Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Tuesday 29 October 2019
Pittsburgh Man Charged with Drug Law ViolationsRead the Press Release
PITTSBURGH - A resident of Pittsburgh, Pennsylvania, has been indicted by a federal grand jury on charges of violating federal narcotics laws, United States Attorney Scott W. Brady announced today.
The two-count Indictment named Montay Clancy, 23, as the sole defendant.
According to the Indictment, on October 3, 2019, Clancy was found to be in possession of at least 500 grams of cocaine, a Schedule II controlled substance, and a mixture containing a detectable amount of heroin, a Schedule I controlled substance.
The law provides for a maximum total sentence of not less than five years and not more than 40 years in prison, a fine of not more than $5,000,000.00, a period of supervised release of at least three years, or a combination thereof. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Michael Leo Ivory is prosecuting this case on behalf of the government.
The United States Postal Inspection Service conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Pinellas County Man Pleads Guilty to Trafficking in Counterfeit Sports JerseysRead the Press Release
Tampa, Florida – Thomas Walker (74, Clearwater) has pleaded guilty to trafficking in counterfeit sports jerseys. Walker faces a maximum penalty of 10 years in federal prison. His sentencing date is not yet scheduled.
According to the plea agreement and facts presented at the plea hearing, Walker owned and operated a business called “Tim’s Sports Cards Plus,” which he operated from a booth at the Oldsmar Flea Market. Among the items sold were numerous sports jerseys bearing the counterfeit trademarks of purported sports organizations, including the National Football League (NFL), the National Hockey League (NHL), and Major League Baseball (MLB).
On January 27, 2017, federal law enforcement agents went to Walker’s booth at the Oldsmar Flea Market, spoke with him, and seized 699 jerseys that were for sale and bearing counterfeit NFL marks. The agents also went to Walker’s home and seized over 1,500 additional counterfeit jerseys from all three purported sports leagues. During an interview with agents, Walker admitted that he had purchased the counterfeit jerseys from a supplier located in China.
This case was investigated by Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Jay L. Hoffer.
Pelham Man Pleads Guilty to Distributing Child PornographyRead the Press Release
ALBANY, Ga. — A Pelham, Georgia man has pleaded guilty to federal child pornography charges, said Charles “Charlie” Peeler, the U.S. Attorney for the Middle District of Georgia. Michael S. King, 41, of Pelham, entered a guilty plea today to count one of his indictment charging him with distribution of child pornography before U.S. District Judge Leslie Gardner. The defendant faces a maximum sentence of twenty years in prison, a maximum fine of $250,000 and a term of supervised release of up to life for his crime. A sentencing date has not been scheduled.
Mr. King’s illegal activity was discovered on August 13, 2018 during an investigation conducted by Homeland Security Investigations (HSI). Using the name “SilentDream1977”, the defendant uploaded and distributed images of child pornography on the Kik App, an online instant messaging application. The defendant also used the name “Silent Dream 78” on the Kik App. HSI agents, with assistance from the Pelham Police Department, executed a search warrant at the defendant’s residence on January 17, 2019. Mr. King had two desktop computers, a laptop, iPad, iPhone and two thumb drives, all containing child pornography. Mr. King admitted he had been possessing, downloading and viewing child pornography “for forever.”
“The distribution of child pornography online is in our own backyards, not just in a distant city in another country,” said Charlie Peeler, the U.S. Attorney. “These are not nameless victims, but real children who are being horribly abused and hurt. These children are victimized every time the images are shared and viewed. We will prosecute child pornography distributors to the fullest extent allowed by law. I want to thank HSI and the Pelham Police Department for their work protecting children and tracking down child perpetrators.”
“While shutting down this defendant’s heinous activity will never bring back the innocence that these children lost, it should serve as a message that these types of criminals cannot hide behind the anonymity of a computer screen,” said acting Special Agent in Charge Robert Hammer, who oversees HSI operations in Alabama and Georgia. “HSI and its law enforcement partners throughout the country have the tools to identify and shutdown these perpetrators who re-victimize these children every time they share these disgusting images.”
The case was investigated by HSI and the Pelham Police Department. Assistant U.S. Attorney Jim Crane is prosecuting the case for the Government. Questions can be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603 or Melissa Hodges, Public Affairs Director (Contractor), United States Attorney’s Office, at (478) 765-2362.
Owners of Greensboro Temporary Staffing Firms Indicted for Employment Tax FraudRead the Press Release
WASHINGTON – A federal grand jury indicted two Greensboro, North Carolina, women yesterday with conspiring to defraud the United States and for failing to pay over employment taxes, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney for the Middle District of North Carolina Matthew G.T. Martin.
According to the indictment, Rebecca Adams and her daughter Elizabeth Wood, who operated a temporary staffing business in Greensboro, conspired to defraud the government by withholding taxes from employees’ paychecks and failing to pay those taxes over to the Internal Revenue Service (IRS). Adams and Wood also allegedly created Forms W-2 for the staffing business employees but failed to file these forms with the government as they were required to do. Instead of paying the taxes they withheld from employees, the indictment alleges that Adams and Wood used the funds to pay for personal expenses, such as a personal maid, personal landscaping services, and pet spa services. The staffing business allegedly changed names twice, even though it did not otherwise change its actual business operations. Adams was also charged with tax evasion based on her allegedly evading payment of more than $400,000 in previously assessed employment taxes and penalties to the IRS.
If convicted, Adams faces a statutory maximum sentence of five years in prison for each charge of conspiracy, employment tax fraud, and tax evasion. Wood faces a statutory maximum sentence of five years in prison for each charge of conspiracy and employment tax fraud. They also face a period of supervised release and monetary penalties.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Martin thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Kevin Schneider of the Tax Division and Assistant United States Attorney Frank Chut, who are prosecuting the case.
# # #
Owners of Greensboro Temporary Staffing Firms Indicted for Employment Tax FraudRead the Press Release
A federal grand jury indicted two Greensboro, North Carolina, women yesterday with conspiring to defraud the United States and for failing to pay over employment taxes, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and United States Attorney for the Middle District of North Carolina Matthew G.T. Martin.
According to the indictment, Rebecca Adams and her daughter Elizabeth Wood, who operated a temporary staffing business in Greensboro, conspired to defraud the government by withholding taxes from employees’ paychecks and failing to pay those taxes over to the Internal Revenue Service (IRS). Adams and Wood also allegedly created Forms W-2 for the staffing business employees but failed to file these forms with the government as they were required to do. Instead of paying the taxes they withheld from employees, the indictment alleges that Adams and Wood used the funds to pay for personal expenses, such as a personal maid, personal landscaping services, and pet spa services. The staffing business allegedly changed names twice, even though it did not otherwise change its actual business operations. Adams was also charged with tax evasion based on her allegedly evading payment of more than $400,000 in previously assessed employment taxes and penalties to the IRS.
If convicted, Adams faces a statutory maximum sentence of five years in prison for each charge of conspiracy, employment tax fraud, and tax evasion. Wood faces a statutory maximum sentence of five years in prison for each charge of conspiracy and employment tax fraud. They also face a period of supervised release and monetary penalties.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Principal Deputy Assistant Attorney General Zuckerman and United States Attorney Martin thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Kevin Schneider of the Tax Division and Assistant United States Attorney Frank Chut, who are prosecuting the case.
Owner of Tulsa Software Company Sentenced to Prison for Employment Tax FraudRead the Press Release
A computer software development company owner was sentenced to 24 months in prison today for failing to account for and pay over employment taxes withheld from his employees’ wages, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney R. Trent Shores for the Northern District of Oklahoma.
According to documents and information provided to the Court, as the owner and operator of Tulsa-based Zealcon Corporation, Earenest J. Grayson Jr. was responsible for withholding, and paying over to the Internal Revenue Service (IRS) payroll taxes on the wages paid to Zealcon employees. For the period January 2014 through June of 2016, Grayson caused a tax loss of approximately $1 million by intentionally not paying to the IRS income and social security taxes withheld from Zealcon employees’ wages and the employer portion of social security taxes due from Zealcon on those wages.
In addition to prison, Grayson was ordered to pay restitution to the IRS in the amount of $904,091, and to serve three years of supervised release.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Shores thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Tax Division Assistant Chief Andrew Kameros and Assistant U.S. Attorneys Charles McLoughlin and Victor Regal, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Ohio Glass Company Owner Sentenced to Prison for Not Paying Employment TaxesRead the Press Release
The owner of a Greenville, Ohio, glass company was sentenced to 14 months in prison today for failing to truthfully account for and pay over employment taxes, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to information and documents provided to the court, Gail Cooper, 64, of Greenville, was the owner of Greenville Architectural Glass (GAG), which primarily installed glass in commercial and residential buildings for clients in Ohio. GAG paid wages to its employees during the years 2013 through 2015, and as the person responsible for GAG’s finances, Cooper was required to withhold federal income taxes and Social Security and Medicare taxes from the employees’ wages and pay those amounts over to the Internal Revenue Service (IRS). Cooper was also required to file quarterly employment tax returns with the IRS. Although Cooper caused GAG to withhold taxes from employees’ wages, she neither filed the required quarterly returns for the first quarter of 2013 through the second quarter of 2015, nor paid the withheld amounts over to the IRS. Cooper also failed to pay over to the IRS unemployment taxes. In all, Cooper caused more than $280,000 in payroll taxes not to be paid.
Cooper also filed false individual income tax returns for 2008, 2009, and 2010, on which she understated GAG’s gross receipts and overstated its expenses. Cooper caused GAG’s bookkeeper to manipulate and delete entries in the company’s accounting records. Specifically, she directed the bookkeeper to delete invoices from the software after GAG received payment from a client to make it appear as if GAG had not received the payment. Cooper also paid personal expenses with business funds, including utility bills for her residence and rental properties, and caused these to be classified as business expenses. After filing fraudulent returns for 2008-2010, Cooper did not file any individual income tax returns for the next several years. In total, Cooper’s conduct caused a tax loss of $587,516 to the United States.
In addition to the term of imprisonment, U.S. District Judge Thomas M. Rose ordered Cooper to serve two years of supervised release and pay restitution to the IRS in the amount of $659,262.39.
Principal Deputy Assistant Attorney General Zuckerman thanked special agents of IRS Criminal Investigation, who investigated the case, and Trial Attorneys Melissa S. Siskind and Thomas F. Koelbl of the Tax Division, who are prosecuting the case. Principal Deputy Assistant Attorney General Zuckerman also thanked the U.S. Attorney’s Office for the Southern District of Ohio for their assistance in this matter.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
North Carolina Woman Sentenced for Role in Cocaine Distribution ConspiracyRead the Press Release
PITTSBURGH - A resident of North Carolina has been sentenced in federal court to one day of incarceration followed by three years of supervised release on her conviction of conspiracy to distribute cocaine, United States Attorney Scott W. Brady announced today.
Senior United States District Judge Arthur J. Schwab imposed the sentence on Joelle Hollis, age 31, of North Carolina.
According to information presented to the court, in 2017, the Federal Bureau of Investigation and the Drug Enforcement Administration initiated a wiretap investigation, primarily targeting the GBK street gang and drug trafficking in and around an area known as the Greenway Projects, located in the West End of the City of Pittsburgh. The wiretap investigation revealed that from in and around November 2017 through in and around June 2018, Joelle Hollis conspired, with her boyfriend, Jewell Hall, among others, to distribute cocaine, primarily in and around the Greenway Projects. Hollis also obtained sensitive law enforcement information from a friend who worked in the Allegheny County Sheriff’s Office and used the information to attempt to protect the conspiracy from detection by law enforcement.
Prior to imposing sentence, Senior Judge Schwab stated that the sentence was sufficient but not greater than necessary to achieve the goals of sentencing.
Assistant United States Attorneys Tonya Sulia Goodman and Yvonne M. Saadi prosecuted this case on behalf of the government.
United States Attorney Brady commended the Federal Bureau of Investigation and the Drug Enforcement Administration jointly with the Pittsburgh Bureau of Police, Allegheny County Sheriff’s Office, Pennsylvania State Police, Robinson Township Police Department, Stowe Township Police Department, Pennsylvania Attorney General’s Office, Wilkinsburg Borough Police Department, and the McKees Rocks Police Department, for the investigation leading to the successful prosecution of Hollis.
The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
Norman Bank Robbery Suspect ArrestedRead the Press Release
OKLAHOMA CITY – CLAYTON LEROY BOWER, 43, of Norman, has been arrested for robbing Chase Bank in Norman, announced U.S. Attorney Timothy J. Downing.
According to an affidavit in support of a criminal complaint filed on October 28, 2019, Bower entered the Chase Bank branch near Robinson Street and 36th Avenue late in the day on Friday, October 25. He allegedly handed a plastic grocery sack and a demand note to a teller, who filled the sack with approximately $2,730.00. After bank surveillance photos were published in the media, law enforcement received information that pointed to Bower. He was arrested at his Norman apartment on October 27 and made an initial appearance today before U.S. Magistrate Judge Shon T. Erwin.
If found guilty of bank robbery, Bower faces a maximum potential penalty of twenty years in prison, three years of supervised release, a fine of $250,000, and mandatory restitution.
This case is a result of an investigation by the Federal Bureau of Investigation—Oklahoma City Division and the Norman Police Department. Assistant U.S. Attorney Edward J. Kumiega is prosecuting the case.
The public is reminded that this charge is merely an allegation and that Bower is presumed innocent unless and until proven guilty beyond a reasonable doubt. Reference is made to public filings for more information.
NDTX Round-Up October 29, 2019Read the Press Release
GUILTY PLEA – Rasheeda Chester
On October 22, Rasheeda Chester, 20, pled guilty to possession with the intent to distribute marijuana. Chester and her coconspirators transported 128 pounds of marijuana sealed in vacuum bags from San Francisco International Airport to Dallas Love Field Airport. Chester was also found to be in the possession of $5,280 that constituted the proceeds of illegal drug trafficking. She faces up to 5 years in federal custody. This case was investigated by the Dallas Police Department and the Federal Bureau of Investigation and is prosecuted by AUSA Rebekah Ricketts.
GUILTY PLEA – Alma Jean Gilbert
On October 22, Alma Jean Gilbert, 52, pled guilty to aiding and assisting in the preparation of a fraudulent tax return. Gilbert owned a tax preparation business, where she hired employees to prepare taxes and obtained Electronic Filer Identification Numbers from the Internal Revenue Service. For five years, Gilbert and her employees falsified credits and deductions on customers’ tax returns, on some occasions up to an $11,000 value. Gilbert faces up to 6 years in federal custody. This case was investigated by the Internal Revenue Service – Criminal Investigations and is prosecuted by AUSA Christopher Stokes.
GUILTY PLEA – Ira Marsh
On October 22, Ira Marsh, 42, pled guilty to possession with the intent to distribute marijuana and possession of a firearm by a convicted felon. Dallas Police Department officers stopped Marsh’s car for temporary tags that belonged to another vehicle. Officers smelled marijuana and saw a green leafy substance in plain view. After searching the car, officers found more marijuana and a pistol, despite Marsh’s previous imprisonment for a sentence of over 1 year. Marsh faces up to 12 years in federal custody. This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Dallas Police Department and is prosecuted by AUSA Damien Diggs.
SENTENCING – Armando Avitia
On October 21, Armando Avitia, was sentenced to 9 years and 2 months in federal custody for possession of heroin with the intent to distribute. Grand Prairie Police Department Narcotics detectives pulled over a vehicle after smelling marijuana, which the passengers confirmed purchasing from Avitia’s residence. While executing a search warrant at the residence, officers seized heroin, methamphetamine, cocaine, marijuana and several firearms. This case was investigated by the Grand Prairie Police Department and the Drug Enforcement Administration and was prosecuted by AUSA Myria Boehm.
SENTENCING – Craig Demond Campbell
On October 21, Craig Demond Campbell was sentenced to 3 years and 1 month in federal custody for stealing firearms from a federal firearm licensee. Campbell and his coconspirators drove to Alvarado to rob Crazy Gun Dealer store. They cut a hole in the side of the store, stole 17 firearms, and transported them back to an apartment in Dallas. This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and was prosecuted by AUSA Kenneth Coffin.
SENTENCING – Rodney Antwon Lewis
On October 23, Rodney Antwon Lewis, 34, was sentenced to 17 years in federal custody for the crimes of interference with commerce by robbery and brandishing a firearm in furtherance of a crime of violence. Lewis committed a series of robberies over the years at Family Dollar Stores, a Jack in the Box, a Schlotzky’s, and a KFC. In most instances, Lewis would purchase a small item with cash. When the clerk opened the register, Lewis would threatened them with a revolver hidden in his pants. This case was investigated by the Federal Bureau of Investigation and was prosecuted by AUSA Shane Read.
Muskogee Woman Pleads Guilty to Witness TamperingRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Alison Rachel Morgan, age 28, of Muskogee, Oklahoma, entered a guilty plea to Tampering with a Witness in violation of Title 18, United States Code, Sections 1512(b)(1), punishable by not more than 20 years imprisonment, a fine up to $250,000.00, or both.
The Information alleges that on or about the 31st day of January, 2019, in the Eastern District of Oklahoma, the defendant did knowingly attempt to intimidate and corruptly persuade B.B. by providing confidential information identifying B.B. as the informant on a search warrant to the subject of the search warrant with the intent to influence, delay, and prevent the testimony of B.B. in an official proceeding, the criminal prosecution of the subject of the search warrant.
The charges arose from a joint investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, the Oklahoma Bureau of Narcotics and Dangerous Drugs, the Muskogee County Sheriff’s Office, and the Muskogee Police Department. Additionally, many different agencies that are members of the DEA High Intensity Drug Trafficking Areas Task Force (“HIDTA”) and the FBI Safe Trails Task Force played important roles in the investigation. The investigation was coordinated by the Organized Crime Drug Enforcement Task Force (“OCDETF”) of the Eastern District of Oklahoma. OCDETF is an initiative led and coordinated by the Office of the United States Attorney.
The Honorable Steven P. Shreder, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Rob Wallace represented the United States.
Muskogee Man Pleads Guilty to Possession of Firearm, AmmunitionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Drew Alexander Ragsdale, a/k/a “Drew Down”, age 21, of Muskogee, Oklahoma, entered a guilty plea to Felon In Possession Of Firearm And Ammunition, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2), punishable by not more than 10 years imprisonment, a fine up to $250,000.00, or both.
The Superseding Indictment alleges that on or about August 18, 2018, within the Eastern District of Oklahoma, the defendant, having previously been convicted of a crime punishable by imprisonment for a term exceeding one year, and knowing of such conviction, did knowingly possess in and affecting commerce, a firearm and ammunition which had been shipped and transported in interstate and foreign commerce.
The charges arose from a joint investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, the Oklahoma Bureau of Narcotics and Dangerous Drugs, the Muskogee County Sheriff’s Office, and the Muskogee Police Department. Additionally, many different agencies that are members of the DEA High Intensity Drug Trafficking Areas Task Force (“HIDTA”) and the FBI Safe Trails Task Force played important roles in the investigation. The investigation was coordinated by the Organized Crime Drug Enforcement Task Force (“OCDETF”) of the Eastern District of Oklahoma. OCDETF is an initiative led and coordinated by the Office of the United States Attorney.
The Honorable Steven P. Shreder, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Rob Wallace represented the United States.
Muskogee Man Pleads Guilty to Methamphetamine Distribution, Firearm PossessionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Cornelious Joshua Jones, a/k/a “Corn”, age 30, of Muskogee, Oklahoma, entered a guilty plea to Possession With Intent To Distribute Methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(B), punishable by not less than 5 and not more than 40 years imprisonment, a fine up to $5,000,000.00, or both; and to Felon In Possession Of Firearm, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2), punishable by not more than 10 years imprisonment, a fine up to $250,000.00, or both.
The Superseding Indictment alleges that on or about January 21, 2019, within the Eastern District of Oklahoma, the defendant did knowingly and intentionally possess with intent to distribute 5 grams or more of a mixture or substance containing a detectable amount of methamphetamine (actual), a Schedule II controlled substance.
The Superseding Indictment further alleges that on or about January 21, 2019, within the Eastern District of Oklahoma, the defendant, having previously been convicted of a crime punishable by imprisonment for a term exceeding one year, and knowing of such conviction, did knowingly possess in and affecting commerce, a firearm which had been shipped and transported in interstate commerce.
The charges arose from a joint investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, the Oklahoma Bureau of Narcotics and Dangerous Drugs, the Muskogee County Sheriff’s Office, and the Muskogee Police Department. Additionally, many different agencies that are members of the DEA High Intensity Drug Trafficking Areas Task Force (“HIDTA”) and the FBI Safe Trails Task Force played important roles in the investigation. The investigation was coordinated by the Organized Crime Drug Enforcement Task Force (“OCDETF”) of the Eastern District of Oklahoma. OCDETF is an initiative led and coordinated by the Office of the United States Attorney.
The Honorable Steven P. Shreder, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Rob Wallace represented the United States.
Muskogee Man Pleads Guilty to Methamphetamine DistributionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Torrell Dshaun Bogar, a/k/a “T Real”, age 21, of Muskogee, Oklahoma, entered a guilty plea to Possession With Intent To Distribute Methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(B), punishable by not less than 5 and not more than 40 years imprisonment, a fine up to $5,000,000.00, or both.
The Information alleges that Between on or about August 4, 2018, and on or about August 15, 2018, within the Eastern District of Oklahoma, defendant, Torrell Dshaun Bogar, a/k/a “T-Real”, did knowingly and intentionally possess with intent to distribute 50 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance.
The charges arose from a joint investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, the Oklahoma Bureau of Narcotics and Dangerous Drugs, the Muskogee County Sheriff’s Office, and the Muskogee Police Department. Additionally, many different agencies that are members of the DEA High Intensity Drug Trafficking Areas Task Force (“HIDTA”) and the FBI Safe Trails Task Force played important roles in the investigation. The investigation was coordinated by the Organized Crime Drug Enforcement Task Force (“OCDETF”) of the Eastern District of Oklahoma. OCDETF is an initiative led and coordinated by the Office of the United States Attorney.
The Honorable Steven P. Shreder, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Rob Wallace represented the United States.
Muskogee Man Pleads Guilty to Methamphetamine DistributionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Christopher Michael Whitaker, Sr., a/k/a “Unc”, age 44, of Muskogee, Oklahoma, entered a guilty plea to Possession With Intent To Distribute Methamphetamine in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(B), punishable by not less than 5 and not more than 40 years imprisonment, a fine up to $5,000,000.00, or both.
The Information alleges that between on or about July 24, 2018, and on or about August 20, 2018, within the Eastern District of Oklahoma, defendant, Christopher Michael Whitaker, Sr., a/k/a “Unc”, did knowingly and intentionally possess with intent to distribute 50 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance.
The charges arose from a joint investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, the Oklahoma Bureau of Narcotics and Dangerous Drugs, the Muskogee County Sheriff’s Office, and the Muskogee Police Department. Additionally, many different agencies that are members of the DEA High Intensity Drug Trafficking Areas Task Force (“HIDTA”) and the FBI Safe Trails Task Force played important roles in the investigation. The investigation was coordinated by the Organized Crime Drug Enforcement Task Force (“OCDETF”) of the Eastern District of Oklahoma. OCDETF is an initiative led and coordinated by the Office of the United States Attorney.
The Honorable Steven P. Shreder, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Rob Wallace represented the United States.
Montgomery County Karate Teacher Sentenced to 6 ½ Years in Prison for Abusing Teenage StudentsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced that Evan Burgess, 28, of Blue Bell, Pennsylvania was sentenced to 78 months’ imprisonment followed by fifteen years of supervised release by the United States District Judge Timothy J. Savage. The defendant will be required to register as a sex offender as a result of this conviction.
The defendant, a former karate instructor at Destolfo’s Premier Martial Arts in Conshohocken, previously pleaded guilty in June 2019 to two counts of traveling in interstate commerce to engage in illicit sexual conduct with two minors, who were his teenage karate students at the time of the incidents. These incidents occurred while the defendant and his victims were attending karate tournaments in August 2016 in National Harbor, Maryland and in September 2014 in East Elmhurst, New York.
“Burgess took advantage of his position of trust as an instructor of young men to abuse them – sometimes brazenly while other adults were in the room or nearby,” said U.S. Attorney McSwain. “Child abuse and exploitation are heinous crimes which my Office takes very seriously. Burgess will now pay for his crimes behind bars where he belongs.”
The case was investigated by the FBI and Whitpain Township Police, and is being prosecuted by Assistant United States Attorney Kelly Harrell.
Miami, Florida Man Pleads Guilty to Wire FraudRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced Yanexy Ricardo Garcia, age 33, of Miami, Florida, entered a guilty plea to Conspiracy to Commit Wire Fraud, in violation of Title 18, United States Code, Section 1343, punishable by not more than 30 years imprisonment, a fine up to $1,000,000.00, or both.
The Superseding Indictment alleges that in or about November 2017, to on or about March 27, 2018, in the Eastern District of Oklahoma and elsewhere, the defendant, knowingly and willfully combined, conspired, confederated and agreed with other persons, known and unknown to the Grand Jury, to commit an offense of Wire Fraud.
The charges arose from an investigation by the Lighthorse Police Department and the United States Secret Service.
The Honorable Steven P. Shreder, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Shannon Henson represented the United States.
Miami Business Owner Pleads Guilty to Employment Tax FraudRead the Press Release
A Miami, Florida, business owner pleaded guilty today to failing to pay over employment taxes, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida.
According to court documents, between 2002 and 2017, Ricardo Betancourt owned and operated multiple parcel delivery businesses in the South Florida area. Betancourt’s businesses earned gross revenues of more than $100 million.
Through his businesses, Betancourt employed hundreds of employees and was responsible for collecting and paying over to the Internal Revenue Service (IRS) the taxes withheld from employees’ paychecks. Betancourt withheld payroll taxes from his employees, but he deliberately failed to pay over those withholdings and other associated taxes to the IRS, despite his obligation to do so. In 2013 and 2014, Betancourt did not pay over approximately 97 percent of the federal employment taxes he withheld from his employees. In 2015 and 2016, Betancourt did not pay over any of the federal employment taxes he withheld from his employees. For the quarter ending December 2016, Betancourt admitted that he failed to truthfully account for and pay over payroll taxes of approximately $727,478.
Sentencing is scheduled for Feb. 12, 2020. Betancourt faces a statutory maximum sentence of five years in prison as well as a period of supervised release, restitution, and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Fajardo Orshan thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Michael Boteler and Assistant Chief Charles Edgar of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
McAlester Man Pleads Guilty to Heroin DistributionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Darron Ray Aldridge, age 41, of McAlester, Oklahoma, entered a guilty plea to Distribution Of Heroin in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C) and Title 18, United States Code, Section 2, punishable by imprisonment for not more than 20 years.
The Information alleges that on or about December 16, 2018, in the Eastern District of Oklahoma, the defendant, Darron Ray Aldridge, did knowingly and intentionally distribute a mixture or substance containing a detectable amount of heroin, a Schedule I controlled substance. As a part of its case, the Government presented evidence that the defendant distributed the heroin to A.B. and that A.B. died after ingesting the heroin.
The charges arose from an investigation by the McAlester Police Department and the Drug Enforcement Administration.
The Honorable Steven P. Shreder, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Sarah McAmis represented the United States.
Marysville Woman Sentenced to One Year and A Day of Imprisonment for Forging 164 Opioid PrescriptionsRead the Press Release
HARRISBURG—The United States Attorney’s Office for the Middle District of Pennsylvania announced that Belinda Dietrich, age 63, of Marysville, Pennsylvania, was sentenced on October 28, 2019, by Senior U.S. District Court Judge Sylvia H. Rambo to one year and a day in prison followed by three years of supervised release, for forging the signature of a dentist on 164 prescriptions for opioid drugs.
According to United States Attorney David J. Freed, Dietrich pleaded guilty before Judge Rambo in April 2019, to one count of distributing a controlled substance and one count of making false statements in health care matters. Dietrich, a former receptionist for a solo dental practitioner in Harrisburg, forged the signature of her employer on a blank prescription form on February 13, 2017, for oxycodone pills for her mother, a Medicare beneficiary, who was not a patient of the dentist. Dietrich then had the prescription filled at a Harrisburg area pharmacy and received 24 oxycodone pills, who then converted the drugs to her own use. The pharmacy billed the cost of the oxycodone pills to Medicare, which paid the claim.
Dietrich’s forgeries were not limited to just one prescription. Between February 17, 2016 and August 2017, Dietrich forged 164 prescriptions for oxycodone and hydrocodone. Dietrich filled out 10 of the bogus prescriptions for herself; the rest were made out to the names of 11 friends and family, who then filled the prescriptions at local pharmacies and shared the controlled substances among themselves. All together, more than 5,022 oxycodone and hydrocodone pill were obtained in this manner. All 11 individuals were prosecuted by the US Attorney’s Office for their role in the forged prescription scheme.
Judge Rambo ordered Dietrich to begin service of her sentence on January 6, 2020
The case was investigated by the Harrisburg Offices of the Drug Enforcement Administration, Diversion Division, and the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services. Assistant U.S. Attorney Kim Douglas Daniel prosecuted the case.
# # #
Man sentenced for stealing more than $300,000 as part of a healthcare fraud schemeRead the Press Release
ATLANTA - Michael Bang has been sentenced for defrauding the Colorado Public Employees Retirement Association’s (“COPERA”) health insurance plan, called PERACare.
“Bang exploited a public entity that was at the same time providing him with medical and other benefits,” said U.S. Attorney Byung J. “BJay” Pak. “His scheme depleted the healthcare resources available to other retirees and cost the public hundreds of thousands of dollars.”
“Bang falsified prescriptions in order to generate illicit profits at the expense of retirees and tax payers,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “This sentencing will not only hold him accountable for those actions but will serve as a reminder to others that the FBI will pursue any individual who abuses our health care system.”
According to U.S. Attorney Pak, the charges and other information presented in court: As part of the healthcare fraud scheme, Bang, who at the time was a resident of Atlanta, sought reimbursement for medications through the submission of fraudulent reimbursement forms for medication that he was either not receiving or that was more expensive than the medications he was receiving. Bang’s scheme involved three Atlanta-area pharmacies.
PERACare’s prescription benefits were administered by Express Scripts. Over more than two years, Bang submitted fraudulent reimbursement claims to Express Scripts, including forms with forged pharmacist signatures, forms for medications that Bang never received, and forms claiming out-of-pocket expenses that Bang never actually incurred. According to pharmacy records, Bang paid a total of approximately $3,500 for prescription medications, while bank records show Bang received more than $180,000 in prescription drug reimbursements from Express Scripts during the same period. Bang received more than $300,000 from COPERA in reimbursements to which he was not entitled.
Michael Bang, 58, of Antioch, California, has been sentenced to one year, six months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $306,179.28. Bang was convicted on these charges on August 5, 2019, after he pleaded guilty.
The Federal Bureau of Investigation investigated this case.
Assistant U.S. Attorneys Ryan Huschka and Alison Prout prosecuted the case.
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.
Luzerne County Man Sentenced to 40 Months’ Imprisonment for Unlawfully Possessing A Firearm and Ammunition as A Convicted FelonRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that Rodney Miles, age 29, of Edwardsville, Pennsylvania, was sentenced on October 28, 2019, by Senior U.S. District Court Judge James M. Munley to 40 months’ imprisonment followed by three years on supervised release for unlawfully possessing a firearm as a convicted felon.
According to United States Attorney David J. Freed, Miles admitted to possessing a .380 caliber handgun and ammunition on October 22, 2014, at a residence in Edwardsville. At the time he possessed the firearm and ammunition, Miles had a previous conviction for conspiracy to commit burglary.
The matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Pennsylvania State Police, and the Kingston Police Department. Assistant U.S. Attorney Francis P. Sempa prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
# # #
Luzerne County Man Guilty of Receiving Child PornographyRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that William Barratt, age 39, of Sugarloaf Township, Pennsylvania, pleaded guilty on October 28, 2019, to receiving child pornography before Senior U.S. District Court Judge James M. Munley.
According to United States Attorney David J. Freed, Barratt admitted that he used his cell phone and computer to receive images and videos of child pornography from websites on the internet. Barratt committed the offense between April 2018 and March 5, 2019, in Luzerne County.
Judge Munley ordered a presentence investigation to be completed, and scheduled sentencing for January 29, 2020.
Barratt was indicted by a federal grand jury in June 2019, as a result of an investigation conducted by the Federal Bureau of Investigation, the Pennsylvania State Police, and the Luzerne County District Attorney’s Office. Assistant United States Attorney Francis P. Sempa is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
The maximum penalty under federal law for the offenses is 20 years’ imprisonment, a term of supervised release following imprisonment, and a fine. There is also a mandatory minimum sentence of five years’ imprisonment. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
# # #
Laredo grand jury charges multiple people with drug, ammo and immigration crimesRead the Press Release
LAREDO, Texas – Four people face up to life in prison on recent drug charges involving meth following the return of several Laredo federal indictments, announced U.S. Attorney Ryan K. Patrick. Two men face charges for trafficking a large amount of marijuana and ammunition, while four others were allegedly involved in the transportation of illegal aliens.
All were originally charged via criminal complaints and are currently in custody. Three are set to appear before U.S. Magistrate Judge Sam Sheldon at 1 p.m. today, while others are scheduled for Oct. 31 at 1 p.m. The Laredo grand jury returned the indictments Oct. 22.
Mexican nationals Nicolas De La Garza Salinas, 50, and Miguel Angel Flores Diaz, 34; and Monica Christine Canales Rodriguez, 52, Dallas, are all charged in separate but similar cases. Each is charged with one count of conspiracy as well as importation of meth. Rodriguez also faces a third count of importing heroin. Two more cases against Mexican national Ramces Chavez-Gomez, 30, and Jose Gonzalo Ojeda, 24, Laredo, allege conspiracy and possession with intent to distribute multiple kilogram quantities of meth and marijuana, respectively. The grand jury returned a fifth indictment against Julio Cesar Vega-Amaral, 42, for smuggling ammunition into the country.
Clarence J. Lee, 60, Ellis L. Boston, 47, and Julie Perez, 33, all of San Antonio, are charged together, while the final indictment charges Sebastian Mosley, 48, Tyler. These four are all charged with conspiracy to transport illegal aliens.
On Sept. 25, Salinas allegedly attempted to entered the United States through the Lincoln-Juarez International Bridge in Laredo. The charges allege that during inspection, authorities soon discovered approximately 31.64 kilograms of a white liquid substance that tested positive for meth concealed within the gas tank.
Flores Diaz allegedly entered the United States on that same day, but at the Colombia Solidarity Bridge in Laredo, driving a tractor trailer. Authorities soon discovered anomalies in the cabin during a vehicle scan, according to the charges. The indictment alleges officials recovered 20 bundles of meth, weighing approximately 20.12 kilograms with an estimated value of more than $100,000.
Similarly, a third case alleges Rodriguez entered the United States at the Lincoln-Juarez Port of Entry in Laredo Sept. 28, driving a Toyota Four Runner. There, law enforcement noticed its four tires had anomalies and, upon inspection, found a total of 24 bundles of heroin and meth, weighing approximately 48.82 kilograms and 14.94 kilograms respectively, according to the charges. The drugs are allegedly valued at more than $1.3 million.
According to the indictment against Chavez-Gomez, Nuevo Laredo, Tamaulipas, Mexico, he attempted to drive his SUV through a Laredo checkpoint Oct. 5. Upon arrival, a K-9 alerted to the presence of narcotics, at which time authorities conducted an x-ray scan which revealed a hidden compartment near the rear seats of the vehicle, according to the charges. The compartment allegedly contained 20 bundles of meth that weighed approximately 36.3 kilos with a street value of more than $250,000.
In another separate matter, law enforcement allegedly observed six individuals carrying bundles near the Rio Grande River in Laredo July 18. The charges allege someone was driving a pickup truck towards the river. The driver, believed to be Ojeda, allegedly absconded on foot. The complaint alleges that authorities apprehended him and recovered 480 pounds of marijuana from that truck worth more than $380,000.
The grand jury indicted Vega-Amaral for smuggling ammunition via the Lincoln Juarez Bridge, Sept. 23. Law enforcement conducted an inspection of his vehicle, at which time they allegedly discovered approximately 4,300 rounds of various caliber ammunition. The charges allege it was concealed inside a speaker box and under a spare tire in the trunk of the vehicle.
Lee, Boston and Perez are charged together with conspiracy to transport illegal aliens. The criminal complaint alleges Lee attempted to drive a commercial truck through a Texas checkpoint west of Bruni. During inspection, a K-9 allegedly alerted to the presence of persons in the cargo area of the truck. An x-ray scan revealed the silhouettes of humans in the rear of the truck, according to the charges. Upon further inspection, authorities allegedly discovered a compartment hidden by a “false wall” with a small door that some utility appliances were blocking. The charges allege they eventually found 24 Mexican citizens in that compartment which had a temperature of 94 degrees. Several of those inside were allegedly sweating profusely and gasping for air. Boston and Perez had allegedly recruited Lee and had driven ahead of him through the checkpoint, acting as a scout vehicle for him.
Finally, Mosley allegedly conspired to transport illegal aliens. On Sept. 27, he attempted to cross a checkpoint driving his tractor that was towing a refrigerated trailer, according the complaint against him. During inspection, authorities allegedly noticed that two different temperature settings were displayed. Further inspection revealed he had 42 undocumented aliens inside the trailer, according to the charges.
Salinas, Diaz, Rodriguez, Chavez-Gomez all face up to life in prison if convicted as well as a maximum $10 million fine. Ojeda’s maximum sentence, upon conviction, carries a potential 40 years of imprisonment and a $5 million fine, while the remaining four could serve up to 10 years and pay up to $250,000.
Immigration and Customs Enforcement’s Homeland Security Investigations (ICE) and Customs and Border Protection conducted the investigations of Salinas, Diaz and Rodriguez, while the Drug Enforcement Administration, along with Border Patrol (BP) worked on the Chavez-Gomez and Ojeda matters. ICE also investigated the cases against the remaining four individuals with the assistance of BP.
Assistant U.S. Attorneys Brandon Scott Bowling, Brian Bajew, Jennifer Day, Paul A. Harrison and Yoona Lim are prosecuting the cases.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Lakeland Man Sentenced to 30 Months for Possessing Firearm and AmmunitionRead the Press Release
Tampa, Florida – U.S. District Judge Susan C. Bucklew has sentenced Solease Asiman Babb (32, Lakeland) to 30 months in federal prison for possessing a firearm and ammunition as a convicted felon. The court ordered Babb to forfeit the firearm and ammunition, and to serve a three-year term of supervised release following his release from prison. Babb had pleaded guilty on July 24, 2019.
According to court documents, officers from the Lakeland Police Department executed a search warrant at Babb’s home. Inside, detectives found a stolen, semi-automatic firearm, nine rounds of ammunition, and various controlled substances, including cocaine, marijuana, methamphetamine, and MDMA. In addition, the officers found several cellphones, digital scales, clear plastic bags, and a vacuum sealer. Babb admitted that the firearm and ammunition belonged to him. Babb, who had previously been convicted of a felony, is prohibited from possessing a firearm or ammunition under federal law.
This case was investigated by the Federal Bureau of Investigation and the Lakeland Police Department. It was prosecuted by Assistant United States Attorney David C. Waterman.
This is another case prosecuted as part of the Department of Justice’s “Project Safe Neighborhoods” Program (PSN), which is a nationwide, crime reduction strategy aimed at decreasing violent crime in communities. It involves a comprehensive approach to public safety — one that includes investigating and prosecuting crimes, along with prevention and reentry efforts. In the Middle District of Florida, U.S. Attorney Maria Chapa Lopez coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
Kingston Man Sentenced to 16 Years’ Imprisonment for Armed Bank RobberyRead the Press Release
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Shawn Cavanaugh, age 38, of Kingston, Pennsylvania, was sentenced on October 25, 2019, by United States District Court Judge Robert D. Mariani to 192 months’ imprisonment followed by four years of supervised release, for an armed bank robbery.
According to United States Attorney David J. Freed, Cavanaugh and his co-defendant, Doug Sickler, robbed the PNC Bank in Avoca, Pennsylvania on June 21, 2017, while threatening employees with pellet guns. Sickler and Cavanaugh were arrested on June 22, 2017, and have remained in custody since. In addition to the sentence of imprisonment, Judge Mariani ordered that Cavanaugh pay $909 to the victim of his crime.
Cavanaugh’s co-defendant, Doug Sickler, was previously sentenced to 63 months’ imprisonment.
The matter was investigated by the Federal Bureau of Investigation and the Kingston Police Department. Assistant United States Attorneys Phillip J. Caraballo and Robert J. O’Hara prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
# # #
Jury Finds Roland Man Guilty of Attempted Enticement of a Minor to Engage in SexRead the Press Release
LITTLE ROCK— A Roland man has been convicted of enticing a minor to engage in sexual activity after exchanging messages with an undercover investigator.
Cody Hiland, U.S. Attorney for the Eastern District of Arkansas, announced today that a federal jury has convicted Patrick Karl Tate, 57, of Roland. United States District Judge James M. Moody, Jr., presided over the two-day trial, which concluded Tuesday with the jury verdict finding Tate guilty on the single count. Tate will be sentenced by Judge Moody at a later date.
Testimony during the trial established that in April of 2017, an undercover investigator with the Faulkner County Sheriff’s Office saw an ad posted on Craigslist. The ad was located in a section of the website titled Casual Encounters, which an investigator testified is known for sex solicitations. The ad specified it was looking for “mother/daughter,” and it asked for responses to be sent through KIK messenger, an online messaging service. The ad provided a KIK username: karlpatrick69. This was later identified to be the defendant, Patrick Karl Tate.
The undercover investigator sent a message to the KIK account, and the undercover exchanged messages with karlpatrick69 from April 9 to April 16, 2017. The messages, all of which were introduced at trial, indicated that the undercover officer was posing as an adult male with access to his girlfriend’s daughter, a 13-year-old child. In the messages, and in two recorded phone conversations that were played at trial, the undercover and Tate made plans to meet so that Tate could have sex with the 13-year-old child. In the messages, the undercover told Tate that he should bring at least three condoms. The two agreed to meet at a location in Greenbrier on April 16, 2017, which was Easter Sunday.
Evidence at trial further indicated that on April 16, 2017, Tate arrived at the agreed-upon location. He had three condoms. He was met by investigators from the Faulkner County Sheriff’s Office, who arrested him. Tate was transported back to the major crimes unit, where he was read his rights and gave a statement. In his statement, Tate admitted to posting the Craigslist ad, admitted to having the conversations on KIK, admitted that karlpatrick69 was his screenname, and admitted that he knew the child involved was 13 years old.
“This 57-year-old defendant planned to have sex with a 13-year-old child,” stated U.S. Attorney Hiland. “Fortunately, instead of an actual child, he was met by the full weight and force of law enforcement. This investigation shows that we will not tolerate those who would prey upon the most vulnerable among us—our children.”
The statutory penalty for enticement of a minor to engage in sexual activity is not less than 10 years and not more than life imprisonment, not more than a $250,000 fine, and not less than five years of supervised release.
The investigation was conducted by the Faulkner County Sheriff’s Office, and the case was prosecuted by Assistant United States Attorneys Jordan Crews and Allison W. Bragg.
# # #
This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available online at
http://www.justice.gov/edar
Twitter:
@EDARNEWS
Jury Convicts Springfield Man of Child PornographyRead the Press Release
SPRINGFIELD, Mo. – A Springfield, Missouri, man was convicted by a federal trial jury today of receiving and distributing child pornography.
Marco Barraza, 27, was found guilty of one count of receiving and distributing child pornography.
Law enforcement investigators received two reports from the National Center for Missing and Exploited Children that Barraza had transmitted images of child pornography through chat sessions on his Tumblr account in September 2016. Officers executed a search warrant at Barraza’s residence on March 16, 2017, and seized numerous computer-related property, including three cell phones and two hard drives that had been removed from laptop computers. Those devices contained approximately 600 images of child pornography.
Following the presentation of evidence, the jury in the U.S. District Court in Springfield, Mo., deliberated for less than an hour before returning the guilty verdict to U.S. District Judge Roseann Ketchmark, ending a trial that began Monday, Oct. 28.
Under federal statutes, Barraza is subject to a mandatory minimum sentence of five years in federal prison without parole, up to a sentence of 20 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney James J. Kelleher and Supervisory Assistant U.S. Attorney Randall D. Eggert. It was investigated by the Southwest Missouri Cybercrimes Task Force, Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the Springfield, Mo., Police Department, and the Barry County, Mo., Sheriff’s Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Jordanian National Sentenced for Conspiracy to Bring Aliens into the United StatesRead the Press Release
WASHINGTON – A Jordanian National was sentenced to 36 months in prison for his role in a conspiracy to bring aliens to the United States and actually bringing Yemeni aliens through Mexico to the United States.
According to the plea agreement, during the second half of 2017, Moayad Heider Mohammad Aldairi, 31, conspired with others to smuggle at least six Yemeni nationals across the Texas border and into the United States in exchange for a fee. Aldairi admitted his role in transporting the aliens from Monterrey, Mexico to Piedras Negras, where he directed them to cross the Rio Grande River into the United States. Aldairi provided construction hard hats and reflective vests to some of the aliens in an effort to enable them to blend in after crossing.
“Aldairi endangered our national security by smuggling unvetted aliens across our border into the United States,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “The Department of Justice and our law enforcement partners will steadfastly pursue investigations and prosecutions to disrupt smugglers like Aldairi and end the risk they pose to our safety.”
“The district court imposed a just sentence today. This case vividly illustrates how border security is a key component of national security,” said U.S. Attorney John Bash of the Western District of Texas. “We simply must know the identities of every individual crossing our southern border, particularly those who are nationals of countries where terrorist organizations operate freely.”
“This sentence serves as a sobering reminder about the serious consequences awaiting those involved in human smuggling,” said Special Agent in Charge Shane M. Folden of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) San Antonio. “This investigation is a great example of how HSI uses its global resources, foreign and interagency partnerships to bring international criminals to justice in the United States. Targeting the leaders of criminal organizations who smuggle aliens from certain countries of interest will always be a priority of HSI in protecting the homeland.”
This case was investigated by HSI Eagle Pass, with assistance from HSI New York, HSI Monterrey, HSI Jordan, the U.S. Embassy of Jordan, U.S. Customs and Border Protection, U.S. Border Patrol and FBI San Antonio. The investigation was conducted under the Extraterritorial Criminal Travel Strike Force (ECT) program, a joint partnership between the Justice Department’s Criminal Division and HSI. The ECT program focuses on human smuggling networks that may present particular national security or public safety risks or present grave humanitarian concerns. ECT has dedicated investigative, intelligence and prosecutorial resources. ECT coordinates and receives assistance from other U.S. government agencies and foreign law enforcement authorities.
This case was prosecuted by Trial Attorneys James Hepburn and Erin Cox of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Matthew Watters of the Western District of Texas.
Jordanian National Sentenced for Conspiracy to Bring Aliens into the United StatesRead the Press Release
A Jordanian National was sentenced to 36 months in prison for his role in a conspiracy to bring aliens to the United States and actually bringing Yemeni aliens through Mexico to the United States.
According to the plea agreement, during the second half of 2017, Moayad Heider Mohammad Aldairi, 31, conspired with others to smuggle at least six Yemeni nationals across the Texas border and into the United States in exchange for a fee. Aldairi admitted his role in transporting the aliens from Monterrey, Mexico to Piedras Negras, where he directed them to cross the Rio Grande River into the United States. Aldairi provided construction hard hats and reflective vests to some of the aliens in an effort to enable them to blend in after crossing.
“Aldairi endangered our national security by smuggling unvetted aliens across our border into the United States,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “The Department of Justice and our law enforcement partners will steadfastly pursue investigations and prosecutions to disrupt smugglers like Aldairi and end the risk they pose to our safety.”
“The district court imposed a just sentence today. This case vividly illustrates how border security is a key component of national security,” said U.S. Attorney John Bash of the Western District of Texas. “We simply must know the identities of every individual crossing our southern border, particularly those who are nationals of countries where terrorist organizations operate freely.”
“This sentence serves as a sobering reminder about the serious consequences awaiting those involved in human smuggling,” said Special Agent in Charge Shane M. Folden of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) San Antonio. “This investigation is a great example of how HSI uses its global resources, foreign and interagency partnerships to bring international criminals to justice in the United States. Targeting the leaders of criminal organizations who smuggle aliens from certain countries of interest will always be a priority of HSI in protecting the homeland.”
This case was investigated by HSI Eagle Pass, with assistance from HSI New York, HSI Monterrey, HSI Jordan, the U.S. Embassy of Jordan, U.S. Customs and Border Protection, U.S. Border Patrol and FBI San Antonio. The investigation was conducted under the Extraterritorial Criminal Travel Strike Force (ECT) program, a joint partnership between the Justice Department’s Criminal Division and HSI. The ECT program focuses on human smuggling networks that may present particular national security or public safety risks or present grave humanitarian concerns. ECT has dedicated investigative, intelligence and prosecutorial resources. ECT coordinates and receives assistance from other U.S. government agencies and foreign law enforcement authorities.
This case was prosecuted by Trial Attorneys James Hepburn and Erin Cox of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Matthew Watters of the Western District of Texas.
Jefferson County Man Sentenced to 41 Months for Wire Fraud SchemeRead the Press Release
BIRMINGHAM – A federal judge today sentenced a Jefferson County man for engaging in a wire fraud scheme, announced U.S. Attorney Jay E. Town and FBI Special Agent in Charge Johnnie Sharp, Jr.
U.S. District Judge Karon O. Bowdre sentenced JEFFREY RUSERT, 52, to 41 months in prison for embezzlement of over $1.3 million from his customers. Rusert pled guilty in June.
“Rusert abused the responsibility entrusted to him by those wanting the American dream of owning their own home, but now he will pay the price for stealing $1.3 million,” Town said. “He chose to feed his own greed and lifestyle. He will now feed on federal prison food for the next 41 months.”
“Rusert’s desire to have more than he honestly worked for drove him to steal the hard earned money of others.” Sharp said. “Today, this sentence ensures that he pays the price for his greed.”
According to the Information, Rusert was the owner and President of Southern Craftsman Custom Homes, Inc. Southern Craftsman was engaged in the business of residential homebuilding. Between 2016 and 2018, Rusert engaged in a fraudulent scheme to obtain money from at least sixteen known individuals and/or families. Rusert solicited individuals and families to sign a contract and pay money to Southern Craftsman for the construction of a custom home. Rusert accepted the checks and down payments from numerous individuals and families and fraudulently used the proceeds on unrelated construction projects, outstanding debt and personal expenses. In addition to obtaining personal checks from the victims, Rusert assisted individuals and families with obtaining a loan to finance the construction of their custom home. After obtaining financing, Rusert, submitted false and fraudulent invoices and documentation to financial institutions for the purpose of obtaining checks or draws from the construction loans purportedly to pay for materials, labor and expenses associated with a particular home under construction. Rusert failed to use and apply the money obtained from the financial institutions towards the construction of the customer’s home project.
In addition to the term of imprisonment imposed, Rusert was ordered to serve three years of supervised release.
The FBI investigated the case with assistance from the Alabama Home Builders Licensure Board, which Assistant U.S. Attorney Robin Beardsley Mark is prosecuted.
Hawthorne Man Found Guilty of Scheming to Defraud Insurance Companies by Intentionally Drowning His Two Autistic SonsRead the Press Release
LOS ANGELES – A Hawthorne man was found guilty by a jury today of 14 federal felonies for intentionally driving his family off a wharf and into the water at the Port of Los Angeles in a scheme to collect money on insurance policies he had taken out on their lives.
Ali F. Elmezayen, 45, was found guilty of four counts of mail fraud, four counts of wire fraud, one count of aggravated identity theft, and five counts of money laundering.
“Dissatisfied with his financial and family situation, Mr. Elmezayen fraudulently purchased millions of dollars in insurance on his common-law wife and disabled young sons, and then drove them off a pier in order to cash in,” said United States Attorney Nick Hanna. “These two boys deserved a loving father; instead they got a man who put his greed and self-interest above their lives.”
“A jury found that Mr. Elmezayen intentionally put his children in a deadly situation from which they could not escape,” said Paul Delacourt, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Today's verdict delivers justice and gives a voice to the young victims who deserved to be protected by their father, but instead were murdered so he could profit from their deaths.”
According to the evidence presented at his nine-day trial, between July 2012 and March 2013, Elmezayen bought from eight different insurance companies more than $7 million worth of life and accidental death insurance policies on himself and his family. Elmezayen paid premiums in excess of $6,000 per year for these policies – even though he reported income of less than $30,000 per year on his tax returns. Elmezayen began purchasing the insurance policies the same year he exited a Chapter 11 bankruptcy proceeding.
After purchasing the policies, Elmezayen repeatedly called the insurance companies – sometimes pretending to be his wife in whose name he had obtained some of the policies – to verify that the policies were active and that they would pay benefits if his wife died in an accident. Elmezayen also called at least two of the insurance companies to confirm they would not investigate claims made two years after the policies were purchased. These telephone calls were recorded and were played for the jury.
On April 9, 2015, 12 days after the 2-year contestability period on the last of his insurance policies expired, Elmezayen drove a car with his wife and two youngest children off a wharf at the Port of Los Angeles. The site of the crash was a loading dock and worksite for commercial fishermen.
Elmezayen swam out the open driver’s side window of the car. Elmezayen’s wife, who did not know how to swim, escaped the vehicle and survived when a nearby fisherman threw her a flotation device. Two of the couple’s three sons, who were 8 and 13 and who were both severely autistic, were strapped into the car and drowned. The third son was away at camp at the time and was not in the car at the time his father drove it into the water.
Elmezayen then collected more than $260,000 in insurance proceeds from Mutual of Omaha Life Insurance and American General Life Insurance on the accidental death insurance policies he had taken out on the children’s lives. He used part of the insurance proceeds to purchase real estate in Egypt as well as a boat.
Prosecutors argued that Elmezayen was an abusive husband and parent who “hatched a plan” to make all of his financial problems disappear.
“What he did on April 9 wasn’t an accident,” prosecutors said. “It was a long time coming.”
“It’s a terrible tragedy that any father would jeopardize the lives of his family for his own financial gain,” stated Special Agent in Charge Ryan L. Korner of IRS Criminal Investigation. “IRS-CI is proud to flex our financial fraud expertise in bringing some closure in this horrific scheme.”
In addition to posing as his wife in communications with the insurance companies without her knowledge, following the crash, Elmezayen repeatedly lied – to law enforcement officers, insurance companies, and in subsequent civil litigation he filed concerning the crash – about the extent of the insurance he had purchased on his family, and specifically about whether he had insured his disabled children’s lives. The evidence at trial also showed that he attempted to persuade witnesses to falsely tell law enforcement that he had given the insurance proceeds to charity.
FBI agents arrested Elmezayen in November 2018 on a criminal complaint and he has been in custody ever since.
Tomorrow, United States District Judge John F. Walter will schedule a sentencing hearing, at which time Elmezayen will face a statutory maximum sentence of 212 years in federal prison.
This case was investigated by the FBI and IRS Criminal Investigation. The Los Angeles Police Department, the Los Angeles Port Police, and the Los Angeles City Attorney’s Office provided substantial assistance in this case.
Assistant United States Attorneys Alexander C.K. Wyman of the Major Frauds Section and David T. Ryan of the Terrorism and Export Crimes Section are prosecuting this matter.
Guam Ambulance Company Executives Plead Guilty to Medicare and TRICARE Fraud and Money Laundering SchemeRead the Press Release
Two former owners and an employee of an ambulance services provider headquartered in Guam pleaded guilty yesterday for their roles in a health care fraud and money laundering scheme that resulted in a loss to the United States of approximately $10.8 million. This is one of the largest single Medicare ambulance fraud cases prosecuted nationwide.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Shawn N. Anderson of the Districts of Guam and the Northern Mariana Islands, Special Agent in Charge Eli S. Miranda of the FBI’s Honolulu Field Office, Special Agent in Charge Justin Campbell of IRS Criminal Investigation’s (IRS-CI) Seattle Field Office and Special Agent in Charge Timothy DeFrancesca of the U.S. Department of Health and Human Services Office of the Inspector General’s (HHS-OIG) Los Angeles Regional Office made the announcement.
Clifford P. Shoemake, 63, of Guam, Casey C. Conner, 60, of Saipan, and Nicholas A. Shoemake, 31, of Guam, the former owners and an employee, respectively, of Guam Medical Transport (GMT), pleaded guilty before U.S. District Judge Frances Tydingco-Gatewood of the District of Guam, to one count of conspiracy to commit health care fraud and one count of conspiracy to engage in monetary transactions with the proceeds of specified unlawful activity. The defendants are scheduled to be sentenced on Jan. 29, 2020.
Medicare and TRICARE are federal health benefit programs, which, under certain conditions, reimburse providers for medically necessary, non-emergency, scheduled ambulance transportation to and from dialysis treatments, provided to beneficiaries with end stage renal disease (ESRD). Ambulance services are medically necessary when provided to such beneficiaries who cannot be transported by any other means without endangering their health, or were bed confined before, during and after the transportation.
According to their admissions at the plea hearing, from approximately March 11, 2010, to approximately March 21, 2014, the defendants engaged in a conspiracy to defraud Medicare and TRICARE by submitting claims for reimbursement for medically unnecessary ambulance services that GMT provided to patients with ESRD. The defendants admitted they were aware that GMT was transporting patients who did not qualify for ambulance transportation under applicable Medicare and TRICARE regulations and guidelines, with which they had failed to familiarize themselves. Specifically, the defendants admitted they were aware that many of GMT’s patients were not bed-confined, and did not have acute medical conditions that would otherwise qualify them for ambulance transportation. As part of the scheme, the defendants directed GMT employees to remove from internal documents references to GMT patients’ ability to walk because they knew that Medicare and TRICARE would not provide reimbursement for the patients. The defendants further admitted they were aware of, but failed to address, concerns about GMT’s Medicare and TRICARE billing practices raised by other GMT employees. The conspiracy resulted in improper payments to GMT of approximately $10.8 million, the defendants admitted.
The defendants further admitted to conspiring to engage in money transactions involving the proceeds of their health care fraud scheme. Specifically, they admitted that they used the proceeds of their health care fraud scheme to pay for personal expenses, such as vacations, personal income taxes, a personal residence and other items. They then caused these expenses to be falsely categorized as business expenses of GMT, thereby improperly reducing GMT’s taxable income and GMT’s corresponding tax liability, they admitted.
To date, five former GMT owners and employees have pleaded guilty to their roles in defrauding Medicare and TRICARE in this scheme. One additional former employee pleaded guilty to obstructing justice by falsifying materials that GMT prepared in response to an HHS subpoena that was served on GMT in approximately September 2012.
The FBI, IRS-CI and HHS-OIG investigated the case. Senior Litigation Counsel John A. Michelich and Trial Attorney Michael P. McCarthy of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Marivic P. David of the Districts of Guam and the Northern Mariana Islands prosecuted the case.
Guam Ambulance Company Executives Plead Guilty to Medicare and TRICARE Fraud and Money Laundering SchemeRead the Press Release
Two former owners and an employee of an ambulance services provider headquartered in Guam pleaded guilty yesterday for their roles in a health care fraud and money laundering scheme that resulted in a loss to the United States of approximately $10.8 million. This is one of the largest single Medicare ambulance fraud cases prosecuted nationwide.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Shawn N. Anderson of the Districts of Guam and the Northern Mariana Islands, Special Agent in Charge Eli S. Miranda of the FBI’s Honolulu Field Office, Special Agent in Charge Justin Campbell of IRS Criminal Investigation’s (IRS-CI) Seattle Field Office and Special Agent in Charge Timothy DeFrancesca of the U.S. Department of Health and Human Services Office of the Inspector General’s (HHS-OIG) Los Angeles Regional Office made the announcement.
Clifford P. Shoemake, 63, of Guam, Casey C. Conner, 60, of Saipan, and Nicholas A. Shoemake, 31, of Guam, the former owners and an employee, respectively, of Guam Medical Transport (GMT), pleaded guilty before U.S. District Judge Frances Tydingco-Gatewood of the District of Guam, to one count of conspiracy to commit health care fraud and one count of conspiracy to engage in monetary transactions with the proceeds of specified unlawful activity. The defendants are scheduled to be sentenced on Jan. 29, 2020.
Medicare and TRICARE are federal health benefit programs, which, under certain conditions, reimburse providers for medically necessary, non-emergency, scheduled ambulance transportation to and from dialysis treatments, provided to beneficiaries with end stage renal disease (ESRD). Ambulance services are medically necessary when provided to such beneficiaries who cannot be transported by any other means without endangering their health, or were bed confined before, during and after the transportation.
According to their admissions at the plea hearing, from approximately March 11, 2010, to approximately March 21, 2014, the defendants engaged in a conspiracy to defraud Medicare and TRICARE by submitting claims for reimbursement for medically unnecessary ambulance services that GMT provided to patients with ESRD. The defendants admitted they were aware that GMT was transporting patients who did not qualify for ambulance transportation under applicable Medicare and TRICARE regulations and guidelines, with which they had failed to familiarize themselves. Specifically, the defendants admitted they were aware that many of GMT’s patients were not bed-confined, and did not have acute medical conditions that would otherwise qualify them for ambulance transportation. As part of the scheme, the defendants directed GMT employees to remove from internal documents references to GMT patients’ ability to walk because they knew that Medicare and TRICARE would not provide reimbursement for the patients. The defendants further admitted they were aware of, but failed to address, concerns about GMT’s Medicare and TRICARE billing practices raised by other GMT employees. The conspiracy resulted in improper payments to GMT of approximately $10.8 million, the defendants admitted.
The defendants further admitted to conspiring to engage in money transactions involving the proceeds of their health care fraud scheme. Specifically, they admitted that they used the proceeds of their health care fraud scheme to pay for personal expenses, such as vacations, personal income taxes, a personal residence and other items. They then caused these expenses to be falsely categorized as business expenses of GMT, thereby improperly reducing GMT’s taxable income and GMT’s corresponding tax liability, they admitted.
To date, five former GMT owners and employees have pleaded guilty to their roles in defrauding Medicare and TRICARE in this scheme. One additional former employee pleaded guilty to obstructing justice by falsifying materials that GMT prepared in response to an HHS subpoena that was served on GMT in approximately September 2012.
The FBI, IRS-CI and HHS-OIG investigated the case. Senior Litigation Counsel John A. Michelich and Trial Attorney Michael P. McCarthy of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Marivic P. David of the Districts of Guam and the Northern Mariana Islands prosecuted the case.
Fraudster Who Created False Documents to Facilitate $396 Million Ponzi Scheme Sentenced to 14 Years in Federal PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge Richard D. Bennett today sentenced Jay B. Ledford, age 55, of Westlake, Texas and Las Vegas, Nevada to 14 years in federal prison, followed by three years of supervised release, for conspiracy to commit wire fraud, aggravated identity theft, and a money-laundering transaction, arising from a $396 million investment fraud scheme that operated from 2013 through September 2018, with an additional $260 million in attempted investments at the time of Ledford’s arrest. Judge Bennett also ordered Ledford to pay restitution in the full amount of the victims’ losses, which is at least $189,166,116. Judge Bennett will also enter an order of forfeiture, with the exact amount of forfeiture still to be determined. On October 10, 2019, Judge Bennett sentenced co-defendant Kevin B. Merrill, age 54, of Towson, Maryland, to 22 years in federal prison.
The U.S. Securities and Exchange Commission (SEC) has a pending parallel civil action in this matter.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Robert W. Manchak of the Federal Housing Finance Agency, Office of Inspector General.
“Jay Ledford created phony documents and operated a debt collection center to provide credibility to Kevin Merrill’s false claims to investors, duping them into paying millions of dollars into this Ponzi scheme,” said U.S. Attorney Robert K. Hur. “The effects of this kind of fraud can be devastating and a number of victims have lost their life savings. This sentence sends a strong message that law enforcement will root out, prosecute, and send to prison criminal fraudsters like Jay Ledford and his co-conspirators.”
According to his plea agreement, Ledford was a certified public accountant in Texas, starting his own practice in Amarillo in 1996 and later expanding to Dallas. In 1999, Ledford met Kevin Merrill in Dallas, when Merrill was a salesman for a Baltimore company that sold supplies for X-ray machines for hospitals and doctors’ practices. Ledford and Merrill became friends, attending sporting events and visiting casinos together. Ledford prepared Merrill’s taxes for several years.
“Consumer debt portfolios” are defaulted consumer debts to banks/credit card issuers, student loan lenders, and car/truck financers which are sold in batches called “portfolios” to third parties that attempt to collect on the debts. Ledford and Merrill both had businesses that collected on consumer debt or purchased consumer debt. Beginning in January 2013, Ledford and Merrill joined forces to perpetrate a Ponzi scheme to defraud investors. Specifically, Ledford and Kevin Merrill invited investors to join them in purchasing consumer debt portfolios. Ledford provided fictitious sales agreements and other documents, including false tax returns, to Merrill, knowing that Merrill was using them to induce individuals to invest with his companies, Delmarva Capital and Global Credit Recovery. For 2013, Merrill took in approximately $4.3 million from investors, while Ledford raised just over $186,000 from investors. Thereafter, Merrill’s superior sales ability caused Ledford to assume a background role, while Merrill was the “front man,” promoting the fraudulent investments to potential investors.
The conspirators falsely represented to investors that they would use the investors’ money to buy consumer debt portfolios and make money for them by (1) collecting the payments that people made on their debts or (2) selling the portfolios for a profit to other third-party debt buyers, in a practice called “flipping.” According to court documents, the victim investors included small business owners, restauranteurs, construction contractors, retirees, doctors, lawyers, accountants, bankers, talent agents, professional athletes, and financial advisors, located in Maryland, Washington, D.C., Virginia, Colorado, Texas, Illinois, New York, and elsewhere.
Ledford admitted that to induce investors to participate, he and his co-conspirators falsely represented who they were buying the debt portfolios from and how much they were paying for the portfolios, whether they were investing their own funds, and their track record of success. According to the plea agreement, sometimes there was no underlying debt portfolio purchased with the investors’ money. To conceal the truth, Ledford, created imposter companies with names similar to actual consumer debt sellers or brokers and opened bank accounts in the names of those imposter companies. In addition, to lend credibility to the transactions, Ledford created false portfolio overviews, sales agreements which used the names and forged signatures of actual employees of the sellers, created false collections reports, and falsified bank statements and merchant account reports. In late 2014, Ledford transferred employee and co-defendant Cameron Jezierski to manage debt collections for the Riverwalk and DeVille companies. DeVille had a collections center in Euless, Texas, and the conspirators began to invite prospective investors to tour Riverwalk’s office and the collections center, which added substance to their claims regarding the success of their portfolio purchasing strategy and collections efforts. In December 2017, Ledford recruited Jezierski to the criminal conspiracy because his analytical skills enabled him to contribute significantly to creating false documentation to induce investors to invest, and to conceal the mark-up Ledford and Merrill added to the purchase price charged to investors for debt portfolios.
Further, Ledford admitted that he and Merrill falsely represented that the monies the conspirators paid to investors were “proceeds” from collections and/or flipping debt portfolios, when in fact, the proceeds were paid from funds provided by other investors. The conspirators provided monthly or quarterly reports to investors regarding the “purported progress of the portfolio and its recovery,” which Ledford and Merrill created. From 2013 to 2018, the scheme to defraud took in over $396 million; the co-conspirators spent only 14% on purchasing consumer debt portfolios. At the time of their arrests, the co-conspirators were attempting to obtain an additional $260 million from investors. Ledford assisted Merrill to divert investors’ funds to purchase a home in Naples, Florida, and also helped Merrill falsify records to the bank lender. Ledford himself diverted fraud proceeds to purchase and renovate a home in Las Vegas, Nevada, to refinance a home in Texas, to gamble at casinos, to purchase luxury automobiles and jewelry, and otherwise to support a lavish lifestyle.
At today’s hearing, the government presented evidence that over the course of the scheme, Ledford used more than $42 million in investors’ funds to gamble at casinos throughout the United States. Generally, Ledford would deposit a cashier’s check with the casino, which provided Ledford with chips up to the value of the check. At the end of the gambling trip, if Ledford won, the casino would pay any winnings to Ledford by cash or check, and return the “front money” cashier’s check to Ledford. If Ledford lost at the casinos, the casino deposited the “front money” cashier’s check to cover his losses, and paid Ledford the difference by cash, check, or chips. Ledford returned over $18 million in casino wires or checks to the Ponzi scheme. Currency Transaction Reports filed by the casinos show that Ledford took $14.9 million in cash out of casinos and paid over $9 million in cash into the casinos. Over the six years of the fraud, according to casino records, Ledford had net losses of more than $16 million.
For example, on December 28, 2017, a group of investors paid over $14 million into a Merrill account to invest in credit portfolios. Of those funds, Ledford spent over $3.5 million on actual credit portfolios purchases, but he also paid Merrill, gave a bonus to Jezierski, and bought a $2.5 million cashier’s check which he gambled against at the Las Vegas Sands, home of The Venetian and The Palazzo casinos. Ledford lost over $1.5 million of the investors’ monies on that gambling trip.
Cameron R. Jezierski, age 28, of Fort Worth, Texas, previously pleaded guilty to his role in the scheme and is scheduled to be sentenced on November 14, 2019, at 3:00 p.m. Kevin Merrill’s wife, Amanda Merrill, age 30 of Towson, Maryland, pleaded guilty on October 9, 2019, to conspiracy to remove and conceal assets in violation of court orders, and is scheduled to be sentenced on January 22, 2020, at 3:00 p.m. Merrill and Ledford have been detained since their arrest on September 18, 2018, and Amanda Merrill and Cameron Jezierski are released under the supervision of U.S. Pretrial Services.
United States Attorney Robert K. Hur commended the FBI in Baltimore, Dallas, Las Vegas and Tampa; the Federal Housing Finance Agency, Office of the Inspector General; and the SEC for their work in this investigation. Mr. Hur thanked Assistant U.S. Attorneys Joyce K. McDonald and Martin J. Clarke, who are prosecuting the criminal case.
# # #
Four Cuban Nationals Defraud West Virginians and Banks with Fraudulent Credit CardsRead the Press Release
CHARLESTON, W.Va. – Four Cuban nationals pled guilty to possessing more than 15 fraudulent credit cards with the intent to defraud West Virginians and banks announced United States Attorney Mike Stuart.
“Defrauding our citizens and businesses will not be tolerated,” said United States Attorney Mike Stuart. “Unfortunately, cases like this are on the rise. We are working side by side with law enforcement to identify and prosecute fraudsters.”
Daniel Collazo, 28, Yaisel Oquendo-Caballero, 26, Ranniel Acosta, 28, all of Florida and Yaidelys Acosta, 23, of Indiana, pled guilty to possessing more than 15 altered credit cards they used or intended to use to defraud West Virginians and banks.
Collazo and Oquendo-Cabellero admitted that on December 20, 2019, law enforcement caught them in the act as they used an altered credit card at Rite Aid defrauding a West Virginian citizen. Law enforcement caught them with more than 15 altered cards in their possession.
Ranniel and Yaidelys Acosta admitted that between November 19, 2018 and December 20, 2018, they possessed more than 15 altered credit cards with the intent to defraud West Virginia citizens. The Acostas used the altered cards at Sam’s, Wal-Mart and 7-11 stores in the Kanawha County area.
Each defendant faces up to 10 years in prison and three years of supervised release when sentenced on March 10, 2020.
The United States Secret Service, the Charleston Police Department, and the South Charleston Police Department conducted the investigation. Senior United States District Judge David A. Faber presided over the hearing. Assistant United States Attorney Christopher Arthur is handling the prosecution.
Follow us on Twitter: SDWVNews and USAttyStuart
###
Former UVA Football Player Convicted of $10 Million FraudRead the Press Release
RICHMOND, Va. – A federal jury convicted a former University of Virginia football player late yesterday of his role in a $10 million fraud scheme.
According to court records and evidence presented at trial, Merrill Robertson, Jr., 39, of Chesterfield, started Cavalier Union Investments, LLC, and Black Bull Wealth Management, LLC, with co-conspirator Sherman Carl Vaughn. From 2008-2016, Robertson and Vaughn solicited individuals to invest money in private investment funds that they managed, as well as distinct investment opportunities that they proposed. Robertson identified potential investors through various contacts; including contacts he developed playing football at Fork Union Military Academy, the University of Virginia, and in the National Football League, while Vaughn focused on developing investment opportunities.
Among other things, Robertson led investors to believe he was an experienced investment advisor, that his company was qualified to serve as a custodian of retirement accounts, that investor money was deposited into individual tax-deferred retirement accounts, and that investor money was secured by tangible cash-producing assets owned by his company.
As a result of this conspiracy, Robertson and Vaughn fraudulently obtained more than $10 million from over 60 investors, spending much of the money on their own personal living expenses, including mortgage and car payments, school tuitions, spa visits, restaurants, department stores, and vacations.
By 2015, Robertson and his partner had spent most of the money they collected from investors. And Robertson was unable to raise new investor capital. So Robertson approached Cavalier investors and other friends and offered to help them get loans in exchange for a portion of the loan proceeds. Mr. Robertson and others then caused falsified loan applications to be submitted to various banks and credit unions on behalf of these individuals, which included false statements about the borrower’s personal financial status, the real purpose of the loan, and whether the loan was secured by collateral. In doing so, Robertson and others obtained nearly $250,000 by submitting falsified loan applications to at least 5 financial institutions.
Robertson was convicted of conspiracy, mail fraud, wire fraud, bank fraud, and money laundering. He faces a maximum penalty of 330 years in prison when sentenced on Jan. 3, 2020. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
U.S. District Judge John A. Gibney, Jr., accepted the verdict. Assistant U.S. Attorneys Katherine Lee Martin, Stephen E. Anthony, and Kenneth Simon are prosecuting the case.
The FBI, U.S. Postal Inspection Service, and IRS – Criminal Investigations investigated 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 is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:16-cr-133.
Former U.S. Navy Airman Apprentice Sentenced to More Than 19 Years for Attempting to Entice A 13-Year-Old and 15-Year-Old for SexRead the Press Release
Jacksonville, Florida – U.S. District Judge Marcia Morales Howard has sentenced Erold Martin Panopio (25, Jacksonville) to 19 years and 7 months in federal prison for attempted enticement of two minors to engage in sexual conduct. Panopio had pleaded guilty on April 24, 2019.
According to court documents, in October 2018, law enforcement learned of online communications of a sexual nature between Panopio and a 15-year-old girl. A forensic analysis of the girl’s phone revealed that Panopio had filmed himself engaging in sexual acts with two 15-year-old girls earlier that month. A Homeland Security Investigations agent assumed the identity of one of the girls and began communicating with Panopio. Panopio told the undercover agent, posing as the child, all of the sexual acts that he wanted to engage in with the child and a “friend” of the child who was 13 years old. Panopio traveled from his home in Jacksonville to Clay County, where he intended to meet the 15-year-old and 13-year-old girls for sex, and was subsequently arrested. During an interview with law enforcement, Panopio admitted that he had traveled for the purpose of meeting the children to have sex with them. He also acknowledged having sex with the 15-year-old on a prior occasion.
A search of Panopio’s phone revealed chats from July and August 2018 with another 15-year-old girl with whom he had previously engaged in sexual conduct. In those chats, Panopio repeatedly demanded nude photographs, threatened to appear at the child’s house, and threatened to tell the child’s parents if the child would not have sex with him again or send nude photographs of herself.
“This predator used social media applications to groom minor girls and magnify their abuse,” said HSI Tampa Special Agent in Charge James C. Spero. “But now, thanks to our HSI special agents and law enforcement partners at the Clay County Sheriff’s Office, he will be held accountable for his crimes.”
This case was investigated by the Clay County Sheriff’s Office and Homeland Security Investigations. It is was prosecuted by Assistant United States Attorney Kelly S. Karase.
This is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Former St. Vincent Healthcare nurse sentenced in pain pill investigationRead the Press Release
BILLINGS—An ex-St. Vincent Healthcare nurse who admitted swapping a patient’s pain pills for an over the counter medication, leaving the patient in pain, was sentenced today to four years of probation, U.S. Attorney Kurt Alme said.
Shelia Marie White, 61, of Billings, pleaded guilty in June to tampering with a consumer product.
U.S. District Judge Dana L. Christensen presided.
“Taking a patient’s pain medication to feed an opioid addiction not only puts the patient’s health at risk but also violates the law. Ms. White’s case sends the message that healthcare professionals who use their position to steal opioids will be prosecuted,” U.S. Attorney Alme said.
“Patients rely on the knowledge that they will receive FDA-approved medications to manage their pain,” said Special Agent in Charge Lisa L. Malinowski, FDA Office of Criminal Investigations, Los Angeles Field Office. “We will continue to pursue and bring to justice healthcare professionals who put their patients’ health at risk by tampering with their pain medications.”
In court records filed in the case, the prosecution said White was a nurse at St. Vincent Healthcare when she replaced packaged hydrocodone, a prescription strength pain reliever, with generic over-the-counter acetaminophen on Dec. 6, 2018. The switch was discovered because one of her patients noticed that she was being given different pills by White than by the other nurses. The patient told officials she was in considerably more pain during White’s shift than other nurses’ shifts.
When confronted by a manager and the human resources director, White initially said she could not understand why the patient was accusing her, but then admitted she had taken the patient’s pain pills. White said she used the hydrocodone pills.
White also admitted to law enforcement agents that she had replaced the hydrocodone pills with an over-the-counter medication and had become addicted to the pills.
Assistant U.S. Attorney Tom Godfrey prosecuted the case, which was investigated by the Food and Drug Administration.
XXX
Former Signal Peak Energy mine manager sentenced in wire fraud conspiracyRead the Press Release
BILLINGS—A former manager at the Signal Peak Energy coal mine in Musselshell County was sentenced today to two years of probation and ordered to forfeit an RV and a Rolex watch for his role in a conspiracy to defraud the company of about $2.3 million, U.S. Attorney Kurt Alme said.
Zachary Madison Ruble, 40, of Billings, pleaded guilty in May to conspiracy to commit wire fraud.
Chief U.S. District Judge Dana Christensen presided. Judge Christensen also ordered the forfeiture of a 2016 Thor Vegas RV and a Rolex Oyster Perpetual watch.
In court records filed in the case, the prosecution said Ruble, who was the surface manager at Signal Peak Energy’s coal mine near Roundup, conspired with others to buy coal mining equipment from Peter’s Equipment Company, located in Virginia, knowing that PEC would not actually provide the equipment to Signal Peak.
In March 2017, Ruble reported to Larry Price, Jr., the mine’s vice president of Surface Operations, and both men were involved in budgeting and requesting funds for surface activities. Ruble and Price fraudulently induced Signal Peak to buy equipment from PEC, which then funneled the money back to Price through an account registered to 3 Solutions, a company Price controlled. Ruble knew the transaction was fraudulent and helped accomplish it by accepting several fraudulent invoices from PEC and submitting them for payment to Signal Peak’s controller, who was responsible for disbursing the money.
The controller issued a series of checks to PEC totaling $2,396,134. The entire amount was a fraud against Signal Peak and most of the money was spent illegitimately by Price and others associated with him. For Ruble’s participation in the scheme, Price gave him a $25,000 check and a 2016 Thor Vegas RV.
Price has pleaded guilty to charges in the case and is awaiting sentencing.
Assistant U.S. Attorneys Colin Rubich, Zeno Baucus and Tim Tatarka prosecuted the case, which was investigated by the FBI.
XXX
Former Pain Foundation Founder and CEO Who Embezzled $1.5 Million Sentenced to PrisonRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that PAUL GILENO, 47, of Brewster, New York, was sentenced today by U.S. District Judge Victor A. Bolden in Bridgeport to 12 months and one day of imprisonment, followed by two years of supervised release, for embezzling approximately $1.5 million from a Connecticut nonprofit organization, and for failing to pay federal income taxes.
According to court documents and statements made in court, Gileno was the founder and Chief Executive Officer of the United States Pain Foundation, a Middletown-based nonprofit organization designed to find support and resources for individuals with pain issues. Between approximately 2015 and 2017, Gileno embezzled more than $1.5 million from the foundation. He also failed to pay more than $532,943 in federal income taxes on the embezzled income, and other income, for the 2015 through 2017 tax years.
Gileno is required to pay full restitution to both the United States Pain Foundation and the Internal Revenue Service, as well as tax penalties and interest.
On June 17, 2019, Gileno pleaded guilty to one count of wire fraud and one count of tax evasion.
Gileno, who is released on bond, was ordered to report to prison on January 6, 2020.
This matter was investigated by the Internal Revenue Service – Criminal Investigation Division and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Douglas P. Morabito.
Former Olney Police Chief Pleads Guilty to Threatening Man at GunpointRead the Press Release
The former Acting Police Chief of Olney, Texas has pleaded guilty to threatening an individual at gunpoint following an investigation by the FBI Dallas Field Office, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
Former Acting Chief Robert Michael Cross, 35, pleaded guilty on Tuesday to deprivation of rights under color of law before U.S. District Judge Reed C. O’Connor.
“This was a despicable abuse of power,” said U.S. Attorney Erin Nealy Cox. “The public should be assured that we will not hesitate to hold the defendant accountable.”
In plea papers, Mr. Cross admitted that shortly after arresting two individuals for aggravated robbery offenses, he coerced them into engaging in conduct for his own personal benefit, promising to have the criminal cases against them dismissed if they complied with his demands.
About a month after the arrest, on Dec. 20, 2017, he took them out in his vehicle to eat dinner and catch a movie. That evening, he brandish a pistol, threatening one of the individuals with bodily injury and willfully depriving him of the Constitutional right to be free from unreasonable force by a law enforcement officer.
Mr. Cross now faces up to 10 years in federal prison. Sentencing is set for March 9, 2020.
The Federal Bureau of Investigation’s Dallas Field Office and the Texas Rangers conducted the investigation. Assistant U.S. Attorney Robert Boudreau is prosecuting the case.
The former Acting Police Chief of Olney, Texas has pleaded guilty to threatening an individual at gunpoint following an investigation by the FBI Dallas Field Office, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
Former Acting Chief Robert Michael Cross, 35, pleaded guilty on Tuesday to deprivation of rights under color of law before U.S. District Judge Reed C. O’Connor.
“This was a despicable abuse of power,” said U.S. Attorney Erin Nealy Cox. “The public should be assured that we will not hesitate to hold the defendant accountable.”
In plea papers, Mr. Cross admitted that shortly after arresting two individuals for aggravated robbery offenses, he coerced them into engaging in conduct for his own personal benefit, promising to have the criminal cases against them dismissed if they complied with his demands.
About a month after the arrest, on Dec. 20, 2017, he took them out in his vehicle to eat dinner and catch a movie. That evening, he brandish a pistol, threatening one of the individuals with bodily injury and willfully depriving him of the Constitutional right to be free from unreasonable force by a law enforcement officer.
Mr. Cross now faces up to 10 years in federal prison. Sentencing is set for March 9, 2020.
The Federal Bureau of Investigation’s Dallas Field Office and the Texas Rangers conducted the investigation. Assistant U.S. Attorney Robert Boudreau is prosecuting the case.
Former Missouri Hospital Executive Pleads Guilty to Pass-Through Billing Scheme that Caused over $100 Million in LossesRead the Press Release
The former CEO of a Missouri hospital pleaded guilty today for his role in a pass-through billing scheme in which the hospital was used to submit fraudulent claims for toxicology and blood testing, resulting in multiple insurance companies and the Missouri Medicaid program paying over $100 million in claims.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Maria Chapa Lopez of the Middle District of Florida, U.S. Attorney Timothy A. Garrison of the Western District of Missouri, Special Agent in Charge Rachel Rojas of the FBI’s Jacksonville Field Office, Special Agent in Charge Timothy R. Langan Jr., of the FBI’s Kansas City Field Office, Deputy Assistant Inspector General for Investigations Thomas W. South of the U.S. Office of Personnel Management Office of the Inspector General (OPM-OIG), Special Agent in Charge Rafiq Ahmad of the U.S. Department of Labor-Office of Inspector General (DOL-OIG) and Special Agent in Charge Basil P. Demczak of the Amtrak Office of Inspector General (Amtrak-OIG) made the announcement.
David Lane Byrns, 62, of Lighthouse Point, Florida, the former CEO of Putnam County Memorial Hospital (Putnam), of Unionville, Missouri, pleaded guilty before U.S. Magistrate Judge James R. Klindt of the Middle District of Florida to a one-count information charging him with conspiracy to commit health care fraud. The information was filed in the Western District of Missouri and the case was transferred to the Middle District of Florida by consent for the entry of Byrns’ plea. As part of his guilty plea, Byrns agreed to a forfeiture judgment of $5,100,000. Sentencing before U.S. District Judge Timothy Corrigan of the Middle District of Florida has not yet been scheduled.
According to admissions made as part of his guilty plea, in 2016, Byrns and another individual took control of Putnam, a rural hospital in Missouri, through a management agreement with the hospital’s board, and Byrns was installed as the hospital’s CEO. Byrns and others, including a laboratory owner, then arranged for urine drug tests (UDTs) and blood tests to be performed on a massive scale at diagnostic testing laboratories outside Missouri, on behalf of individuals who were not Putnam patients and who otherwise had no connection to Putnam. To obtain samples for testing, Byrns and his co-conspirators entered into arrangements with marketers, who solicited samples from substance abuse treatment centers, sober living homes, physicians’ offices and other sources throughout the United States, in exchange for a portion of the insurance reimbursements. Many of the tests conducted were medically unnecessary. Byrns and his co-conspirators billed the tests to private insurers and to the Missouri Medicaid program using Putnam’s billing credentials, in order to take advantage of Putnam’s favorable reimbursement rates under its in-network contracts with the insurers, while failing to identify the fact that most testing had not taken place at Putnam, Byrns admitted.
During a 15-month period, Byrns and his co-conspirators caused private insurers and the Missouri Medicaid Program to reimburse Putnam approximately $114 million for the laboratory tests, most of which was shared among Byrns and his co-conspirators, including the laboratories, marketers and billing companies involved in the scheme, Byrns admitted.
The case was investigated by the FBI’s Jacksonville Field Office, the Jefferson City, Missouri Resident Agency of the FBI’s Kansas City Field Office, OPM-OIG, DOL-OIG and Amtrak OIG. Trial Attorneys Gary A. Winters and James V. Hayes of the Criminal Division’s Fraud Section, Assistant U.S. Attorney Tysen Duva of the Middle District of Florida and Assistant U.S. Attorney Lucinda Woolery of the Western District of Missouri are prosecuting the case.
The Department wishes to acknowledge the assistance of the Missouri State Auditor’s Office and the Missouri Attorney General’s Medicaid Fraud Control Unit.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Former Missouri Hospital Executive Pleads Guilty to Pass-Through Billing Scheme That Caused over $100 Million in LossesRead the Press Release
WASHINGTON – The former CEO of a Missouri hospital pleaded guilty today for his role in a pass-through billing scheme in which the hospital was used to submit fraudulent claims for toxicology and blood testing, resulting in multiple insurance companies and the Missouri Medicaid program paying over $100 million in claims.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Maria Chapa Lopez of the Middle District of Florida, U.S. Attorney Timothy A. Garrison of the Western District of Missouri, Special Agent in Charge Rachel Rojas of the FBI’s Jacksonville Field Office, Special Agent in Charge Timothy R. Langan Jr., of the FBI’s Kansas City Field Office, Deputy Assistant Inspector General Thomas W. South of the U.S. Office of Personnel Management-Office of Inspector General (OPM-OIG), Special Agent in Charge Rafiq Ahmad of the U.S. Department of Labor-Office of Inspector General (DOL-OIG) and Special Agent in Charge Basil P. Demczak of the Amtrak Office of Inspector General (Amtrak-OIG) made the announcement.
David Lane Byrns, 62, of Lighthouse Point, Florida, the former CEO of Putnam County Memorial Hospital (Putnam), of Unionville, Missouri, pleaded guilty before U.S. Magistrate Judge James R. Klindt of the Middle District of Florida to a one-count information charging him with conspiracy to commit health care fraud. The information was filed in the Western District of Missouri and the case was transferred to the Middle District of Florida by consent for the entry of Byrns’ plea. As part of his guilty plea, Byrns agreed to a forfeiture judgment of $5,100,000. Sentencing before U.S. District Judge Timothy Corrigan of the Middle District of Florida has not yet been scheduled.
According to admissions made as part of his guilty plea, in 2016, Byrns and another individual took control of Putnam, a rural hospital in Missouri, through a management agreement with the hospital’s board, and Byrns was installed as the hospital’s CEO. Byrns and others, including a laboratory owner, then arranged for urine drug tests (UDTs) and blood tests to be performed on a massive scale at diagnostic testing laboratories outside Missouri, on behalf of individuals who were not Putnam patients and who otherwise had no connection to Putnam. To obtain samples for testing, Byrns and his co-conspirators entered into arrangements with marketers, who solicited samples from substance abuse treatment centers, sober living homes, physicians’ offices and other sources throughout the United States, in exchange for a portion of the insurance reimbursements. Many of the tests conducted were medically unnecessary. Byrns and his co-conspirators billed the tests to private insurers and to the Missouri Medicaid program using Putnam’s billing credentials, in order to take advantage of Putnam’s favorable reimbursement rates under its in-network contracts with the insurers, while failing to identify the fact that most testing had not taken place at Putnam, Byrns admitted.
During a 15-month period, Byrns and his co-conspirators caused private insurers and the Missouri Medicaid Program to reimburse Putnam approximately $114 million for the laboratory tests, most of which was shared among Byrns and his co-conspirators, including the laboratories, marketers and billing companies involved in the scheme, Byrns admitted.
The case was investigated by the FBI’s Jacksonville Field Office, the Jefferson City, Missouri Resident Agency of the FBI’s Kansas City Field Office, OPM-OIG, DOL-OIG and Amtrak OIG. Trial Attorneys Gary A. Winters and James V. Hayes of the Criminal Division’s Fraud Section, Assistant U.S. Attorney Tysen Duva of the Middle District of Florida and Assistant U.S. Attorney Lucinda Woolery of the Western District of Missouri are prosecuting the case.
The Department wishes to acknowledge the assistance of the Missouri State Auditor’s Office and the Missouri Attorney General’s Medicaid Fraud Control Unit.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Former Mexican governor extradited on money laundering chargesRead the Press Release
CORPUS CHRISTI, Texas – A former Coahuila, Mexico, governor is set to appear in federal court to face charges for his role in a money laundering scheme to enrich himself and others through bribery, misappropriation and theft of public funds, announced U.S. Attorney Ryan K. Patrick.
A federal grand jury returned a superseding indictment against Jorge Juan Torres-Lopez, 65, Feb. 8, 2017. He has been in custody in Mexico since Feb. 5, 2019. Today, he was returned to the United States and is set for his initial appearance before U.S. Magistrate Judge B. Janice Ellington in Corpus Christi tomorrow at 2 p.m.
Torres-Lopez is charged in the money laundering scheme that includes offenses against a foreign nation involving bribery of a public official and misappropriation, theft and embezzlement of public funds by or for the benefit of a public official. He is also charged with bank fraud and wire fraud.
The case is related to previous civil litigation in which authorities seized two foreign bank accounts located in Bermuda. Torres-Lopez and Hector Javier Villarreal-Hernandez, his secretary of finance, allegedly opened the accounts in order to secrete stolen monies.
Sun Secured Advantage and N.T. Butterfield and Son Limited held the accounts which had more than $2 million each. As its basis for forfeiture, the government contended the funds were involved in a money laundering transaction, the property constituted or was derived from proceeds traceable to offenses including bribery of a public official or the misappropriation, theft or embezzlement of public funds by or for the benefit of a public official.
Torres-Lopez and Villarreal-Hernandez were the account holders and allegedly transferred stolen Coahuila finances from Mexico into an account in Brownsville. They later transferred the money to the Bermuda accounts, according to court documents. Villarreal-Hernandez, 48, of Saltillo, Coahuilla, Mexico, has been convicted in the Southern and Western Districts of Texas for money laundering offenses and is awaiting sentencing.
The charges allege the Mexican government employed Torres-Lopez from 1994 to 2011. His roles allegedly included work as the general director of Promotion and Development as secretary of Finance for the state of Coahuila, municipal president of Saltillo and interim governor of Coahuila. In approximately December 2005, Villarreal-Hernandez was appointed as undersecretary of Program and Budget for the state of Coahuila. At the time, Torres-Lopez was his supervisor. In July 2008, Villarreal-Hernandez was appointed to the position of secretary of Finance for Coahuila, where he remained until his resignation in August 2011, according to court documents.
During his time in office, Mexican authorities reportedly began investigating Villarreal-Hernandez. While this commenced, U.S. officials uncovered evidence that in 2008 both Torres-Lopez and Villarreal-Hernandez allegedly opened accounts at J.P. Morgan Chase Bank in Brownsville. The charges allege they used these accounts to move monies to offshore accounts in Bermuda. The two used stolen funds from the Mexican federal government and the state of Coahuila.
If convicted of money laundering, Torres-Lopez faces up to 20 years in federal prison and a possible $500,000 fine, twice the value of the monetary instrument or funds involved in the transaction or both. Bank fraud and wire fraud carry 30 and 20-year-terms of imprisonment, respectively, as well as up to $1 million and $250,000 in potential fines.
Multiple agencies are conducting the Organized Crime Drug Enforcement Task Force investigation dubbed Operation Politico Junction” to include Drug Enforcement Administration, IRS - Criminal Investigation, Immigration and Customs Enforcement’s Homeland Security Investigations, FBI and U.S. Marshals Service. As part of the investigation, the United States sought the assistance of the Prosecutor General of the Republic of Mexico via the Mutual Legal Assistance Treaty in effect between the United States and Mexico. The Department of Justice’s Office of International Affairs also provided assistance.
Assistant U.S. Attorneys Julie K. Hampton, Jon Muschenheim and Lance A. Watt are prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Former Jacksonville Beach Doctor’s Office Employee Pleads Guilty to Opioid Distribution ConspiracyRead the Press Release
Jacksonville, Florida – Rhiannon Rader (34, Fern Park) has pleaded guilty to conspiracy to distribute oxycodone, hydrocodone, and alprazolam (also known as Xanax). She faces a maximum penalty of 20 years in federal prison. A sentencing date has not yet been set.
According to the plea agreement, as an employee in a Jacksonville Beach physician’s office, Rader had access to her employer’s prescription pad. Without her employer’s knowledge, Rader sold fraudulent prescriptions for controlled substances, including oxycodone, hydrocodone, and Xanax to drug dealers. She also filled fraudulent prescriptions for drugs in her own name.
Pharmacy records show that between March and September 2016, in Duval and Nassau Counties, 44 different pharmacies filled approximately 116 fraudulent prescriptions for 46 individuals who were not actually patients of Rader’s employer. Records from multiple pharmacies show that on certain occasions, when pharmacy employees called the physician’s office to confirm whether such prescriptions were genuine, Rader falsely confirmed that the prescriptions were legitimate.
As part of her guilty plea, Rader admitted that her actions resulted in the illegal distribution of nearly 7,000 doses of controlled substances.
Rader is the eighth member of this drug distribution ring to plead guilty in federal court. Christopher John Bates (27, Nassau County), Christopher Lee Calhoun Jr. (24, Fernandina Beach), Christopher Oquendo Martinez (27, Baldwin, Georgia), Otis Kirkland (32, Jacksonville), Reginald Ray (33, Jacksonville), LaRhonda Lukes (31, Jacksonville), and Jon’quill Holmes (30, Jacksonville) have previously pleaded guilty for their involvement in this case.
This case was investigated by the Jacksonville Sheriff’s Office, the Nassau County Sheriff’s Office, the Drug Enforcement Administration, and the State Attorney’s Office for the Fourth Judicial Circuit. It is being prosecuted by Assistant United States Attorney Michael J. Coolican.
Former Iowa Army National Guard Member Sentenced to Federal Prison After Buying Guns with Fraudulent ChecksRead the Press Release
A Marion man who lied about his drug use to the Linn County Sheriff in order to obtain a permit to carry, and then purchased multiple guns with fraudulent checks, was sentenced October 28, 2019, to nearly three years in federal prison.
Edinton Grugbay Wright, age 23, from Marion, Iowa, originally from Monrovia, Liberia, received the prison term after a May 9, 2019, guilty plea to one count of a possessing a firearm as a drug user.
Evidence presented at multiple court hearings showed that, in September 2017, Wright applied for a permit to carry weapons from the Linn County Sheriff. Wright lied to the Sheriff by falsely stating that he had not unlawfully used any controlled substances in the previous twelve months. In truth, Wright had used marijuana while a member of the Iowa Army National Guard. The Iowa Army National Guard later discharged Wright in part because of his drug use.
Between October 2017 and July 2018, Wright used the fraudulently obtained gun permit to purchase seven firearms from Linn County businesses. Wright also used phony checks to fund the purchases.
On October 21, 2018, Wright was involved in a domestic dispute with his girlfriend in Cedar Rapids. While arresting Wright on an unrelated warrant in state court, law enforcement officers found a gun and a small amount of marijuana on his person. In the course of the investigation, officers recovered all but one of the seven guns, which Wright often pawned shortly after purchasing them.
In March 2019, after a grand jury indicted Wright, officers arrested him on a warrant. Wright was driving a rental car and attempting to pass another fraudulent check at a local financial institution at the time of his arrest. Unbeknownst to officers, Wright had a gun under the seat of his rental car. In jail calls after his arrest, Wright asked his girlfriend to work with his mother to retrieve the gun before the rental car company found it. Wright also spoke with a federal felon about selling the gun to the felon for $300.
Wright was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams. Wright was sentenced to 33 months’ imprisonment. He was ordered to make $900 in restitution. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Wright is being held in the United States Marshal’s custody until he can be transported to a federal prison. Wright was detained shortly after his release in federal court after violating the terms of his pretrial release. Among other things, Wright violated a no contact order and repeatedly had contact with his girlfriend against the court’s order not to do so. In April 2019, officers responded to an incident in which defendant was driving a car erratically near Westdale in Cedar Rapids, and his girlfriend was shouting for help out the car’s window and claiming the Wright was assaulting her.
The case was prosecuted by Assistant United States Attorney Tim Vavricek and investigated by the Linn County Sheriff’s Office and Homeland Security Investigations.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-CR-34.
Follow us on Twitter @USAO_NDIA.
Former Coca-Cola employee charged with embezzlementRead the Press Release
ATLANTA - Anne Gronek-Gibbs has been arraigned on federal charges of wire fraud for embezzling hundreds of thousands of dollars from the Coca-Cola Company.
“The defendant used her employer’s money to pay for trips, jewelry and expensive hand-bags,” said U.S. Attorney Byung J. “BJay” Pak. “Employees who are trusted with access to corporate funds are not entitled to use them to enrich themselves. This case is a reminder that all entities should have strong internal controls and a robust compliance program to prevent this type of fraud.”
“When someone is elevated to a position of leadership in a company, it is a sign of that company’s trust in the integrity and honesty of the person chosen to lead,” said Special Agent in Charge of FBI Atlanta, Chris Hacker. “When someone violates that trust and abuses their position, as is alleged in these charges, the FBI stands ready to hold them accountable.”
According to U.S. Attorney Pak, the charges, and other information presented in court: Gronek-Gibbs was a sales director who allegedly used her position to obtain personal goods and services from Coca-Cola Company suppliers and had the company pay for those goods and services. She ordered luxury goods, tickets, and gift cards and also booked first class travel, and had Coca-Cola pay for luxury hotel accommodations for personal trips. Gronek-Gibbs modified electronic versions of quotes, purchase orders, and invoices from vendors which she then submitted to Coca-Cola for payment. Ultimately, Gronek-Gibbs purchased hundreds of thousands of dollars’ worth of gift cards, jewelry, handbags, and purses using this system and, all told, embezzled over $450,000.
Anne Gronek-Gibbs, 41, of Atlanta, Georgia, was arraigned before U.S. Magistrate Judge Christopher C. Bly. The government filed an information charging Gronek-Gibbs on October 28, 2019.
The Federal Bureau of Investigation is investigating this case with assistance from the Atlanta Police Department Major Fraud Unit.
Assistant U.S. Attorney Christopher J. Huber, Deputy Chief of the Complex Frauds Section, is prosecuting the case.
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.
Former City of New Orleans Building Inspector Pleads GuiltyRead the Press Release
NEW ORLEANS - U.S. Attorney Peter G. Strasser announced today that KEVIN RICHARDSON age 56, of New Orleans, pleaded guilty today before United States District Judge Susie Morgan, to one count of violating Title 18, United States Code, Sections 1952(a)(3) and 2, use of an interstate facility with intent to carry on unlawful activity.
According to the court documents, RICHARDSON was employed as a building inspector for the City of New Orleans and utilized the internet-based City of New Orleans’ LAMA system to alter and/or delete city documents and submit material information. He solicited and accepted approximately $65,000 in bribe payments from individuals seeking favorable inspection reports and certificates of completion for properties that did not comply with the city and state building codes and for properties that had not been inspected. He also paid bribe money to a City of New Orleans permit analyst for the issuance of permits without proper documentation and plan review.
RICHARDSON faces a maximum term of imprisonment of five (5) years, a fine of not more than $250,000, three years supervised release following any term of imprisonment, and a $100 special assessment fee. He is scheduled to be sentenced on February 4, 2020.
This matter was handled by the City of New Orleans Office of Inspector General, Housing and Urban Development, Office of Inspector General, and the Department of Homeland Security, Office of Inspector General. Assistant United States Attorney Tracey N. Knight is prosecuting the matter.
Former Camden County Public Service Authority Executive Director pleads guilty to tax evasionRead the Press Release
BRUNSWICK, GA: The former executive director of the Camden County Public Service Authority has admitted misappropriating funds intended for payment of employees’ federal payroll taxes.
Willliam Brunson, 52, of Kingsland, Ga., entered a guilty plea to one count of Tax Evasion in U.S. District Court in Brunswick, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. The charge carries a penalty of up to five years in prison, along with fines, restitution and supervised release upon completion of any prison sentence. There is no parole in the federal system.
“Public employees in high places raking ill-gotten gains into their own pockets from taxpayers creates public distrust,” said U.S. Attorney Christine. “William Brunson’s greed destroyed a lot of goodwill, and fuels the cynicism and distrust that unfairly stains public service all too often.”
According to court documents and testimony, Brunson was responsible for paying over to the Internal Revenue Service employment taxes on behalf of the Public Service Authority (PSA). Federal taxes were withheld from employees’ paychecks from 2014 to 2016, but Brunson failed to remit more than $677,000 that was due to the IRS. In addition to not filing his personal tax returns during that period, Brunson also used a Camden County PSA credit card and other funds for his personal use, including the purchase of antique cars and car parts.
Brunson was terminated from the PSA in May 2018 after an audit of PSA finances and an investigation by the Georgia Bureau of Investigation (GBI).
“Corruption involving public officials will not be tolerated in the state of Georgia,” said Vic Reynolds, Director of the GBI. “It is essential that violators like Brunson be held accountable for these types of crimes. The GBI is fully committed to working with our federal partners to conduct public corruption investigations.”
“Brunson betrayed the public’s trust for personal gain. Instead of helping the community, Brunson was enriching himself at the expense of the taxpayers whom he was to serve. As a result of his greed, he must now be held accountable for his crimes in order to restore public trust,” said Thomas J. Holloman III, Special Agent in Charge of the IRS-Criminal Investigation, Atlanta Field Office. “IRS-CI will continue to leverage its skilled workforce in partnership with the U.S. Attorney’s Office to eradicate public corruption by recommending prosecution of any government employee involved in criminal activity under the guise of serving the public.”
“In our mission to protect U.S. citizens, nothing is more disturbing than when public officials abuse their positions by stealing from the taxpayers they serve,” said Special Agent in Charge of FBI Atlanta Chris Hacker. “Hopefully, holding Brunson accountable for his greed, will help regain the public’s trust that was eroded by his actions.”
The case was investigated by the Internal Revenue Service, the FBI and the GBI, and prosecuted by the U.S. Attorney’s Office for the Southern District of Georgia.