/projectguardian.
The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Services and the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney Cameron J. Cook is prosecuting the case.
Condon was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
24 January 2020
Wilkinsburg Woman Sentenced to 14 Years for Health Care Fraud and Illegal Distribution of Pain MedicationRead the Press Release
PITTSBURGH - A resident of Wilkinsburg, Pennsylvania, has been sentenced in federal court to 14 years' imprisonment and five years supervised release on her conviction of Health Care Fraud and the illegal distribution of prescription opioid pain medication, United States Attorney Scott W. Brady announced today.
Chief United States District Judge Mark R. Hornak imposed the sentence yesterday on Antoinette Adair, age 51. Adair was convicted of one count of Health Care Fraud, one count of Conspiracy to Distribute Oxycodone and Oxymorphone, and eight counts of Possession with the Intent to Distribute and Distribution of Oxycodone and Oxymorphone.
According to information presented to the court, Adair was part of a group of individuals involved in a large-scale Health Care Fraud and pill distribution network. As a part of the criminal enterprise, Adair and others obtained powerful and addictive prescription pain medication through physicians under the false pretense that they intended to use that medication themselves. In fact, they intended to sell the medication for profit to individuals addicted to those medications. Additionally, medication was often paid for through taxpayer-funded health care insurance programs. Thus, the taxpayers ended paying much of the prescription medications that these conspirators sold.
Assistant United States Attorney Brendan T. Conway prosecuted this case on behalf of the government.
United States Attorney Brady commended the Federal Organized Crime Drug Enforcement Task Force (OCDETF) investigation led by the Federal Bureau of Investigation, the Drug Enforcement Administration, the Pennsylvania Office of the Attorney General, the Pittsburgh Bureau of Police, and the Allegheny County Police Department for the investigation leading to the successful prosecution of Adair.
Waterbury Licensed Professional Counselor Pays $39K to Settle False Claims AllegationsRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, today announced that CHANNA SONTAG, LPC, and her business, CHILDREN’S BEHAVIORAL THERAPY LLC, have entered into a civil settlement agreement with the federal and state governments and will pay more than $39,000 to resolve allegations that they violated the federal and state False Claims Acts.
Sontag is a state Licensed Professional Counselor and the owner of Children’s Behavioral Therapy LLC, a private behavioral health practice in Waterbury. Sontag was enrolled as a Licensed Behavioral Health Clinician in Independent Practice in the Connecticut Medical Assistance Program (“CMAP”), which includes the state’s Medicaid program. It is alleged that, on numerous occasions, Sontag billed Medicaid for 60 minutes of one-on-one individual psychotherapy services when, in fact, she had performed individual psychotherapy services for less time.
To resolve the allegations under the federal and state False Claims Acts, Sontag and Children’s Behavioral Therapy LLC will pay $39,471.22 in order to reimburse the Medicaid program for conduct occurring from November 3, 2014 to March 15, 2017. Sontag has also agreed to a voluntary five-year suspension from the Connecticut Medicaid Program as part of the settlement.
Under the False Claims Act, the government can recover up to three times its actual damages, plus penalties of $11,181 to $22,363 for each false claim.
This case stems from a larger investigation into fraudulent activity in the area of behavioral health services, which has been jointly conducted by the Office of the Inspector General of the U.S. Department of Health and Human Services, the Medicaid Fraud Control Unit of the Chief State’s Attorney’s Office and the Connecticut Office of the Attorney General, with support from the Connecticut Department of Social Services.
This matter was handled by Assistant U.S. Attorney Anne Thidemann, and Assistant Attorney General Karla Turekian of the Connecticut Office of the Attorney General.
People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS or the Health Care Fraud Task Force at (203) 777-6311.
Washington State Man Sentenced to over 17 Years in Federal Prison for Child ExploitationRead the Press Release
Fayetteville, Arkansas – David Clay Fowlkes, Acting United States Attorney for the Western District of Arkansas, announced that Kyle Paul Vance, age 24, of Shelton, Washington, was sentenced today to 210 months in federal prison without the possibility of parole followed by 15 years of supervised release on one count of enticing a minor to Produce to Child Pornography and one count of Receipt of Child Pornography. The Honorable Timothy L. Brooks, United States District Judge, presided over the sentencing hearing in the United States District Court in Fayetteville.
According to court records, in January 12, 2018, a concerned father came to the Gravette Police Department to report that an individual, later identified as Vance solicited sexually explicit images of his 9-year-old daughter via Facebook Messenger. The investigation was turned over to the FBI, who obtained a search warrant for Vance’s Facebook records. Among the records produced by Facebook, law enforcement located a messenger conversation in which Vance solicited multiple sexually explicit images from the minor. The FBI subsequently executed a search warrant on Vance’s residence located in Washington. While at the residence, FBI agents interviewed Vance, who admitted to engaging in online conversations with minors and receiving nude images of underage females.
In October of 2019, Vance was found guilty by a federal jury sitting in Fayetteville of Production of Child Pornography and Knowing Receipt of Child Pornography.
This case was investigated by the Gravette Police Department and the Federal Bureau of Investigation. Assistant United States Attorney’s Carly Marshall and Dustin Roberts prosecuted the case for the United States.
Washington State Couple and Companies Sentenced for Fraud and False Statement in Connection with Renewable Energy Fraud SchemeRead the Press Release
A Richland, Washington couple and their companies, HTG Trucking LLC and Freedom Fuel Inc., were sentenced yesterday in federal court in Richland, Washington for fraud and false statement charges in connection with a renewable energy fraud scheme, announced Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Environment and Natural Resources Division and U.S. Attorney for the Eastern District of Washington William D. Hyslop.
Hector Garza Jr., 49, was sentenced to two years in prison to be followed by a three-year term of supervised release. Tammy Garza, 38, was sentenced to four months in prison and one year of supervised release. HTG Trucking LLC and Freedom Fuel Inc. were placed on probation for three years. All of the defendants were ordered to pay restitution to the U.S. Treasury of $284,546 and a $100,000 fine. The defendants had previously pled guilty on June 6, 2019, before the Honorable Salvador Mendoza Jr.
Hector and Tammy Garza and their companies, HTG Trucking and Freedom Fuel, were participants in a conspiracy involving Gen-X Energy Group Inc. (Gen-X), a renewable energy company formerly located in Pasco and Moses Lake, Washington. Between January 2013 and April 2013, Hector Garza and his co-conspirators falsely claimed the production of hundreds of thousands of marketable renewable energy credits, which they then sold for more than $296,000, and filed false claims with the IRS for $284,546 in excise credit refunds. Throughout this period, much of the renewable fuel claimed to be produced at the Gen-X facilities was either not produced or it was re-processed multiple times.
Hector Garza, HTG Trucking and Freedom Fuel pled guilty to conspiring to defraud the United States with respect to the false claims made to the IRS, through the use of the Garzas’ companies, which were used to “round” supposed renewable fuel by driving the same material back and forth between Gen-X’s Moses Lake facility and the Garzas’ businesses in Othello, Washington. This activity enabled the conspirators to generate fraudulent renewable energy credits and tax credits each time the material was “rounded.” Tammy Garza pled guilty to a separate offense of aiding and abetting the use of false statements in connection with the renewable energy credits that were claimed and sold as part of the scheme.
Several conspirators have previously pled guilty and been sentenced in connection with their role in the fraud. In June 2017, Scott Johnson, the former CEO of Gen-X, was sentenced to 97 months in prison in connection with his role in the fraud scheme. In December 2017, Donald Holmes, the former vice president of Gen-X, was sentenced to 78 months of imprisonment. In June 2018, Jin Chul “Jacob” Cha of Tustin, California, was sentenced to 51 months in prison in connection with his role in the fraud.
The case was prosecuted by Assistant U.S. Attorney Dan Fruchter of the Eastern District of Washington; EPA Regional Criminal Enforcement Counsel and Special Assistant U.S. Attorney Karla G. Perrin for the Eastern District of Washington and Senior Trial Attorney Jennifer Leigh Blackwell of the Environment and Natural Resources Division’s Environmental Crimes Section. The IRS-Criminal Investigation and the Environmental Protection Agency’s Criminal Investigation Division investigated the case.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Washington State Couple and Companies Sentenced for Fraud and False Statement in Connection with Renewable Energy Fraud SchemeRead the Press Release
WASHINGTON – A Richland, Washington couple and their companies, HTG Trucking LLC and Freedom Fuel Inc., were sentenced yesterday in federal court in Richland, Washington for fraud and false statement charges in connection with a renewable energy fraud scheme, announced Assistant Attorney General Jeffrey Bossert Clark for the Justice Department’s Environment and Natural Resources Division and U.S. Attorney for the Eastern District of Washington William D. Hyslop.
Hector Garza Jr., 49, was sentenced to two years in prison to be followed by a three-year term of supervised release. Tammy Garza, 38, was sentenced to four months in prison and one year of supervised release. All of the defendants were ordered to pay restitution to the U.S. Treasury of $284,546 and a $100,000 fine. HTG Trucking, LLC and Freedom Fuel, Inc. were sentenced to a three-year term of court supervision. The defendants had previously pled guilty on June 6, 2019, before the Honorable Salvador Mendoza Jr.
Hector and Tammy Garza and their companies, HTG Trucking and Freedom Fuel, were participants in a conspiracy involving Gen-X Energy Group Inc. (Gen-X), a renewable energy company formerly located in Pasco and Moses Lake, Washington. Between January 2013 and April 2013, Hector Garza and his co-conspirators falsely claimed the production of hundreds of thousands of marketable renewable energy credits, which they then sold for more than $296,000, and filed false claims with the IRS for $284,546 in excise credit refunds. Throughout this period, much of the renewable fuel claimed to be produced at the Gen-X facilities was either not produced or it was re-processed multiple times.
Hector Garza, HTG Trucking and Freedom Fuel pled guilty to conspiring to defraud the United States with respect to the false claims made to the IRS, through the use of the Garzas’ companies, which were used to “round” supposed renewable fuel by driving the same material back and forth between Gen-X’s Moses Lake facility and the Garzas’ businesses in Othello, Washington. This activity enabled the conspirators to generate fraudulent renewable energy credits and tax credits each time the material was “rounded.” Tammy Garza pled guilty to a separate offense of aiding and abetting the use of false statements in connection with the renewable energy credits that were claimed and sold as part of the scheme.
Defrauding a renewable energy program in order to steal taxpayer funds is simply unconscionable,” said Hyslop. “I especially want to commend the exceptional investigative work by the Environmental Protection Agency and the Internal Revenue Service in uncovering this complex scheme, and to thank them and the Department of Justice’s Environment and Natural Resources Division for their support and hard work throughout this investigation and prosecution. We will continue to work with our law enforcement partners to ensure that individuals and companies that steal taxpayer dollars are held to account.”
"Mr. and Mrs. Garza's actions to defraud the IRS and the EPA were dishonest and harmful to our community. They conspired with others to steal from honest taxpayers and exploit financial incentives aimed at safeguarding our environment," said IRS-Criminal Investigation Special Agent in Charge Justin Campbell. "IRS-Criminal Investigation will continue to prosecute those who defraud the U.S. for personal gain."
“We will not tolerate environmental fraud in the Renewable Fuels Program, or anywhere else.” said EPA Assistant Administrator for Enforcement and Compliance Assurance Susan Bodine. “This case highlights EPA's resolve in working with partners, nationally, to hold bad actors accountable."
Several conspirators have previously pled guilty and been sentenced in connection with their role in the fraud. In June 2017, Scott Johnson, the former CEO of Gen-X, was sentenced to 97 months in prison in connection with his role in the fraud scheme. In December 2017, Donald Holmes, the former vice president of Gen-X, was sentenced to 78 months of imprisonment. In June 2018, Jin Chul “Jacob” Cha of Tustin, California, was sentenced to 51 months in prison in connection with his role in the fraud.
The case was prosecuted by Assistant U.S. Attorney Dan Fruchter of the Eastern District of Washington; EPA Regional Criminal Enforcement Counsel and Special Assistant U.S. Attorney Karla G. Perrin for the Eastern District of Washington and Senior Trial Attorney Jennifer Leigh Blackwell of the Environment and Natural Resources Division’s Environmental Crimes Section. The IRS-Criminal Investigation and the Environmental Protection Agency’s Criminal Investigation Division investigated the case.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Union Officials Plead Guilty to Violent ExtortionRead the Press Release
Two officials from the local Iron Workers union pleaded guilty today for their role in a brutal assault on a group of non-union ironworkers in Dyer, Indiana. The attack, which left multiple workers with serious injuries, was part of an effort to obtain a contract for the union to assist with the construction of the Plum Creek Christian Academy, a school affiliated with the Dyer Baptist Church.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Thomas L. Kirsch II of the Northern District of Indiana, Special Agent in Charge Irene Lindow, Chicago Regional Office, U.S. Department of Labor, Office of Inspector General (DOL-OIG) and Special Agent in Charge Grant Mendenhall of the FBI’s Indianapolis Field Office made the announcement.
Thomas Williamson Sr., 68, and Jeffrey Veach, 56, pleaded guilty to one count of extortion conspiracy before U.S. Magistrate Judge John Martin of the Northern District of Indiana.
Veach is the current president of Local 395 of the International Association of Bridge, Structural, Ornamental, and Reinforcing Iron Workers (Local 395), based in Portage, Indiana. Prior to his recent retirement, Williamson was a business agent for Local 395. Under federal law, following their guilty pleas, Veach will forfeit his position as president and both men will be barred from holding any union position for at least 13 years following the end of any prison sentences they may serve.
Pursuant to their plea agreements, Williamson and Veach admitted that on Jan. 7, 2016, they conspired to use actual and threatened violence to obtain contracts for Local 395 – a business contract from general contractor Lagestee-Mulder of Illinois, and/or a labor contract from D5 Iron Works (D5), also of Illinois. Prior to Jan. 7, 2016, the two defendants had learned that D5 was performing structural ironwork for the Dyer Baptist Church, which was located in Local 395’s “territory.” They also knew that D5 was not signed up to a labor contract with Local 395.
On the afternoon of Jan. 6, 2016, Williamson visited the church jobsite to talk to the foreman of the D5 crew and convince him to “sign up” with Local 395, or to stop work on the site. After being told to leave the site, Williamson went across the street to the church. Once inside, he confronted a youth pastor for the church and told him that it was “unethical” to use non-union labor for the construction site. Williamson offered to get “his guys” on the jobsite instead. The next morning, Williamson returned to the jobsite, this time accompanied by co-defendant Veach. The D5 foreman again refused to join the union and asked the two defendants to leave the site. Williamson became angry and grabbed the foreman’s jacket, calling him, among other things, a “scab bastard.” As they left the site, Williamson remarked to Veach that the two of them were going to have to “take things back to old school.”
The two defendants then gathered up about 10 rank-and-file members of Local 395 to return to the jobsite that afternoon. Once at the jobsite, the union members immediately attacked the D5 workers and beat them with fists and loose pieces of hardwood, kicking them while they were on the ground. As a result of the attack, one D5 worker sustained a broken jaw that required several surgeries and extended hospitalization.
The DOL-OIG, the FBI and the Dyer Police Department investigated the case. Trial Attorneys Alexander Gottfried and Robert Tully of the Criminal Division’s Organized Crime and Gang Section are prosecuting the case. Through its Labor Unit, the Organized Crime and Gang Section supports federal criminal prosecution in cases involving labor-management relations, internal union affairs, and the operation of employee pension and health care plans. Assistant Chief for Labor-Management Racketeering Gerald Toner provided invaluable assistance in the prosecution of this case.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Union Officials Plead Guilty to Violent ExtortionRead the Press Release
WASHINGTON – Two officials from the local Iron Workers union pleaded guilty today for their role in a brutal assault on a group of non-union ironworkers in Dyer, Indiana. The attack, which left multiple workers with serious injuries, was part of an effort to obtain a contract for the union to assist with the construction of the Plum Creek Christian Academy, a school affiliated with the Dyer Baptist Church.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Thomas L. Kirsch II of the Northern District of Indiana, Special Agent in Charge Irene Lindow, Chicago Regional Office, U.S. Department of Labor, Office of Inspector General (DOL-OIG) and Special Agent in Charge Grant Mendenhall of the FBI’s Indianapolis Field Office made the announcement.
Thomas Williamson Sr., 68, and Jeffrey Veach, 56, pleaded guilty to one count of extortion conspiracy before U.S. Magistrate Judge John Martin of the Northern District of Indiana.
Veach is the current president of Local 395 of the International Association of Bridge, Structural, Ornamental, and Reinforcing Iron Workers (Local 395), based in Portage, Indiana. Prior to his recent retirement, Williamson was a business agent for Local 395. Under federal law, following their guilty pleas, Veach will forfeit his position as president and both men will be barred from holding any union position for at least 13 years following the end of any prison sentences they may serve.
Pursuant to their plea agreements, Williamson and Veach admitted that on Jan. 7, 2016, they conspired to use actual and threatened violence to obtain contracts for Local 395 – a business contract from general contractor Lagestee-Mulder of Illinois, and/or a labor contract from D5 Iron Works (D5), also of Illinois. Prior to Jan. 7, 2016, the two defendants had learned that D5 was performing structural ironwork for the Dyer Baptist Church, which was located in Local 395’s “territory.” They also knew that D5 was not signed up to a labor contract with Local 395.
On the afternoon of Jan. 6, 2016, Williamson visited the church jobsite to talk to the foreman of the D5 crew and convince him to “sign up” with Local 395, or to stop work on the site. After being told to leave the site, Williamson went across the street to the church. Once inside, he confronted a youth pastor for the church and told him that it was “unethical” to use non-union labor for the construction site. Williamson offered to get “his guys” on the jobsite instead. The next morning, Williamson returned to the jobsite, this time accompanied by co-defendant Veach. The D5 foreman again refused to join the union and asked the two defendants to leave the site. Williamson became angry and grabbed the foreman’s jacket, calling him, among other things, a “scab bastard.” As they left the site, Williamson remarked to Veach that the two of them were going to have to “take things back to old school.”
The two defendants then gathered up about 10 rank-and-file members of Local 395 to return to the jobsite that afternoon. Once at the jobsite, the union members immediately attacked the D5 workers and beat them with fists and loose pieces of hardwood, kicking them while they were on the ground. As a result of the attack, one D5 worker sustained a broken jaw that required several surgeries and extended hospitalization.
The Department of Labor-Office of Inspector General, the Federal Bureau of Investigation and the Dyer Police Department investigated the case. Trial Attorneys Alexander Gottfried and Robert Tully of the Criminal Division’s Organized Crime and Gang Section are prosecuting the case. Through its Labor Unit, the Organized Crime and Gang Section supports federal criminal prosecution in cases involving labor-management relations, internal union affairs, and the operation of employee pension and health care plans. Assistant Chief for Labor-Management Racketeering Gerald Toner provided invaluable assistance in the prosecution of this case.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
# # #
Two Men Sentenced to Prison for Their Roles in an Investment Fraud Scheme Targeting Elderly VictimsRead the Press Release
Two men were sentenced to prison for their roles in a multimillion-dollar investment fraud scheme targeting the elderly and other vulnerable victims.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney R. Andrew Murray of the Western District of North Carolina and Inspector in Charge David McGinnis of the U.S. Postal Inspection Service’s Charlotte Division made the announcement.
Robert Leslie Stencil, 62, of Charlotte, North Carolina, and Michael Allen Duke, 51, of Richardson, Texas, were each sentenced by U.S. District Judge Max O. Cogburn Jr. of the Western District of North Carolina. Stencil was sentenced to 135 months in prison, and was also ordered to pay $2,745,239 in restitution and to forfeit $868,317.58. Duke was sentenced to 70 months in prison, and was ordered to pay $1,635,485 in restitution.
Following a three-week trial in January 2019, Stencil and Duke were each found guilty of one count of conspiracy to commit mail and wire fraud. In addition, Stencil was found guilty of 13 counts of mail fraud, 13 counts of wire fraud and four counts of money laundering. Duke was found guilty of three counts of mail fraud, one count of wire fraud and one count of money laundering.
According to the evidence presented at trial, from 2012 through 2016, Stencil, Duke and their co-conspirators sold millions of dollars of worthless stock in a sham company named Niyato Industries Inc. (Niyato). Stencil played the role of Niyato’s chief executive officer. Duke was Stencil’s top salesperson. Together with their co-conspirators, Stencil and Duke portrayed Niyato as a leader in its field, manufacturing electric vehicles and converting gasoline vehicles to run on compressed natural gas. Stencil, Duke and their co-conspirators told victims that Niyato was run by a team of high-profile executives, and that Niyato had patented technology, state-of-the-art facilities and valuable contracts. They also told victims that Niyato would use 97 percent of the money it raised selling stock to grow its business and expand operations. Stencil, Duke and their co-conspirators used high-pressure tactics when pitching Niyato stock to victims, the evidence showed. Among other things, they sold victims on the opportunity to “get in on the ground floor,” offering them a portion of a supposedly limited supply of pre-IPO stock at $.50 per share and promising them a 10- to 16-fold return when Niyato went public. From 2012 to 2016, Stencil, Duke and their co-conspirators repeatedly told victims that an IPO was imminent, the evidence showed.
In reality, Niyato had no patents, facilities, products or plans to commence an IPO. Niyato’s true business was the sale of worthless stock. Stencil, Duke and their co-conspirators used nearly all of the money raised by selling Niyato stock for their own personal benefit, with Stencil paying salespeople – like Duke – half or nearly half of the money they solicited from each investor on behalf of Niyato. Moreover, Stencil used Niyato’s bank account as his own personal piggybank, the evidence showed.
The evidence showed that, together, Stencil, Duke and their co-conspirators sold approximately $2.8 million in stock to approximately 140 victims, many of whom were elderly or vulnerable for other reasons.
Five other defendants have pleaded guilty in this matter and have already been sentenced, namely Nicholas Fleming, 64, of Northridge, California; Martin Delaine Lewis, 53, of Frisco, Texas; Paula Saccomanno, 62, of Boca Raton, Florida; Kristian F. Sierp, 48, of Costa Rica; and Dennis Swerdlen, 65, of Boca Raton, Florida. Daniel Thomas Broyles Sr., 62, of Beverly Hills, California, was also charged and remains a fugitive. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the U.S. Postal Inspection Service. Trial Attorney Christopher Fenton of the Criminal Division’s Fraud Section is prosecuting the case.
The Criminal Division’s Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.
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.
Two Defendants Sentenced in Poly-Drug Distribution Conspiracy Originating in CaliforniaRead the Press Release
United States Attorney Joe Kelly announced that on January 23, 2020, Chief United States District Judge John M. Gerrard sentenced Marvin Moua and Meng Her to terms of imprisonment of 151 months and 37 months, respectively. Moua, 35, and Her, 38, conspired together and with others to transport narcotics including methamphetamine, marijuana, and psilocybin mushrooms from California to Nebraska, and then distributed the drugs in Nebraska, Iowa, and in other states. Billy Fang is a remaining co-conspirator in the case and will be sentenced at a later date.
In early 2019, investigators learned that a mobile home in Omaha was being used by the drug trafficking organization to package narcotics for further distribution. Investigators thereafter identified several members of the group and determined that they also used residences in Storm Lake, Iowa. Over the course of the investigation, agents obtained warrants to search the residences in Omaha and Storm Lake. On May 2, 2019, investigators recovered close to five pounds of methamphetamine from a suitcase inside a residence in Storm Lake. Investigators also seized approximately 74 pounds of marijuana and a stolen firearm within a second residence, as well as baggies of methamphetamine and marijuana, two AR-15-style rifles, and a Glock handgun inside a car parked inside an enclosed garage.
The case was investigated by the Drug Enforcement Administration, Omaha Field Division, the Iowa Division of Narcotics Enforcement, and the Storm Lake (Iowa) Police Department.
Two Central Illinois Hunters Banned for Illegal PracticesRead the Press Release
PEORIA, Ill. – The former host of a cable hunting show, Christopher Brackett, of East Peoria, Ill., and the owner of a waterfowl outfitting service, Rick A. Hamm, of Chillicothe, Ill., have each been banned from hunting during their respective terms of probation. Both central Illinois men were sentenced in separate, unrelated cases for federal hunting violations of the Lacey Act.
Brackett, 41, former host of “Fear No Evil,” a cable show that aired on the Outdoor Channel, is banned from hunting worldwide and cannot possess firearms during his sentence of 30 months of probation. U.S. District Judge Michael M. Mihm further ordered Brackett to pay $3,500 in restitution to the State of Indiana and to pay a $26,500 fine.
Hamm, 58, owner of “Show Me Your Snows,” a waterfowl outfitting service, is banned from hunting and guiding worldwide during his sentence of 24 months of probation. U.S. District Judge James E. Shadid further ordered Hamm to serve five days in jail, to pay $2,500 in restitution to the State of Illinois and the U.S. Fish and Wildlife Service, and to pay a $50,000 fine.
Brackett was sentenced on Jan. 15, 2020, for unlawful transportation of wildlife, in violation of the Lacey Act. Brackett pleaded guilty in July 2019, to killing two bucks within minutes of each other, during the December 2013 filming of an episode of his cable show, when the state of Indiana permitted hunters to kill only one buck per season. Brackett further admitted that he transported the second, 11-point buck he had nicknamed the “Unicorn Buck,” for its unique antler formation, to his home in East Peoria. Brackett featured the “Unicorn Buck” kill on his television show in 2014. Brackett instructed his cameraman and producer to hide footage of the first buck killed, a smaller eight-point buck, and instructed an employee to destroy an eight-point rack prior to charges being filed against him,
Hamm was sentenced on Jan. 16, 2020, to unlawful sale of wildlife, in violation of the Lacey Act. Hamm pleaded guilty in September 2019, to using an electronic caller to lure geese into shooting range during a guided hunt in December 2015, in Fulton County, Ill., knowing it was unlawful under the Migratory Bird Treaty Act and Illinois conservation regulations.
In a prior federal case, in 2000, Hamm was fined $5,000 for federal violations of the Migratory Bird Treaty Act dealing with shooting waterfowl over the bag limit, transporting untagged waterfowl, and hunting with lead shot.
Hamm’s co-defendants, Trent Gustafson, Zachary Entwistle, James Schupp, and J. Weston Schupp, were each sentenced to six months of probation, during which each is banned from waterfowl hunting, and ordered to pay a fine of $1,500.
Assistant U.S. Attorney Katherine Legge represented the government in the case prosecutions. The U.S. Fish and Wildlife Service conducted the case investigations with the assistance of both the Illinois and Indiana Departments of Natural Resources.
Tulsa Man Convicted of Sex Trafficking through Force and CoercionRead the Press Release
TULSA, Okla. –A federal jury today returned a guilty verdict against a man who trafficked a woman through force and coercion then attempted to obstruct the investigation into his crimes, announced U.S. Attorney Trent Shores.
Ramar Travelle Palms, 31, was convicted of the sex trafficking through the use of force, fraud and coercion; attempted obstruction of sex trafficking enforcement; and transporting an individual for prostitution.
“The jury got it right, and I thank them for their service. Human trafficking is a vile and repugnant crime, and it’s happening right here in Oklahoma. So called “pimps” like Mr. Palms dehumanize victims through psychological abuse and sexual exploitation. They control victims with violence and threats,” said U.S. Attorney Trent Shores. “The victim in this case, however, was also a survivor. She testified in this case, facing her tormentor as he sat across the courtroom. I hope her courage and this guilty verdict will give hope to others that help is out there. The Tulsa Police Department and U.S. Attorney’s Office remain deeply committed to ensuring every victim’s voice is heard. Together, we will work tirelessly to eradicate human trafficking in our community. From the traffickers who supply commercial sex to the ‘Johns’ who demand it, you will be prosecuted.”
During the four-day trial, the United States showed that Palms trafficked the victim in Tulsa, Oklahoma City, Dallas, and Houston. Palms forced the victim to advertise on CityXGuide.com and book hotel rooms in her name, particularly in areas that were closer to higher paying, wealthier johns. He provided the money to advertise and book the rooms but did not allow his name to be associated with the activity in an effort to distance himself legally from the activity.
A Tulsa Police officer testified that he originally met the victim in November 2018 in Tulsa. The Vice officer answered an online advertisement for a “$100 Quick Visit” with the victim, which indicates a short prostitution visit. When the officer arrived, he noticed Palms at the bottom of the stairs watching him enter the hotel. Once with the victim, the officer identified himself and the two discussed the trafficking operation. The victim revealed that she did not willingly participate in prostitution.
The United States argued that the victim did not simply enter into a mutual agreement with Palms to participate in the sex trade as the defense contended. Prosecutors showed that Palms glorified the pimp lifestyle and bragged about making money from selling women. They argued that Palms controlled the victim, the trafficking operations and the money he received from exploiting the victim. They stated that Palms was a “finesse pimp” who used charm to gain the victim’s trust and affection. Then he also began to use control, fear and violence to force and keep the victim in a life of prostitution. The victim described how Palms abused her, often strangling her, when he was angry or she did not produce enough money. The victim also testified that she witnessed Palms violently abusing another female he trafficked.
In the prosecution’s closing, Assistant U.S. Attorneys Christopher Nassar and Edward Snow reminded the jury that this trafficking case was about money, violence, fear and control. Assistant U.S. Attorney Nassar described how Palms targeted a vulnerable woman, isolated her, degraded her and imposed his will and force upon her, leading the victim to live in fear if she ever “stepped out of line.” He reminded the jury that the only thing Palms cared about was using the victim to make money. The prosecutors asked the jury to follow the evidence and find Palms guilty.
The Tulsa Police Department conducted the investigation. Assistant U.S. Attorneys Christopher Nassar and Edward Snow prosecuted the case.
Top Executives Plead Guilty to Participating in a Billion Dollar Ponzi Scheme—the Biggest Criminal Fraud Scheme in the History of the Eastern District of CaliforniaRead the Press Release
SACRAMENTO, Calif. — The owners of DC Solar, a Benicia-based company, pleaded guilty today to charges related to a billion dollar Ponzi scheme— the biggest criminal fraud scheme in the history of the Eastern District of California. The government’s investigation has resulted in the largest criminal forfeiture in the history of the District with over $120 million in assets forfeited that will go to victims, and has returned $500 million to the United States Treasury, with more to come, U.S. Attorney McGregor W. Scott announced.
Jeff Carpoff, 49, of Martinez, pleaded guilty today to conspiracy to commit wire fraud and money laundering. His wife, Paulette Carpoff, 46, pleaded guilty today to conspiracy to commit an offense against the United States and money laundering. According to court documents, between 2011 and 2018, DC Solar manufactured mobile solar generator units (MSG), solar generators that were mounted on trailers that were promoted as able to provide emergency power to cellphone towers and lighting at sporting events. A significant incentive for investors were generous federal tax credits due to the solar nature of the MSGs.
The conspirators pulled off their scheme by selling solar generators that did not exist to investors, making it appear that solar generators existed in locations that they did not, creating false financial statements, and obtaining false lease contracts, among other efforts to conceal the fraud. In reality, at least half of the approximately 17,000 solar generators claimed to have been manufactured by DC Solar did not exist.
U.S. Attorney Scott stated: “This billion dollar Ponzi scheme hurt investors and took money from the United States Treasury. This case represents not only the largest criminal fraud scheme in the history of the District, it also represents the largest criminal forfeiture in the history of the District with over $120 million in assets forfeited. All of this money will be returned to the victims. This scheme also targeted the United States Treasury, and we have returned $500 million to the Treasury to date. Agents, investigators and attorneys from various federal agencies are still working to continue to return money to victims and the United States Treasury. Today’s guilty pleas sends a strong message that fraudsters will get caught and will pay for their crimes. You can run, but you cannot hide.”
The forfeiture included seizing and auctioning 148 of the Carpoffs’ luxury and collector vehicles, including the 1978 Firebird previously owned by actor Burt Reynolds. This historical auction resulted in recouping approximately $8.233 million for victims. In addition to their collection of luxury and collector vehicles, Jeff and Paulette Carpoff used money from the scheme to pay for a minor-league professional baseball team and a NASCAR racecar sponsorship; to purchase luxury real estate in California, Nevada, the Caribbean, Mexico, and elsewhere; a subscription private jet service; a suite at a professional football stadium; and jewelry.
“The Carpoffs and their co-conspirators wove a web of lies and deceit in a massive fraud scheme. Meticulous review and analysis of millions of documents revealed the operation and true intention of the scheme,” said Special Agent in Charge Sean Ragan. “The FBI is committed to our partnerships with the Internal Revenue Service Criminal Investigation, Federal Deposit Insurance Corporation Office of Inspector General, and U.S. Marshals Service. Together, we seek to uncover fraud that exploits investors and taxpayers, ensuring criminals face justice.”
“By all outer appearances this was a legitimate and successful company,” said Kareem Carter, Special Agent in Charge IRS Criminal Investigation. “But in reality it was all just smoke and mirrors — a Ponzi scheme touting tax benefits to the tune of over $900 million. IRS CI is committed to investigating those who take advantage and impact the financial well-being of others for their own personal gain.”
“The Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG) is pleased to join our law enforcement colleagues in announcing these guilty pleas,” stated Special Agent in Charge Wade Walters for the FDIC OIG San Francisco Regional Office. “The defendants conspired with others to create a fraudulent business venture that duped unsuspecting entities, including banks, to invest approximately $1 billion, which the two later used to support a lavish lifestyle. They also knowingly engaged in a money laundering transaction involving criminally derived property. The FDIC-OIG is committed to ensuring that those who use our Nation’s banks to undermine the integrity of the financial system will be held accountable.”
Four defendants have previously pleaded guilty to federal criminal charges related to the fraud scheme since October. Joseph W. Bayliss, 44, of Martinez, and Ronald J. Roach, of Walnut Creek, each pleaded guilty to related charges on Oct. 22, 2019. Robert A. Karmann, 53, of Clayton, pleaded guilty to related charges on Dec. 17, 2019. Ryan Guidry, 53, of Pleasant Hill, pleaded guilty to related charges on Jan. 14, 2020. A seventh co-conspirator is scheduled to plead guilty on Feb. 11. The investigation into the fraud remains ongoing.
This case is the product of an investigation by the Federal Bureau of Investigation, IRS‑Criminal Investigation, and the Federal Deposit Insurance Corporation Office of Inspector General. Assistant U.S. Attorneys André M. Espinosa and Kevin C. Khasigian are prosecuting the case.
Jeff and Paulette Carpoff are scheduled to be sentenced by U.S. District Judge John A. Mendez on May 19. Jeff Carpoff faces a maximum statutory penalty of 30 years in prison. Paulette Carpoff faces a maximum statutory penalty of 15 years in prison. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Toledo, Ohio man indicted and arrested for sex trafficking juvenilesRead the Press Release
A Toledo man was arrested January 23, 2020 for sex trafficking two juveniles in Toledo, Ohio.
Tyrone Cannon, aka “Bama,” 24, was indicted January 8, 2020 on two counts of Sex Trafficking of Minors between April and May. One count charges sex trafficking of a 17-year old female juvenile, while the other count charges sex trafficking of a 16-year old female juvenile.
If convicted, the defendant faces a mandatory minimum sentence of 10 years on each count and designation as a sex offender. The sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigation of this matter was conducted by the Federal Bureau of Investigation, Toledo Police Department, and the Northwest Ohio Human Trafficking and Child Exploitation Task Force. The case is being prosecuted by Assistant U.S. Attorneys Tracey Ballard Tangeman and Ranya Elzein.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
####
Three Louisiana Residents Charged for Conspiring to File False Tax ReturnsRead the Press Release
A federal grand jury in New Orleans, Louisiana, returned an indictment today charging three Louisiana residents with one count of conspiracy to defraud the United States, 14 counts of aiding and assisting in the preparation of a fraudulent tax return, three counts of wire fraud, and three counts of aggravated identity theft, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and the U.S. Attorney’s Office, Eastern District of Louisiana.
According to the indictment, throughout 2015, Morgan Antoine, Jennifer Austin, and Brittany Patterson conspired to file false tax returns for clients of Pelican Income Tax and Payroll Service, a tax preparation business located in Kenner and Westwego, Louisiana. The coconspirators allegedly prepared client returns reporting false income, false withholdings, and false dependents, in order to cause the Internal Revenue Service (IRS) to pay inflated refunds. The indictment further alleges that the coconspirators charged fees as high as $1,100 for preparing tax returns, which they often deducted from the clients’ refunds.
The indictment also charges that to conceal their involvement in the fraud, the coconspirators filed returns in the name of a third party whose personal identifying information was stolen. Finally, the indictment alleges that Antoine and Patterson each falsified their own personal returns claiming false dependents.
If convicted, Antoine, Austin, and Patterson each face a statutory maximum sentence of five years in prison for the conspiracy charge and three years for each count of aiding and assisting in the preparation of a fraudulent tax return. Antoine and Patterson face an additional twenty years in prison for each count of wire fraud and a two-year mandatory minimum for each count of aggravated identity theft. They also face a period of supervised release, restitution, and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman and the U.S. Attorney’s Office, Eastern District of Louisiana thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Carter Guice and Trial Attorneys Lauren Castaldi and Jessica Kraft of the Tax Division, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.
Three Louisiana Residents Charged for Conspiring to File False Tax ReturnsRead the Press Release
WASHINGTON – A federal grand jury in New Orleans, Louisiana, returned an indictment today charging three Louisiana residents with one count of conspiracy to defraud the United States, 14 counts of aiding and assisting in the preparation of a fraudulent tax return, three counts of wire fraud, and three counts of aggravated identity theft, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and the U.S. Attorney’s Office, Eastern District of Louisiana.
According to the indictment, throughout 2015, Morgan Antoine, Jennifer Austin, and Brittany Patterson conspired to file false tax returns for clients of Pelican Income Tax and Payroll Service, a tax preparation business located in Kenner and Westwego, Louisiana. The coconspirators allegedly prepared client returns reporting false income, false withholdings, and false dependents, in order to cause the Internal Revenue Service (IRS) to pay inflated refunds. The indictment further alleges that the coconspirators charged fees as high as $1,100 for preparing tax returns, which they often deducted from the clients’ refunds.
The indictment also charges that to conceal their involvement in the fraud, the coconspirators filed returns in the name of a third party whose personal identifying information was stolen. Finally, the indictment alleges that Antoine and Patterson each falsified their own personal returns claiming false dependents.
If convicted, Antoine, Austin, and Patterson each face a statutory maximum sentence of five years in prison for the conspiracy charge and three years for each count of aiding and assisting in the preparation of a fraudulent tax return. Antoine and Patterson face an additional twenty years in prison for each count of wire fraud and a two-year mandatory minimum for each count of aggravated identity theft. They also face a period of supervised release, restitution, and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman and the U.S. Attorney’s Office, Eastern District of Louisiana thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Carter Guice and Trial Attorneys Lauren Castaldi and Jessica Kraft of the Tax Division, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.