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9 January 2020
San Anselmo Resident Pleads Guilty in ID Theft and Tax Fraud SchemeRead the Press Release
SAN FRANCISCO – Parnian Djafarzadeh, aka Parnian Clark, aka Saundra Djafarzadeh, pleaded guilty to possessing stolen mail, filing a false claim, and committing wire fraud in connection with a multi-year tax fraud scheme, announced United States Attorney David L. Anderson and Internal Revenue Service (IRS), Criminal Investigation, Special Agent in Charge Kareem Carter. The guilty pleas were accepted by the Honorable Charles R. Breyer, Senior United States District Judge.
According to the plea agreement, Djafarzadeh, 42, of San Anselmo, Calif., admitted she devised and executed a scheme to defraud the United States by filing false federal income tax returns with the IRS from 2010 through 2012. Djafarzadeh further admitted she wrongfully obtained personal identifying information, including names and social security numbers, of Marin County residents. She then used that information to prepare and electronically file false tax returns in their names without their knowledge or consent. In addition, according to the plea agreement, Djafarzadeh filed fraudulent federal income tax returns claiming a total of $219,635.89, as a result of which the IRS paid refunds of at least $90,822.30. Djafarzadeh also admitted in the plea agreement that she obtained and knowingly possessed stolen mail from one of her neighbors.
A federal grand jury indicted Djafarzadeh on April 21, 2016, charging her with one count of possession of stolen mail, in violation of 18 U.S.C. § 1708; fourteen counts of false claims, in violation of 18 U.S.C. § 287; three counts of wire fraud, in violation of 18 U.S.C. § 1343; and three counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A. Djafarzadeh pleaded guilty to one count of possession of stolen mail, one count of filing a false claim, and one count of wire fraud. If she complies with the plea agreement, the remaining counts will be dismissed at sentencing.
Judge Breyer scheduled Djafarzadeh’s sentencing hearing for April 29, 2020. Pursuant to the plea agreement, Djafarzadeh has agreed to pay restitution of at least $90,952.48. The maximum statutory penalty for possession of stolen mail, in violation of 18 U.S.C. § 1708, is five years in prison and a fine of $250,000. The maximum sentence for false claims, in violation of 18 U.S.C. § 287, is five years in prison and a fine of $250,000. The maximum sentence for wire fraud, in violation of 18 U.S.C. § 1343, is twenty years in prison and a fine of $250,000. Additional fines, forfeitures, restitution, and special assessments also may be imposed. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Thomas Moore is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation, with the assistance of the U.S. Postal Inspection Service.
Rockland County Man Pleads Guilty to Defrauding InvestorsRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JORGE PADILLA pled guilty today to defrauding victims of more than $900,000 by soliciting investments in a sham financial firm based on misrepresentations and fraudulent documents. PADILLA pled guilty before U.S. District Judge J. Paul Oetken.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As he admitted today, Jorge Padilla fleeced investors through lies and deception. He lied about the very existence of the company through which he solicited investors, and he sent investors fraudulent statements to prop up the scheme. Padilla now awaits sentencing for his crime.”
According to the allegations contained in the Complaint and Information against PADILLA and other documents filed in federal court:
From at least in or about September 2014 through in or about April 2017, JORGE PADILLA orchestrated a scheme to solicit investments in a sham family investment office, Dunatos Capital. PADILLA, a financial professional registered with the Financial Industry Regulatory Authority (“FINRA”), worked throughout the period at issue for large financial institutions. Nevertheless, PADILLA, targeting Argentina-based victim-investors who had been clients of one such institution, claimed he had gone to work for Dunatos Capital, purportedly a family office managing tens of millions of dollars in investments. In order to solicit investments in this sham firm, PADILLA made false representations, including claiming, for example, that Dunatos had tens of millions of dollars under management, was regulated by U.S. financial regulators, and operated out of non-existent Manhattan-based offices. After victims transferred funds pursuant to PADILLA’s directions, PADILLA prepared and sent fraudulent statements about how the funds were invested. PADILLA solicited more than $900,000 in purported investments in the sham firm.
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PADILLA, 33, of Haverstraw, New York, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentence for the defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of the Federal Bureau of Investigation.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Katherine Reilly and Michael McGinnis are in charge of the prosecution.
Rochester Man Sentenced to Prison After Jury Convicts Him of Gun and Drug ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Sofonzia Mack, 37, of Rochester, NY, who was convicted following a jury trial of possession with intent to distribute marijuana, and being a felon in possession of a handgun and ammunition, was sentenced to serve 36 months in prison by U.S. District Judge David G. Larimer.
Assistant U.S. Attorneys Matthew T. McGrath and Charles E. Moynihan, who handled the trial of the case, stated that on March 28, 2017, Rochester Police officers stopped a blue Kia Sedona in the 800 block of Exchange Street in Rochester after seeing the driver commit multiple violations of the New York State Vehicle and Traffic Law. As officers approached the vehicle, they smelled what they believed to be marijuana coming from inside. The driver and the defendant, who was in the front passenger seat, were directed to get out of the vehicle so officers could further investigate the smell.
While searching the defendant, officers found a .25 caliber, semiautomatic pistol in Mack’s jacket pocket. Officers could see the serial number on the firearm had been defaced and that it was loaded with four rounds of ammunition. Officers also seized 21 plastic vials containing marijuana in a draw-string bag, which the defendant had secured over his shoulder at the time of the stop, and over $900 in United States currency located in the center console.
On July 30, 2007, in Albany County Court, the defendant was convicted of Attempted Criminal Sale of a Controlled Substance in the Third Degree and sentenced to serve three years in prison. As a result, Mack was legally prohibited from possessing a gun.
In addition to convicting defendant of the aforementioned charges, the jury found Mack not guilty of two other gun charges.
The matter was brought by the United States Attorney’s Office as part of its Project Safe Neighborhoods (PSN) initiative. PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
The sentencing is the result of an investigation by the Rochester Police Department, under the direction of Chief La’Ron Singletary, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge John B. DeVito, New York Field Division.
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Repeat Offender Receives More than a Year in Federal Prison for Second Escape from CustodyRead the Press Release
A man who escaped from the custody of the Gerald R. Hinzman Residential Center in Cedar Rapids, Iowa, for the second time was sentenced on January 6, 2020, to more than a year in federal prison.
Jamie Goad, age 30, from Cedar Rapids, Iowa, received the prison term after an October 17, 2019 guilty plea to escape from custody.
Goad’s first federal sentence of imprisonment was imposed on December 23, 2010, after he pled guilty to being a prohibited person in possession of a firearm. While on supervised release in that case, Goad escaped from the custody of the Hinzman Center on December 11, 2013. After he pled guilty to escape from custody, he was sentenced to prison in that case on August 25, 2014. While on supervised release this time, he escaped from the Hinzman Center for the second time on January 8, 2019.
Goad was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Goad was sentenced to 15 months’ imprisonment. He must also serve a one-year term of supervised release after the prison term. There is no parole in the federal system. Goad is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Kyndra Lundquist and investigated by the United States Marshals Service. Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-CR-99.
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Queens Woman Sentenced to 15 Years’ Imprisonment for Teaching and Distributing Information About Weapons of Mass DestructionRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, New York, Asia Siddiqui was sentenced to 15 years’ imprisonment by United States District Judge Sterling Johnson Jr. for her role in planning to build a bomb for use in a terrorist attack in the United States. Siddiqui and her co-defendant, Noelle Velentzas, pleaded guilty on August 23, 2019 to a charge of teaching or distributing information pertaining to the making and use of an explosive, destructive device, and weapon of mass destruction in furtherance of a planned federal crime of violence. Velentzas is awaiting sentencing.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; John C. Demers, Assistant Attorney General for National Security; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the sentence.
“Lives were saved when the defendants’ plot to detonate a bomb in a terrorist attack was thwarted by the tireless efforts of law enforcement,” stated United States Attorney Donoghue. “This is precisely the reason why countering terrorism remains the highest priority of the Department of Justice, and working with the FBI, the NYPD and our Joint Terrorism Task Force partners, we will continue to do everything possible to stay steps ahead of aspiring terrorists and their evil plans to harm Americans.”
“With the sentence imposed by the court, Siddiqui has been held accountable for her crimes. Inspired by radical Islam, Siddiqui and her co-defendant researched and taught each other how to construct bombs to be used on American soil against law enforcement and military targets,” stated Assistant Attorney General Demers. “They were thwarted by the excellent work of the agents, analysts and prosecutors who are responsible for this investigation and prosecution. For this, we are grateful.”
“Asia Siddiqui and co-defendant Noelle Velentzas were more than prepared to kill Americans and fellow New Yorkers. Thanks to the dedicated work of the FBI’s JTTF in New York and our many law enforcement partners, they never succeeded. Today, Siddiqui’s fate has been sealed as we await one final sentencing that will decisively bring this case to a close,” stated FBI Assistant Director-in-Charge Sweeney.
“Today’s sentencing is a strong and timely reminder that the NYPD and its partners in law enforcement will never stop pursuing those who, if undetected, would plan and execute acts of terrorism in the United States,” stated NYPD Commissioner Shea. “I want to thank the members of the Department of Justice, the FBI and the NYPD for their work each and every day and on this investigation.”
Between approximately 2013 and 2015, Siddiqui and Velentzas planned to build a bomb for use in a terrorist attack in the United States. They taught each other chemistry and electrical skills directly related to creating explosives and building detonating devices; conducted research on how to make plastic explosives and build a car bomb; shopped for materials for use in an explosive device; and discussed explosive devices used in past terrorist incidents, including the Boston Marathon bombing, Oklahoma City bombing and 1993 World Trade Center attack. They then researched potential targets for an attack, focusing on law enforcement and military-related targets.
Siddiqui’s long-term interest in violent terrorist-related activities was demonstrated in her written submissions to a radical jihadist magazine edited by Samir Khan – a prominent figure and member of the designated foreign terrorist organization al-Qaeda in the Arabian Peninsula. In a poem titled “Take Me to the Lands Where the Eyes Are Cooled,” Siddiqui wrote that she “taste[s] the Truth through fists and slit throats,” and that there is “[n]o excuse to sit back and wait – for the skies rain martyrdom.”
At the time of the defendants’ arrests, law enforcement agents searched their residences and seized tools of the trade for terrorists, including propane gas tanks, soldering tools, car bomb instructions, machetes, knives and jihadist literature.
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Craig R. Heeren, Jennifer M. Sasso, Michael T. Keilty, Josh Hafetz and Jonathan E. Algor are in charge of the prosecution, with assistance provided by Trial Attorney Jennifer Burke of the National Security Division’s Counterterrorism Section.
The Defendant:
ASIA SIDDIQUI
Age: 35
Queens, New YorkE.D.N.Y. Docket No. 15-CR-213 (SJ)
Queens Woman Sentenced to 15 Years’ Imprisonment for Teaching and Distributing Information About Weapons of Mass DestructionRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, New York, Asia Siddiqui was sentenced to 15 years’ imprisonment by United States District Judge Sterling Johnson Jr. for her role in planning to build a bomb for use in a terrorist attack in the United States. Siddiqui and her co-defendant, Noelle Velentzas, pleaded guilty on Aug. 23, 2019, to a charge of teaching or distributing information pertaining to the making and use of an explosive, destructive device, or weapon of mass destruction in furtherance of a planned federal crime of violence. Velentzas is awaiting sentencing.
“With the sentence imposed by the court, Siddiqui has been held accountable for her crimes. Inspired by radical Islam, Siddiqui and her co-defendant researched and taught each other how to construct bombs to be used on American soil against law enforcement and military targets,” said Assistant Attorney General for National Security John C. Demers. “They were thwarted by the excellent work of the agents, analysts and prosecutors who are responsible for this investigation and prosecution. For this, we are grateful.”
“Lives were saved when the defendants’ plot to detonate a bomb in a terrorist attack was thwarted by the tireless efforts of law enforcement,” said U.S. Attorney Richard P. Donoghue for the Eastern District of New York. “This is precisely the reason why countering terrorism remains the highest priority of the Department of Justice, and working with the FBI, the NYPD and our Joint Terrorism Task Force partners, we will continue to do everything possible to stay steps ahead of aspiring terrorists and their evil plans to harm Americans.”
“Asia Siddiqui and co-defendant Noelle Velentzas were more than prepared to kill Americans and fellow New Yorkers. Thanks to the dedicated work of the FBI’s JTTF in New York and our many law enforcement partners, they never succeeded. Today, Siddiqui’s fate has been sealed as we await one final sentencing that will decisively bring this case to a close,” said FBI Assistant Director-in-Charge William F. Sweeney.
“Today’s sentencing is a strong and timely reminder that the NYPD and its partners in law enforcement will never stop pursuing those who, if undetected, would plan and execute acts of terrorism in the United States,” said NYPD Commissioner Dermot F. Shea. “I want to thank the members of the Department of Justice, the FBI and the NYPD for their work each and every day and on this investigation.”
Between approximately 2013 and 2015, Siddiqui and Velentzas planned to build a bomb for use in a terrorist attack in the United States. In furtherance of their plan, the defendants taught each other chemistry and electrical skills related to creating explosives and building detonating devices, conducted research on how to make plastic explosives and how to build a car bomb, and shopped for and acquired materials to be used in an explosive device. They discussed similar devices used in past terrorist incidents like the Boston Marathon bombing, Oklahoma City bombing, and 1993 World Trade Center attack and researched potential targets of an attack, focusing on law enforcement and military-related targets.
Siddiqui’s interest in violent terrorist-related activities was reflected in her written submissions to a radical jihadist magazine edited by Samir Khan — a now- deceased prominent figure and member of the designated foreign terrorist organization al-Qaeda in the Arabian Peninsula (AQAP). In a poem called “Take Me to the Lands Where the Eyes Are Cooled,” Siddiqui wrote that she “taste[s] the Truth through fists and slit throats” and that there is “[n]o excuse to sit back and wait – for the skies rain martyrdom.”
When the defendants were arrested, law enforcement officers seized propane gas tanks, soldering tools, car bomb instructions, jihadist literature, machetes and several knives from their residences.
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Craig R. Heeren, Jennifer M. Sasso, Michael T. Keilty, Josh Hafetz and Jonathan E. Algor are in charge of the prosecution, with assistance provided by Trial Attorney Jennifer Burke of the National Security Division’s Counterterrorism Section.
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.
Prince George’s County Felon Pleads Guilty to Illegal Possession of Firearms and AmmunitionRead the Press Release
Greenbelt, Maryland – Jerome Francis Canty, age 23, of Oxon Hill, Maryland, pleaded guilty today to being a felon in possession of firearms and ammunition, and to violating his supervised release from a January 31, 2018 federal conviction for illegal possession of a firearm and ammunition by a convicted felon.
The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; and Chief Henry P. Stawinski III of the Prince George’s County Police Department.
According to his guilty plea, on June 5, 2019, in response to a citizen complaint, Prince George’s County Police officers responded to an apartment in Temple Hills, Maryland, where they saw Canty and another man on the couch in the living room. Officers also saw a black handgun in plain view on the couch next to Canty’s left leg. The gun was a .40-caliber semi-automatic pistol. The officers detained Canty and the other man. The officers also saw a second firearm—a 9x19 millimeter caliber semi-automatic pistol—protruding from Canty’s right pants pocket. Both guns were loaded. At the time of the incident, a minor was asleep on the couch near the loaded firearms and three other children, all under the age of 10, were also in the apartment with the men.
The officers removed the two men from the apartment. As they walked toward the police cruiser, Canty told the officers that the “guns were his.” Canty also provided consent for law enforcement to search his vehicle and provided the keys to the officers. During the search, law enforcement recovered a loaded .40-caliber semi-automatic pistol, loose ammunition, two additional magazines, including a 30-round magazine, located next to the loaded pistol, and $8,010 in cash found in a trash bag. Both of the .40-caliber pistols had previously been reported as stolen.
As detailed in his plea agreement, Canty knew that as a result of his previous conviction he was prohibited from possessing the three firearms and 99 rounds of ammunition.
Canty and the government have agreed that, if the Court accepts the plea agreement, Canty will be sentenced to 57 months in federal prison for illegal possession of firearms and ammunition. The parties also agree that the advisory guidelines range for the violation of supervised release is between eight and 14 months, but there is no agreement as to whether that sentence shall be ordered to be served concurrently or consecutively. U.S. District Judge Theodore D. Chuang has scheduled sentencing for April 17, 2020 at 10:00 a.m.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
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.
United States Attorney Robert K. Hur commended the ATF and the Prince George’s County Police Department for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorney Jennifer R. Sykes, who is prosecuting the case.
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Police Find Gun During Domestic Disturbance Investigation, Leading to Federal Prison Time for Domestic AbuserRead the Press Release
A convicted domestic abuser who beat and a strangled a woman and unlawfully possessed a gun was sentenced January 8, 2020, to more than a year in federal prison.
Charles Dwayne Carter, age 28, from Dubuque, Iowa, received the prison term after an August 6, 2019 guilty plea to possessing a firearm as a convicted domestic abuser.
In a plea agreement, Carter admitted he possessed a gun in August 2018. Police discovered the gun while investigating a domestic incident. Carter had assaulted the victim by striking her in the face and arms causing red marks, swelling, bruising, and pain. He then grabbed a towel rack and struck her in the face causing a raised, red bump on her left eyebrow. Carter also strangled her, causing her to “blackout” and hit her with a belt. When the police arrived, they found Carter hiding in the trunk of the victim’s car.
During the subsequent investigation, the police found a gun in Carter’s dresser drawer. Carter was prohibited from possessing guns because he had two prior convictions for domestic abuse.
Carter was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Carter was sentenced to 18 months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
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. The United States Attorney’s Office has prosecuted this case with support from the following Project Guardian partners: the Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, and Firearms, the Dubuque Police Department, and the Dubuque County Sheriff’s Office. For more information about Project Guardian, please see /media/1122011/dl?inline.
Carter is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Emily K. Nydle and investigated by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, and Firearms, the Dubuque Police Department, and the Dubuque County Sheriff’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-cr-1007.
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Pell City Woman Sentenced to 2 ½ Years in Prison for Wire and Bank FraudRead the Press Release
Pell City Woman Sentenced to 2 ½ Years in Prison for Wire and Bank Fraud
BIRMINGHAM –A federal judge today sentenced a Pelly City woman for orchestrating a sophisticated financial fraud scheme involving over $200,000 in fraudulent transfers, announced U.S. Attorney Jay E. Town and FBI Special Agent in Charge Johnnie Sharp, Jr.
U.S. District Judge Annemarie Axon sentenced JULIA HOLLIS MEYERS, to 30 months in prison for wire fraud and bank fraud related to her stealing money from her employer. Meyers pled guilty to one count wire fraud and one count bank fraud in August.
“Motivated by greed, Meyers violated the trust of her employer,” Town said. “Meyers chose a life of theft and fraud and will now spend time in the bed space reserved for her in federal prison.”
“Anyone who tries to take advantage of a trusted position by illegally profiting from it should see this sentencing as a warning that the FBI is determined to pursue justice for the companies who are victimized,” Sharp said.
According to court documents, Meyers was previously employed by Hibbett Sports, Inc., as a Senior Lease Administrator. Between 2014 and 2018, Meyers engaged in a scheme to direct ACH payments from Hibbett Sports to her personal bank account. Meyers obtained checks for vendor lease payments from Hibbett Sports and deposited the checks into her personal bank account. Meyers’ scheme resulted in her stealing $207,357.56 from her employer.
The FBI investigated the case, which Assistant U.S. Attorney Robin Beardsley Mark prosecuted.
Oregon Military Department Employee Pleads Guilty to Making False StatementsRead the Press Release
PORTLAND, Ore.—Dominic Caputo, 48, of Clackamas County, Oregon, pleaded guilty today to making false statements while employed as a civilian program manager for the Oregon National Guard Oregon Sustainment Maintenance Site (OSMS).
According to court documents, the Oregon National Guard (ONG) operates and maintains the OSMS at Camp Withycombe, an Oregon Military Department installation in Clackamas County. OSMS supports readiness and training of the U.S. Military by refurbishing out-of-service electronic equipment owned by the U.S. Department of Defense. In the event of an emergency or declaration of war, OSMS deploys refurbished equipment to other military bases or installations. During the time alleged in the Indictment and until 2015, OSMS was the only maintenance site in the United States capable of repairing and rebuilding certain engines in support of the federal military supply system.
From 2010 to 2014, Caputo served as a civilian program manager for the OSMS Power Division where he directed, controlled, and supervised the rebuilding and repair of small and large engines, generators, tires and other types of equipment. Caputo was responsible for certifying completed work and submitting claims to the U.S. Army Communications-Electronics Command (CECOM) under the National Maintenance and RESET Programs.
In Fiscal Year 2014, Caputo billed CECOM more than $675,000 for the repair and rebuilding of John Deere Diesel Engines despite the work having not been performed. More than 60 of the engines had already been repaired and billed to CECOM in prior fiscal years. For those engines, Caputo directed Power Division employees to remove and replace original serial numbers and identifying engine plates from the engines to conceal the duplicate billing.
In June 2014, Caputo willingly and knowingly prepared a work order and run test data indicating that the falsified repair work on an engine had been performed. Caputo submitted this false information to CECOM. Caputo’s employment with OSMS was terminated in November 2014 when his fraud was revealed.
In September 2018, a federal grand jury in Portland indicted Caputo for misrepresenting the operational status of military equipment used to maintain a war-ready posture.
Caputo faces a maximum sentence of five years in prison, a $100,000 fine and three years of supervised release. He will be sentenced on May 4, 2020 before U.S. District Court Judge Karin J. Immergut.
As part of the plea agreement, Caputo has agreed to pay more than $2.6 million in restitution to CECOM.
This case was investigated by the FBI, the U.S. Department of Defense Office of Inspector General’s Defense Criminal Investigative Service (DCIS), and the U.S. Army Criminal Investigation Command (CID). It is being prosecuted by Michelle Kerin, Assistant U.S. Attorney for the District of Oregon.
Orange County Man Charged with Additional Federal Hate Crimes for December 28, 2019, Machete Attack at Rabbi’s HomeRead the Press Release
Eric Dreiband, Assistant Attorney General for Civil Rights, Geoffrey S. Berman, the United States Attorney for the Southern District of New York and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the FBI announced today that Grafton Thomas has been indicted by a federal grand jury with five counts of willfully causing bodily injury to five victims because of the victims’ religion and five counts of obstructing the free exercise of religion in an attempt to kill, federal hate crimes, related to his alleged machete attack during Hanukkah observances at a rabbi’s home in Monsey, New York, on the night of Dec. 28, 2019.
“Since before our founding as a nation and ever since, this country has provided refuge for people from other parts of the world who suffered violence and other forms of persecution because of their right to believe and worship as they see fit,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “The United States remains today a beacon of freedom for persecuted religious people all over the world, and violent attacks against anyone because of religion is both illegal and against everything our nation stands for. The United States Department of Justice will continue to prosecute anyone who engages in such conduct to the fullest extent of the law.”
“On December 28, 2019, Grafton Thomas allegedly came armed with an 18-inch machete and entered a rabbi’s home, where dozens had gathered for the holiday,” said U.S. Attorney Geoffrey S. Berman for the Southern District of New York. “We now allege that he did this with the intention of targeting his victims because of their religion. As alleged, with his face concealed beneath a scarf, he slashed and stabbed the assembled congregants, fled, and left at least five victims in his wake. Thomas faces life in prison for his alleged violent acts of prejudice and intolerance.”
“When an individual’s actions cross the threshold of a federal crime, as we allege Mr. Grafton did here, we will act swiftly,” said FBI Assistant Director William F. Sweeney Jr. “The message from today’s charges should be crystal clear – the FBI won’t tolerate violence against anyone. Working with our partners, we will hold anyone who commits a crime like this accountable for their actions. The federal penalties for this type of attack are severe and justified. In this instance, the local community was engaged, and their actions were essential to saving lives and led directly to Mr. Grafton’s capture. It’s the rest of our community’s joint responsibility to step up and engage as well – don’t give hate a platform to propagate and don’t dismiss this type of behavior as someone else’s problem, address it and immediately report suspicious activity to authorities.”
According to the allegations in the Indictment and the Complaint:
On Dec. 28, 2019, Thomas entered a Rabbi’s home in Monsey, New York, which is adjacent to the Rabbi’s synagogue, during observances related to the end of Shabbat and the seventh night of Hanukkah. Thomas declared to dozens of assembled congregants, “no one is leaving,” and attacked the group with an 18-inch machete. At least five victims were hospitalized with serious injuries, including slash wounds, deep lacerations, a severed finger, and a skull fracture.
Following the attack, Thomas traveled in a car to New York City, and he was stopped in Harlem by members of the New York City Police Department. The responding officers observed what appeared to be blood on Thomas’s hands and clothing, and smelled bleach coming from his vehicle. A search of Thomas’s vehicle led to the seizure of, among other things, a machete that appeared to have traces of dried blood on it. Law enforcement subsequently searched Thomas’s residence and cellphone pursuant to warrants. The residence contained handwritten journals with several pages of anti-Semitic references, including references to “Adolf Hitler” and “Nazi Culture.” Thomas’s cellphone contained Internet searches dating back to at least November 2019 for terms such as “Zionist Temples” in Staten Island and New Jersey, “why did Hitler hate the Jews,” and “prominent companies founded by Jews in America,” as well as a webpage visit on the day of the attack to an article titled, “New York Increases Police Presence in Jewish Neighborhoods After Anti-Semitic Attacks. Here’s What to Know.”
Thomas, 37, is charged with five counts of willfully causing bodily injury to, and attempting to kill, five victims because of their religion in violation of Title 18, United States Code, Section 249, and five counts of obstructing the free exercise of religion in an attempt to kill, in violation of Title 18, United States Code, Section 247. Each of the 10 counts carries a maximum prison term of life. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Assistant Attorney General Dreiband and Mr. Berman praised the outstanding efforts of the FBI, the Rockland County District Attorney’s Office, the Ramapo Police Department, the Rockland County Sherriff’s Office, the New York State Police, the Clarkstown Police Department, and the New York City Police Department.
This case is being handled by the Office’s Terrorism and International Narcotics Unit, its White Plains Division, and the Civil Rights Unit of the Office’s Civil Division. Assistant U.S. Attorneys Michael K. Krouse, Lindsey Keenan, and Lara K. Eshkenazi are in charge of the prosecution.
The charges in the Indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
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.
Orange County Man Charged with Additional Federal Hate Crimes for December 28, 2019, Machete Attack at Rabbi’s HomeRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Eric Dreiband, Assistant Attorney General for Civil Rights, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today that GRAFTON THOMAS has been indicted by a federal grand jury with five counts of willfully causing bodily injury to five victims because of the victims’ religion and five counts of obstructing the free exercise of religion in an attempt to kill, federal hate crimes, related to his machete attack during Hanukkah observances at a rabbi’s home in Monsey, New York, on the night of December 28, 2019.
Manhattan U.S. Attorney Geoffrey S. Berman said: “On December 28, 2019, Grafton Thomas allegedly came armed with an 18-inch machete and entered a rabbi’s home, where dozens had gathered for the holiday. We now allege that he did this with the intention of targeting his victims because of their religion. As alleged, with his face concealed beneath a scarf, he slashed and stabbed the assembled congregants, fled, and left at least five victims in his wake. Thomas faces life in prison for his alleged violent acts of prejudice and intolerance.”
Assistant Attorney General Eric Dreiband said: “Since before our founding as a nation and ever since, this country has provided refuge for people from other parts of the world who suffered violence and other forms of persecution because of their right to believe and worship as they see fit. The United States remains today a beacon of freedom for persecuted religious people all over the world, and violent attacks against anyone because of religion are both illegal and against everything our nation stands for. The United States Department of Justice will continue to prosecute anyone who engages in such conduct to the fullest extent of the law.”
FBI Assistant Director William F. Sweeney Jr. said: “When an individual’s actions cross the threshold of a federal crime, as we allege Mr. Thomas did here, we will act swiftly. The message from today’s indictment should be crystal clear – the FBI won’t tolerate violence against anyone. Working with our partners, we will hold anyone who allegedly commits a crime like this accountable for their actions. The federal penalties for this type of attack are severe and justified. In this instance, the local community was engaged, and their actions were essential to saving lives and led directly to Mr. Thomas’s capture. It’s the rest of our community’s joint responsibility to step up and engage as well – don’t give hate a platform to propagate and don’t dismiss this type of behavior as someone else’s problem, address it and immediately report suspicious activity to authorities.”
According to the allegations in the Indictment and the Complaint[[1]]:
On December 28, 2019, THOMAS entered a Rabbi’s home in Monsey, New York, which is adjacent to the Rabbi’s synagogue, during observances related to the end of Shabbat and the seventh night of Hanukkah. THOMAS declared to dozens of assembled congregants, “no one is leaving,” and attacked the group with an 18-inch machete. At least five victims were hospitalized with serious injuries, including slash wounds, deep lacerations, a severed finger, and a skull fracture.
Following the attack, Thomas traveled in a car to New York City, and he was stopped in Harlem by members of the New York City Police Department. The responding officers observed what appeared to be blood on THOMAS’s hands and clothing, and smelled bleach coming from his vehicle. A search of THOMAS’s vehicle led to the seizure of, among other things, a machete that appeared to have traces of dried blood on it. Law enforcement subsequently searched THOMAS’s residence and cellphone pursuant to warrants. The residence contained handwritten journals with several pages of anti-Semitic references, including references to “Adolf Hitler” and “Nazi Culture.” THOMAS’s cellphone contained Internet searches dating back to at least November 2019 for terms such as “Zionist Temples” in Staten Island and New Jersey, “why did Hitler hate the Jews,” and “prominent companies founded by Jews in America,” as well as a webpage visit on the day of the attack to an article titled, “New York Increases Police Presence in Jewish Neighborhoods After Anti-Semitic Attacks. Here’s What to Know.”
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THOMAS, 37, is charged with five counts of willfully causing bodily injury to, and attempting to kill, five victims because of their religion in violation of Title 18, United States Code, Section 249, and five counts of obstructing the free exercise of religion in an attempt to kill, in violation of Title 18, United States Code, Section 247. Each of the ten counts carries a maximum prison term of life. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Berman praised the outstanding efforts of the FBI, the Rockland County District Attorney’s Office, the Ramapo Police Department, the Rockland County Sherriff’s Office, the New York State Police, the Clarkstown Police Department, and the New York City Police Department, as well as the U.S. Department of Justice’s Civil Rights Division.
This case is being handled by the Office’s Terrorism and International Narcotics Unit, its White Plains Division, and the Civil Rights Unit of the Office’s Civil Division. Assistant U.S. Attorneys Michael K. Krouse, Lindsey Keenan, and Lara K. Eshkenazi are in charge of the prosecution.
The charges in the Indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the texts of the Indictment and Complaint and the description of the Indictment and Complaint set forth herein constitute only allegations and every fact described should be treated as an allegation.
Ohio Man Pleads Guilty to Conspiracy to Commit Wire FraudRead the Press Release
NEW ORLEANS – United States Attorney Peter G. Strasser announced that ESTEBAN RAMIREZ, III (“RAMIREZ”), age 27, a resident of Lorain, Ohio, entered a plea of guilty January 7, 2020 to Conspiracy to Commit Wire Fraud, in violation of Title 18, United States Code, Section 371.
According to court records, in the beginning of February 2017, Jose Fernandez Morel (“Fernandez”) devised a scheme to defraud by fraudulently representing himself as an immigration attorney. Specifically, Fernandez and other coconspirators acting at his direction, created the fictitious law firm of “Micheal (sic) Browns Immigration Attorneys” with an address of 4207 Parliament Drive, Alexandria, LA 71303. Fernandez enlisted the assistance of RAMIREZ and Heather Tolson (“Tolson”) to receive funds, totaling approximately $8,200, from various individuals who were victims of Fernandez’s scheme. RAMIREZ and Tolson agreed to wire via Western Union the fraudulently obtained funds they received to Fernandez in the Dominican Republic. Part of their agreement was that Fernandez would split these funds with RAMIREZ and Tolson.
During the scheme, Fernandez fraudulently represented himself as an attorney named “Robert McCane” and Fernandez, RAMIREZ, and Tolson represented themselves as employees with the “Micheal Browns Immigration Attorneys” law firm. According to documents filed in federal court, Fernandez, RAMIREZ, and Tolson represented to Individual A’s family members that “McCane” was an attorney associated with the “Micheal Browns Immigration Attorneys” law firm located in Alexandria, LA that also had offices in New York and Ohio. Fernandez, RAMIREZ, and Tolson utilized various email accounts to communicate with Individual A’s family members in an effort to promote the scheme. For example, Fernandez, RAMIREZ, and Tolson created a “Legal Services Agreement” that was emailed to Individual A’s family members which referenced a $4,980.00 fee and a $980.00 initial deposit for “attorney’s fees and cost incurred by clients.” Fernandez, RAMIREZ, and Tolson obtained money from Individual A’s family members under the guise of collecting a retainer to provide legal services for Individual A and under the pretense of posting a bond to secure the release of Individual A from immigration custody.
In addition, Tolson opened a bank account at a Chase Bank branch in Lorain, OH in order to receive fraudulently obtained payments from Individual A’s family members and Fernandez, RAMIREZ, and Tolson utilized various Chase Bank locations in Lorain, OH and Western Union agent branches to conduct cash transactions to withdraw payments from Individual A’s family members. Further, RAMIREZ and Tolson utilized Western Union locations to wire fraudulently obtained payments to Fernandez in the Dominican Republic. Finally, Fernandez, RAMIREZ, and Tolson falsely represented themselves as employees of the U.S. Department of Homeland Security.
On February 11, 2019, Special Agents with the U.S. Department of Homeland Security, Homeland Security Investigations (“HSI”) arrested Tolson and RAMIREZ in Ohio. On February 11, 2019, Tolson and RAMIREZ appeared before a federal magistrate judge in Ohio who released Tolson on a $10,000 bond and with the condition that she appear in U.S. District Court for the Eastern District of Louisiana on February 25, 2019. RAMIREZ was detained. The U.S. Attorney’s Office for the Eastern District of Louisiana and HSI are working with the U.S. Department of Justice’s Office of International Affairs and the U.S. Department of State to extradite Fernandez from the Dominican Republic.
RAMIREZ faces maximum sentence of five (5) years. Upon release from prison, RAMIREZ also faces a term of supervised release up to (3) three years, and/or a fine of $250,000 or the greater of twice the gross gain to each defendant or twice the gross loss to any person under Title 18, United States Code, Section 3571. Sentencing by U.S. District Judge Sarah S. Vance is scheduled for May 6, 2020.
U.S. Attorney Peter G. Strasser praised the work of Homeland Security Investigations. The prosecution of this case is being handled by Assistant U.S. Attorney Brian M. Klebba, Supervisor of the Financial Crimes Unit.
North Country Hunting Guide Indicted for Hunting Waterfowl over BaitRead the Press Release
SYRACUSE, NEW YORK - William “Bill” Saiff III, age 56, of Henderson, New York, was arraigned yesterday in federal court in Syracuse after being charged by indictment with three felony counts for hiring guides to lead paying hunters on illegal waterfowl hunts over baited ponds in October and November 2018 in Jefferson County, New York. The charges were announced by United States Attorney Grant C. Jaquith; Ryan Noel, Regional Special Agent in Charge, U.S. Fish and Wildlife Service, Office of Law Enforcement; and Bernard Rivers, Director of Law Enforcement, New York State Department of Environmental Conservation.
If convicted, Saiff faces up to 5 years in prison on each count, a fine of up to $250,000, and a term of supervised release of up to 3 years. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
At the time of these offenses, Saiff was on probation for a previous misdemeanor conviction in federal court in Syracuse in 2017 for guiding illegal waterfowl hunts over bait. Saiff has been charged separately with violating the terms of his probation based upon this new criminal conduct.
The charges in the indictment and in the probation violation petition are merely accusations. The defendant is presumed innocent unless and until proven guilty.
This case is being investigated by U.S. Fish and Wildlife Service, Office of Law Enforcement, and the New York State Department of Environmental Conservation, Division of Law Enforcement, and it is being prosecuted by Assistant U.S. Attorney Michael F. Perry.
New Orleans Man Sentenced for Armed Robbery SpreeRead the Press Release
NEW ORLEANS – U.S. Attorney Peter G. Strasser announced that JAMES RAIFORD, age 26, of New Orleans, was sentenced on January 7, 2020 to a term of 74 months for multiple violations of Hobbs Act Robbery, and one count of Attempted Hobbs Act Robbery. Additionally, the Honorable Wendy B. Vitter, U.S. District Court Judge of the Eastern District of Louisiana, sentenced RAIFORD to serve 120 months, to run consecutive to the 74 month sentence, for violating the Federal Gun Control Act, by brandishing a firearm during and in relation to the Hobbs Act Robberies and Attempted Hobbs Act Robbery. After the completion of his sentence, RAIFORD will be on supervised release for a period of 3 years.
Agents with the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the New Orleans Police Department conducted an investigation into armed robberies occurring at various businesses located in New Orleans, Louisiana during April of 2018. On April 17, 2018, RAIFORD robbed the Boost Mobile cellular telephone store located at 7058 Read Boulevard, while in possession of a firearm. On April 19, 2018, RAIFORD robbed the Boost Mobile cellular telephone store located at 5741 Crowder Boulevard, while in possession of a firearm. On April 19, 2018, RAIFORD robbed the Dollar General store located at 11020 Morrison Road, while in possession of a firearm. On April 24, 2018, RAIFORD robbed the Kwik Pik gas station and convenience store located at 10040 Morrison Road, while in possession of a firearm. The last robbery occurred on April 25, 2018, at the Boost Mobile cellular telephone store located at 2277 St. Claude Avenue. RAIFORD brandished firearms and threatened harm to the victims during each of the robberies. RAIFORD obtained $3,572.00 in total as a result of the robberies.
NOPD detectives identified RAIFORD from surveillance camera footage recovered from the stores. A search of RAIFORD’s cellular telephone showed that RAIFORD researched the robberies after he committed them.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safe for everyone. Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
U.S. Attorney Peter G. Strasser praised the work of the Bureau of Alcohol, Tobacco, and Firearms and the New Orleans Police Department in investigating this matter. Assistant United States Attorney Brittany L. Reed is in charge of the prosecution.
New Haven Man Guilty of Gun Possession and Marijuana Distribution OffensesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, today announced that JAMIE MIDDLEBROOK, 20, of New Haven, has been convicted of firearm possession and drug trafficking offenses.
According to the evidence presented during a trial before U.S. District Judge Janet C. Hall in New Haven, in the afternoon of November 1, 2019, New Haven Police detectives patrolling the area of Grand Avenue and Hamilton Street saw Middlebrook standing on a corner. As the police cruiser approached Middlebrook, he ran through a parking lot. During a pursuit, detectives observed Middlebrook duck down and place a firearm behind the tire of a pickup truck on the ground in the parking lot. The firearm, a loaded SCCY CPX-1, 9mm pistol, was recovered, and Middlebrook was apprehended after a foot chase a few blocks away from the parking lot. Investigators subsequently retrieved a bag that Middlebrook left on the corner where he was standing before he fled. The bag contained approximately 19 grams of marijuana packaged for individual sale.
Middlebrook’s criminal history includes a state felony conviction, in 2018, for sale of a crack cocaine. In November 2019, Middlebrook was serving two separate terms of conditional discharge stemming from state convictions.
Yesterday, the jury found Middlebrook guilty of one count of possession with intent to distribute marijuana, and not guilty of one count of possession of a firearm in furtherance of a drug trafficking crime. Today, before the jury returned a verdict on the third count of the indictment, which charged Middlebrook with possession of a firearm by a convicted felon, Middlebrook pleaded guilty to the offense.
Judge Hall scheduled sentencing for April 6, 2020 at which time Middlebrook faces a maximum term of imprisonment of 15 years.
This investigation was conducted by the New Haven Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The case is being prosecuted by Assistant U.S. Attorneys Maria del Pilar Gonzalez and Margaret M. Donovan.
This prosecution has been brought through Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make neighborhoods safer for everyone.
Medicare Fraud Complaint Filed Against Physician, His Siblings, and a Home Health Agency They Owned and OperatedRead the Press Release
HAMMOND - United States Attorney Thomas L. Kirsch II announced today the filing of a civil Medicare fraud complaint against physician Conrado Castor, age 74, of Schererville, Indiana, American Home Health Services, Inc. of Schererville, Indiana and its owners, Aurea Duncan, age 59, of Crown Point, Indiana, and Jacob Castor, age 58, of Dyer, Indiana for submitting claims to Medicare in violation of the Stark Law.
The Stark Law provides that the government will not pay for designated health services if such services were furnished by an entity that had a financial relationship with an immediate family member of the referring physician because such financial relationships can cause overutilization of those services and compromise the physician’s professional judgment. The False Claims Act prohibits an entity from knowingly submitting claims for payment for such services.
The complaint alleges that during 2008-2014, physician Conrado Castor referred numerous Medicare patients for the purpose of receiving home health care services to three home health agencies owned by his immediate family members: American Home Health Services, Inc., Adarna Home Health Care Services, Inc., and Amore Home Health Care Services, Inc. All three entities were owned by Dr. Castor’s immediate family members and billed Medicare for home health services for patients referred by Dr. Castor. Medicare paid over 400 claims totaling over $1.2 million to American, Adarna, and Amore for Dr. Castor’s home health care referrals. Defendant American Home Health Services, Inc. is owned by Dr. Castor’s sister, Aurea Duncan, and, during an earlier time period, Dr. Castor’s brother, Jacob Castor. Medicare paid over 300 claims totaling more than $800,000 to American for Dr. Castor’s home health care referrals.
The False Claims Act allows the federal government to recover three times the amount of the false and fraudulent claims submitted to Medicare plus a civil penalty of $5,500 to $11,000 per false claim submitted during 2008-2014. A small portion of recoveries under the federal False Claims Act, three percent, is used to fund the cost of future health care fraud investigations and cases.
“Medical decisions should be based on the best interests of patients and not on the personal financial interests of referring physicians and their family members,” said United States Attorney Thomas L. Kirsch II. “My Office will continue to make it a high priority to file civil suits to recover funds that were paid out under the Medicare program because of health care fraud.”
The United States Attorney’s office emphasizes that a Complaint is merely an allegation and that the United States is required to prove their allegations before defendants can be found liable.
This suit was filed as the result of a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act. The case was investigated by the United States Attorney’s Office for the Northern District of Indiana and is being handled by Assistant United States Attorneys Wayne T. Ault and Dirk D. De Lor.
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Marion Co. Man Sentenced for Drug Distribution, Possession of Firearm by Convicted FelonRead the Press Release
LOUISVILLE, Ky. – United States District Judge David J. Hale sentenced Phillip Randolph Johnson Jr. of Marion County, Kentucky, to 180 months followed by 5 years of supervised release after he pleaded guilty to a seven count federal indictment.
“Armed drug dealing will not be tolerated in Marion County or the Western District of Kentucky,” said U.S. Attorney Russell Coleman. “Those who ignore this warning will pay a heavy price, in this case a decade and a half in federal prison.”
“Armed felons who illegally possess and use guns to further drug deals are criminals who pose an increased threat to the safety of our communities,” stated ATF Acting Special Agent in Charge Tommy Estevan of the Louisville Field Division. “ATF provides investigative resources that lead to arrests and successful prosecutions of these offenders”
On October 3, 2019, Johnson, 38 years of age, entered a plea of guilty to all seven counts of the federal indictment. The federal charges included 2 Counts of possession with the intent to distribute cocaine, 2 Counts of possession with the intent to distribute methamphetamine, 1 Count of conspiracy to possess with the intent to distribute methamphetamine and cocaine, 1 Count of possession of a firearm in furtherance of drug trafficking, and 1 Count of possession of a firearm by a convicted felon.
Johnson was previously convicted in Marion County of reckless homicide and two charges of trafficking in a controlled substance (cocaine) in the first degree, all felonies.
The federal charges to which Johnson pleaded guilty are based on conduct which occurred between November 13, 2018, and November 30, 2018, in Marion County. According to the plea, Johnson sold cocaine and methamphetamine to law enforcement officials on multiple occasions between the above dates and on November 30, 2018, was found in possession of a Taurus, Model PT809, 9 millimeter semiautomatic pistol and ammunition, following the execution of a search warrant of the residence from which he had been selling narcotics.
Based on the fact that Johnson had two prior felony controlled substance offenses and pleaded guilty to the current drug charges, the Court determined he is a “career offender” for sentencing purposes which made him eligible for an enhanced sentence.
The case was prosecuted by Assistant United States Attorney Mac Shannon, and was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Lebanon Police Department.
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Man from Zuni Pueblo pleads guilty to assaulting two children in Indian CountryRead the Press Release
ALBUQUERQUE, N.M. – Stanton Sanchez, 32, of Zuni, New Mexico, pleaded guilty in federal court in Albuquerque on Jan. 9 to two charges of assault of a minor resulting in serious bodily injury.
In Sanchez’s plea agreement, he admitted to committing the offenses on the Zuni Pueblo in McKinley County on July 22, 2018. Sanchez was intoxicated and driving too fast when he hit two children who were walking down a residential road. Sanchez’s blood alcohol content was more than twice the legal limit. Both children suffered serious injuries.
Sanchez is currently in custody pending sentencing. He will receive a sentence of 10 years in custody under the terms of his plea agreement.
The Pueblo of Zuni Tribal Police Department investigated this case. Assistant U.S. Attorney Allison Jaros is prosecuting the case.
Man Who Tried to Ditch Meth While Running from Police Sentenced to More than a Decade in PrisonRead the Press Release
A man who attempted to run from cops and ditch the meth he was carrying was sentenced January 6, 2020, to more than ten years in federal prison.
Robert Ryan Lee Baer, age 43, from Cedar Rapids, Iowa, received the prison term after a July 26, 2019 guilty plea to possessing meth with the intent to distribute it.
In a plea agreement, Baer admitted discarding a glove which had a bag containing 109.89 grams of pure methamphetamine while he was running from the cops. Baer has numerous previous state criminal convictions, including possessing methamphetamine with the intent to deliver, possessing contraband while confined, and another conviction for possessing a controlled substance. Baer also has six convictions for theft and a forgery conviction.
Baer was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Baer was sentenced to 130 months’ imprisonment. He must also serve a five-year term of supervised release after the prison term. There is no parole in the federal system. Baer is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Emily K. Nydle and investigated by the Drug Enforcement Agency and the Cedar Rapids Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-cr-00060.
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Man Who Made $4,000 a Month Selling Drugs Sentenced to Federal PrisonRead the Press Release
An Iowa man responsible for selling methamphetamine was sentenced January 8, 2020, to seven years in federal prison.
David Joe McVay, age 40, from Cedar Rapids, Iowa, received the prison sentence after a July 22, 2019 guilty plea to distribution of methamphetamine.
Information disclosed at sentencing and at his plea hearing showed that in March 2017, McVay sold methamphetamine to a confidential source. Evidence also showed that McVay not only sold methamphetamine, but also manufactured it. In total, he was involved with over a kilogram of methamphetamine. At times, McVay made up to $4,000 a month in drug sales. He also provided methamphetamine in exchange for Sudafed, a medication commonly used to manufacture methamphetamine. McVay has a long criminal history, totally 26 adult criminal convictions. He has nine prior controlled substance convictions.
McVay was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Robertson was sentenced to 84 months’ imprisonment. He must also serve a four-year term of supervised release after the prison term. There is no parole in the federal system.
The case was prosecuted by Assistant United States Attorney Ashley Corkery and investigated by the Vinton Police Department, Benton County Sheriff’s Office, Iowa Division of Narcotics Enforcement, Benton County Attorney’s Office, the
Bureau of Alcohol, Tobacco, Firearms and Explosives, Hiawatha Police Department, Cedar Rapids Police Department, Independence Police Department, Iowa Department of Correctional Services, Tama County Sheriff’s Office, and Sumner Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-CR-00051.
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Man Who Fired Bullet That Killed 7-Year Old Child in Louisville Pleads Guilty to Federal Gun CrimeRead the Press Release
LOUISVILLE, Ky. – A Louisville, Kentucky, man, who fired the shot that killed a 7-year old child on May 21, 2017, has now pleaded guilty to three federal firearms charges, announced U.S. Attorney Russell Coleman.
“The face of gun crime in our city is an innocent child sitting at his kitchen table eating birthday cake on a Sunday night,” said U.S. Attorney Russell Coleman. “This case demonstrates how the feds can partner with LMPD and the Commonwealth’s Attorney’s Office to maximize our ability to incapacitate the trigger-pullers and protect kids like Dequante Hobbs.”
Wyatt Lamar Williams, 25, of Louisville, Kentucky, was charged in a superseding indictment on October 1, 2019, by a Federal Grand Jury sitting in Louisville with a three counts of being an unlawful user of a controlled substance in possession of a firearm.
Williams faces no more than 10 years in federal prison per count and a period of supervised release. There is no parole in the federal system.
The defendant was also successfully prosecuted by the Office of Jefferson Commonwealth’s Attorney Tom Wine and previously pled guilty in Jefferson County Circuit Court to second degree manslaughter, two counts of wanton endangerment and receiving a stolen firearm, and received a 20 year state sentence.
The case is being prosecuted by Assistant United States Attorney Larry Fentress and United States Attorney Russell Coleman. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Louisville Metro Police Department (LMPD).
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Man Sentenced to More than Two Years in Federal Prison for Possessing a SilencerRead the Press Release
A man who cut off his GPS ankle monitor while on release after pleading guilty to unlawfully possessing a silencer was sentenced January 6, 2020, to more than two years in federal prison.
Brett Scott Meana, age 44, from Newton, Iowa, received the prison term after a May 28, 2019 guilty plea to possessing an unregistered silencer.
Police were called to Meana’s residence following a domestic disturbance at his residence, during which he held a gun to his head and threatened to kill himself, later admitting he did not intend to kill himself, he just wanted a woman that was present to stop talking and judging him. Police found an unregistered silencer at Meana’s residence that he had made himself previously. Evidence at the sentencing hearing showed that after pleading guilty to possessing the unregistered silencer, Meana cutoff his GPS ankle monitor during June 2019. Meana left the ankle monitor, his wallet, and phone on the side of the road. He disappeared and was not heard from again for over a month. He finally made contact with his family and was picked up in a field near Des Moines.
Meana was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Carter was sentenced to 28 months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
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. The United States Attorney’s Office has prosecuted this case with support from the following Project Guardian partners: the Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, and Firearms, the Dubuque Police Department, the Dubuque County Sheriff’s Office, and the US Marshal’s. For more information about Project Guardian, please see /media/1122011/dl?inline.
Meana is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Emily K. Nydle and investigated by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, and Firearms, the Dubuque Police Department, the Dubuque County Sheriff’s Office, and the United States Marshal’s Service.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-cr-1009.
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Man Sentenced to 10 Years in Prison for Promising $5,000 to Have Ex-Wife MurderedRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that JAMES ERIK GODIKSEN, 57, formerly of Clinton, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 120 months of imprisonment, followed by three years of supervised release, for hiring an individual to murder Godiksen’s former spouse. Judge Bryant also ordered Godiksen to pay a $10,000 fine.
According to the evidence presented during a trial in this matter, while he was incarcerated at New Haven Correctional Center in 2016, Godiksen reached out to other inmates seeking a person who would be willing to kill Godiksen’s former wife. Between September 10 and September 14, 2016, Godiksen and an ATF special agent acting in an undercover capacity spoke multiple times by phone. During these conversations, Godiksen offered to pay the undercover agent $5,000 to murder his “ex-wife,” and provided the agent with a physical description of his former wife, her phone number, her home address, her place of work and the route she typically drove to work. He also told the undercover agent how he would like his former wife to be murdered. Godiksen stated to the undercover agent “I want her killed, if that’s possible . . . . Head cut off would be nice.”
Godiksen also offered the undercover agent additional money if he encountered his former wife’s current boyfriend and killed him, too.
Godiksen was arrested on September 14, 2016, after he met with the undercover agent and provided him with a “down payment” of $80, some of which was to be used to purchase a knife. Godiksen has been detained since his arrest.
On July 20, 2018, a jury found Godiksen guilty of one count of murder for hire.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Clinton Police Department and Connecticut Department of Correction. The case was prosecuted by Assistant U.S. Attorneys Rahul Kale and Dave Vatti.
Man Sentenced for Armed Robbery and Armed Drug TraffickingRead the Press Release
RICHMOND, Va. – A Norfolk man was sentenced today to 28 years in prison for robbery affecting commerce, using, carrying, brandishing a firearm during the robbery, and three separate instances of armed drug trafficking.
According to court documents, Tajh Rodgers, 30, previously pleaded guilty for working with an accomplice to commit a violent armed robbery of a Sprint Store in Colonial Heights in January 2019. During the robbery, Rodgers and his co-conspirator held two employees hostage in the back of the store at gunpoint, and attempted to tie up the employees and threatened to kill them if they notified police. Due to a time-delay lock on the store’s safe, the robbers had to wait several minutes for the safe to open, and a customer entered the store. The robbers let one of the employees go to assist the customer, along with a warning that the employee would be killed if they tried to alert the customer about the crime. Soon after the customer left, the time-delay lock on the safe opened, allowing the robbers to steal a total of 72 items valued at approximately $25,000.
The investigation led to the identification of Rodgers as a suspect, as well as his connection to another drug trafficking investigation in Norfolk where the defendant engaged in several armed drug transactions during which he sold fentanyl, crack cocaine, and firearms to cooperating sources. In December 2018, Rodgers sold cocaine base, fentanyl, and a .38 caliber revolver to cooperating sources. A month later, he sold two bundles of fentanyl and a 9mm semi-automatic pistol. During both drug transactions, Rodgers was armed with the same .40 caliber Ruger semi-automatic pistol that he carried during the armed robbery of the Sprint Store.
After identifying Rodgers as the robbery suspect, investigators obtained a search warrant for his residence in Norfolk. During the search in January 2019, officers recovered the .40 caliber pistol, a loaded semi-automatic pistol, various items connected to the Sprint Store robbery, distribution quantities of fentanyl, marijuana, crack cocaine, and a plastic safe containing a digital scale with suspected narcotics residue and packaging material.
This case is part of Project Safe Neighborhoods (PSN) and Project Guardian, the Department of Justice’s signature initiatives to reduce gun violence and enforce federal firearms laws. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. Click here for more information about Project Guardian.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; Ashan M. Benedict, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division; Colonel Jeffrey W. Faries, Chief of Colonial Heights Police; Larry D. Boone, Chief of Norfolk Police, made the announcement after Senior U.S. District Judge Robert E. Payne accepted the plea. Assistant U.S. Attorneys Michael Gill, Kenneth Simon, and William B. Jackson are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:19-cr-111.
Maintenance Supervisor Charged with Violating the Clean Air Act and Making False StatementsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that a federal grand jury has returned an indictment charging James S. Marshall, 67, of Farmington, NY, with violation of the Clean Air Act, negligent endangerment under the Clean Air Act, and making a false statement. The charges carry a maximum penalty of five years in prison and a $250,000 fine.
Assistant U.S. Attorney Aaron J. Mango, who is handling the case, stated that according to the indictment, the defendant was a Maintenance Supervisor with the Finger Lakes Office for People with Developmental Disabilities (OPWDD), Developmental Disabilities Services Office. As part of his duties, Marshall controlled and supervised facilities being demolished or renovated.
On October 7, 2014, the defendant requested that asbestos testing be conducted at the Hillcrest Building, a building owned by the OPWDD, located on E. Maple Avenue in Newark, NY. On October 8, 2014, Marshall directed an inspector for the asbestos testing company to take four samples from two locations within the 300,000 square foot Hillcrest Building. The results of the four samples came back negative for asbestos.
On November 10, 2014, the OPWDD began soliciting public bids for the cleanout of the Hillcrest building. The specifications for the project stated that swipe testing for asbestos and lead was conducted and the findings for the substances were within normal limits.
On December 2, 2014, the defendant led a mandatory walkthrough of the Hillcrest Building for any individuals seeking to bid on the project. On December 24, 2014, a third-party contractor was awarded the contract for the cleanout of the Hillcrest Building.
The contractor conducted the cleanout between April 6 and April 10, 2015. On April 16, 2015, Marshall sent an e-mail to the OPWDD business office stating that the cleanout of the Hillcrest Building had been completed to his satisfaction.
On April 30 and May 28, 2015, regulated asbestos was found at the Hillcrest Building in a dry condition and was not in any container. According to the indictment, the defendant failed thoroughly to inspect the affected facility for the presence of asbestos prior to the commencement of a renovation activity; failed to ensure that regulated asbestos was adequately wetted during removal activity; failed to ensure that regulated asbestos remained wetted until placed in leak-tight containers; and failed to ensure that all regulated asbestos stripped and removed was disposed of timely. Marshall is also accused of negligently releasing into the ambient air a hazardous air pollutant, and placing another person in imminent danger of death and serious bodily injury during the cleanout of the Hillcrest Building. In addition, the defendant is accused of making a false statement by stating that the asbestos sampler walked through the entire building during testing, as it is alleged that the defendant knew that the asbestos sampler had not walked through the entire building.
The indictment is the result of an investigation by the U.S. Environmental Protection Agency, Criminal Investigation Division, under the direction of Special Agent-in-Charge Tyler Amon. Additional assistance was also provided by the New York State Department of Labor, Asbestos Control Bureau.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Lubbock Man Sentenced for Stealing FirearmsRead the Press Release
A firearms trafficker who stole guns from a Lubbock pawn shop was sentenced to 2.5 years in federal prison following an investigation by the ATF Lubbock Field Office, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
Zachary Nicholas Gonzales, 21, pleaded guilty in September to theft of firearms from a federal firearms licensee.
In his plea papers, Mr. Gonzales admitted that in the early morning hours of July 4, 2019, he burglarized a Cash America Pawn shop on 50th Street, escaping with at least 14 stolen guns.
He breached the cage where guns were stored by propping a ladder next to the cage and removing several ceiling tiles in order to jump over the mesh, he said.
Surveillance video from an attempted burglary at anther Cash America location the evening of July 4 showed Mr. Gonzalez there as well.
Following his arrest on July 9, Mr. Gonzales was Mirandized and admitted to ATF agents that he intended to sell the stolen firearms to support his drug habit.
“Firearms traffickers are a menace to our communities, often allowing dangerous individuals to get their hands on deadly weapons,” said U.S. Attorney Nealy Cox. “We’re proud to work with ATF and our state and local partners to prosecute this case under Project Guardian, the Attorney General’s gun violence reduction initiative.”
“Mr. Gonzales garnered funds to support his drug habit by victimizing a Federal Firearms Licensee and fueling the illicit firearms trade,” stated ATF Special Agent in Charge Jeffrey C. Boshek II. “At least one of the stolen firearms was subsequently used in a violent crime.”
The Bureau of Alcohol, Tobacco, Firearms & Explosives, the Lubbock Police Department, the Lubbock County Sheriff’s Office, and the Texas Department Public Safety conducted the investigation. Assistant U.S. Attorney Stephen Rancourt prosecuted the case. U.S. District Judge James Wesley Hendrix handed down the sentence.
This case was brought under Project Guardian, a Department of Justice initiative aimed at reducing gun violence by enforcing federal firearm laws through coordination between the federal government and state and local law enforcement.
Leader of Million-Dollar Moving Company Fraud Sentenced to Five Years in PrisonRead the Press Release
NEWARK, N.J. – A Passaic County, New Jersey, man was sentenced today to 60 months in prison for leading a conspiracy involving numerous moving companies that systematically extorted hundreds of customers, U.S. Attorney Craig Carpenito announced.
Richard Bishara, 43, of Woodland Park, New Jersey, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of conspiracy to commit wire fraud. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Bishara and his conspirators jointly operated numerous moving companies that quoted customers “low-ball” price estimates for household goods moves and then raised prices on the date of the move after the goods were loaded and the customers were vulnerable. Through this scheme, Bishara and his conspirators, over a number of years and hundreds of moves, raised final prices for moves above the allowed increase from initial estimates as provided by federal regulations, including increases as high as 400 percent on the day of the move. The collective difference between the many estimates and the final balances for the customers’ moves was more than $1 million. Bishara personally owned a number of the moving companies involved, and, as a leader of the conspiracy, controlled certain bank accounts used by the companies.
Judge Wigenton also sentenced Bishara to three years of supervised release and ordered him to pay restitution of $72,709.
U.S. Attorney Carpenito credited special agents of the Department of Transportation-Office of the Inspector General, under the direction of Special Agent in Charge Douglas Shoemaker, Northeast Region; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn, Newark Division; and special agents of the Department of Homeland Security, Homeland Security Investigations (HSI), New York, under the direction of Special Agent in Charge Peter C. Fitzhugh, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Andrew Macurdy of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Anthony Pope Esq., Newark
Lawrence Contractor Pleads Guilty to Conspiracy in Oread Hotel Tax CaseRead the Press Release
TOPEKA, KAN. – A Kansas building contractor pleaded guilty today to conspiring to deprive the city of Lawrence of sales tax revenues in connection with the development of a seven-story hotel adjacent to the University of Kansas campus.
Thomas S. Fritzel, 54, Lawrence, Kan., pleaded guilty to one count of criminal conspiracy. Fritzel, part owner and manager of Oread Inn LC, was a party to an agreement with the city to finance the more than $40 million hotel project, including $11 million worth of street repairs and a public parking garage.
Oread Inn LC was to pay all costs up front and to be repaid $11 million for public improvements. The money to repay Oread Inn LC was to come from an incremental increase in property tax, a sales tax and an additional 1 percent tax on sales within a portion of the redevelopment district.
In his plea, Fritzel admitted that he and others caused false monthly Kansas sales tax returns to be submitted to the state of Kansas. The reports classified certain sales as occurring within the redevelopment district when in fact they occurred outside the district. As a result, the city of Lawrence lost a portion of sales taxes it was due.
The city of Lawrence filed a civil lawsuit against Fritzel seeking the lost revenue and the parties settled that case in 2017.
Sentencing in the criminal case is set for May 4. Both parties have agreed to recommend a sentence of 12 months and a day in federal prison and a fine up to $250,000. The FBI and the Lawrence Police Department investigated. Assistant U.S. Attorney Rich Hathaway prosecuted.
Law Enforcement Appreciation Day and new PSA from U.S. Attorney's OfficeRead the Press Release
ATLANTA – Today, January 9, 2020 is Law Enforcement Appreciation Day. U.S. Attorney Byung J. “BJay” Pak is asking citizens to join him in saluting law enforcement officers in the Northern District of Georgia.
“Law enforcement officers are everyday heroes and part of our community. Fathers, mothers, brothers, sisters, sons, daughters, and our neighbors,” said U.S. Attorney Byung J. “BJay” Pak. “They go to work every day with a passion to serve others and to protect us. Few can truly appreciate the rigors of working in law enforcement. In addition, many of them serve the communities in which they grew up because they love where they are from, and see it as an honor and duty to give back. They are one of us. Please join us in thanking them for their dedication, and service.”
The U.S. Attorney’s Office for the Northern District of Georgia is also releasing our second “Everyday Heroes are One of Us” Public Service Announcement featuring Lt. Robert Howell of the Henry County, Georgia, Sheriff’s Office. The PSA is posted on our social media platforms and has been submitted to local media outlets.
The PSA is available on our Facebook page: https://www.facebook.com/NDGAnews/
Also on our YouTube Channel at: https://www.youtube.com/c/usaondga
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.
Justice Department Recovers over $3 Billion from False Claims Act Cases in Fiscal Year 2019Read the Press Release
The Department of Justice obtained more than $3 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year ending Sept. 30, 2019, Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division announced today. Recoveries since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $62 billion.
“The significant number of settlements and judgments obtained over the past year demonstrate the high priority this administration places on deterring fraud against the government and ensuring that citizens’ tax dollars are well spent,” said Assistant Attorney General Hunt. “The continued success of the department’s False Claims Act enforcement efforts are a testament to the tireless efforts of the civil servants who investigate, litigate, and try these important cases as well as to the fortitude of whistleblowers who report fraud.”
Of the more than $3 billion in settlements and judgments recovered by the Department of Justice this past fiscal year, $2.6 billion relates to matters that involved the health care industry, including drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians. This is the tenth consecutive year that the department’s civil health care fraud settlements and judgments have exceeded $2 billion. The amounts included in the $2.6 billion reflect only federal losses, but in many of these cases the department was instrumental in recovering additional millions of dollars for state Medicaid programs.
In addition to combating health care fraud, the False Claims Act serves as the government’s primary civil tool to redress false claims for federal funds and property involving a multitude of other government operations and functions. The Act helps to protect our military and first responders by ensuring that government contractors provide equipment that is safe, effective, and cost efficient; to protect American businesses and workers by promoting compliance with customs laws, trade agreements, visa requirements, and small business protections; and to protect other critical government programs ranging from the provision of disaster relief funds to farming subsidies.
In 1986, Congress strengthened the Act by increasing incentives for whistleblowers to file lawsuits alleging false claims on behalf of the government. These whistleblower, or qui tam, actions comprise a significant percentage of the False Claims Act cases that are filed. If the government prevails in a qui tam action, the whistleblower, also known as the relator, typically receives a portion of the recovery ranging between 15 and 30 percent. Whistleblowers filed 633 qui tam suits in fiscal year 2019, and this past year the department recovered over $2.1 billion in these and earlier filed suits.
Health Care Fraud
The department investigates and resolves matters involving a wide array of health care providers, goods, and services. The department’s health care fraud enforcement efforts not only recover money for federal health care programs, such as Medicare, Medicaid, and TRICARE, but also help deter fraud schemes that put patients at risk and increase health care costs.
Reflecting the department’s commitment to holding drug companies accountable for their role in the opioid crisis, two of the largest recoveries involving the health care industry this past year came from opioid manufacturers. In one matter, as part of a global resolution of criminal and civil claims, Insys Therapeutics paid $195 million to settle civil allegations that it paid kickbacks to induce physicians and nurse practitioners to prescribe Subsys for their patients. The kickbacks allegedly took the form of sham speaker events, jobs for the prescribers’ relatives and friends, and lavish meals and entertainment. The government also alleged that Insys improperly encouraged physicians to prescribe Subsys for patients who did not have cancer, and lied to insurers about patients’ diagnoses to ensure payment by federal healthcare programs. In another matter, Reckitt Benckiser Group plc paid a total of $1.4 billion to resolve criminal and civil liability related to the marketing of the opioid addiction treatment drug Suboxone, which is a formulation of the opioid buprenorphine. As part of the resolution, RB Group paid $500 million to the United States to resolve civil allegations that it directly or through subsidiaries promoted Suboxone to physicians who were writing prescriptions for uses that were unsafe, ineffective, and medically unnecessary; promoted Suboxone Film using false and misleading claims that it was less susceptible to diversion, abuse, and accidental pediatric exposure than other buprenorphine products; and took steps to delay the entry of generic competition in order to improperly control pricing of Suboxone.
The department also pursued other cases involving drug manufacturers. For example, Avanir Pharmaceuticals paid over $95 million to resolve allegations that it paid kickbacks and engaged in false and misleading marketing to induce healthcare providers in long term care facilities to prescribe the drug Neudexta for behaviors commonly associated with dementia patients, which is not an approved use of the drug. The department also continued to investigate efforts by drug manufacturers to facilitate increases in drug prices by funding the co-payments of Medicare patients. Congress included co-pay requirements in the Medicare program, in part, to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs. This year, seven drug manufacturers – Actelion Pharmaceuticals US Inc., Amgen Inc., Astellas Pharma US Inc., Alexion Pharmaceuticals, Inc., Jazz Pharmacueticals Inc., Lundbeck LLC, and US Worldmeds LLC – paid a combined total of over $624 million to resolve claims that they illegally paid patient copays for their own drugs through purportedly independent foundations that the companies in fact treated as mere conduits.
The department also reported substantial recoveries involving a variety of other healthcare providers. Pathology laboratory company Inform Diagnostics, formerly known as Miraca Life Sciences Inc., paid $63.5 million to resolve allegations that it paid kickbacks to referring physicians in the form of subsidies for electronic health records (EHR) systems and free or discounted technology consulting services. Greenway Health LLC, an EHR software vendor, paid over $57 million to resolve allegations that it misrepresented the capabilities of its EHR product “Prime Suite” and provided unlawful remuneration to users to induce them to recommend Prime Suite to prospective new customers. Encompass Health Corporation (formerly known as HealthSouth Corporation), the nation’s largest operator of inpatient rehabilitation facilities (IRFs), paid $48 million to resolve allegations that some of its IRFs provided inaccurate information to Medicare to maintain their status as an IRF and to earn a higher rate of reimbursement, and that some admissions to its IRFs were not medically necessary.
Procurement Fraud
In the past year, the department also pursued a variety of fraud matters involving the government’s purchase of goods and services. For example, five South Korea-based companies – SK Energy Co. Ltd., GS Caltex Corporation, Hanjin Transportation Co. Ltd., Hyundai Oilbank Co. Ltd. and S-Oil Corporation – agreed to resolve allegations that they engaged in anticompetitive conduct targeting contracts to supply fuel to the U.S. military in South Korea and made false statements to the government in connection with their agreement not to compete. The United States Department of Defense paid substantially more for fuel supply services in South Korea than it would have absent collusion on the fuel supply contracts. In total, the five companies paid over $162 million as part of the False Claims Act settlements.
The Civil Division entered into a $34.6 million settlement with aluminum extrusion manufacturer Hydro Extrusion Portland Inc., formerly known as Sapa Profiles Inc. (SPI), to resolve SPI’s civil liability for causing a government contractor to invoice NASA and the Department of Defense’s Missile Defense Agency (MDA) for aluminum extrusions that did not comply with contract specifications. Government contractors purchased aluminum extrusions from SPI for use on rockets for NASA and missiles provided to the MDA. SPI provided those contractors with falsified certifications after altering the results of tensile tests designed to ensure the consistency and reliability of aluminum extrusions. Several of the rockets used by NASA crashed, resulting in the loss of the NASA payloads that they carried. SPI also resolved related criminal claims arising from the same conduct.
The department recovered over $27 million from Northrop Grumman Systems Corporation (NGSC) in a settlement resolving False Claims Act allegations related to two battlefield communications contracts with the United States Air Force. The settlement resolved allegations that NGSC billed the Air Force for labor hours purportedly incurred by individuals stationed in the Middle East who had not actually worked the hours claimed.
In separate settlement agreements with the Civil Division, American Airlines paid $22 million and British Airways Plc/Iberia Airlines paid $5.8 million to resolve allegations that they falsely reported the times they transferred possession of United States mail to foreign postal administrations or other intended recipients under contracts with the United States Postal Service (USPS). USPS contracted with the airlines to take possession of receptacles of United States mail at six locations in the United States or at various Department of Defense and Department of State locations abroad, and then timely deliver that mail to numerous international and domestic destinations.
The software development company Informatica LLC paid $21.57 million to resolve allegations that it caused the government to be overcharged by providing misleading information about its commercial sales practices that was used in General Services Administration (GSA) contract negotiations. Informatica allegedly provided false information concerning its commercial discounting practices for its products and services to resellers, who then used that false information in negotiations with GSA for government-wide contracts. The false disclosures caused GSA to agree to less favorable pricing, and, ultimately, government purchasers to be overcharged.
Other Fraud Recoveries
The number and variety of judgments and settlements announced during fiscal year 2019 reflect the diversity of fraud recoveries arising under the False Claims Act. For example, Duke University paid $112.5 million to resolve allegations that it violated the False Claims Act by submitting applications and progress reports that contained falsified research on federal grants to the National Institutes of Health (NIH) and to the Environmental Protection Agency (EPA). Luke Hillier, the majority owner and former Chief Executive Officer of Virginia-based defense contractor ADS, Inc., paid $20 million to settle allegations that he fraudulently obtained federal set-aside contracts reserved for small businesses that his company was ineligible to receive. In order to qualify as a small business, companies must satisfy defined eligibility criteria, including requirements concerning size, ownership, and operational control. The government alleged that Hillier caused ADS to falsely represent that it qualified as a small business concern and that, as a result of Hillier’s representations, his company was awarded numerous small business set-aside contracts for which it was ineligible. The government previously resolved related claims against ADS for $16 million and Charles Salle, the former general counsel of ADS, for $225,000.
The department also continued its efforts to hold accountable those who seek to abuse their license to remove minerals from federal lands in exchange for the payment of an appropriate royalty. This past year, gas marketer B. Charles Rogers Gas Ltd. (BCR) and its owners paid over $3.5 million to resolve allegations that they engaged in a scheme to reduce mineral royalty payments for natural gas removed from federal lands. Another individual who worked with BCR while employed as a gas supply manager at a natural gas distributor paid an additional $800,000 to resolve his alleged role in the scheme.
In another matter, Omega Protein Corp. and Omega Protein, Inc. paid $1 million to resolve allegations that it obtained a loan from the United States by falsely certifying compliance with federal environmental laws. A leading domestic producer of Omega-3 rich fish oil, protein-rich specialty fishmeal, and organic fish solubles, Omega allegedly certified to the Oceanic and Atmospheric Administration, an agency within the Department of Commerce, that it was complying with federal environmental laws while knowingly and unlawfully discharging pollutants and oil into U.S. waters.
North Greenville University (NGU) paid $2.5 million to resolve allegations that it submitted false claims to the U.S. Department of Education. Title IV of the Higher Education Act (HEA) prohibits any institution of higher education that receives federal student aid from making incentive payments to student recruiters based on their success in securing student enrollment. The settlement resolves allegations that NGU compensated a student recruiting company based on the number of students who enrolled in NGU’s programs, in violation of the prohibition on incentive compensation.
Holding Individuals Accountable
The department continued its commitment to use the False Claims Act and other civil remedies to deter and redress fraud by individuals as well as corporations. In addition to the settlements with Luke Hillier and Charles Salle discussed above, the following are additional examples of recoveries involving individuals.
The department negotiated separate settlements with the individual owners of seven Osteo Relief Institutes for a total recovery from the owners and their clinics of more than $7.1 million. The settlements resolved allegations that the defendants knowingly billed Medicare for medically unnecessary viscosupplementation injections and medically unnecessary knee braces. Viscosupplementation is a treatment for osteoarthritis, in which a doctor injects a gel-like fluid into a patient’s knee joint to act as a lubricant and to supplement the natural properties of joint fluid. The government alleged that these clinics administered viscosupplementation injections to patients who did not need them, used multiple brands of viscosupplements successively on patients without clinical support, and used discounted viscosupplements reimported from foreign countries. The government also alleged that they provided unnecessary custom knee braces to patients.
In addition to negotiating a settlement with Vanguard Healthcare LLC for approximately $18 million in allowed claims to resolve allegations of grossly substandard nursing home services, the department also pursued Vanguard’s majority owner and CEO and Vanguard’s former director of operations. These two individuals collectively paid $250,000 to resolve allegations that five Vanguard-owned skilled nursing facilities submitted false claims to Medicare and Medicaid for nursing home services that were grossly substandard or worthless, including allegations that the facilities failed to administer medications as prescribed, failed to provide standard infection control or wound care, failed to take prophylactic measures to prevent pressure ulcers, and failed to meet basic nutrition and hygiene needs of their residents.
This year, the department also obtained a $21 million settlement with a compounding pharmacy, Diabetic Care Rx LLC (which does business as Patient Care America), and a private equity firm, Riordan, Lewis & Haden Inc., (RLH) to resolve a lawsuit alleging that they submitted false claims to Tricare, the federal health care program for military members and their families, through their involvement in a kickback scheme to generate referrals of prescriptions for expensive pain creams, scar creams, and vitamins, regardless of patient need. At the same time as this settlement with Diabetic Care and RLH, the department secured settlements totaling over $300,000 with Diabetic Care Rx’s Chief Executive Officer and former Vice President of Operations. All of the settlements were based on the defendants’ ability to pay.
Recoveries in Whistleblower Suits
Of the $3 billion in settlements and judgments reported by the government in fiscal year 2019, over $2.1 billion arose from lawsuits filed under the qui tam provisions of the False Claims Act. During the same period, the government paid out $265 million to the individuals who exposed fraud and false claims by filing these actions.
The number of lawsuits filed under the qui tam provisions of the Act has grown significantly since 1986, with 633 qui tam suits filed this past year – an average of more than 12 new cases every week.
“Whistleblowers continue to play a critical role identifying new and evolving fraud schemes that might otherwise remain undetected,” said Assistant Attorney General Hunt. “Taxpayers have benefitted greatly from these individuals who are often required to make substantial sacrifices to bring these schemes to light.”
In 1986, Senator Charles Grassley and Representative Howard Berman led the successful efforts in Congress to amend the False Claims Act to, among other things, encourage whistleblowers to come forward with allegations of fraud. In 2009 and 2010, further improvements were made to the False Claims Act and its whistleblower provisions. Congress also included in the False Claims Act authority for the government to dismiss cases that do not advance the goal of fraud prevention, and during the past year the government made increasing use of this tool to help prioritize and protect the expenditure of government resources.
Finally, Assistant Attorney General Hunt expressed appreciation for the many dedicated public servants throughout the department’s Civil Division and the U.S. Attorneys’ Offices, as well as the agency Offices of Inspector General and the many other federal and state agencies that contributed to the department’s False Claims Act recoveries this past fiscal year.
“The accomplishments announced today reflect the extraordinary efforts of the men and women throughout the government committed to protecting the federal fisc and the integrity of the government’s programs,” said Assistant Attorney General Hunt. “Having served many years in the Civil Division, I have witnessed the passion and dedication of the talented employees who have committed their careers to serving the American people and defending the interests of our great nation.”
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Except where indicated, the government’s claims in the matters described above are allegations only and there has been no determination of liability. The numbers contained in this press release may differ slightly from the original press releases due to accrued interest.
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.
Jury Finds Florida Felon Guilty of Armed Drug Trafficking and Other OffensesRead the Press Release
Tampa, Florida – A federal jury today found Robert Christopher Sunmonu (22, St. Petersburg) guilty of possessing a firearm in furtherance of a drug trafficking crime, possessing crack cocaine with the intent to distribute it, and possessing a firearm as a convicted felon. Sunmonu faces a mandatory minimum penalty of five years, and up to life, in federal prison. His sentencing hearing has not yet been scheduled.
Sunmonu was indicted on September 24, 2019.
According to testimony presented at trial, on August 2, 2019, officers from the St. Petersburg Police Department attempted to stop Sunmonu, who was driving a stolen car. Instead of stopping, Sunmonu fled and led officers on a chase through St. Petersburg, ending in an apartment complex, where Sunmonu then fled on foot. Sunmonu jumped a concrete wall and was attempting to hop a fence when an officer grabbed him. Sunmonu continued to try and break free as a second officer pried Sunmonu from the fence and got him to the ground. As officers tried to gain control of Sunmonu’s hands, he resisted and reached for his waist. The officers eventually handcuffed Sunmonu and found a loaded firearm in his pants pocket. In retracing Sunmonu’s steps, the officers recovered trafficking amounts of crack cocaine, marijuana, and Xanax.
At the time of the incident, Sunmonu had multiple prior felony convictions. Therefore, he is prohibited from possessing a firearm or ammunition under federal law.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the St. Petersburg Police Department. It is being prosecuted by Assistant United States Attorney Gregory T. Nolan.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. In the Middle District of Florida, U.S. Attorney Maria Chapa Lopez coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
Jury Convicts Lawrence Man of Participating in Fentanyl Trafficking ConspiracyRead the Press Release
CONCORD – Malaquia Guillermo, 52, of Lawrence, Massachusetts was found guilty of participating in a conspiracy to distribute fentanyl, United States Attorney Scott W. Murray announced today.
According to evidence presented during a three-day jury trial, Guillermo, Marangely Melendez, and others participated in a conspiracy to distribute fentanyl to customers in the Lawrence area, including customers from New Hampshire. Evidence at trial showed that on December 6, 2018, an individual who was cooperating with law enforcement officers contacted Melendez and ordered approximately 50 grams of fentanyl. Shortly thereafter, Guillermo met with the cooperating individual at a location in Lawrence and provided approximately 50.9 grams of fentanyl in exchange for $1,000.
Guillermo will be sentenced on April 23, 2020. Melendez pleaded guilty on November 26, 2019, and is scheduled to be sentenced on March 11, 2020.
“Interstate fentanyl trafficking continues to cause substantial damage to the health and safety of the people New Hampshire,” said U.S. Attorney Murray. “I am grateful for this jury verdict holding the defendant responsible for conspiring to distribute this lethal drug. Working with DEA and all of our law enforcement partners, we will continue with our efforts to stop the flow of fentanyl into the Granite State.”
This matter was investigated by the Drug Enforcement Administration. The case is being prosecuted by Assistant U.S. Attorneys Anna Dronzek and Joachim Barth.
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Janesville Felon Sentenced to 46 Months for Possessing FirearmRead the Press Release
MADISON, WIS. - Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that Antonio Sims, 39, Janesville, Wisconsin, was sentenced today by Chief U.S. District Judge James D. Peterson to 46 months in federal prison, to be followed by three years of supervised release, for being a felon in possession of a firearm. Sims pled guilty to this offense on October 8, 2019.
On July 4, 2019, Janesville law enforcement officers responded to a complaint of a man making threats with a gun. The officers made contact with Sims who fit the description provided to them. When officers attempted to take Sims into custody, Sims fled on foot. With officers in close pursuit, Sims retrieved a handgun from his waistband and discharged it in the air three times.
Sims previously had been convicted of five felony offenses, including possession of a controlled substance with intent to deliver and aggravated battery.
The charge against Sims was the result of an investigation conducted by the Janesville Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The prosecution of this case has been handled by United States Attorney Blader.
The charge against Sims was brought as part of Project Safe Neighborhoods (PSN), the U.S. Justice Department’s program to reduce violent crime. The PSN approach emphasizes coordination between state and federal prosecutors and all levels of law enforcement to address gun crime, especially felons illegally possessing firearms and ammunition, and violent crimes and drug crimes that involve the use of firearms.
Indian national convicted of role in call center scam that victimized thousands in the U.S.Read the Press Release
HOUSTON - An Indian national has entered a guilty plea for his role in operating and funding India-based call centers which defrauded thousands of victims out of millions of dollars between 2013 and 2016.
Hitesh Madhubhai Patel aka Hitesh Hinglaj, 43, of Ahmedabad, India, pleaded guilty to conspiracy to commit wire fraud as well as a general conspiracy to commit identification fraud, access device fraud, money laundering and to impersonate a federal officer or employee.
“Hitesh Patel played a prominent role in this massive, India-based fraud scheme that bilked vulnerable Americans out of millions of dollars,” said Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division. “This important resolution would not have occurred without the assistance of our Singaporean colleagues, to whom we extend our deep appreciation.”
Patel and his conspirators perpetrated a complex scheme in which employees from call centers in Ahmedabad, India, impersonated officials from the IRS and U.S. Citizenship and Immigration Services (USCIS). They also engaged in other telephone call scams designed to defraud victims throughout the United States. U.S. victims were threatened with arrest, imprisonment, fines or deportation if they did not pay alleged monies owed to the government. Those who fell victim to the scammers were instructed how to provide payment, including by purchasing general purpose reloadable (GPR) cards or wiring money. Upon payment, the call centers would immediately turn to a network of “runners” based in the United States to liquidate and launder the fraudulently-obtained funds.
In his plea, Patel admitted to operating and funding several India-based call centers from which the fraud schemes were perpetrated, including organizational co-defendant call center HGLOBAL. Patel frequently corresponded by email and WhatsApp messaging with co-defendants to exchange credit card numbers, telephone scam scripts, deposit slips, payment information, call center operations information, instructions and bank account information. The scripts included impersonation of IRS, USCIS, Canada Revenue Agency and Australian Tax Office personnel as well as payday loan, U.S. government grant and debt collection fraud schemes.
Patel also received monthly income and expense reports to his personal email from the call centers and used his Indian cell phone number to access GPR cards through automated telephone systems on many occasions.
A co-defendant described Patel as “the top person in India and the boss for whom most of the other defendants worked.” Another co-defendant claimed Patel was arrested in India in 2016, but paid a bribe and was released. Additionally, Patel admitted he was accountable for approximately $25-65 million.
Patel was extradited from Singapore in April 2019 to face charges in this large-scale telefraud and money laundering scheme. Singapore authorities apprehended Patel at the request of the United States pursuant to a provisional arrest warrant in September 2018 after Patel flew there from India.
U.S. District Judge David Hittner accepted the plea today and set sentencing for April 3. At that time, Patel faces up to 20 years in prison for the wire fraud conspiracy and five years for the general conspiracy. Both counts also carry the possibility of a fine of up $250,000 or twice the gross gain or loss from the offense.
A total of 24 domestic defendants associated with this transnational criminal scheme have already been convicted and sentenced to up to 20 years in prison in the Southern District of Texas, District of Arizona and Northern District of Georgia. They were also ordered to pay millions of dollars in victim restitution and money judgments and to forfeit seized assets. Some defendants were removed from the country based on their illegal immigration status, while another defendant had his U.S. citizenship revoked due to a separate conviction for immigration fraud. Charges remain pending for other India-based defendants. They are presumed innocent unless and until convicted through due process of law.
Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), Department of Homeland Security – Office of Inspector General and Treasury Inspector General for Tax Administration conducted the investigation. The Department of Justice’s Office of International Affairs and HSI Singapore provided significant support in securing and coordinating Patel’s arrest and extradition, working in concert with their counterparts at the Singapore Attorney General’s-Chambers and the Singapore Police Force.
Assistant U.S. Attorneys Mark McIntyre and Craig Feazel of are prosecuting the case along with Trial Attorney Mona Sahaf of the Criminal Division’s Human Rights and Special Prosecutions Section and Amanda Wick of the Criminal Division’s Money Laundering and Asset Recovery Section.
Indian National Pleads Guilty to Owning, Funding, and Operating India-Based Call Centers That Scammed U.S. Victims Out of Millions of DollarsRead the Press Release
An Indian national pleaded guilty today in the Southern District of Texas for his role in operating and funding India-based call centers whose callers, and U.S.-based conspirators, defrauded U.S. victims out of millions of dollars between 2013 and 2016.
Hitesh Madhubhai Patel, also known as Hitesh Hinglaj, 43, of Ahmedabad, India, pleaded guilty to wire fraud conspiracy and general conspiracy to commit identification fraud, access device fraud, money laundering, and impersonation of a federal officer or employee.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ryan K. Patrick of the Southern District of Texas, Acting Executive Associate Director Alysa D. Erichs of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Inspector General J. Russell George of the U.S. Treasury Inspector General for Tax Administration (TIGTA) and Inspector General Joseph V. Cuffari of the U.S. Department of Homeland Security (DHS) Office of Inspector General (OIG) made the announcement today.
"Hitesh Patel played a prominent role in this massive, India-based fraud scheme that bilked vulnerable Americans out of millions of dollars," said Assistant Attorney General Benczkowski. "This important resolution would not have occurred without the assistance of our Singaporean colleagues, to whom we extend our deep appreciation."
According to admissions that he made as part of his plea, Patel and his co-conspirators perpetrated a complex scheme in which employees from call centers in Ahmedabad, India, impersonated officials from the IRS and U.S. Citizenship and Immigration Services (USCIS), and engaged in other telephone call scams designed to defraud victims throughout the United States. U.S. victims were threatened with arrest, imprisonment, fines or deportation if they did not pay alleged monies owed to the government. Those who fell victim to the scammers were instructed how to provide payment, including by purchasing general purpose reloadable (GPR) cards or wiring money. Upon payment, the call centers would immediately turn to a network of “runners” based in the United States to liquidate and launder the fraudulently obtained funds.
In his plea, Patel admitted to operating and funding several India-based call centers from which the fraud schemes were perpetrated, including the call center HGLOBAL. Patel corresponded by email and WhatsApp messaging frequently with his co-defendants to exchange credit card numbers, telephone scam scripts, deposit slips, payment information, call center operations information and instructions, and bank account information. The scripts included IRS impersonation, USCIS impersonation, Canada Revenue Agency (CRA) impersonation, Australian Tax Office (ATO) impersonation, payday loan fraud, U.S. Government grant fraud, and debt collection fraud.
Patel also received monthly income and expense reports to his personal email from the call centers, and used his Indian cell phone number to access GPR cards through automated telephone systems on many occasions.
A co-defendant described Patel as “the top person in India and the boss for whom most of the other defendants worked,” and the owner of multiple call centers. Another co-defendant stated that Patel was arrested in India in 2016, but then paid a bribe and was released. Additionally, Patel admitted that a reasonably foreseeable loss of more than $25 million but less than $65 million was attributable to him, based on the government’s evidence against him.
Patel was prosecuted in the United States after being extradited from Singapore in April 2019 to face charges in this large-scale telefraud and money laundering scheme. Singapore authorities apprehended Patel at the request of the United States pursuant to a provisional arrest warrant in September 2018, after Patel flew there from India.
U.S. District Judge David Hittner of the Southern District of Texas accepted the plea today and set sentencing for April 3, 2020. At that time, Patel faces up to 20 years in prison for the wire fraud conspiracy and five years for the general conspiracy. Both counts also carry the possibility of a fine of up to $250,000 or twice the gross gain or loss from the offense.
A total of 24 domestic defendants associated with this transnational criminal scheme have previously been convicted and sentenced to terms of imprisonment of up to 20 years in the Southern District of Texas, District of Arizona and Northern District of Georgia. The defendants were also ordered to pay millions of dollars in victim restitution and money judgments and to forfeit seized assets. Some defendants were ordered to be deported based on their illegal immigration status, with another defendant having his U.S. citizenship revoked due to a separate conviction for immigration fraud. Charges remain pending for other India-based defendants. They are presumed innocent unless and until convicted through due process of law.
HSI, DHS-OIG and TIGTA conducted the investigation. The Department of Justice’s Office of International Affairs and HSI Singapore provided significant support in securing and coordinating Patel’s arrest and extradition, working in concert with their counterparts at the Singapore Attorney General’s-Chambers and the Singapore Police Force.
Trial Attorney Mona Sahaf of the Criminal Division’s Human Rights and Special Prosecutions Section, Amanda Wick of the Criminal Division’s Money Laundering and Asset Recovery Section, and Assistant U.S. Attorneys Mark McIntyre and Craig Feazel of the Southern District of Texas are prosecuting the case.
A Department of Justice website has been established to provide information about the case to victims and the public. Anyone who believes they may be a victim of fraud or identity theft in relation to this investigation or other telefraud scam phone calls may contact the FTC via this website.
Anyone seeking additional information about telefraud scams generally, or preventing identity theft or fraudulent use of their identity information, may find helpful information on the IRS tax scams website, the FTC phone scam website, and the FTC identity theft website.
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.
Illegal Alien Sentenced for Possession of a FirearmRead the Press Release
Hattiesburg, Miss. – Gregorio Xolotl-Hipolito, 42, an illegal alien from Mexico, was sentenced today by U.S. District Judge Keith Starrett to 15 months in prison, followed by three years of supervised release, for possession of a firearm by an illegal alien, announced U.S. Attorney Mike Hurst, Mr. William Joyce, Acting Field Office Director of Immigration and Customs Enforcement (ICE), Enforcement and Removal Operations, in New Orleans, and Special Agent-in-Charge Kurt Thielhorn with the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Upon completion of his federal prison sentence, Xolotl-Hipolito will be surrendered to the administrative custody of ICE officials in the Department of Homeland Security, where he will face removal proceedings to remove him from the United States to his home nation of Mexico. Were he to return to the U.S. during the three-year period after his imprisonment, he would be subject to additional prison time consecutive to imprisonment that could result from further prosecution for the crime of return-after-removal. Xolotl-Hipolito pled guilty before Judge Starrett, on October 1, 2019.
On June 24, 2019, while conducting Criminal Alien Program duties at the Forrest County Adult Detention Center, in Hattiesburg, an agent of Immigration & Customs Enforcement (ICE) encountered Xolotl-Hipolito, who had been arrested by Hattiesburg Police for possession of a stolen firearm and driving while consuming alcohol. When stopped by police, Xolotl-Hipolito had no driver’s license and only a Tennessee ID card. A .22 caliber pistol was found in plain view next to Xolotl-Hipolito in the vehicle of which he was the sole occupant. Police also found .22 ammunition in Xolotl-Hipolito’s pocket as well as elsewhere in the vehicle. Local officials notified ICE, and Xolotl-Hipolito was identified as an illegal alien from Mexico who had been removed from the United States. Records revealed that, in 2011, an Immigration Judge ordered Xolotl-Hipolito removed from the U.S. Records also documented that Xolotl-Hipolito illegally reentered the U.S. and was removed four previous times.
Additionally, police and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), determined that the pistol had been reported as stolen. ATF also determined that the firearm had traveled in and affected interstate commerce.
U.S. Attorney Hurst praised the cooperation of the U.S. Department of Homeland Security, Immigration & Customs Enforcement, Enforcement Removal Operations, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Hattiesburg Police Department and the Forrest County Sheriff’s Department. Assistant United States Attorney Stan Harris was the prosecutor for the case.
Illegal Alien Known as the “Rittenhouse Rapist” Sentenced to Federal Prison for Illegally Reentering the United StatesRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Milton Mateo Garcia-Vasquez, 32, of Philadelphia, PA and a citizen of Honduras, was sentenced to the statutory maximum of 24 months’ imprisonment by United States District Court Judge Paul S. Diamond for unlawfully re-entering the United States after being deported.
Garcia-Vasquez pleaded guilty to illegal re-entry after deportation in August 2019. The defendant was previously deported and removed from the United States on June 18, 2013, and never requested or received authorization to re-enter the country. Nonetheless, he broke the law by re-entering the country and then proceeded to brutally rape a young woman near Rittenhouse Square in Philadelphia. The defendant grabbed the young woman from behind while she was walking back to her apartment, pushed her into the apartment and sexually assaulted her. He then left, but soon returned to the apartment and sexually assaulted the victim a second time. Garcia-Vasquez was arrested on June 23, 2014 by Philadelphia Police and charged with burglary, kidnapping and rape. He pleaded guilty to those charges in 2015 and was sentenced to a total of 22-44 years in state prison.
“Responsible public policy involves protecting public safety by setting up incentives for people to follow the law. Sanctuary city polices do just the opposite by incentivizing illegal aliens to come to sanctuary jurisdictions, like Philadelphia, where they are led to believe that our nation’s immigration laws will not apply to them,” said U.S. Attorney McSwain. “A natural consequence of this policymaking is that illegal aliens are drawn to Philadelphia, where some of them commit heinous crimes that never would have occurred if they weren’t here in the first place. This is a terrible tragedy for the innocent victims of such crimes. But it is also a tragedy for our justice system because it normalizes the unfair and un-American idea that the rule of law should not apply to a certain segment of society -- namely, illegal aliens. Anyone who cares about the rule of law or equal treatment under the law should find sanctuary city policies utterly repugnant. We at the U.S. Attorney’s Office will continue to enforce the rule of law in a neutral, non-partisan manner, rather than playing favorites.”
The case was investigated by the Department of Homeland Security – Immigration and Customs Enforcement, and is being prosecuted by Assistant United States Attorney Mary E. Crawley.
Houston Man gets significant time for sexually exploiting young childrenRead the Press Release
HOUSTON – A 26-year-old man from Houston has received a 30-year prison term following his convictions of producing and possessing child pornography, announced U.S. Attorney Ryan K. Patrick.
Stephen Edward Torres pleaded guilty June 7, 2019.
Today, U.S. District Judge Sim Lake ordered Torres to serve 360 months for each count of the sexual exploitation of a child, otherwise known as production of child pornography. He also received another 120 months for the possession charge which were all ordered to be served concurrently for a total of 360 months in federal prison.
At the hearing, the court heard evidence regarding a pattern of abuse which rendered Torres a repeat and dangerous sex offender. The abuse included oral and vaginal penetration of the minors who were under the age of 5.
The defense asked Judge Lake to consider the fact that he is “slow,” suffers from substance abuse and has suffered head trauma. However, the government implored asked that Torres be held accountable for the pain and trauma he caused to the young victims - still too young to understand the magnitude of how he has impacted them. The court also heard that what he stole from the children cannot be replaced. Torres not only produced photos documenting the rapes of these minors, but he shared these images via the internet with others who share this sexually-deviant interest in children.
The victims’ mother also provided testimony who detailed the children’s suffering. She told the court how she and the children experience anxiety because of the trauma they endured and how scared the children are to be away from her. “We are thankful for being away from that HEARTLESS DECIEVING SOUL,” she said.
Following the 30-year prison term, Torres will be on supervised release for the rest of his life, during which time he will have to comply with numerous requirements designed to restrict his access to children and the internet. He will also be ordered to register as a sex offender and must pay restitution.
Torres came to the attention of law enforcement after a he communicated online with an undercover law enforcement officer and sent child pornography images he created of one of his molestation victims.
Authorities executed a search warrant, at which time they seized a cellular phone and children’s clothes from his residence. Forensic analysis yielded 17 image files and 56 videos that constituted child pornography. Torres produced 16 of the videos himself, some of them which depict Torres violating the minors via oral penetration.
Torres has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI conducted the investigation.
Assistant U.S. Attorney Sherri L. Zack is prosecuting the case, which was brought as part of Project Safe Childhood(PSC), a nationwide initiative the Department of Justice (DOJ) launched in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section leads PSC, which marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children and identifies and rescues victims. For more information about PSC, please visit DOJ’s PSC page. For more information about internet safety education, please visit the resources tab on that page.
Grovetown man charged with illegally possessing weapons, including pipe bombRead the Press Release
AUGUSTA, GA: A Grovetown man has been indicted by a federal grand jury on charges that include possession of a pipe bomb.
James Richard Grates II, 36, is charged with Possession of a Firearm by a Convicted Felon, and Possession of an Unregistered Firearm, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. The charges carry a possible penalty of up to 10 years in prison, followed by a period of supervised release. There is no parole in the federal system.
Personnel from the Columbia County Sheriff’s Office, the Richmond County Sheriff’s Office Bomb Squad and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) were called to Grates’ mobile home in April 2019 after being alerted about possible unsafe conditions in the residence. Investigators searched the property and seized homemade explosives made from pipe and black powder, along with a 12-gauge shotgun.
“This cases involves illegally possessed firearms and explosives in the hands of convicted felon,” said Beau Kolodka, Assistant Special Agent in Charge of the Atlanta Field Division of the ATF. “It demonstrates the cooperation that exists between ATF, Columbia County Sheriff’s Office and Richmond County Sheriff’s Office to keep the residents of these counties safe.”
Criminal indictments contain only charges; defendants are presumed innocent unless and until proven guilty.
The case is being investigated by the ATF, the Columbia County Sheriff’s Office and the Richmond County Sheriff’s Office, and prosecuted for the United States by Assistant U.S. Attorney Alejandro V. Pascual IV.
Gates Man Arrested for Attempting to Have Sex with A 13 Year Old ChildRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Michael Greco, 24, of Gates, NY, was arrested and charged by criminal complaint with online enticement of a minor. The charge carries a minimum penalty of 10 years in prison, a maximum of life, and a $250,000 fine.
Assistant U.S. Attorney Kyle Rossi, who is handling the case, stated that earlier this month, the defendant engaged in online conversations with an individual who he believed was a “mother” engaged in the prostitution of her 13 year old daughter. In fact, the “mother” was an undercover New York State Police investigator. Between January 2 and January 7, 2020, Greco engaged in text messaging and phone calls with the undercover investigator, during which the defendant agreed to pay $100 in order to have sex with the child.
On January 7, 2020, Greco arrived at pre-arranged meeting place, where he expected to meet the child for sex. Instead, the defendant was met by members of the State police and Homeland Security Investigations, who took
Greco into custody. The defendant was found in possession of $100, condoms, and candy, which he intended to give the child as a gift.
Greco made an initial appearance today before U.S. Magistrate Judge Marian W. Payson and is being held pending a detention hearing scheduled for January 9, 2020.
The criminal complaint is the result of an investigation by the New York State Police Troop E Major Crimes Unit, Canandaigua, under the direction of Major Eric Laughton, and Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Fourth Charlotte Man Pleads Guilty in Check-Cashing SchemeRead the Press Release
CHARLOTTE, N.C. – Omontie Rowe, 22, of Charlotte, pleaded guilty in federal court to aggravated identity theft, for his role in an extensive check-cashing scheme that caused hundreds of thousands of dollars in losses to at least five financial institutions, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. U.S. District Judge David S. Cayer presided over today’s plea hearing.
David M. McGinnis, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service, joins U.S. Attorney Murray in making today’s announcement.
From January 2018 through June 2019, Rowe and his three co-defendants, Jacoby Berry, Fredrick Clark, and Fabio Wolfe, executed the check cashing scheme by obtaining business and personal checks that were stolen, counterfeit or altered by members of the conspiracy. After depositing the worthless checks into various bank accounts, the co-conspirators made multiple cash withdrawals and purchases before the victim banks detected the fraud.
Court records show that the four defendants called themselves the “All Profit Group,” or “AP Group,” and bragged about their successful check fraud scheme on social media, by posting images of themselves with handfuls of cash. They also used social media to recruit “straw account holders,” by posting to social media websites and approaching individuals with the promise of an easy pay day. According to court records, the recruited straw account holders were promised a payment of $100 to $1,500, in exchange for allowing the co-defendants to use the account holders’ new or existing bank accounts to perpetuate the fraud.
All four co-defendants have pleaded guilty to aggravated identity theft and are awaiting sentencing. The aggravated identity theft charge carries a mandatory minimum prison term of two years. A sentencing date has not been set.
In making today’s announcement, U.S. Attorney Murray thanked USPIS for their investigation of the case.
Assistant U.S. Attorneys Maria Vento and William Miller, of the U.S. Attorney’s Office in Charlotte, is in charge of the prosecution.
Four indicted in drug conspiracy distributing meth in Richmond CountyRead the Press Release
AUGUSTA, GA: Four people have been indicted in Richmond County on federal charges for distributing methamphetamine and illegally possessing firearms.
The eight-count indictment, returned by a U.S. District Court grand jury, alleges that the four defendants were involved in a conspiracy dating back at least to February 2018 to distribute large amounts of methamphetamine throughout the Augusta area, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia.
“Cooperative efforts by federal and local law enforcement partners, including the Drug Enforcement Administration (DEA) and the Richmond County Sheriff’s Office, provide our office with powerful tools to dismantle illegal drug distribution networks,” said U.S. Attorney Christine. “Working together, we will use every weapon at our disposal to eliminate these merchants of misery.”
The investigation, which included controlled purchases and federal search warrants, seized quantities of methamphetamine, 15 firearms and more than $44,000 in cash.
Charged in the indictment are:
- Bridget Lydell Biggam, 35, of Appling, Ga., is charged with Conspiracy to Possess with Intent to Distribute 50 Grams or More of Methamphetamine; Possession of 50 Grams or More of Methamphetamine with Intent to Distribute; and Possession of Methamphetamine with Intent to Distribute. She faces a possible sentence of up to life in prison.
- Christopher Allen Marshall, 33, of Augusta, Ga., is charged with Conspiracy to Possess with Intent to Distribute 50 Grams or More of Methamphetamine; Possession of 50 Grams or More of Methamphetamine with Intent to Distribute; Possession of Firearms in Furtherance of a Drug Trafficking Crime; and Possession of Firearms by a Convicted Felon. He faces a possible sentence of up to life in prison.
- Bjorn Michael Wiley, 42, of Martinez, Ga.; is charged with Conspiracy to Possess with Intent to Distribute 50 Grams or More of Methamphetamine; and Possession of 50 Grams or More of Methamphetamine with Intent to Distribute. He faces a possible sentence of up to life in prison. And,
- John Tillman Durst, 29, of Waynesboro, Ga., is charged with Conspiracy to Possess with Intent to Distribute 5 Grams or More of Methamphetamine; and Possession of Methamphetamine. He faces a possible sentence of up to 40 years in prison.
Each of the defendants, if convicted, also would be subject to substantial fines and would serve a period of supervised release after completion of any prison sentence. There is no parole in the federal system.
Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Field Division said of the indictments, “This criminal network posed a clear and present danger to the safety and security of the Augusta area. Their removal automatically makes this community safer. These indictments illustrate how success can be achieved through the combined efforts between federal, state and local law enforcement and the U.S. Attorney’s Office.”
“When you arrest four drug traffickers with 15 firearms, this is a victory for the citizens of Richmond County,” said Richmond County Sheriff Richard Roundtree. “This will contribute to reducing the senseless gun violence accompanied by drug distribution and firearms. We continue to value our partnership with the U.S. Attorney’s Office and the U.S. Drug Enforcement Administration.”
Criminal indictments contain only charges; defendants are presumed innocent unless and until proven guilty.
The investigation is being conducted by the DEA and the Richmond County Sheriff’s Office, and prosecuted for the United States by Assistant U.S. Attorney Henry W. Syms Jr.
Former State Senator’s Accountant Sentenced for Tax FraudRead the Press Release
BOSTON—John H. Nardozzi, a certified public accountant for former State Senator Brian Joyce, was sentenced today for conspiring with the late senator to defraud the IRS from 2011 through 2014.
Nardozzi, 68, of Waltham, was sentenced by U.S. District Court Judge William G. Young to 18 months in prison and three years of supervised release.
In October 2019, Nardozzi was convicted after a seven-day trial of conspiring with Joyce to defraud the IRS of approximately $600,000 by manipulating income that should have been reported on Joyce’s corporate tax return and by applying it to Joyce’s personal tax return. Nardozzi was also convicted of fraudulently creating a simplified-employee pension plan (SEP) for Joyce and his wife, to which they were not otherwise entitled. In doing so, Nardozzi enabled Joyce and his wife to defer taxes on over $400,000 of income, including income that Joyce falsely attributed to his wife. Nardozzi also assisted Joyce in an illegal rollover of Joyce’s SEP account to purchase stock in a private company without following the IRA rollover rules.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Assistant U.S. Attorneys Dustin Chao and Evan Gotlob of Lelling’s Public Corruption and Special Prosecutions Unit prosecuted the case.
Former Professor Sentenced to over Seven Years in Federal Prison for Possessing Methamphetamine in a School ZoneRead the Press Release
A man who previously worked as a professor was sentenced January 8, 2020, to more than seven years in federal prison.
Randall Mark Gilbert, age 61, from Marion, Iowa, received the prison term after a July 31, 2019 guilty plea to possession with intent to distribute methamphetamine near a protected location.
In a plea agreement, Gilbert admitted he possessed more than ten grams of meth within 1,000 feet of Lisbon High School. Police found the meth in his home during a search. After being arrested and getting out of jail, Gilbert went to the home of a man and woman. After Gilbert entered, the man ran out of the house. Gilbert cut a phone line and threatened the woman, who he believed had set him up, with a knife. Gilbert forced the woman to go with him to his house. Gilbert had previously worked as professor.
Gilbert was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Gilbert was sentenced to 85 months’ imprisonment. He must also serve an eight-year term of supervised release after the prison term. There is no parole in the federal system.
Gilbert being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Emily K. Nydle and investigated by the Lisbon Police Department, the Mt. Vernon Police Department, the Cedar County Sheriff’s Department, the Mechanicsville Police Department, and the Jones County Emergency Response Team.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-CR-00064.
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Former Newark Police Officer Admits Bribery and Assisting in Preparing False Federal Tax ReturnRead the Press Release
NEWARK, N.J. – A former Newark police officer today admitted soliciting and accepting cash payments from a brothel owner in Newark in exchange for protecting brothels from police action, and to failing to report those cash payments on his personal federal income tax returns, U.S. Attorney Craig Carpenito announced.
Julio I. Rivera, 50, of Old Bridge, New Jersey, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to two counts of an indictment charging him with bribery (Count Six) and aiding and assisting in the preparation of a false 2015 personal federal tax return (Count 13).
According to documents filed in this case and statements made in court:
From September 2014 to August 2015, Rivera solicited and accepted cash payments from a Newark brothel owner (“Individual 1”) who ran brothels located on Lafayette Street and Emmet Street. In exchange for these cash bribes, Rivera performed official acts and violated his lawful duties for the benefit of Individual 1, including declining to arrest individuals who were committing and promoting prostitution, agreeing to protect these individuals from arrest by other Newark police officers, and agreeing to take adverse action against a competing brothel. Rivera collected between $40,000 and $95,000 in bribes in exchange for protecting those and other brothels in Newark.
Rivera also intentionally withheld information from his tax preparer regarding the cash bribes that he received, which caused Rivera’s filed federal tax returns for certain tax years, including 2015, to understate the total amount of income that Rivera received. Rivera stipulated that this misconduct resulted in a loss to the IRS of $15,000 to $40,000.
The maximum potential penalty for the count of bribery is 10 years in prison and the maximum potential penalty for the tax fraud is three years in prison; both counts carry a maximum potential fine of up to $250,000 or twice the gross gain or loss from the offense. Sentencing is scheduled for April 30, 2020.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Cari Fais of the Special Prosecutions Division in Newark.
Defense counsel: Kristen Santillo Esq., New York
Former Long Island Investment Advisor Sentenced to 170 Months in Prison for Multi-Million Dollar Securities Fraud and Ponzi SchemeRead the Press Release
Earlier today, in federal court in Central Islip, Steven Pagartanis was sentenced by United States District Judge Joan M. Azrack to 170 months’ imprisonment and ordered to pay more than $6.5 million in restitution. Pagartanis, a former registered investment advisor based on Long Island, pleaded guilty in December 2018 to conspiracy to commit mail and wire fraud for orchestrating a securities fraud scheme over the course of 18 years.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), announced the sentence.
“Today’s sentence is a well-deserved reckoning for Pagartanis, who preyed on elderly investors, many of whom trusted him with their life savings, for nearly two decades,” stated United States Attorney Donoghue. “Protecting investors, especially those that are vulnerable, from white-collar criminals is a priority of this Office and the Department of Justice.” Mr. Donoghue thanked the Securities and Exchange Commission, New York Regional Office, and the Financial Industry Regulatory Authority for their cooperation and assistance during the investigation.
“Steven Pagartanis deceived investors from New York to California with the selfish goal of enriching himself at the expense of innocent elderly victims,” stated IRS-CI Special Agent-in-Charge Larsen. “We at IRS-CI welcome the opportunity to lend our financial expertise to uncover such callous criminality and protect the innocent from being swindled out of their life savings.”
From January 2000 to March 2018, Pagartanis, then an affiliate of a registered broker-dealer, solicited victims, almost all of whom were elderly women, to invest in two publicly traded companies, promising an eight percent return. At Pagartanis’s direction, the victims wrote checks payable to an entity he secretly controlled. Pagartanis then laundered the victims’ investments through a series of bank accounts, and used the money to pay personal expenses, purchase luxury items, fund failed business ventures including his wife’s pet store and make the guaranteed “interest” or “dividend” payments to other victims. The defendant’s victims invested over $13 million and sustained losses of over $9 million. Many lost substantial amounts of their life savings, including funds set aside to help ill family members, pay college expenses and maintain their homes.
Assistant United States Attorney Artie McConnell is in charge of the prosecution.
The Defendant:
STEVEN PAGARTANIS
Age: 60
East Setauket, New YorkE.D.N.Y. Docket No. 18-CR-374 (JMA)
Former Gulf Cartel leader convicted of international drug traffickingRead the Press Release
BROWNSVILLE, Texas - Jorge Costilla-Sanchez has pleaded guilty to an international drug trafficking conspiracy to distribute cocaine and marijuana into the United States.
Costilla-Sanchez, 48, was an active member of the “Cartel Del Golfo” (CDG or Gulf Cartel). CDG is a violent Mexican criminal organization engaged in the manufacture, distribution and importation of ton quantities of cocaine and marijuana into the United States. In the late 1990s, the Gulf Cartel recruited an elite group of former Mexican military personnel to join their ranks as security and enforcers who became known as Los Zetas. The Gulf Cartel and Los Zetas operated under the name of “The Company.” Costilla-Sanchez became the leader of The Company for several years following the arrest of Osiel Cardenas in 2003 and before Costilla-Sanchez’s arrest in September 2012.
During his association with The Company, Costilla-Sanchez was responsible for overseeing all operations and providing leadership that resulted in the importation of thousands of kilograms of cocaine and marijuana into the United States. Under Costilla-Sanchez’s leadership, The Company controlled numerous plazas along the United States and Mexico border including Matamoros, Rio Bravo, Reynosa, Miguel Aleman and Nuevo Laredo. Costilla-Sanchez used these strategically important locations to distribute cocaine and marijuana into the United States and to return bulk U.S. currency to himself and other members of CDG in Mexico.
During the course of his involvement in the conspiracy, law enforcement in Mexico and Panama seized ton quantities of cocaine that were intended for Costilla-Sanchez and other members of CDG to distribute in Mexico and the United States. Specifically, on Oct. 5, 2007, Mexican law enforcement seized 11,700 kilograms of cocaine from a warehouse in Tampico, Mexico, and on Nov. 30, 2007, the Panamanian National Police seized approximately 2,400 kilograms of cocaine in Colon, Panama.
During his guilty plea today, Costilla-Sanchez acknowledged his participation in a conspiracy to possess with the intent to distribute over 450 kilograms of cocaine and over 90,000 kilograms of marijuana.
Costilla-Sanchez previously pleaded guilty in 2017 to a separate conspiracy to possess with intent to distribute cocaine and marijuana as well as two counts of assault on a federal officer. He has not yet been sentenced for those offenses.
U.S. District Judge Fernando Rodriguez Jr. will impose sentencing April 14. At that time, Costilla-Sanchez faces a minimum of 10 years and up to life in federal prison.
The Drug Enforcement Administration - Houston Field Division conducted the investigation.
Trial Attorneys Cole Radovich and Kirk Handrich of the Criminal Division’s Narcotic and Dangerous Drug Section prosecuted this case with significant assistance of Assistant U.S. Attorney Jody Young of the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Office of International Affairs and Office of Enforcement Operations.
Former Gulf Cartel Leader Convicted of International Drug Trafficking ConspiracyRead the Press Release
Jorge Costilla-Sanchez pleaded guilty to an international drug trafficking conspiracy to distribute cocaine and marijuana into the United States.
Costilla-Sanchez, 48, was an active member of the “Cartel Del Golfo” (CDG or Gulf Cartel). CDG is a violent Mexican criminal organization engaged in the manufacture, distribution, and importation of ton quantities of cocaine and marijuana into the United States. In the late 1990s, the Gulf Cartel recruited an elite group of former Mexican military personnel to join their ranks as security and enforcers who became known as Los Zetas. The Gulf Cartel and Los Zetas operated under the name of “The Company.” Costilla-Sanchez became the leader of The Company for several years following the arrest of Osiel Cardenas in 2003 and before Costilla-Sanchez’s arrest in September 2012.
During his association with The Company, Costilla-Sanchez was responsible for overseeing all operations and providing leadership that resulted in the importation of thousands of kilograms of cocaine and marijuana into the United States. Under Costilla-Sanchez’s leadership, The Company controlled numerous plazas along the United States and Mexico border including Matamoros, Rio Bravo, Reynosa, Miguel Aleman and Nuevo Laredo. Costilla-Sanchez used these strategically important locations to distribute cocaine and marijuana into the United States and to return bulk U.S. currency to himself and other members of CDG in Mexico.
During the course of his involvement in the conspiracy, law enforcement in Mexico and Panama seized ton quantities of cocaine that were intended for Costilla-Sanchez and other members of CDG to distribute in Mexico and the United States. Specifically, on Oct. 5, 2007, Mexican law enforcement seized 11,700 kilograms of cocaine from a warehouse in Tampico, Mexico, and on Nov. 30, 2007, the Panamanian National Police seized approximately 2,400 kilograms of cocaine in Colon, Panama.
The Defendant oversaw a vast network of other individuals including local plaza bosses, drug couriers, security personnel, scouts, hitmen and others to facilitate The Company’s drug trafficking operations. In the performance of his duties for The Company, the Defendant and others under his charge possessed and used dangerous weapons, including firearms. Further, the Defendant organized, directed, and carried out numerous acts of violence against rival drug trafficking groups, Mexican law enforcement and others who The Company perceived as threats to their drug trafficking activities.
During his guilty plea today, Costilla-Sanchez acknowledged his participation in a conspiracy to possess with the intent to distribute over 450 kilograms of cocaine and over 90,000 kilograms of marijuana.
Costilla-Sanchez’s sentencing has been set for April 14, 2020, before U.S. District Judge Fernando Rodriguez Jr. At that time Costilla-Sanchez faces a minimum of 10 years and up to life in federal prison.
The Drug Enforcement Administration - Houston Field Division conducted the investigation.
Trial Attorneys Cole Radovich and Kirk Handrich of the Criminal Division’s Narcotic and Dangerous Drug Section prosecuted this case, with significant assistance provided by Assistant U.S. Attorney Jody Young of the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Office of International Affairs and Office of Enforcement Operations.
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Former Consultant/Chief Operating Officer of 1 Global Capital LLC Pleads Guilty for Role in Wire and Securities Fraud Conspiracy Related to $287 Million SchemeRead the Press Release
Today, a former consultant who also served as the Chief Operating Officer of 1 Global Capital, LLC pled guilty for his role in connection with a $287 million securities fraud scheme involving a commercial payday loan business that operated from early 2014 through July 2018 and impacted more than 3,400 investors in 42 different states.
Ariana Fajardo Orshan, United States Attorney, Southern District of Florida, George L. Piro, Special Agent in Charge, FBI Miami Field Office, and Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office made the announcement.
Steven Allen Schwartz, 75, of Delray Beach, Florida, pled guilty before U.S. Magistrate Judge Patrick M. Hunt to the single count information, charging him with one count of conspiracy to commit wire fraud and securities fraud, in violation of Title 18, United States Code, Section 371 (Case No. 20-CR-60003). Schwartz is scheduled to be sentenced on March 13, 2020 at 3:00 p.m. before U.S. District Judge Roy K. Altman. He faces a maximum statutory sentence of up to five years in prison and a fine up to $250,000 or double the gross proceeds of the offense.
According to the court record, 1 Global Capital LLC (1 Global) was a commercial lending business based in Hallandale Beach, Florida, that made the equivalent of “pay day” loans to small businesses at high interest rates, termed merchant cash advance loans (“MCAs”). To fund these loans, 1 Global obtained funds from investors nationwide, offering short-term investment contracts that promised to “place” the investors’ money in MCAs. The investors would supposedly receive a proportionate share of the principal and interest payments as the loans were repaid. 1 Global raised money using investment advisors and other intermediaries, with promises to these advisors of significant commissions. In many cases, the commissions were not fully disclosed to investors.
Schwartz was a director and consultant at 1 Global, and also held out as a Chief Operating Officer in the company’s marketing materials. Schwartz also served as the designated trustee for a purported family trust and an art trust for which Individual #1, the de facto owner of 1 Global, served as the grantor. On or about June 5, 2014, 100% of the issued and outstanding shares of 1 Global were transferred under the umbrella of Individual #1’s purported family trust, and designated as the trust property.
In order to attract investments, Individual #1, Schwartz, Attorney #1, co-conspirator Alan G. Heide, and others made false and misleading representations to investors and potential investors as to the profitability of 1 Global’s business in marketing materials and periodic account statements. 1 Global promised investors that all or nearly all of that money would be applied to various MCA agreements with the investor supposedly receiving a portion of the proceeds paid back by the merchants. In reality, 1 Global business lost money and ultimately used new investor funds to pay back earlier investors who sought to cash out in a manner consistent with a Ponzi scheme. Furthermore, the conspirators misappropriated large amounts of cash for themselves, including, primarily, to support the lavish lifestyle of Individual #1. 1 Global also paid substantial commissions and other expenses with investor funds without disclosing the extent of these payments.
According to the court record, co-conspirators at 1 Global made false statements to investors that gave the impression that 1 Global had an independent auditor. These misrepresentations were made in monthly statements mailed to investors that falsely showed profitable investments. The statements gave the false impression that the finances had been independently verified by an outside audit firm. As 1 Global continued to lose money over time, the cash shortfall continued to increase and 1 Global was only able to continue operations by raising new investor funds before its eventual collapse in July 2018.
According to the court record, Schwartz was also aware that 1 Global had received written legal advice authored by an outside law firm retained by 1 Global, and that in memoranda received from this outside law firm, the firm opined that 1 Global was improperly offering unregistered securities, in violation of federal law. Despite having received this advice in or around June and July 2016, Schwartz, Individual #1, and their co-conspirators continued to operate the business and hid the advice contained in the legal memoranda from investors, failing to disclose the risks it described. Moreover, instead of following this advice, Individual #1 and co-conspirators not only concealed it from the investors, but also sought false legal cover from co-conspirator Jan Douglas Atlas, who authored opinion letters based on false and fraudulent information, stating that 1 Global’s offerings were not securities.
1 Global operated from early 2014 through approximately July 27, 2018, when it filed for bankruptcy. As of that time, according to documents from related cases, 1 Global had more than 3,600 investors and had raised more than $330 million, and its own internal documents showed a $50 million cash deficit. The bankruptcy case, In re: 1 Global Capital LLC, et al., No. 18-19121-RBR (S.D. Fla.), remains pending.
In connection with a parallel civil enforcement action, the SEC announced the filing of civil fraud charges against Schwartz on January 6, 2020. In related cases, the SEC previously filed civil fraud actions, captioned, SEC v. 1 Global Capital LLC and Carl C. Ruderman, Case No. 18-61991-CV-BB (S.D. Fla.); SEC v. Alan G. Heide, Case No. 19-62047-CV-FAM (S.D. Fla.); and SEC v. Jan Douglas Atlas, 19-62303-CV-WPD (S.D. Fla.).
Two co-conspirators have pled guilty to charges arising from their roles in the 1 Global fraud, in related criminal cases pending in the Southern District of Florida: United States v. Alan G. Heide, 19-60231-CR-RKA, and United States v. Jan Douglas Atlas, 19-60258-CR-RKA.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI’s Miami Field Office and the IRS-CI’s Miami Field Office. She also thanked the SEC’s Miami Regional Office and Florida’s Office of Financial Regulation for their assistance. This case is being prosecuted by Assistant U.S. Attorneys Jerrob Duffy and Lisa H. Miller, as well as Assistant Chief Rush Atkinson from the Criminal Division’s Fraud Section. Assistant U.S. Attorney Nicole Grosnoff is handling asset forfeiture related to the matter.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.