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29 October 2019
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.
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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.
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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.
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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.
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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.
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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.
Former Bureau of Prisons Employee Sentenced to Five Years in Prison for Soliciting a BribeRead the Press Release
TUCSON, Ariz. - On October 24, 2019, Jessica Diane Ferrell, 34, of Tucson, Arizona, was sentenced by United States District Judge James A. Soto to 60 months in prison to be followed by three years of supervised release. Ferrell had previously pleaded guilty to Solicitation of a Bribe and Falsification of Records.
In March 2016, Ferrell, then an employee at the FCC Tucson Bureau of Prisons Facility, sought an inmate’s assistance to arrange the murder of her former romantic partner. In exchange for the inmate’s assistance, Ferrell agreed to provide contraband to the inmate in violation of her duty as a prison employee. To facilitate the murder, Ferrell provided a photograph, a map to the former romantic partner’s home, and other identifying information to the inmate.
On March 30, 2016, Ferrell received a list of contraband desired by the inmate. Approximately six hours later, Ferrell changed her mind and reported to her supervisor at the facility that she had received the inmate’s contraband request, but did not reveal her prior agreement with the inmate to her supervisor. Nor did Ferrell take any action to protect or notify her former partner.
“Ferrell solicited an inmate to help her carry out a deadly hit on her ex-romantic partner, in exchange for bribes of contraband. As a result of the OIG’s investigative work, her plan was thwarted. Because of this successful prosecution she will rightfully serve 5 years in prison, where she will not be able to further victimize her ex-romantic partner or endanger the public,” said Sandra D. Barnes, Special Agent in Charge of the Department of Justice Office of the Inspector General Denver Field Office.
The Department of Justice Office of the Inspector General conducted the investigation. The prosecution was handled by the Public Integrity Section of the U.S. Attorney’s Office for the District of Arizona.
Former Administrator of Texarkana Assisted Living Facility Guilty of Federal ViolationsRead the Press Release
TEXARKANA, Texas – A 43-year-old Little Rock, AR man has pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.
Antonio Otero pleaded guilty to an Information charging him with equity skimming today before U.S. Magistrate Judge Barry A. Bryant.
According to information presented in court, from before 2011 until October 2015, Otero was the administrator of the Magnolia Alzheimer’s Assisted Living facility in Texarkana, Texas, and was instrumental in the founding and operation of the facility. In order to secure millions of dollars in necessary funding, Otero obtained a loan that was insured by the U.S. Department of Housing and Urban Development (HUD.) The HUD insured loan provided a favorable interest rate and did not require the owners of the Magnolia to take personal responsibility for the loan in the event of a default. Instead, HUD would suffer the financial loss in the event that the Magnolia defaulted on the loan. As a condition of this federal benefit, Otero and the owners of the Magnolia agreed to be bound by a regulatory agreement with HUD that prohibited them from removing equity from the Magnolia unless the loan was being paid and the Magnolia had surplus cash.
Instead of paying the HUD insured loan, Otero engaged in a scheme to skim equity from the Magnolia. For example, Otero took money from the Magnolia to pay for $3,952 of camera equipment, a $3,247 watch, $2,520 in landscaping for his personal residence, a $27,408 personal mortgage payment, a $12,750 down payment on a personal vehicle, and $1,540 tickets to a Dallas Cowboys football game. Additionally, he took money from the Magnolia and gave it to other individuals, including $13,000 for cosmetic surgery, $5,500 for a loan repayment, and $30,000 in equity distributions. In total, Otero took personal responsibility for causing a loss to the United States in the amount of $2 million. As part of his plea agreement, he has agreed to pay restitution in that amount to the United States.
Under federal statutes, Otero faces up to five years in federal prison at sentencing and restitution to the parties involved. The maximum penalty prescribed by Congress is provided here for information purposes, as the sentencing 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 U.S. Probation Office.
This case is being investigated by the Fort Worth Office of the U.S. Department of Housing and Urban Development’s Office of Inspector General and prosecuted by Assistant U.S. Attorney Jonathan R. Hornok.
Federal Judge Denies Bond to San Antonio University Student Charged with Enticing Minors into Performing Sexually Explicit ConductRead the Press Release
In San Antonio today, a federal magistrate ordered that a 21-year-old local university student be detained without bond pending trial for allegedly enticing minors into engaging in sexually explicit conduct, announced U.S. Attorney John F. Bash, FBI Special Agent in Charge Christopher Combs and Texas Attorney General Ken Paxton.
During a detention hearing this morning, U.S. Magistrate Judge Richard Farrer ruled that Felipe Jesus Duron of Atascosa, TX, poses a threat to the community and should remain in federal custody while litigation is pending. On October 15, 2019, federal and state authorities arrested Duron based on a federal criminal complaint charging him with enticement of a minor and extortion as well as production, receipt and possession of child pornography.
According to the criminal complaint unsealed today as well as courtroom testimony, since September 2018, Duron has used Internet accessible devices to entice a minor female into sending him nude photographs. Duron then used those photographs to extort the minor, claiming he would release the sexually explicit photographs to her family and friends if she did not provide additional images of sexual activity, including requiring her to enter real time video chat rooms where she was expected to perform sexual acts for adult males.
Upon conviction, the defendant faces up to life in federal prison and a maximum $250,000 fine.
During the hearing, testimony confirmed the presence of additional child victims, male and female. To that note, if you have information about this defendant or his scheme, you are asked to contact the Office of the Attorney General at (512) 475-4565 or the San Antonio FBI at 210-225-6741. Tips can also be submitted online at https://tips.fbi.gov.
The San Antonio FBI’s Crimes Against Children Task Force and the Texas Attorney General’s Office are conducting this investigation. This case marks the first arrest by a state grant-funded investigation position in the Texas Attorney General’s Office that focuses on sexual coercion.
Assistant U.S. Attorney Bettina Richardson is prosecuting this case on behalf of the government.
It is important to note that a criminal complaint is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Federal Grand Jury in El Paso Indicts Alleged Law Enforcement ImposterRead the Press Release
In El Paso this morning, federal and state authorities arrested 27–year-old Jose Alejandro Vaquera for allegedly impersonating a federal agent, stated U.S. Attorney John F. Bash; FBI Acting Special Agent in Charge David Eisenreich, El Paso Division; U.S. Immigration and Customs Enforcement (ICE) Office of Professional Responsibility (OPR) Special Agent in Charge Charles Anderson and El Paso County Sheriff Richard Wiles.
A federal grand jury indictment unsealed today charges the El Paso resident with one count of impersonator making arrest or search. According to the indictment, on July 8, 2018, Vaquera knowingly pretended to be an ICE agent engaged in detaining and arresting a person.
Vaquera is expected to make his initial appearance at 2:00PM tomorrow afternoon before U.S. Magistrate Judge Miguel Torres in El Paso. Upon conviction, Vaquera faces up to three years in federal prison and a maximum $250,000 fine.
The FBI, ICE-OPR and the El Paso County Sheriff’s Office conducted this investigation. Assistant U.S. Attorney Patricia Aguayo is prosecuting this case on behalf of the government.
It is important to note that an indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
Ex-Doctor Sentenced to More Than 11 Years’ Imprisonment for His Role in Illegal Oxycodone Prescribing, Health Care Fraud, and Money Laundering Scheme and for Committing Social Security FraudRead the Press Release
PITTSBURGH - A former Pennsylvania-licensed physician has been sentenced in federal court to a total of 11 years and four months (136 months) in prison on his conviction for conspiracy to illegally distribute oxycodone, conspiracy to commit health care fraud, conspiracy to commit money laundering, and Social Security fraud, United States Attorney Scott W. Brady announced today.
On October 28, 2019, Chief Judge Mark R. Hornak imposed the sentence on Paul Michael Hoover, age 59, formerly of Novato, California. Judge Hornak further ordered Hoover to pay restitution to Medicare, Medicaid, and the Social Security Administration totaling $406,760.75, and to forfeit assets totaling approximately $1.2 million in U.S. currency, gold, silver, and real property.
"We are attacking the opioid crisis from every direction and with every tool that we have," said U.S. Attorney Brady. "The message sent by this sentence should be loud and clear: drug dealers will face the justice and do the time they deserve – in the case of Dr. Hoover, the next 11 years."
According to information presented to the court, from March 26, 2015 to June 22, 2018, in the Western District of Pennsylvania and elsewhere, Hoover and his co-defendant conspired to illegally distribute oxycodone, commit health care fraud, and launder drug proceeds. Approximately every three months, Hoover and his co-defendant traveled from California to operate a pill mill in Coraopolis, Pennsylvania for one or two days, during which time, Hoover wrote individuals illegitimate oxycodone prescriptions for cash. While back in California, Hoover received money orders for oxycodone prescriptions from individuals residing in the Pittsburgh area, and after receiving payment, mailed the illegitimate prescriptions to the individuals. Hoover also conspired with his co-defendant to commit health care fraud by signing preauthorization forms and submitting the forms to Medicare and Medicaid health plans, which then paid for the cost of the illegitimate prescriptions. Hoover further conspired with his co-defendant to launder the proceeds from their drug distribution operation. Finally, from approximately May 2012 to August 2018, Hoover falsely represented to the Social Security Administration that he was unable to work and was not working due to his disability when in reality, Hoover could have worked as a legitimate physician. Instead, Hoover falsely represented that he was incapable of working, collected Social Security benefits, and then used his status as a physician to earn money by illegally prescribing oxycodone.
"Dr. Hoover was once a trusted physician who took an oath to care for patients and provide them with proper medical care," said FBI Pittsburgh Special Agent in Charge Robert Jones. "At some point during his career, greed took over. The FBI will not allow these doctors to peddle opioids for profit. That makes them drug dealers and we will use all our resources to put them out of business and in jail."
"Dr. Hoover was a criminal in a lab coat who contributed to the drug problem in the Pittsburgh area," said Paris S. Pratt, Assistant Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Pittsburgh District Office. "Doctors that seek to betray their professional oath and engage in this type of illegal activity will be subject to both criminal charges and significant civil penalties."
"Physicians should be part of the solution to the opioid crisis, not part of the problem," said Special Agent in Charge Maureen R. Dixon of HHS-OIG. "We will continue to collaborate with our law enforcement partners to bring criminals -- including corrupt physicians -- to justice."
"IRS-Criminal Investigation is committed to lending our financial expertise and working with our law enforcement partners to help put an end to the opioid epidemic," said Guy Ficco, Special Agent in Charge of IRS-Criminal Investigation. "The sentencing of Dr. Hoover will hopefully be a deterrent to any other practitioners who may be considering carrying out similar conduct."
"The defendant abused his position as a doctor to pump dangerous opioids into our communities and defraud our health care and social security systems," said Pennsylvania Attorney General Josh Shapiro. "I’m proud to have assisted our law enforcement partners in putting an end to this scheme and ensuring that he spends significant time behind bars for his crimes."
The case against co-defendant Marci Ramsier Arthurs is pending.
Assistant United States Attorneys Cindy K. Chung and Rachael L. Mamula prosecuted this case on behalf of the United States.
U.S. Attorney Brady commended the work by the Pennsylvania Office of Attorney General, Bureau of Narcotics, Drug Enforcement Administration, Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigations, U.S. Health and Human Services – Office of Inspector General, U.S. Postal Inspection Service, and Social Security Administration – Office of Inspector General, which conducted the investigation that led to the prosecution of Hoover.
The investigation leading to the filing of charges in these cases were conducted by the Western Pennsylvania Opioid Fraud and Abuse Detection Unit, which combines personnel and resources from the following agencies to combat the growing prescription opioid epidemic: Federal Bureau of Investigation, U.S. Health and Human Services – Office of Inspector General, Drug Enforcement Administration, Internal Revenue Service-Criminal Investigations, Pennsylvania Office of Attorney General – Medicaid Fraud Control Unit, U.S. Postal Inspection Service, U.S. Attorney’s Office – Criminal Division, Civil Division, and Asset Forfeiture Unit, Department of Veterans Affairs – Office of Inspector General, Food and Drug Administration – Office of Criminal Investigations, and the Pennsylvania Bureau of Licensing.
Encompass Health Corporation Agrees to Pay $4 Million to Resolve Allegations of Improperly Billing MedicareRead the Press Release
LAS VEGAS, Nev. – Encompass Health Corp. (EHC), formerly known as HealthSouth Corporation, has agreed to pay the United States $4 million to settle allegations that an inpatient rehabilitation facility the company owned and operated in Nevada was improperly billing Medicare.
“This significant settlement demonstrates our continued commitment to protecting the Medicare program against fraud and abuse,” said U.S. Attorney Nicholas A. Trutanich for the District of Nevada.
Encompass Health Rehabilitation Hospital of Henderson, LLC is owned by EHC, which operates an inpatient rehabilitation facility, formerly HealthSouth Henderson, Inc. (HHI). Kenneth Bowman was the Chief Executive Officer of HHI from approximately January 2010 through approximately March 2012.
The settlement resolves allegations that, from January 1, 2008 through December 31, 2012, HHI improperly assigned inaccurate and artificially low admission Functional Independence Measure scores on Patient Assessment Instrument forms to some of its patients. Given these allegations, the United States alleges that HHI submitted false claims to Medicare seeking and receiving greater reimbursement for its services for those patients than was warranted.
The claims resolved by this settlement are allegations only, and there has been no determination of liability.
The matter was investigated by the Office of Inspector General (OIG-HHS) of the Department of Health and Human Services (HHS). Assistant U.S. Attorney Roger Wenthe litigated the case.
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Eleventh Man Sentenced for International Credit Card Fraud Scheme Receives 97-Month Prison SentenceRead the Press Release
LAS VEGAS, Nev. — Anderson Clayton Mariano Alcantara, 29, of Sorocaba, Brazil, was sentenced Monday to 97 months in prison, U.S. Attorney Nicholas A. Trutanich announced.
According to court documents, from about January 1, 2013, to about January 3, 2017, Alcantara and others conspired to commit credit and debit card fraud by placing “skimmers” on automatic teller machines (ATM) and cash-out transaction ticket dispensing terminals, such as Global Cash Advance (GCA) machines in order to steal account information. Alcantara and his co-conspirators set-up credit card forgery “laboratories” in residences and Las Vegas hotel rooms to manufacture counterfeit credit and debit cards. Equipment in the laboratories included counterfeit card production systems, thermal dye printers, card-encoding devices, embossing and foil tipping machines, and computer software for fabricating forged bankcards.
Alcantara and his co-conspirators used the counterfeit credit and debit cards at hotel casinos; nightclub;, high-end watch, jewelry, and fashion boutiques: electronic retailers; and ATMs in Las Vegas and in other cities around the country. The Alcantara group’s conspiracy touched Del Mar, California; Detroit, Michigan; New Orleans, Louisiana; Nassau County, New York; Biloxi, Mississippi; and Atlantic City, New Jersey. The co-conspirators obtained cash advances at casinos, and purchased expensive merchandise, including Rolex watches, high-end purses and handbags, and Apple iPhones. They resold the fraudulently obtained goods on the black market or through online marketplaces. Alcantara and his co-conspirators then laundered their ill-gotten proceeds through various bank accounts. These activities caused millions of dollars in losses to hotel-casino properties and other retail businesses.
This case was the product of a ten-month investigation by the FBI; the U.S. Department of State’s Diplomatic Security Service (DSS); the Las Vegas Metropolitan Police Department; and the Henderson Police Department. Assistant U.S. Attorney Patrick Burns prosecuted the case.
Alcantara pleaded guilty in September 2019, to conspiracy to commit fraud and related activity in connection with access devices; four counts of use or trafficking in unauthorized access device; four counts of aggravated identity theft; five counts of possession of access device-making equipment; two counts of production, use or trafficking of counterfeit access device; possession of fifteen or more counterfeit or unauthorized access devices; conspiracy to commit money laundering; and 18 counts of money laundering.
Alcantara is the 11th defendant to be sentenced in this case. Twenty-one individuals were charged in a 2017 indictment for their alleged roles in the conspiracy. To date, 12 defendants have pleaded guilty or have been sentenced. Co-defendants Fausto Teixeira Martins Neto and Felipe Augusto Vicale Martins are currently scheduled for a jury trial beginning in January 2020. The remaining seven indicted defendants are currently at large. The charges as to these defendants are allegations only and the defendants are presumed innocent unless and until proven guilty in a court of law.
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Eighth Member of International Money Laundering Organization Sentenced in $19 Million Dollar SchemeRead the Press Release
Assistant U. S. Attorneys Blanca Quintero and Daniel Silva (619) 546-7118
NEWS RELEASE SUMMARY – October 25, 2019
SAN DIEGO – Manuel Reynoso Garcia was sentenced today by U.S. District Judge William Q. Hayes to 78 months in prison for his role as a leader in an international money laundering organization that laundered more than $19 million in narcotics proceeds from the United States to Mexico.
The multi-year investigation led by the FBI’s Cross Border Violence Task Force targeted Reynoso as one of the key leaders of the Tijuana- and San Diego-based money laundering organization. Reynoso was the last of eight former members of the criminal organization sentenced.
Earlier this year, Judge Hayes sentenced Reynoso’s co-defendants to prison, including Estefania Plascencia Ponce to 57 months; Carlos Ballesteros Robles to 43 months; Gilberto Beltran Salazar to 46 months; Perla Alejandra Perez Guirado to 30 months; Joaquin Enrique Ramirez Calva to 37 months; Humberto Ruiz Bernadac to 24 months; and Luis Fernando Figueroa to time served. One final defendant, Manuel Alejandro Garcia remains a fugitive in Mexico.
According to the plea agreement and other public records, the money laundering organization was composed of a network of co-conspirators who coordinated the pick up, deposit, laundering, and transfer of millions of dollars of narcotics proceeds to Mexico-based drug trafficking organizations to include the Sinaloa Cartel. The organization used sophisticated methods to avoid law enforcement detection, such as encrypted messaging applications, and employed shell corporations complete with fictitious websites in an attempt to disguise their criminal activity as legitimate business.
The organization recruited individuals to serve as “funnel account holders” and transported them to bank branches in San Diego to open personal bank accounts. These funnel bank accounts were typically opened by the funnel account holders at Wells Fargo Bank or other domestic U.S. banks. The funnel account holders were primarily young adults between the ages of 18 and 23 who attended a university in Tijuana, Mexico.
Other members of the money laundering organization, known as “couriers”, travelled to San Diego, Los Angeles, Chicago, Boston, New Jersey, Philadelphia, Cincinnati, New York City and other cities throughout the United States to pick up and transport large amounts of bulk cash that ranged between $150,000 to $600,000 in narcotics proceeds. Couriers often met associates in private residences or public places such as parking lots, retail stores, and hotel rooms. The cash was typically concealed in shopping bags, duffel bags or shoeboxes.
Once in possession of the bulk cash, the couriers deposited the cash in increments of $30,000 to $45,000 into the funnel bank accounts controlled by the money laundering organization. The funds were then wire transferred from these United States-based funnel bank accounts to a series of Mexico-based shell companies also controlled by the money laundering organization. Once in Mexico, the funds were transferred to representatives of the Sinaloa Cartel.
During the case, federal agents employed extensive surveillance, undercover operations, witness interviews and bank records analysis to collect evidence against the organization. Key operations included the surveillance of members of the organization as they picked up drug proceeds in amounts as large as $200,000 in Cincinnati, Ohio; New York; and San Diego. The FBI also seized a large amount of bulk cash from defendant Joaquin Ramirez Calva in Chula Vista, California, and seized more drug proceeds following the surveillance of a bulk cash delivery to Reynoso in a McDonald’s parking lot in Bonita, California.
“By tracking and seizing drug money, we are hitting the cartels where it hurts,” said U.S. Attorney Robert Brewer. “Our aim is to prevent drug-related violence and overdoses, and denying the cartels the fruits of their illegal labor is an important part of our legal playbook. Thanks to prosecutors Blanca Quintero and Daniel Silva and our partners at FBI and IRS, we are impacting the operations of the Sinaloa Cartel on the way to our goal.”
“Drug trafficking and money laundering go hand-in-hand,” said FBI Special Agent in Charge Scott Brunner. “This case shows that stopping the flow of drug money to the cartels disrupts these dangerous criminal organizations. The FBI will use every investigative tool to keep illegal narcotics and dangerous crime from poisoning our communities.”
“Drug cartels misuse our financial institutions to launder their illicit proceeds, by using shell companies and exploiting young students to conceal their illegal activities. Reynoso was the co-leader of this money laundering organization. His guilty plea and subsequent sentence, in this multi-year investigation, demonstrates IRS Criminal Investigation's determination to identify and bring to justice those that would corrupt our banking system to launder illegal narcotics proceeds,” said Special Agent in Charge Ryan L. Korner of IRS Criminal Investigation.
This case is the result of ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise of federal, state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking, and money laundering organizations and enterprises. This case is being prosecuted by Assistant U.S. Attorneys Blanca Quintero and Daniel Silva.
DEFENDANT Case Number 17-CR-2203-WQH
Manuel Reynoso Garcia Age: 64 Tijuana, Mexico
Estefania Plascencia Pone Age: 36 Tijuana, Mexico
Carlos Ballesteros Robles Age: 28 Tijuana, Mexico
Perla Alejandra Perez Guirado Age: 27 Tijuana, Mexico
Joaquin Enrique Ramirez Calva Age: 30 Tijuana, Mexico
Gilberto Beltran Salazar Age: 31 Tijuana, Mexico
Humberto Ruiz Bernadac Age: 27 Tijuana, Mexico
Luis Fernando Figueroa Age: 30 Tijuana, Mexico
SUMMARY OF CHARGES*
Money Laundering Conspiracy – Title 18, U.S.C., Section 1956(h)
Maximum penalty: 20 years’ imprisonment and $500,000 fine
AGENCIES
Federal Bureau of Investigation’s San Diego Cross Border Violence Task Force
IRS Criminal Investigations
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Doctor and Nurse Practitioner Plead Guilty to Making False Claims to Medicare and MedicaidRead the Press Release
St. Louis, MO – Dr. Brij R. Vaid, M.D., 58, of Ladue, MO, and Donna A. Waldo, 59, of Saint Louis, MO, each pleaded guilty to one count of making a false claim to Medicaid or Medicare. Dr. Vaid appeared today before U.S. District Judge Audrey G. Fleissig who accepted his plea and set his sentencing date for January 30, 2020. Ms. Waldo pleaded guilty on October 23, 2019, and will be sentenced on January 28, 2020.
According to the plea agreements, Dr. Vaid was a medical doctor who operated St. Louis Internal Medicine (SLIM), where he saw patients at his medical office in St. Louis County, Missouri. Waldo was a nurse practitioner and advanced practice registered nurse. Waldo worked under the supervision of Dr. Brij Vaid at SLIM.
As alleged in the Superseding Indictment, Dr. Vaid had a large number of patients who received Schedule II controlled substance prescriptions typically every 30 days, including opioid pain relief drugs such as Oxycodone® and Hydrocodone and anti-anxiety drugs such as Xanax®. Dr. Vaid was the only person at his office who had the credentials to legally prescribe these pain management and anti-anxiety drugs,
Dr. Vaid traveled frequently, including trips to New Jersey and India. Given the number of patients needing drugs and his own scheduling challenges, Dr. Vaid often signed numerous prescriptions for controlled substances in advance of patients' visits -- before patients had even visited the office and had an examination. Dr. Vaid instructed his staff, including Waldo, to provide these pre-signed prescriptions for controlled substances to patients later, in his absence. After these office visits, Dr. Vaid and Waldo caused claims for reimbursement to be presented to Medicare and Medicaid in which they represented that Dr. Vaid had met face-to-face with the patients and engaged in complex medical decision making during the office visits.
In her plea agreement, Waldo admitted that she saw patient G.J. in the SLIM medical office on February 27, 2014. At the time of the patient visit, Waldo was aware that SLIM could bill Medicaid under Dr. Vaid’s provider number for an office visit where the patient was seen by Waldo, but only if Waldo was acting under Dr. Vaid’s direct personal supervision, which required Dr. Vaid’s physical presence in the office during the office visit with patient G.J. At the time of the G.J. patient visit on February 27, 2014, Dr. Vaid was out of the country and unable to provide any direct personal supervision.
In his plea agreement, Dr. Vaid admitted that on February 23, 2015, he was out of the country. Waldo saw patient B.T. Dr. Vaid knew that Ms. Waldo would be seeing patient B.T. while Dr. Vaid was in India. Dr. Vaid caused the presentation of a false claim to Medicare related to the February 23, 2015, office visit. This claim, submitted under CPT code 99214 to Medicare, falsely stated that Dr. Vaid had provided a face-to-face office visit with patient B.T. when he was really out of town.
In his plea agreement, Dr. Vaid further admitted that he violated the terms of his probation agreement with the Missouri Board of Registration for the Healing Arts when committing this offense.
These charges carry a maximum possible penalty of five years imprisonment, a fine of $250,000 or both imprisonment and a fine. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Office of Inspector General for the U.S. Department of Health and Human Services, the Drug Enforcement Administration, the Medicaid Fraud Control Unit of the Missouri Attorney General’s Office, and the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, with critical assistance from the U.S. Customs and Border Protection, U.S. Department of Homeland Security and the Missouri Department of Health and Senior Services, Bureau of Narcotic and Dangerous Drugs.
District Man Pleads Guilty to Federal Narcotics ChargeRead the Press Release
WASHINGTON – Edward Magruder, 49, of Washington, D.C., pled guilty yesterday to a federal narcotics charge for the unlawful possession and intent to distribute heroin. The announcement was made by U.S. Attorney Jessie K. Liu, and Timothy M. Dunham, Special Agent in Charge, Criminal Division, FBI Washington Field Office.
Magruder pled guilty in the U.S. District Court for the District of Columbia to the unlawful possession with intent to distribute one kilogram or more of heroin. The Honorable Colleen Kollar-Kotelly scheduled sentencing for January 10, 2020. The charges against Magruder arose from a law enforcement investigation that showed that he regularly traveled to New York City to obtain large amounts of heroin that he would later redistribute in Washington, D.C.
The investigation began in the summer of 2018. FBI agents learned through their investigation that, between December 2018 and May 31, 2019, Magruder traveled to New York from Washington, D.C. on at least seven separate occasions. On each trip, he stayed in New York for only a short period (a few hours) and then returned to Washington, D.C.
On June 7, 2019, FBI agents learned that Magruder had traveled from Washington, D.C. to New York via Greyhound bus. Agents observed him at the Port Authority Bus Terminal in Midtown Manhattan at approximately 2:30 PM. They also observed him as he stood outside of the bus terminal for approximately one hour and made several calls using a flip phone. Magruder was carrying a bright blue backpack.
The following day, on June 8, 2019, Magruder departed the Port Authority Bus Terminal and began traveling towards Washington, D.C. He arrived at Union Station in Washington, D.C. at approximately 4:30 PM. He walked off the bus carrying the same bright blue backpack that he was observed with in New York. Agents approached Magruder, stopped him, and searched his backpack. At the bottom of the backpack, underneath several items of clothing, were two blocks of compressed tan powder, wrapped in duct tape and several plastic bags. Each block weighed approximately 600 grams. A chemist with the DEA Mid-Atlantic Laboratory examined the blocks. She concluded that together they weighed approximately 1,200 grams (1.2 kilograms), and that they consisted of a mixture and substance containing heroin. The estimated street value of the heroin is approximately $400,000. Sentencing is scheduled for January 16, 2020, and Magruder is expected to be sentenced to a term of 12 to 15 years of imprisonment.
In announcing the guilty plea, U.S. Attorney Liu and Special Agent in Charge Dunham commended the work of the FBI agents involved in the arrest and prosecution of Magruder. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office for the District of Columbia, including Assistant U.S. Attorney Nihar Mohanty of the Violent Crime and Narcotics Trafficking Section, and Paralegal Specialist Candace Battle.
Department of Justice Awards over $2.3 Billion in Grants to Assist Victims NationwideRead the Press Release
The Office for Victims of Crime (OVC), a component of the Department’s Office of Justice Programs (OJP), has released awards totaling more than $2.3 billion to state victim assistance and compensation programs, funding thousands of local victim assistance programs across the country and providing millions in compensation to victims of crime.
OVC’s flagship formula grant program is supported by the Crime Victims Fund (the Fund), which was established under The Victims of Crime Act (VOCA). The Fund supports a broad array of programs and services that focus on helping victims in the immediate aftermath of crime and continuing to support them as they rebuild their lives. In FY18 alone, VOCA grants served over 6.3 million victims (a 24 percent increase over FY17) and paid more than $400 million in compensation claims. The Fund is financed by fines and penalties paid by convicted federal offenders and does not include tax dollars.
“Building on the historic amount of victim assistance and victim compensation funding awarded last year, these new awards have the potential to alter the landscape of the victims’ field, putting services and support within reach of every crime victim in America,” said Katharine T. Sullivan, Principal Deputy Assistant Attorney General of the Office of Justice Programs. “Backed by Attorney General William Barr, whose commitment to crime victims is second to none, we are proud to make these resources available to help meet the emotional, psychological and financial needs that victims face in the aftermath of crime.”
The vast majority of the over $2.3 billion in victim assistance funding goes to approximately 6,000 local direct service programs, including children’s advocacy centers, domestic violence shelters, rape crisis centers, human trafficking and elder abuse programs, civil legal services, crime victims’ rights enforcement, as well as victim assistance positions in prosecutors’ offices and law enforcement departments.
State victim compensation programs will receive over $136 million to supplement the state funds that offset victims’ financial burdens resulting from crime. This compensation is often extremely vital to victims who face enormous financial setbacks from medical fees, lost income, dependent care, funeral expenses, and other costs.
“The services made available by this funding represent a lifeline for tens of thousands of survivors each month, many of whom otherwise would have no place to turn in a moment of profound crisis,” said Darlene Hutchinson, Director of OJP’s Office for Victims of Crime. “These awards will help service providers, as well as law enforcement agencies and prosecutor offices respond to the many emotional and material challenges that crime victims in our country face every day.”
The Office of Justice Programs, directed by Principal Deputy Assistant Attorney General Katharine T. Sullivan, provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal justice and juvenile justice systems. More information about OJP and its components can be found at www.ojp.gov. For a full database of OVC awardees, visit: https://www.ovc.gov/grants/grant_award_search.html.
Department of Justice Awards over $2.3 Billion in Grants to Assist Victims Nationwide: More than $5.6 Million Awarded in the Northern District of OklahomaRead the Press Release
The Office for Victims of Crime (OVC), a component of the Department’s Office of Justice Programs (OJP), has released awards totaling more than $2.3 billion to state victim assistance and compensation programs, funding thousands of local victim assistance programs across the country and providing millions in compensation to victims of crime.
Nine cities, tribes, and advocate organizations in the Northern District of Oklahoma were awarded more than $5.6 million to aid victims of crime.
OVC’s flagship formula grant program is supported by the Crime Victims Fund (the Fund), which was established under The Victims of Crime Act (VOCA). The Fund supports a broad array of programs and services that focus on helping victims in the immediate aftermath of crime and continuing to support them as they rebuild their lives. In FY18 alone, VOCA grants served over 6.3 million victims (a 24 percent increase over FY17) and paid more than $400 million in compensation claims. The Fund is financed by fines and penalties paid by convicted federal offenders and does not include tax dollars.
“Building on the historic amount of victim assistance and victim compensation funding awarded last year, these new awards have the potential to alter the landscape of the victims’ field, putting services and support within reach of every crime victim in America,” said Katharine T. Sullivan, Principal Deputy Assistant Attorney General of the Office of Justice Programs. “Backed by Attorney General William Barr, whose commitment to crime victims is second to none, we are proud to make these resources available to help meet the emotional, psychological and financial needs that victims face in the aftermath of crime.”
“These record-breaking grant allocations will provide crucial resources and support to victims of crime and their families who often struggle with the psychological and financial costs associated with long-term recovery,” said U.S. Attorney Trent Shores of the Northern District of Oklahoma. “Law enforcement and prosecutors work hand in hand with many of the organizations receiving funding today. We understand that holistic justice for victims includes both courtroom processes as well as restorative healing and restitution recovery.“
In the Northern District of Oklahoma, the following groups received victim assistance and compensation funding:
- Youth Services of Tulsa, Inc.— $447,694.00
- City of Tulsa— $439,676.00
- Quapaw Tribe of Oklahoma— $613,860.00
- ONE FIRE, Cherokee Nation— $719,994.00
- Delaware Tribe of Indians—$672,192.00
- Lost River Treatment Center, Modoc Tribe of Oklahoma— $500,000.00
- Muscogee (Creek) Nation—$1,250,000.00
- City of Fairland/Ottawa County— $179,508.00
- Family Safety Center Inc.--$785,000.00
The Oklahoma District Attorneys Council received $27,033,125.00 for victim assistance and $1,112,000.000 for victim compensation.
Also receiving funding in Oklahoma are Palomar: Oklahoma City’s Family Justice Center, Choctaw Nation, Tonkawa Tribe of Indians of Oklahoma, Citizen Potawatomi Nation, Comanche Nation, Kaw Nation, Sac and Fox Nation, and Absentee Shawnee Tribe of Oklahoma.
Nationwide, the vast majority of the over $2.3 billion in victim assistance funding goes to approximately 6,000 local direct service programs, including children’s advocacy centers, domestic violence shelters, rape crisis centers, human trafficking and elder abuse programs, civil legal services, crime victims’ rights enforcement, as well as victim assistance positions in prosecutors’ offices and law enforcement departments.
State victim compensation programs will receive over $136 million to supplement the state funds that offset victims’ financial burdens resulting from crime. This compensation is often extremely vital to victims who face enormous financial setbacks from medical fees, lost income, dependent care, funeral expenses, and other costs.
“The services made available by this funding represent a lifeline for tens of thousands of survivors each month, many of whom otherwise would have no place to turn in a moment of profound crisis,” said Darlene Hutchinson, Director of OJP’s Office for Victims of Crime. “These awards will help service providers, as well as law enforcement agencies and prosecutor offices respond to the many emotional and material challenges that crime victims in our country face every day.”
The Office of Justice Programs, directed by Principal Deputy Assistant Attorney General Katharine T. Sullivan, provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal justice and juvenile justice systems. More information about OJP and its components can be found at www.ojp.gov.
For a full database of OVC awardees, visit: https://www.ovc.gov/grants/grant_award_search.html.
Department of Justice Awards over $2.3 Billion in Grants to Assist Victims NationwideRead the Press Release
LAS VEGAS, Nev. – Today, the Office for Victims of Crime (OVC), a component of the Department’s Office of Justice Programs (OJP), released awards totaling more than $2.3 billion to state victim assistance and compensation programs, funding thousands of local victim assistance programs across the country, and providing millions in compensation to victims of crime. Ten awardees in Nevada will receive more than $43.7 million of these grant awards.
“Building on the historic amount of victim assistance and victim compensation funding awarded last year, these new awards have the potential to alter the landscape of the victims’ field, putting services and support within reach of every crime victim in America,” said Katharine T. Sullivan, Principal Deputy Assistant Attorney General of the Office of Justice Programs. “Backed by Attorney General William Barr, whose commitment to crime victims is second to none, we are proud to make these resources available to help meet the emotional, psychological and financial needs that victims face in the aftermath of crime.”
“This funding will help Nevada service providers and law enforcement provide the necessary assistance and compensation to survivors in need of critical service assistance during their road to recovery,” said U.S. Attorney Nicholas A. Trutanich for the District of Nevada.
OVC’s flagship formula grant program is supported by the Crime Victims Fund (the Fund), which was established under the Victims of Crime Act (VOCA). The Fund supports a broad array of programs and services that help victims in the immediate aftermath of crime and continue to support them as they rebuild their lives. In FY18 alone, VOCA grants served over 6.3 million victims (a 24 percent increase over FY17) and paid more than $400 million in compensation claims. The Fund is financed by fines and penalties paid by convicted federal offenders and does not include tax dollars.
The vast majority of the over $2.3 billion in victim assistance funding goes to approximately 6,000 local direct service programs. These include children’s advocacy centers, domestic violence shelters, rape crisis centers, human trafficking and elder abuse programs, civil legal services, crime victims’ rights enforcement, as well as victim assistance positions in prosecutors’ offices and law enforcement departments.
State victim compensation programs will receive over $136 million to supplement the state funds that offset victims’ financial burdens resulting from crime. This compensation is vital to victims who face enormous financial setbacks stemming from medical fees, lost income, dependent care, funeral expenses, and other costs.
The Office of Justice Programs, directed by Principal Deputy Assistant Attorney General Katharine T. Sullivan, provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal justice and juvenile justice systems. More information about OJP and its components can be found at www.ojp.gov. For a full database of OVC awardees, visit: https://www.ovc.gov/grants/grant_award_search.html.
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Award Title
Awardee
Amount
Solicitation Title
Reno Police Department FY 2019 Law Enforcement-Based Victim Specialist Program
Reno Police Department
$280,777
OVC FY 2019 Law Enforcement-Based Victim Specialist Program
Shoshone-Paiute Tribes Tribal Victim Services Program
Shoshone-Paiute Tribes of the Duck Valley Indian Reservation
$604,741
OVC FY 2019 Tribal Victim Services Set-Aside Program: OVC FY 2019 Tribal Victim Services Set-Aside Program: Purpose Area 1: Establishment of a New Victim Service Program
OVC FY 19 VOCA Assistance Formula
Nevada Department of Health and Human Services
$20,918,536
OVC FY 2019 VOCA Victim Assistance
Antiterrorism and Emergency Assistance Program for Crime Victim Compensation and/or Assistance
Nevada Department of Health and Human Services
$16,735,720
OVC FY 2019 Antiterrorism and Emergency Assistance Program (AEAP) for Crime Victim Compensation and Assistance
OVC FY 19 VOCA Compensation Formula
Nevada Dept of Administration
$2,252,000
OVC FY 2019 VOCA Victim Compensation
Reno-Sparks Indian Colony Victims Services Program
Reno Sparks Indian Colony
$459,786
OVC FY 2019 Tribal Victim Services Set-Aside Program: OVC FY 2019 Tribal Victim Services Set-Aside Program: Purpose Area 2: Coordination and Expansion of Existing Victim Service Program
Resources and Integration for Survivor Empowerment (R.I.S.E.)
The Rape Crisis Center DBA Community Action Against Rape
$889,015
OVC FY 2019 Direct Services to Support Victims of Human Trafficking: OVC FY 2019 Direct Services to Support Victims of Human Trafficking: PA1 Comprehensive Services for Victims of Human Trafficking
Southern Nevada Human Trafficking Services Project
Hookers For Jesus, Inc.
$530,190
OVC FY 2019 Direct Services to Support Victims of Human Trafficking: OVC FY 2019 Direct Services to Support Victims of Human Trafficking: PA1 Comprehensive Services for Victims of Human Trafficking
Awaken Housing Attainment Project Purpose Area 2: Specialized Services, Housing Services
Awaken, Inc.
$650,000
OVC FY 2019 Direct Services to Support Victims of Human Trafficking: OVC FY 2019 Direct Services to Support Victims of Human Trafficking: PA2 Specialized Services for Victims of Human Trafficking
Victim Assistance Academy of Nevada Enhancement and Expansion
State of Nevada Division of Child and Family Services
$394,920
OVC FY 2019 Discretionary Training and Technical Assistance Program for VOCA Victim Assistance Grantees
DEA Task Force and Waterbury Police Investigation Takes Down Heroin Trafficking Ring; 15 ChargedRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration for New England, and Waterbury Police Chief Fernando C. Spagnolo today announced that 15 individuals have been charged with federal narcotics offenses related to the distribution of heroin and fentanyl in and around Waterbury.
As alleged in court documents and statements made in court, the arrests stem a joint investigation headed by the DEA New Haven Task Force and the Waterbury Police Department. The investigation, which has included the use of court-authorized wiretaps, physical surveillance and controlled purchases of narcotics, revealed that Nestor Sosa-Ortiz has operated a Waterbury-based drug trafficking organization that received large quantities of heroin and fentanyl from suppliers in Connecticut and New York and distributed the narcotics throughout New Haven County. After Nestor Sosa-Ortiz was arrested in New York City on a separate federal heroin and fentanyl trafficking charge in May 2019, he continued to control his drug network while incarcerated by using smuggled cell phones to communicate with various co-conspirators, including his sisters, Isamelis Sosa-Ortiz and Imirici Sosa-Ortiz, in Waterbury.
The following individuals have been charged by federal criminal complaint with conspiracy to distribute, and to possess with intent to distribute, heroin and fentanyl:
NESTOR SOSA-ORTIZ, 35, of Waterbury
ISAMELIS MARIAN SOSA-ORTIZ, a.k.a. “Marian,” 29, of Waterbury
IMIRICI SOSA-ORTIZ, a.k.a. “Mimi,” 31, of Waterbury
ELIAS SANCHEZ-MARTINEZ, 27, of Waterbury
FRANCIS AYBAR-PEGUERO, a.k.a. “Grena,” 27, of Waterbury
ERICA ORAMA, a.k.a. “Wifey,” 39, of Waterbury
RONEY SOSA, 23, of Waterbury
IVANNY ANTONIO FRANCISCO-ESTRELLA, 34, of Waterbury
BRAYAN GONZALEZ, 35, of Waterbury
JEFFREY TAVAREZ, 21, of Waterbury
ORLANDO MARTINEZ, a.k.a. “Bolo,” 51, of Watertown
JUAN CARLOS CASTELLANO, 41, of Bridgeport
ERIK RAFAEL POLANCO, a.k.a. “Chino,” 23, of Waterbury
DARRY JOSE GUERRERO, a.k.a. “Domi,” 27, of Waterbury
JEISSON AMARANTE-PEREZ, a.k.a. “Smart Yeii,” 25, of WaterburyThirteen defendants were arrested today, and one defendant, Jeisson Amarante-Perez, is currently being sought. Nestor Sosa-Ortiz has been detained in federal custody since May 18, 2019.
In association with today’s arrests, law enforcement officers executed five search warrants at locations in Waterbury, including an apartment at 330 Bishop Street and the Corner Mini Market at 52 East Farm Street, and seized approximately six kilograms of suspected heroin/fentanyl, approximately 100,000 bags of suspected heroin/fentanyl packaged for street distribution, approximately 1,000 fentanyl pills disguised as Percocet pills, one firearm and approximately $50,000 in cash.
“Heroin and fentanyl continue to destroy too many lives in our state, and we are committed to using federal law enforcement resources to prosecute those responsible for distributing these deadly drugs,” said U.S. Attorney Durham. “This investigation has closed the door on one drug trafficking network, but we know our work is not done, in Waterbury and throughout Connecticut. We thank the members of the DEA Task Force and the Waterbury Police Department for their great work. Every time a heroin dealer is arrested, we believe that lives are saved.”
“DEA is committed to investigating and dismantling large scale Drug Trafficking Organizations like this one operating in the greater Waterbury area,” said DEA Special Agent in Charge Boyle. “DEA and Waterbury Police will continue to aggressively pursue those responsible for distributing lethal drugs like fentanyl and heroin to the citizens of Connecticut and hold them accountable for their actions.”
“In recent years, the flow of opioids in Waterbury has had a devastating impact on our community as a whole,” said Chief Spagnolo. “We are grateful for the support from the U.S. Attorney’s Office and for our partnership with the DEA. We will continue to work side by side with these agencies to combat the opioid trade in Waterbury.”
The 13 individuals who were arrested today appeared before U.S. Magistrate Judge Sarah A. L. Merriam in New Haven.
U.S. Attorney Durham stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This investigation is being conducted by the Drug Enforcement Administration New Haven Task Force and the Waterbury Police Department. The DEA New Haven Task Force includes participants from the U.S. Marshals Service, Internal Revenue Service – Criminal Investigation Division, and the New Haven, Hamden, West Haven, North Haven, Branford, Ansonia, Meriden, Derby, Middletown, Naugatuck and Waterbury Police Departments.
The case is being prosecuted by Assistant U.S. Attorneys Jocelyn Courtney Kaoutzanis, Lauren C. Clark, H. Gordon Hall, Peter D. Markle and Anthony E. Kaplan.
D.C. Man Pleads Guilty to Distributing FentanylRead the Press Release
ALEXANDRIA, Va. – A Washington, D.C., man pleaded guilty today to supplying fentanyl, a deadly synthetic opioid, to a D.C. government employee who was selling it to customers outside his government office.
According to court documents, Ronald Maxwell Gorham, 61, supplied fentanyl and heroin to Darrell Pope from at least March 2019 through September 24, when the two men were arrested. Gorham “fronted” the drugs to Pope at a cost of $80 or $85 per gram. Pope, in turn, sold the fentanyl or heroin back to his customers for $100 per gram and repaid Gorham with the proceeds. Gorham and Pope used coded language to talk about drugs, referring to heroin or fentanyl as jerseys, wings, or helmets. When the quality of drugs was not very good, Pope told Gorham that “the color of the paint” was no good, or that the “crabs” were no good and he needed “another bushel.”
Fentanyl, which is 50 times more potent than heroin, is a Schedule II synthetic opioid that is often combined with heroin or other substances to increase potency or add an opioid effect to an otherwise non-opioid drug. Fentanyl and other synthetic opioid-related deaths have increased dramatically since 2013. The Centers for Disease Control and Prevention estimates that in 2018, 32,000 persons in the United States died from overdosing on synthetic opioids.
Gorham is charged with conspiracy to distribute 40 grams or more of fentanyl. He faces a mandatory minimum of five years in prison, and a maximum penalty of 40 years when sentenced on Feb. 21, 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.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Timothy R. Slater, Assistant Director of the FBI’s Washington Field Office, made the announcement. Assistant U.S. Attorney Katherine E. Rumbaugh is prosecuting the case.
The Prince William County Police Department provided significant assistance with this case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:19-cr-320.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Convicted Felon Sentenced for Possessing AM-15 Rifle and AmmunitionRead the Press Release
BOSTON – A Holyoke man was sentenced today in federal court in Springfield for illegally possessing an AM-15 rifle and ammunition.
Akeem Castro, 26, was sentenced by U.S. District Court Judge Mark G. Mastroianni to 41 months in prison and three years of supervised release. In April 2019, Castro pleaded guilty to one count of possession of a firearm and ammunition by a convicted felon.
On March 7, 2017, Castro possessed an Anderson Manufacturing AM-15 assault-style rifle and 34 rounds of ammunition. Castro is prohibited from owning a firearm due to a prior felony conviction. Castro admitted that, on that date, he sold the firearm, ammunition, and two magazines capable of holding 30 rounds each, for $1,800 to a government witness in a parking lot in Chicopee.
United States Attorney Andrew E. Lelling; Kelly Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; Springfield Police Commissioner Cheryl Clapprood; and Holyoke Police Chief Manny Febo made the announcement. Assistant U.S. Attorney Neil L. Desroches of Lelling’s Springfield Branch Office prosecuted the case.
Chicago Man Pleads Guilty to Meth Trafficking, Faces 15 Years in PrisonRead the Press Release
KANSAS CITY, Mo. – A Chicago, Illinois, man who was arrested while driving through northern Missouri pleaded guilty in federal court today to possessing nearly a kilogram of methamphetamine to distribute.
Kevin M. Phyfiher, 29, pleaded guilty before U.S. District Judge Greg Kays to one count of possessing methamphetamine with the intent to distribute.
A Missouri State Highway Patrol trooper stopped the Dodge Caravan Phyfiher was driving on Interstate 29 in Andrew County, Missouri, on May 8, 2017. In addition to Phyfiher, co-defendant Donta Mosley, 27, of Chicago, was in the cargo area of the van, and there were two female passengers. Phyfiher was not identified as a lawful driver of the vehicle, which had been rented by his cousin (who was not present).
Officers directed Phyfiher and the passengers to get out of the van while they deployed a police support canine. Mosley, who had a handgun in his waistband, was arrested. The others were instructed to get on the ground during the search. Phyfiher then fled, running into the underbrush, and law enforcement officers were unable to find him. During a later search of the vehicle, officers found two plastic baggies that contained a total of 907 grams of methamphetamine.
The next day, a vehicle was reported as stolen from Jesse’s Last Stop Gas Station in Andrew County. At about 6:19 a.m., a state trooper saw Phyfiher driving the stolen vehicle on 36 Highway. The trooper attempted to stop the vehicle and the vehicle attempted to evade the officer. After several miles of pursuit at high rates of speed, the stolen vehicle was stopped by spike strips that were deployed in the road by other law enforcement officers. Phyfiher, who surrendered and was arrested, told officers, “I should have stayed in the bushes.”
According to today’s plea agreement, investigators discovered several live stream video recordings taken by Phyfiher in the days before his arrest. The videos show Phyfiher on a road trip to Las Vegas and California. In one of the videos, Phyfiher and Mosley are holding large stacks of money. In another video, Phyfiher refers to getting some “Cali dope.”
Mosley was sentenced on Jan. 30, 2019, to five years and four months in federal prison without parole after pleading guilty to being a felon in possession of a firearm.
Under the terms of today’s plea agreement, Phyfiher is subject to a sentence of 15 years in federal prison without parole. 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 Trey Alford. It was investigated by the Drug Enforcement Administration and the Missouri State Highway Patrol.
Central Texas Lawyer Guilty of Swindling Colombian Drug Trafficking ClientsRead the Press Release
SHERMAN, Texas – A Central Texas criminal defense lawyer was found guilty of federal violations related to an international fraud scheme involving his Colombian cocaine trafficking clients, announced U.S. Attorney Joseph D. Brown and FBI Special Agent in Charge Matthew J. DeSarno of the Dallas Field Office today.
James Morris Balagia, 62, of Manor, Texas was found guilty by a jury of five federal charges today following a two week trial before U.S. District Judge Amos Mazzant.
According to information presented in court, Balagia, also known as Jamie Balagia, also known as The DWI Dude,
had a law practice with offices in San Antonio and Manor specializing in defending clients charged with violations such as driving while intoxicated and drug possession. In 2014, Balagia conspired with Florida private investigator, Chuck Morgan, and Colombian attorney, Bibiana Correa Perrea to swindle Colombian drug traffickers under the guise of bribing officials in the United Sates. During meetings in Colombia and in Collin County, Texas, the group represented that in exchange for inflated “attorney fees,” they were in contact with government officials in the United States who would accept bribes resulting in either the dismissal of their criminal charges or significant reductions in their U.S. federal prison sentences. In reality, there were no bribes or government officials.
The Office of Foreign Assets and Control (OFAC) had previously designated Balagia’s Colombian clients as “Specially Designated Narcotics Traffickers.” These individuals were considered some of the biggest drug traffickers in the world. As such, they were on an OFAC list, essentially freezing their assets and prohibiting U.S. persons from engaging in any financial transactions or dealings with them unless they had received an OFAC license. In order to comply with federal requirements under the “Kingpin Act,” Balagia was advised to obtain an OFAC license on multiple occasions but failed to do so.
As part of the scheme, Balagia provided Colombian co-conspirators with his personal bank account number and routing number. Evidence at trial showed multiple deposits over several months into the account in amounts intended to avoid federal cash transaction reporting requirements. The cash deposits were made at bank counters across the United States by anonymous individuals with daily deposits totaling just under the $10,000 reporting threshold. Additionally, at least four bulk cash payments were made to Balagia in amounts ranging from approximately $70,000 to $120,000. Balagia admitted to driving from his San Antonio office to a mall parking lot in Katy, Texas, where he was given a shopping bag filled with bundles of cash from either an unknown individual, or an individual who identified himself only as “Coco.” In an attempt to conceal these payments, Balagia failed to report the payments as required by federal law.
Balagia was indicted by a federal grand jury on Dec. 15, 2016. Bibiana Correa Perea pleaded guilty and was sentenced to 84 months in federal prison on June 29, 2018. Chuck Morgan pleaded guilty and was sentenced to 72 months in federal prison on Mar. 8, 2018.
Balagia was found guilty of conspiracy to commit money laundering; obstruction of justice, violation of the Kingpin Act; conspiracy to commit wire fraud; and conspiracy to obstruct justice.
“This defendant-and his group-were running a scam on drug dealers – some of the biggest drug dealers in the world,” said U.S. Attorney Joe Brown. “Fortunately for him, these drug dealers chose to turn him into the FBI rather than handle it any other way. It is important for the American justice system that we prosecute those who represent that the justice system is for sale. The Colombians, and criminals in every other country that we deal with, need to understand things don’t work that way in the United States. When we have lawyers representing that officials can be bought, we take that very seriously.”
“The defendant used his position as an attorney to not only steal from drug lords, but also to sell out the U.S. justice system in order to line his own pockets,” said FBI Special Agent in Charge Matthew J. DeSarno of the Dallas Field Office. “The FBI prioritizes all cases of public corruption and we will continue to hold these officials accountable for using their positions to benefit financially.”
This case is the result of an extensive joint investigation by the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Under the federal sentencing guidelines, Balagia faces up to 30 years in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing 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 U.S. Probation Office.
This case was investigated by the Federal Bureau of Investigation’s Dallas Field Office – Frisco Resident Agency and prosecuted by Assistant U.S. Attorneys Heather H. Rattan and Jay Combs.
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Boise Septuagenarian Pleads Guilty to Distributing MethamphetamineRead the Press Release
BOISE – Clinton DeWitt Bays, Jr., 77, of Boise, pleaded guilty to distributing methamphetamine, U.S. Attorney Bart M. Davis announced today. Pursuant to a written plea agreement filed with the Court, Bays pleaded guilty to distributing more than fifty grams of actual methamphetamine.
According to court records, while out on bond on state court charges for drug trafficking and possession with intent to deliver methamphetamine, Bays sold four ounces of methamphetamine to an undercover officer.
Bays faces a statutory mandatory minimum sentence of at least ten years and a maximum sentence of life imprisonment, a $10,000,000 fine, and at least five years of supervised release.
Sentencing for Bays is set for February 19, 2020, before Chief U.S. District Judge David C. Nye at the federal courthouse in Boise. Bays remains in-custody pending sentencing.
The case was a result of a joint investigation by the Boise and Meridian Police Departments and the Organized Crime and Drug Enforcement Task Force (OCDETF). The Organized Crime and Drug Enforcement Task Force (OCDETF), includes the cooperative law enforcement efforts of the Federal Bureau of Investigation; Drug Enforcement Administration; Bureau of Alcohol, Tobacco, Firearms and Explosives; U. S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Internal Revenue Service-Criminal Investigation; and U.S. Marshals Service. The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
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Blacklick man sentenced to 25 years in prison for posing online as teenage internet start to coerce 10-year-old childRead the Press Release
COLUMBUS, Ohio – Darren M. Kamnitzer, 45, of Blacklick, was sentenced in U.S. District Court today to 300 months in prison for producing child pornography.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Joseph M. Deters, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, Westerville Police Chief Charles Chandler, and other members of the FBI’s Child Exploitation Task Force announced the sentence handed down today by U.S. District Judge Sarah D. Morrison.
According to court documents, in September 2018, law enforcement in Switzerland received information that Kamnitzer, using the Twitter handle “jacobauditions,” had contacted a 10-year-old girl and convinced her to send him multiple sexually explicit photographs and videos of herself.
Kamnitzer was posing as the manager for Jacob Sartorious, an American teenage singer and internet personality. The defendant asked the girl if she wanted to audition to be in a music video with Sartorious and told her if she completed all the requirements of the audition, she and a parent would be flown to California, where the music video would be produced.
Kamnitzer initially requested photographs of the girl clothed, then instructed her to take photographs in a bikini, and eventually coerced her into sending him nude videos focused on her genitalia and anus. The defendant assured the girl that it was all part of the audition and that all the other participants had done it.
When Swiss authorities learned of the activity, they contacted Twitter, who shut down Kamnitzer’s account. Twitter also submitted a tip to the National Center for Missing and Exploited Children and the FBI became involved in the case.
The FBI traced the IP address used to a computer at the Worthington Public Library. Kamnitzer was employed as the Network Administrator for the library and was at work on at least two occasions when he reached out to the victim via his Twitter account. A search warrant executed at Kamnitzer’s residence revealed evidence that he had communicated with other minors online.
In April 2019, Kamnitzer waived indictment and pleaded guilty to a bill of information.
U.S. Attorney Glassman commended the cooperative investigation by the FBI’s Child Exploitation Task Force, as well as Assistant United States Attorney Heather A. Hill, who is representing the United States in this case.
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Baltimore Business Owner Convicted After Trial on Federal Charges for Conspiring to Burn Down His Business in Order to Obtain Insurance ProceedsRead the Press Release
Baltimore, Maryland – A federal jury convicted Demetrios Stavrakis, a/k/a Jimmy, age 53, of Lutherville-Timonium, Maryland, for an arson conspiracy to damage his business by setting it on fire in order to obtain insurance proceeds. The verdict was returned late on October 28, 2019.
The guilty verdict was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; Maryland State Fire Marshal Brian Geraci; and Commissioner Michael Harrison of the Baltimore Police Department.
U.S. Attorney Robert K. Hur stated, “The evidence proved that ‘Jimmy’ Stavrakis conspired to burn down his business in order to defraud his insurance company of millions of dollars in insurance proceeds. Criminals who commit fraud destroying property by fire, jeopardizing their community and first responders, then spend the stolen money on luxury cars, watches, and jewelry, must be held accountable
According to evidence presented at his 7-week trial, beginning in July 2015, Stavrakis made a plan to set fire to commercial property he owned at 234 S. Haven Street in Baltimore, in order to collect insurance proceeds on the property. The building housed Adcor Industries, Inc., a manufacturing shop owned by Stavrakis since 1991, as well as Adcor Beverage, LLC and other LLC’s owned and created by Stavrakis.
Testimony at trial revealed that by 2010, Adcor’s business experienced a down turn due to the loss of a contract with Colt Industries. From 2011 to 2015, Stavrakis’s businesses defaulted on various loans, struggled to pay suppliers resulting in legal action, and sold off profitable divisions of the business to satisfy defaulted loans. In 2014, Adcor incurred an operating loss of $2,053,427 and its liabilities exceeded its assets by almost $900,000. Financial records showed that during 2014, Stavrakis liquidated personal assets and injected the proceeds into Adcor to utilize as working capital. A public accounting firm hired by Adcor to review its financial condition reported to Stavrakis that the balance of cash and cash equivalents as of December 31, 2014 was inadequate to fund operations through December 31, 2015. More losses followed, and Adcor was again in default on a line of credit and their monthly operating losses put them on a pace to lose approximately $2.9 million for the year.
The evidence proved that on July 28, 2015, just before 6 p.m., Stavrakis used adhesive tape to defeat one of the security features on the front door of the building so that the person or persons setting the fire could enter the building.
According to the trial evidence, at 12:25 a.m. on July 29, 2015, someone disarmed the alarm inside the building by entering the four-digit code. At 12:33 a.m., an alarm in another part of the building was disarmed. At approximately 1:30 a.m., the fire was reported to law enforcement by a passer-by who saw smoke emanating from the building. The Baltimore Fire Department responded to extinguish the blaze. The fire destroyed an office on the shop floor of the building and damaged a portion of the ceiling directly above the office area. Later on July 29, 2015, Stavrakis contacted a public adjuster firm that his company had previously retained to notify them of the fire and to request their assistance in filing claims with the insurance company.
Trial evidence proved that from July 29, 2015 through August 5, 2016, the adjusters, acting on behalf of Stavrakis and his companies, submitted insurance claims totaling more than $21 million. The insurance company paid a total of approximately $15,081,435. Of that amount, approximately $7.5 million was used to purchase new machinery, purchase parts inventory, restore the building, and for other business expenses. In addition, insurance proceeds were transferred or used for other expenses, including $600,000 which was transferred to an account in the name of Stavrakis’s wife, after which additional monthly payments of approximately $6,000 followed; approximately $98,499.20 used to purchase a 2016 Mercedes-Benz GL 550, titled and registered to Stavrakis; approximately $52,890.55 used to purchase a BMW titled and registered in the name of Stavrakis’s wife; approximately $25,500 used to purchase a 2016 Harley-Davidson Street Glide motorcycle; and approximately $35,087 in watches and jewelry.
Stavrakis faces a mandatory minimum sentence of five years and a maximum of 20 years in prison for the malicious destruction of property by fire; a mandatory 10 years in prison, consecutive to any other sentence imposed, for use of fire to commit a federal felony; and a maximum sentence of 20 years in prison for each of two counts of wire fraud. U.S. District Judge Ellen L. Hollander has scheduled sentencing for January 24, 2020.
United States Attorney Robert K. Hur commended the ATF, the Office of the Maryland State Fire Marshal, and the Baltimore Police Department for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Judson T. Mihok and Paul E. Budlow, who are prosecuting the case.
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Augusta Man Pleads Guilty to Robbery ChargesRead the Press Release
Bangor, Maine: An Augusta man pleaded guilty yesterday in federal court in Bangor to four counts of interfering with commerce by robbery, U.S. Attorney Halsey B. Frank announced.
According to court records, on February 25, 2019, and on July 17, 20 and 23, 2019, Barry Grant, Jr., 38, robbed four different Augusta businesses at knife point. On each occasion he fled the scene with cash from the register. Grant was arrested by Augusta Police while fleeing the July 23 robbery.
Grant faces up to 20 years in prison, a $250,000 fine, and three years of supervised release for each count. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The Augusta Police Department and the FBI investigated the case, which was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime. For more information about PSN please visit www.justice.gov/psn.
Arizona Truck Driver Sentenced to Two Years in Federal Prison for Causing Bus Crash that Left One Man Dead on Fort Irwin Army BaseRead the Press Release
RIVERSIDE, California – An Arizona man has been sentenced to 24 months in federal prison for involuntary manslaughter in a fatal bus crash that happened after he parked his truck – without any lights or warning cones – in the middle of a highway on the Fort Irwin Army Base in the Mojave Desert.
Steven Kilty, 52, of Apache Junction, Arizona, was sentenced late Monday afternoon by United States District Judge Jesus G. Bernal.
After a five-day trial that ended in early October 2018, a federal jury found Kilty of involuntary manslaughter. The evidence presented at trial showed that Kilty, who was delivering a military tactical vehicle, arrived at Army’s National Training Center at Fort Irwin on June 1, 2014. Kilty had arrived at the base the night before his scheduled delivery, and he parked his tractor-trailer in the right lane of the road on Fort Irwin property. Kilty turned off the lights on the truck and, instead of putting out any safety triangle reflectors or turning on his hazard lights, he went to sleep in the berth of his truck – while the truck was still parked in the middle of the roadway.
Just after 5 a.m. on June 2, prior to sunrise, a Victor Valley Transit Authority bus transporting commuters to Fort Irwin collided with the parked truck. As a result of the collision, Dail Lee Keiper, 62, of Barstow, was killed and seven people suffered significant injuries, including one man who lost his arm.
“The death was the direct result of defendant’s decision to park the semi-truck loaded with an armored vehicle in the middle of a moving lane of traffic,” prosecutors wrote in a sentencing memorandum filed with the court. “Rather than a single isolated decision, the accident was the culmination of a number of reckless decisions made by (the) defendant.”
The evidence presented at trial showed that Kilty was “grossly negligent” because his truck was blocking traffic on the roadway and he failed to place any warning reflectors, both of which are violations of the California Vehicle Code.
Kilty was indicted in this case in March 2016. He initially was tried in this matter in late 2017, but a jury was unable to reach a unanimous verdict, and a mistrial was declared.
This case was investigated by the FBI, California Highway Patrol, the U.S. Army Criminal Investigation Command, and the Fort Irwin Police Department.
This matter was prosecuted by Special Assistant United States Attorney Paul D. Levers and Assistant United States Attorney Jerry C. Yang of the Riverside Branch Office.
Another young man charged with making online threatsRead the Press Release
BROWNSVILLE, Texas – A federal grand jury has indicted an 18-year-old resident of Harlingen for making threats to damage federal and religious buildings, announced U.S. Attorney Ryan K. Patrick.
Joel Hayden Schrimsher is charged in a six-count indictment, returned today, alleging he made threats through the internet to damage or destroy buildings and conveyed false or misleading information through the internet concerning those threats. He is expected to make his initial appearance before U.S. Magistrate Judge Ronald G. Morgan in Brownsville later this week.
Schrimser is the second young adult facing federal charges in less than a week related to making threats via social media platforms. A Corpus Christi 19-year-old was charged Oct. 24 after he made threats on his Facebook account.
“Parents must talk with their kids about the repercussions of making threats to schools and other public places,” said Patrick. “Law enforcement responses are thorough, time consuming and take finite resources to address.”
The indictment alleges Schrimsher made threats via his Twitter account indicating he intended to mail a bomb to the Federal Reserve, set a Mosque on fire and shoot at a Synagogue.
If convicted of making a threat to damage or destroy a building through the use of an instrument of interstate or foreign commerce, Schrimsher faces up to 10 years in federal prison, while conveying false or misleading information carries up to a five-year-term of federal imprisonment. Both charges could result in a $250,000 maximum possible fine.
The FBI, Cameron County District Attorney’s Office, police departments in Harlingen and Brownsville and Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant U. S. Attorneys Jody Young and Oscar Ponce 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.Accounting Firm Sentenced for Failing to File Cash Transaction FormsRead the Press Release
Portland, Maine: A Lewiston accounting firm was sentenced yesterday in federal court in Portland for failing to file cash transaction forms, U.S. Attorney Halsey B. Frank announced.
U.S. District Judge George Z. Singal sentenced Leonardo & Co., P.A. to one year of probation. The company was also fined $15,000 and ordered to forfeit $12,500. The company pleaded guilty on June 12, 2019.
According to court records, in 2017, Leonardo & Co. wrote four checks, each in the amount of $12,500, to a member of a marijuana trafficking organization. The checks were drawn on accounts associated with the firm. The payments did not involve a tax refund or payment for any services rendered to the firm. Instead, on each occasion, the company exchanged the checks for $12,500 in cash.
Because the checks involved the receipt of more than $10,000 in U.S. currency, federal law required Leonardo & Co. to file a report commonly known as a Form 8300. The company failed to file reports as required by federal law and as a result intentionally evaded the mandated reporting requirements.The U.S. Drug Enforcement Administration and the IRS Criminal Investigation Division investigated the case.
The prosecution is a result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF) Program, a partnership between federal, state, and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high-level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state, and local law enforcement.
A Member of the Seven Mile Bloods Street Gang Was Sentenced to Life, the Other to 18 Years on Racketeering and Other Related ChargesRead the Press Release
Two members of the Seven Mile Bloods Street Gang were sentenced for their participation in various criminal acts, including racketeering conspiracy and related firearm offenses, announced United States Attorney Matthew Schneider.
Schneider was joined in the announcement by Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Steven M. D'Antuono, Special Agent in Charge of the Detroit Field Office and Chief James Craig, Detroit Police Department.
“These sentences should send a clear message to other members of gangs operating in the City of Detroit – our community has no tolerance for the senseless murders and violence spread by gang members,” said U.S. Attorney Schneider.
Corey Bailey, aka “Sonny,” “Cocaine Sonny,” 31, of Detroit, was sentenced to two life sentences and three 10 year sentences, all to run concurrent, after having been convicted of RICO conspiracy; murder in aid of racketeering; attempted murder in aid of racketeering; and possession of a firearm in furtherance of a crime of violence;
Arlandis Shy, aka “Grymee,” “Vil,” 30, of Clinton Township was sentenced to 18 years and 4 months after having been convicted of RICO conspiracy.
The 10-week trial was conducted last year before U.S. District Judge George Caram Steeh in Detroit, Michigan. The jury deliberated approximately seven days before reaching their verdicts. Amongst those convicted were:
•Robert Brown II, aka “R.O.,” 37, of Warren, Michigan, is awaiting sentencing after having been convicted of RICO conspiracy, attempted murder in aid of racketeering; and use and carry of a firearm during and in relation to a crime of violence; and
•Keithon Porter, aka “KP,” 33, of Detroit; is awaiting sentencing after having been convicted of RICO conspiracy; murder in aid of racketeering; attempted murder in aid of racketeering; and use and carry of a firearm during and in relation to a crime of violence causing death.
A fifth defendant, Eugene Fisher, aka “Fes,” 39, of Detroit, was sentenced to 90 months after having been convicted of two counts of felon in possession of a firearm.
According to evidence presented during the trial, the Seven Mile Bloods gang operates on the east side of Detroit, between Gratiot Avenue and Kelly Road and between Seven and Eight Mile Roads. Seven Mile Bloods or “SMB” members have claimed this area as their territory and refer to it as the “Red Zone.” The area is in zip code 48205, which SMB members refer to as “4-8-2-0-Die” in some of their rap lyrics.
Evidence presented at trial showed an ongoing gang war between the Seven Mile Bloods and an alliance of other gangs operating on Detroit’s east side stemming from a murder that occurred in July 2014. These rival gangs have been violently attacking one another and have posted respective “hit lists” on social media. This shooting war has led to increased homicides and non-fatal shootings on Detroit’s east side.
This case was the work of the Detroit One Initiative. Investigators were able to bring together separate probes into various members of this organization and its criminal activities into one encompassing investigation. Partners include the Detroit Police Department Gang Intelligence Unit, the FBI Violent Gang Task Force, which consists of representatives of Detroit Police Department, U.S. Border Patrol, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, U.S. Customs and Border Protection, Michigan Department of Corrections and Michigan State Police, with the cooperation of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the U.S. Drug Enforcement Administration (DEA).
The investigation further resulted in the seizure of more than 20 firearms, including several high-powered assault rifles.
The case was prosecuted by Julie A. Finocchiaro of the Criminal Division’s Organized Crime and Gang Section, Justin Wechsler of the Criminal Section of the Antitrust Division, and Assistant U.S. Attorneys, Mark Bilkovic and Tare Wigod of the U.S. Attorney’s Office for the Eastern District of Michigan.
3 Pennsylvania Residents Indicted on Drug and Firearms OffensesRead the Press Release
PITTSBURGH – Three Pennsylvania residents have been indicted by a federal grand jury in Pittsburgh, Pennsylvania, on charges of violating the federal narcotics and firearms laws, United States Attorney Scott W. Brady announced today.
The 11-count Superseding Indictment named Mark Carter, age 33, formerly of Butler, Pennsylvania, Brandon Morris, aka Bopp, age 34, of Philadelphia County, Pennsylvania, and Janell Hunter, age 23, of Philadelphia County, Pennsylvania, as defendants.
According to the Superseding Indictment, on dates from January 2016 to June 2016, defendant Morris possessed with intent to distribute heroin, crack cocaine and fentanyl, and conspired with defendant Carter to possess with intent to distribute crack cocaine and heroin. The Superseding Indictment also alleges that Morris, a former felon was in possession of a firearm.
The Superseding Indictment further alleges that on dates from June to July 2016, defendant Carter possessed with intent to distribute heroin and crack cocaine and conspired with defendant, Hunter to possess with intent to distribute crack cocaine and heroin. The Superseding Indictment asserts that the amount of crack cocaine attributable to defendants Morris and Carter is 28 grams or more.
For Morris and Carter, the law provides for a maximum total sentence of not less than five years and up to 40 years in prison, a fine of $5,000,000, or both. For Hunter, the law provides for a maximum total sentence of not more than 20 years in prison, a fine of $1,000,000, or both. 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 defendants.
Assistant United States Attorney Shanicka L. Kennedy is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Pennsylvania State Police conducted the investigation leading to the Superseding Indictment in this case.
A Superseding Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
28 October 2019
Wisconsin Woman Sentenced for Role in Office Burglary of a U.S. SenatorRead the Press Release
A former staff member who worked in an office of a United States Senator was sentenced today to two years of supervised probation with 200 hours of community service for burglary of the office of a U.S. Senator.
The announcement was made by Alessio D. Evangelista, the Acting U.S. Attorney in this case, and Steven A. Sund, Chief of the U.S. Capitol Police.
Samantha DeForest Davis, 24, of Beloit, Wisconsin, pled guilty to the federal charge of aiding and abetting computer fraud, and to the District of Columbia charge of attempted tampering with evidence on July 30, 2019. DeForest Davis was sentenced today on two separate counts to a total of 180 days in prison, execution of sentence suspended, and placed on two years of supervised probation. As part of her conditions of probation, she was ordered to perform 200 hours of community service, stay away from the Senator’s office to include current and former staff, and to not use TOR or anonymized computer applications.
According to the government’s evidence, DeForest Davis was a staffer employed by a U.S. Senator, and was also friends with Jackson Cosko, a former staffer for that same U.S. Senator who had been fired in May 2018. Between July and October 2018, Cosko began burglarizing the Senator’s office, illegally accessing Senate computers, and stealing information from those computers. By August 2018, DeForest Davis started to suspect that Cosko was breaking into the Senator’s office and stealing information from Senate computers, but DeForest Davis did not report Cosko. Finally, on the night of October 2, 2018, DeForest Davis agreed to lend Cosko her keys to the Senator’s office. When she provided her keys, DeForest Davis understood that Cosko needed the keys to unlawfully enter the Senator’s office to access Senate computers.
Cosko used DeForest Davis’s keys to break into the Senator’s office that night, and during the break-in, Cosko illegally accessed a Senate computer for the purpose of obtaining information. However, during the break-in, a witness noticed and recognized Cosko in the office. Cosko fled, but the witness reported the break-in to U.S. Capitol Police.
The following morning, on October 3, 2018, Cosko returned DeForest Davis’s keys and asked DeForest Davis to “wipe down” the computers, keyboards, and computer mice in the Senator’s office, in the hope that DeForest Davis could thereby destroy any latent fingerprints and other evidence of Cosko’s burglary. DeForest Davis, knowing that Cosko had unlawfully entered the office the night before, did attempt to wipe down the computers, but was unsuccessful because another employee entered the office early.
As part of her plea, DeForest Davis acknowledged that she lied to her employer and the U.S. Capitol Police on several occasions during the investigation.
Cosko pled guilty to his role in the criminal activity on April 5, 2019. On June 27, 2019, he was sentenced by Judge Thomas F. Hogan to 48 months in prison.
In announcing the sentence, Acting U.S. Attorney Evangelista and Chief Sund commended the work of those who worked on the case. The U.S. Capitol Police investigated the case. They also acknowledged the efforts of those who handled the case for the U.S. Attorney’s Office, including Paralegal Specialists Diane Brashears and Donna Galindo and Victim/Witness Advocate Yvonne Bryant and Assistant U.S. Attorneys Tejpal S. Chawla, Demian S. Ahn, and Youli Lee who prosecuted the case.
Wetzel County man admits to drug chargeRead the Press Release
WHEELING, WEST VIRGINIA – Zack Jerico, of New Martinsville, West Virginia, has admitted to selling drugs near a school, U.S. Attorney Bill Powell announced.
Jerico, age 32, pled guilty to one count of “Distribution of Methamphetamine in Proximity to a Protected Location.” Jerico admitted to selling methamphetamine near New Martinsville Elementary School in Wetzel County in May 2018.
Jerico faces up to 40 years incarceration and a fine of up to $2,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Robert H. McWilliams, Jr. is prosecuting the case on behalf of the government. The Marshall County Drug & Violent Crimes Task Force, a HIDTA-funded initiative, and the West Virginia State Police investigated.
Senior U.S. District Judge Frederick P. Stamp, Jr. presided.
Webster County Man Pleads Guilty to Drug and Gun ChargesRead the Press Release
A man who distributed cocaine and possessed a gun in furtherance of his drug trafficking pled guilty October 22, 2019, in federal court in Sioux City.
Quinn Schleimer, 21, from Fort Dodge, Iowa, was convicted of two counts of distribution of cocaine and one count of possession of a firearm during a drug trafficking crime.
At the plea hearing, Schleimer admitted that on three occasions in 2017 he distributed 1/8 ounce of powder cocaine to an individual cooperating with law enforcement. Schleimer also admitted to selling about 4 ½ ounces of cocaine and 10 pounds of marijuana in 2017. During a search of Schleimer’s residence, officers seized two loaded shotguns.
Sentencing before United States District Court Chief Judge Leonard T. Strand will be set after a presentence report is prepared. Schleimer was taken into custody by the United States Marshal after the guilty plea and will remain in custody pending sentencing. On the drug convictions Schleimer faces a possible maximum sentence of 20 years’ imprisonment, a $1,000,000 fine, and at least three years of supervised release following any imprisonment. On the firearm conviction, Schleimer faces a mandatory minimum term of imprisonment of 5 years’ (which must be consecutive to any term imposed on the other two counts), and a possible maximum sentence of life imprisonment, a $250,000 fine, and a term of not more than three years of supervised release.
The case is being prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by Iowa Division of Narcotics Enforcement, Fort Dodge Police Department, Iowa Division of Criminalistics Laboratory, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 17-3051. Follow us on Twitter @USAO_NDIA.
Virginia Man Sentenced to 25 Years in Prison for Producing Child PornographyRead the Press Release
HUNTINGTON, W.Va. – A Vinton, Virginia, man was sentenced to federal prison for a child pornography offense, announced United States Attorney Mike Stuart. Conner Ray Blevins, 19, was sentenced to 25 years in prison for production of a video of child pornography. Blevins was also sentenced to serve 25 years of supervised release and will be required to register as a sex offender following his release from prison.
“Individuals committing egregious crimes like this should be prepared to do significant time, because we’re coming after you,” said United States Attorney Mike Stuart. “And we’re going to argue for the longest sentences possible.”
Blevins previously admitted that on October 5, 2018, he traveled from his residence in Virginia to West Virginia, where he picked up two minors under the age of 12 with whom he had been communicating with over Facebook. Blevins took the minors to a hotel in Putnam County where he proceeded to record a video depicting himself engaging in sexually explicit conduct with one of the minors. Blevins also admitted to engaging in sexually explicit conduct with the other minor as well.
The Putnam County Sheriff’s Department, the Mason County Sheriff’s Department, the West Virginia State Police, and the Department of Homeland—Security Homeland Security Investigations conducted the investigation. United States District Judge Robert C. Chambers presided over the hearing. Assistant United States Attorney Jennifer Rada Herrald is handling the prosecution.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative of the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
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Venice Man Pleads Guilty to Federal Criminal Charge for Selling Fentanyl that Caused Los Angeles Man’s Fatal OverdoseRead the Press Release
LOS ANGELES – A Venice man who sold the powerful synthetic opioid fentanyl to a 19-year-old man who suffered a fatal overdose last year pleaded guilty today to a federal narcotics offense.
Julian Miles Mayers-Johnson, 32, pleaded guilty to one count of possession with intent to distribute fentanyl. He has been in custody since his arrest on April 17.
Mayers-Johnson admitted in his plea agreement that on October 19, 2018, outside a fast-food restaurant in Venice, he knowingly possessed fentanyl, intending to distribute it. That same evening, at the same location, Mayers-Johnson sold one-half gram of fentanyl to the victim, who was residing at a sober living home in the Beverlywood neighborhood of Los Angeles, according to court documents. The victim later ingested the fentanyl that Mayers-Johnson supplied, resulting in the victim’s overdose on October 20, and, one day later, the victim’s death, the plea agreement states.
A search of the victim’s cell phone resulted in law enforcement determining that Mayers-Johnson sold the fatal dose of fentanyl to the victim, according to court documents.
United States District Judge Otis D. Wright II scheduled a May 4, 2020 sentencing hearing, at which time Mayers-Johnson will face a statutory maximum sentence of 20 years in federal prison.
This matter was investigated by the Drug Enforcement Administration and the High Intensity Drug Trafficking Area (HIDTA) Opioid Response Team, which is tasked with investigating suspected opioid-related overdose deaths in Los Angeles County.
This case is being prosecuted by Assistant United States Attorneys J. Jamari Buxton and Ali Moghaddas of the General Crimes Section.