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Wednesday 4 September 2019
Kirksville Man Sentenced for Receipt of Child PornographyRead the Press Release
St. Louis, MO – Scott B. Walsh, 48, of Kirksville, MO, was sentenced to 20 years in federal prison for Receipt of Child Pornography. Walsh appeared before United States District Judge John A. Ross.
According to court documents, in September of 2017 it came to the attention of Shelbina and Kirksville Police Departments that Walsh had solicited child pornography from a twelve-year boy in the area. The police and FBI discovered that Walsh, a registered sex offender, had befriended the twelve-year old boy, and given the child presents (such a bike and cell phone). Walsh persuaded the child, after numerous and constant text messaging, to send Walsh a self-produced video which depicted child pornography. The Kirksville Regional Computer Crimes Unit was able to forensically locate the video on the child’s cell phone, as well as, the many text messages Walsh had sent the child.
Walsh pled guilty to Deviate Sexual Assault in an unrelated case on December 20, 2004, Boone County, Missouri and received five years in state prison.
The Kirksville Police Department, the Kirksville Regional Computer Crimes Unit, the Federal Bureau of Investigation, and the Shelbina Police Department investigated the case.
Assistant U.S. Attorney Colleen Lang is handling the case for the U.S. Attorney’s Office.
Kentucky Woman Pleads Guilty to Sex Trafficking Two VictimsRead the Press Release
WASHINGTON – Cleoretta Allen, 41, of Louisville, Kentucky, pleaded guilty today in the U.S. District Court for the Western District of Kentucky to two counts of sex trafficking by force, fraud, or coercion and one count of interstate transportation for prostitution.
According to court documents, the defendant used violence, threats, fear, and intimidation to coerce two young women to engage in commercial sex acts in the Louisville area between September 2017 and October 2017. Allen also transported the victims from Kentucky to Georgia to engage in commercial sex. On Oct. 31, 2017, the victims contacted the police, which resulted in the defendant’s arrest.
“This defendant abused the victims and coerced them to engage in commercial sex for her gain,” said Assistant Attorney General Eric Dreiband for the Department of Justice’s Civil Rights Division. “The Department of Justice will continue to work tirelessly to seek justice on behalf of victims and survivors of human trafficking.”
“Our basic task in law enforcement is to protect the most vulnerable in this community,” said U.S. Attorney Russell M. Coleman of the Western District of Kentucky. “This successful investigation and prosecution demonstrates that principle is just how we do business in the Western District of Kentucky.”
“Human traffickers have no limits and will find victims anywhere,” said Special Agent in Charge James Robert Brown Jr. of the FBI’s Louisville Field Office. “Through investigations like this with our law enforcement partners, FBI Louisville is fiercely focused on freeing victims from the abusive life of sex trafficking and bringing to justice those who exploit them.”
In accordance with the plea agreement, the defendant faces a sentence of 15 to 19.5 years in prison. She is further subject to a maximum fine of $250,000 per count of conviction, as well as mandatory restitution to the victims. Sentencing will be scheduled on a later date.
This case was investigated by the FBI in Louisville, Kentucky, the Louisville Metro Police Department, and the Jefferson County Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Amanda E. Gregory of the Western District of Kentucky and Special Litigation Counsel William E. Nolan and Trial Attorney Kate Alexander of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Kentucky Woman Pleads Guilty to Sex Trafficking Two VictimsRead the Press Release
Cleoretta Allen, 41, of Louisville, Kentucky, pleaded guilty today in the U.S. District Court for the Western District of Kentucky to two counts of sex trafficking by force, fraud, or coercion and one count of interstate transportation for prostitution.
According to court documents, the defendant used violence, threats, fear, and intimidation to coerce two young women to engage in commercial sex acts in the Louisville area between September 2017 and October 2017. Allen also transported the victims from Kentucky to Georgia to engage in commercial sex. On Oct. 31, 2017, the victims contacted the police, which resulted in the defendant’s arrest.
“This defendant abused the victims and coerced them to engage in commercial sex for her gain,” said Assistant Attorney General Eric Dreiband for the Department of Justice’s Civil Rights Division. “The Department of Justice will continue to work tirelessly to seek justice on behalf of victims and survivors of human trafficking.”
“Our basic task in law enforcement is to protect the most vulnerable in this community,” said U.S. Attorney Russell M. Coleman of the Western District of Kentucky. “This successful investigation and prosecution demonstrates that principle is just how we do business in the Western District of Kentucky.”
“Human traffickers have no limits and will find victims anywhere,” said Special Agent in Charge James Robert Brown Jr of the FBI’s Louisville Field Office. “Through investigations like this with our law enforcement partners, FBI Louisville is fiercely focused on freeing victims from the abusive life of sex trafficking and bringing to justice those who exploit them.”
In accordance with the plea agreement, the defendant faces a sentence of 15 to 19.5 years in prison. She is further subject to a maximum fine of $250,000 per count of conviction, as well as mandatory restitution to the victims. Sentencing will be scheduled on a later date.
This case was investigated by the FBI in Louisville, Kentucky, the Louisville Metro Police Department, and the Jefferson County Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Amanda E. Gregory of the Western District of Kentucky and Special Litigation Counsel William E. Nolan and Trial Attorney Kate Alexander of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Justice Department Sues to Block Novelis's Acquisition of AlerisRead the Press Release
The Department of Justice filed a civil antitrust lawsuit today seeking to block Novelis Inc.’s proposed acquisition of Aleris Corporation in order to preserve competition in the North American market for rolled aluminum sheet for automotive applications, commonly referred to as aluminum auto body sheet.
The Antitrust Division’s lawsuit alleges that the transaction would combine two of only four North American producers of aluminum auto body sheet. Automakers rely on Novelis and Aleris to produce aluminum parts for automobiles to make cars lighter, more fuel-efficient, safer and more durable. The department filed its lawsuit in the U.S. District Court for the Northern District of Ohio.
The Antitrust Division has agreed with defendants to refer the matter to binding arbitration should certain conditions be triggered. The arbitration would resolve the issue of product market definition. The arbitration would take place pursuant to the Administrative Dispute Resolution Act of 1996 (5 U.S.C. § 571 et seq.) and the Antitrust Division’s implementing regulations (61 Fed. Reg. 36,896 (July 15, 1996)). This would mark the first time the Antitrust Division is using this arbitration authority to resolve a matter.
“Automakers increasingly need aluminum auto body sheet to satisfy American consumers’ demand for larger vehicles that are lighter and more fuel-efficient. The loss of a competing supplier of aluminum auto body sheet ultimately would harm American car buyers,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “This arbitration would allow the Antitrust Division to resolve the dispositive issue of market definition in this case efficiently and effectively, saving taxpayer resources. Alternative dispute resolution is an important tool that the Antitrust Division can and will use, in appropriate circumstances, to maximize its enforcement resources to protect American consumers.”
As alleged in the complaint, Aleris is an aggressive competitor whose expansion into the North American market had an immediate impact on pricing in North America. If this deal were allowed to proceed, Novelis would lock up 60 percent of projected total domestic capacity and the vast majority of uncommitted capacity, enabling the company to raise prices, reduce innovation and provide less favorable terms of service to the detriment of automakers and ultimately American consumers. Novelis’s acquisition of Aleris would eliminate a rival it described as “poised for transformational growth.” The complaint quotes internal presentations and emails describing an anticompetitive rationale for the transaction:
- Novelis worried that Aleris could be sold to a “[n]ew market entrant in the US with lower pricing discipline” than Novelis, and that an “[a]lternative buyer [was] likely to bid aggressively and negatively impact pricing” in the market.
- “[A]n acquisition by us as the market leader will help preserve the industry structure versus a new player . . . coming into our growth markets and disturbing the industry structure to create space for himself, while hurting us the most.”
Novelis is a Canadian corporation headquartered in Atlanta, Georgia. It offers flat-rolled aluminum products in three segments: automotive, beverage can and specialty products. In the fiscal year ending March 31, 2019, Novelis’s revenues were approximately $12.3 billion. Novelis is a wholly-owned subsidiary of Hindalco Industries Ltd., an Indian company headquartered in Mumbai, India.
Aleris is a Delaware corporation headquartered in Cleveland, Ohio. It offers flat-rolled aluminum products to the automotive, aerospace, and building and construction industries, among others. In 2018, Aleris’s revenues were approximately $3.4 billion.
Jury Finds San Antonio Man Guilty of Possession of Child PornographyRead the Press Release
In San Antonio today, a federal jury convicted 44-year-old Jeffrey Clinton Michalik of possession of child pornography, announced U.S. Attorney John F. Bash and Homeland Security Investigation (HSI) Special Agent in Charge Shane Folden, San Antonio Division.
Evidence presented at trial revealed that five images of child pornography were downloaded from a website in Switzerland using the defendant’s secure IP address assigned to his house. HSI agents executed a federal search warrant for child pornography at the defendant’s house. The defendant admitted viewing child pornography on a laptop computer and provided agents with consent to search that computer. The laptop computer contained over 2500 images and 112 videos depicting children engaged in sexually explicit conduct. The majority of the child pornography files depicted children under the age of 12, including children as young as three.
Michalik, who faces up to 20 years in federal prison, was placed into the custody of the U.S. Marshals Service following the verdict. Sentencing is scheduled for 9:00am on December 9, 2019, before Senior U.S. District Judge David A. Ezra.
HSI agents investigated this case. Assistant U.S. Attorney Tracy Thompson is prosecuting this case on behalf of the Government.
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.
Judge Decides CVS-Aetna Final Judgment is in the Public Interest and Grants United States' MotionRead the Press Release
A federal district court in Washington, D.C. today entered a final order giving effect to the settlement that the Department of Justice reached with CVS Health Corporation and Aetna Inc., which required the parties to divest Aetna’s Medicare Part D prescription drug plan (PDP) business for individuals in order to proceed with their $69 billion merger. The divestiture to WellCare Health Plans Inc., an experienced health insurer focused on government-sponsored health plans, including Medicare Part D individual prescription drug plans, resolved the department’s competition concerns with the underlying transaction.
“I am pleased with the Court’s decision finally to enter the judgment as ‘well within the reaches of the public interest’ !” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “The divestiture of Aetna’s individual PDP business provides a comprehensive remedy to the harms the Justice Department identified. The entry of the Final Judgment protects seniors and other vulnerable customers of individual PDPs from the anticompetitive effects that would have occurred if CVS and Aetna had merged their individual PDP businesses.”
The department’s Antitrust Division, along with the offices of five state Attorneys General, filed a civil antitrust lawsuit on Oct. 10, 2018, in the U.S. District Court for the District of Columbia to enjoin the proposed transaction. At the same time, the department and the Plaintiff States filed the proposed settlement, which the Court entered today. The participating state Attorneys General offices represent California, Florida, Hawaii, Mississippi and Washington.
CVS, headquartered in Woonsocket, Rhode Island, is the nation’s second-largest provider of individual prescription drug plans, with approximately 4.8 million members. It also operates a retail pharmacy chain and a pharmacy benefit manager called Caremark. CVS earned revenues of approximately $185 billion in 2017.
Aetna, headquartered in Hartford, Connecticut, was the nation’s third-largest health-insurance company and fourth-largest individual prescription drug plan insurer, with over two million prescription drug plan members. Aetna earned revenues of approximately $60 billion in 2017.
Johnson County Man Sentenced to 65 Months for Embezzling from a Lexington BusinessRead the Press Release
LEXINGTON, Ky. – Franklin Fletcher, 55, of Oil Springs, Ky., was sentenced on Friday to 65 months in federal prison, by Chief United States District Judge, Danny C. Reeves, for wire fraud and aggravated identity theft. Fletcher was also ordered to pay $374,192.89 in restitution.
Fletcher pleaded guilty on May 9, 2019, and admitted to embezzling nearly $375,000 from his former employer, NYTIS Exploration, from September 2012 until March 2018. According to court records, Fletcher abused his authority as an Accounting Manager to generate checks that he would deposit into his own accounts. He engaged in a complicated series of actions to hide the stolen money from his employer. He further concealed his crime by writing the checks in another individual’s name and forging her signature on the endorsement line.
According to court documents, this was not Fletcher’s first act of embezzlement. Records indicate that from some point until 2009, Fletcher embezzled nearly $1,000,000 from his then-employer, again abusing his position in accounting at that Kentucky energy company. Fletcher paid a significant portion of the money he embezzled from NYTIS Exploration against the restitution agreement he had entered into with his prior employer.
Under federal law, Fletcher must serve 85 percent of his prison sentence, and upon his release, he will be under the supervision of the United States Probation Office for three years.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky and Richard Ferretti, Special Agent in Charge for the United States Secret Service, jointly announced the sentence.
Jefferson County Felon Sentenced for Federal Firearms ViolationsRead the Press Release
BEAUMONT, Texas – A 28-year-old Beaumont, Texas man has been sentenced to federal prison for firearms violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.
Raymond Earl Robinson, III, pleaded guilty on April 15, 2019, to being a felon in possession of a firearm and possession of a firearm during a drug trafficking crime and was sentenced to 97 months in federal prison today by U.S. District Judge Thad Heartfield.
According to information presented in court, on Feb. 11, 2018, Robinson was a passenger in a vehicle stopped by local police in Beaumont. A search of the vehicle during the stop revealed a loaded automatic handgun, ammunition and various illegal drugs including marijuana, Xanax, Hydrocodone, and methamphetamine. On Mar. 24, 2018, Robinson was driving a vehicle in Beaumont when he was stopped by local police. During the traffic stop, it was discovered that Robinson had multiple warrants and was arrested. A semiautomatic handgun was discovered during a search of the vehicle. Further investigation revealed Robinson was a convicted felon having been previously found guilty of possession of a controlled substance in 2012, evading arrest in 2013, firearms smuggling in 2013, and unlawfully carrying a weapon in 2015. It is a violation of federal law for a convicted felon to own or possess a firearm or ammunition. Robinson was indicted on June 6, 2018 and charged with federal firearms violations.
“By removing a criminal involved in the illegal possession of firearms and narcotics, ATF and Beaumont Police Department have successfully shortened the reach of this individuals’ capability to do harm to our community,” said ATF Special Agent in Charge Fred Milanowski.
This case was prosecuted as part of the Project Safe Neighborhoods Initiative. Project Safe Neighborhoods is aimed at reducing gun and gang violence, deterring illegal possession of guns, ammunition and body armor, and improving the safety of residents in the Eastern District of Texas. Participants in the initiative include community members and organizations as well as federal, state and local law enforcement agencies.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Randall L. Fluke.
Inmate at FCI Gilmer indicted for attempting to obtain suboxoneRead the Press Release
CLARKSBURG, WEST VIRGINIA – Eduardo Ramos, an inmate at FCI Gilmer in Glenville, West Virginia, was indicted by a federal grand jury today for attempt to possession contraband, United States Attorney Bill Powell announced.
Ramos, age 35, is charged with one count of “Attempt to Obtain a Prohibited Object (Narcotic).” Ramos is accused of attempting to obtain suboxone inside FCI Gilmer in December 2018.
Ramos faces up to 20 years incarceration and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Brandon S. Flower is prosecuting the case on behalf of the government. The Bureau of Prisons Special Investigation Services investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Illegal alien indicted on reentry chargeRead the Press Release
CLARKSBURG, WEST VIRGINIA – Jesus Sinaca-Ambrose, a citizen of Mexico, was indicted by a federal grand jury today on a reentry charge, United States Attorney Bill Powell announced.
Sinaca-Ambrose, age 30, was indicted on one count of “Reentry of Removed Alien.” Sinaca-Ambrose is accused of being in Berkeley County in July 2019 after being removed twice for being in the country illegally.
Sinaca-Ambrose faces up to two years incarceration and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Jeffrey A. Finucane is prosecuting the case on behalf of the government. The Department of Homeland Security Immigrations and Customs Enforcement and the Martinsburg Police Department investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Houston-Area Man Who Posed as Physician Found Guilty of Conspiring to Unlawfully Prescribe Hundreds of Thousands of Doses of OpioidsRead the Press Release
A Houston-area man who posed as a physician at an unregistered pain clinic was found guilty today for his role at a “pill mill” at which he and his co-conspirators illegally prescribed hundreds of thousands of doses of opioids and other controlled substances.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ryan Patrick of the Southern District of Texas and Special Agent in Charge Will R. Glaspy of the Drug Enforcement Administration’s (DEA) Houston Division made the announcement.
After a five-day day jury trial, Muhammad Arif, 61, of Katy, Texas, was found guilty of one count of conspiracy to unlawfully distribute and dispense controlled substances and three counts of unlawfully distributing and dispensing controlled substances. Arif is expected to be sentenced on a date not yet determined by U.S. District Judge Alfred H. Bennett of the Southern District of Texas, who presided over the trial.
According to the evidence presented at trial, from September 2015 through February 2016, Arif conspired with a doctor and with the owner of Aster Medical Clinic of Rosenberg, Texas, which operated as an illegal pill mill, to unlawfully prescribe controlled substances to patients. The evidence showed that Arif was not licensed to practice medicine in the United States, but posed as a physician at Aster Medical Clinic, saw patients as if he were a physician and wrote prescriptions for patients on prescription pads that had been pre-signed by the doctor, Arif’s co-conspirator.
Through this scheme, Aster Medical Clinic dispensed prescriptions for over 200,000 dosage units of hydrocodone, a Schedule II controlled substance, and over 145,000 dosage units of carisoprodol, a Schedule IV controlled substance. The combination of hydrocodone and carisoprodol is a dangerous drug cocktail with no known medical benefit, the evidence showed.
Trial evidence showed that Aster Medical Clinic issued unlawful prescriptions for controlled substances to over 40 people on its busiest days. “Crew leaders” brought numerous people to pose as patients at Aster Medical Clinic and paid for their visits in order to obtain prescriptions for controlled substances that the crew leaders would then sell on the street. Aster Medical Clinic charged approximately $250 for each patient visit, and required payment in cash, the evidence showed.
To date, two co-conspirators have pleaded guilty based on their roles in the unlawful prescription scheme at Aster Medical Clinic. Baker Niazi, 48, of Sugar Land, Texas, and Waleed Khan, 47, of Parker, Texas, are currently awaiting sentencing before U.S. District Judge Alfred H. Bennett of the Southern District of Texas.
The case was investigated by the DEA, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas. The case is being prosecuted by Assistant Deputy Chief Aleza Remis and Trial Attorney Alexis Gregorian of the Fraud Section.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and the U.S. Department of Health and Human Services (HHS) to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.
Houston, Pa. Man Pleads Guilty to Multiple Drug and Firearms OffensesRead the Press Release
PITTSBURGH, PA - A resident of Washington County, Pennsylvania pleaded guilty in federal court today to violating the federal narcotics and firearms laws, United States Attorney Scott W. Brady announced today.
Vashaun Lasalle Wright, 30, of Houston, PA, pleaded guilty to charges including conspiracy to distribute and possess with intent to distribute 40 grams or more of fentanyl; possession with intent to distribute 40 grams or more of fentanyl and a quantity of cocaine; possession of firearms and ammunition by a convicted felon; and possession of firearms in furtherance of a drug trafficking crime before United States District Judge Marilyn J. Horan.
In connection with the guilty plea, the court was advised that between March 7, 2018, and March 20, 2018, investigators with the Washington County District Attorney’s Office Drug Task Force utilized confidential informants to purchase quantities of fentanyl from Wright and his alleged co-conspirator, Alyssa Adkins. Through those investigative efforts, task force officers obtained a search warrant for a residence located on Main Street in Houston Borough, Washington County, which was utilized by the defendant and Adkins. On March 23, 2018, investigators served the search warrant and seized over 40 grams of fentanyl (which was packaged for distribution), a quantity of cocaine (which was packaged for distribution), approximately $24,000 in U.S. Currency, and three loaded firearms, amongst other evidence. Wright, a felon, admitted in connection with the plea that he unlawfully possessed the three seized firearms and ammunition. Federal law prohibits individuals with prior felony convictions from possessing firearms or ammunition. Wright further admitted to possessing the firearms in furtherance of the drug trafficking crimes charged in the Indictment.
Judge Horan scheduled sentencing for October 30, 2019, at 10:30 a.m. The law provides for a total sentence of not less than ten years and up to life in prison, a fine of not more than $11,500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history of the defendant.
Assistant United States Attorney Jerome A. Moschetta is prosecuting this case on behalf of the government.
The Washington County District Attorney’s Office Drug Task Force, Pennsylvania State Police, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives conducted the investigation that led to the prosecution of Wright.
Houston Woman Admits to Defrauding Dr. Pepper SnappleRead the Press Release
HOUSTON – The 42-year-old Friendswood woman charged with committing fraud against a popular beverage company has admitted her guilt, announced U.S. Attorney Ryan K. Patrick.
Anna Maria Sites pleaded guilty today before U.S. Magistrate Judge Nancy Johnson to conspiracy to commit mail fraud against Dr. Pepper Snapple Group Inc. (DPSG).
Sites admitted to participating in the scheme from 2010 through Feb. 17, 2015, by not paying rebates to those who had requested them. Sites handled human resources and accounting for FulFill Plus Inc., which administered the DPSG rebate campaigns. The rebates included returned bottle caps or for switching to DPSG brand drinks in restaurant/convenience store soda dispensers. DPSG paid FulFill to administer those campaigns.
Specifically, in 2014 and 2015, FulFill administered a DPSG program known as 2014 Fast Start, which paid a $75 rebate for switching to a DPSG drink in soda dispensers. DPSG paid $125,000 for FulFill to manage this campaign. Sites was responsible for rebates not being issued. Only after receiving multiple complaints would she arrange for the monies to be dispersed.
Sites sent rebate fund reports for the 2014 Fast Start rebate program to DPSG, which falsely represented that rebates were being paid when, in truth, they were not.
DPSG suffered a financial loss as a result of the scheme Sites committed. The court will determine that official amount at the time of sentencing.
U.S. District Judge Gray Miller will impose sentencing Dec. 4, 2019. At that time. Sites faces up to five years in prison and a possible $250,000 maximum fine.
She was permitted to remain on bond pending that hearing.
The FBI conducted the investigation. Assistant U.S. Attorney John Braddock is prosecuting the case.
Hollywood Hills Man Arrested on Federal Charges of Selling Fentanyl-Laced Pills to Rapper Mac Miller Two Days before His Overdose DeathRead the Press Release
COMPLAINTLOS ANGELES – A Hollywood Hills resident was arrested this morning on federal charges alleging that he sold counterfeit pharmaceutical narcotics containing fentanyl to Mac Miller two days before the hip-hop artist died of a drug overdose.
Cameron James Pettit, 28, was arrested this morning by special agents with the Drug Enforcement Administration and officers with the Los Angeles Police Department. Pettit is expected to make his initial appearance this afternoon in United States District Court in downtown Los Angeles.
Pettit was arrested pursuant to a criminal complaint filed last Friday that charges him with one count of distribution of a controlled substance.
According to the affidavit in support of the criminal complaint, Pettit and others distributed narcotics to 26-year-old Malcolm James McCormick – who recorded and performed under the name Mac Miller – approximately two days before McCormick suffered a fatal drug overdose in Studio City on September 7, 2018. The Los Angeles County Medical Examiner-Coroner later determined that McCormick died of mixed drug toxicity involving fentanyl, cocaine and alcohol.
According to communications detailed in the affidavit, late on the night of September 4, Pettit agreed to supply McCormick with 30 milligram oxycodone pills, as well as cocaine and the sedative Xanax. But, instead of providing McCormick with genuine oxycodone when he made the delivery during the early morning hours of September 5, Pettit allegedly sold McCormick counterfeit oxycodone pills that contained fentanyl – a powerful synthetic opioid that is 50 times more potent than heroin.
Two days after Pettit allegedly supplied McCormick with the fentanyl-laced pills, McCormick died in his Studio City home. The affidavit states that that hours after news outlets reported McCormick’s death, Pettit sent a message to a friend saying, “Most likely I will die in jail.”
Investigators believe that McCormick died after snorting the counterfeit oxycodone pills containing fentanyl and that those pills had been provided by Pettit, according to the affidavit. While another individual allegedly supplied McCormick with other drugs prior to his death, according to the affidavit those narcotics drugs did not contain fentanyl.
“Fentanyl disguised as a genuine pharmaceutical is a killer – which is being proven every day in America,” said United States Attorney Nick Hanna. “Drugs laced with cheap and potent fentanyl are increasingly common, and we owe it to the victims and their families to aggressively target the drug dealers that cause these overdose deaths.”
“While the death of any victim of the opioid epidemic is tragic, today’s arrest is another success for the DEA’s HIDTA Fusion Task Force,” said DEA Los Angeles Deputy Special Agent in Charge Daniel C. Comeaux. “Let our message be clear, if you peddle illegal drugs and kill someone, the DEA will be the voice of the victim. We will not rest until you face the justice system.”
If convicted of the drug trafficking charge alleged in the complaint, Pettit would face a statutory maximum sentence of 20 years in federal prison.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The ongoing investigation in this matter is being conducted by the High Intensity Drug Trafficking Area’s (HIDTA) Opioid Response Team, which operates under the direction of the DEA. The Los Angeles Police Department provided substantial assistance in this matter.
This case is being prosecuted by Assistant United States Attorney Matthew J. Jacobs of the General Crimes Section.
Hinds County Man Pleads Guilty Under Project EJECT to Illegal Possession of FirearmRead the Press Release
Jackson, Miss. – Herbert Thomas, 41, of Jackson, pled guilty today before Chief U.S. District Judge Daniel P. Jordan to being a felon in possession of a firearm, announced U.S. Attorney Mike Hurst and Special Agent in Charge Kurt Thielhorn with the Bureau of Alcohol, Tobacco, Firearms and Explosives.
On January 23, 2018, Thomas fled from Jackson Police Department officers, first in his vehicle and then on foot, before ultimately being subdued by law enforcement. Upon a subsequent inventory of his vehicle, a firearm was located. When interviewed, Thomas admitted to knowingly possessing the firearm and being a convicted felon. He was previously convicted of felonious motor vehicle theft and felony fleeing from a law enforcement officer in Hinds County in 2009
Thomas will be sentenced by Chief Judge Jordan on January 6, 2020 at 9:00 a.m. He faces a maximum penalty of 10 years in prison and a $250,000 fine.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Jackson Police Department. It is being prosecuted by Assistant United States Attorneys Lynn Murray and Andrew W. Eichner.
This case is part of Project EJECT, an initiative by the U.S. Attorney’s Office for the Southern District of Mississippi under the U.S. Department of Justice’s Project Safe Neighborhoods (PSN). EJECT is a holistic, multi-disciplinary approach to fighting and reducing violent crime through prosecution, prevention, re-entry and awareness. EJECT stands for “Empower Justice Expel Crime Together.” PSN is bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Former Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Hartford Man Sentenced to 54 Months in Prison for Trafficking Heroin, Fentanyl and Other DrugsRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, today announced that ANGEL GONZALEZ, also known as “Spider” and “June,” 41, of Hartford, was sentenced yesterday by U.S. District Judge Michael P. Shea in Hartford to 54 months of imprisonment, followed by three years of supervised release, for distributing large quantities of heroin and fentanyl in Hartford.
According to court documents and statements made in court, in August 2017, the Drug Enforcement Administration’s Hartford Task Force launched an investigation into an organization that was selling large amounts of heroin, fentanyl and other narcotics in Hartford. The investigation, which included approximately six months of court-authorized wiretaps, controlled purchases of narcotics and physical surveillance, revealed that members of the organization supplied distribution quantities of narcotics to several Hartford-area drug dealers, and used multiple locations in Hartford to process, store and distribute narcotics. Gonzalez made street-level sales of heroin, fentanyl, cocaine and crack cocaine on behalf of this organization.
Gonzalez and other members of the organization were arrested on July 19, 2018. On that date, investigators executed 10 search warrants and seized more than five kilograms of heroin and/or fentanyl, approximately 600 grams of crack cocaine, eight firearms, cash, and other evidence of narcotics trafficking activity. A search of Gonzalez’s residence revealed 33 grams of fentanyl that was packaged for street sale, approximately 19 grams of crack cocaine, $4,147 in cash, and other items.
On August 2, 2018, a grand jury in Hartford returned an indictment charging Gonzalez and 15 co-defendants with various offenses.
Gonzalez has been detained since his arrest. On June 10, 2019, he pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute heroin, fentanyl, cocaine and cocaine base (“crack”).
The Drug Enforcement Administration’s Hartford Task Force includes personnel from the DEA Hartford Resident Office and the Bristol, Hartford, East Hartford, Manchester, New Britain, Rocky Hill, Wethersfield, Windsor Locks and Willimantic Police Departments. Agencies assisting the investigation include the Bureau of Alcohol, Tobacco, Firearms and Explosives, Connecticut Department of Correction, and the East Hartford, New Britain, Newington and West Hartford Police Departments.
This case is being prosecuted by Assistant U.S. Attorney Geoffrey M. Stone.
Harrison County man indicted on drug chargesRead the Press Release
CLARKSBURG, WEST VIRGINIA – Timothy Rock, of Clarksburg, West Virginia, was indicted by a federal grand jury today on drug charges, United States Attorney Bill Powell announced.
Rock, age 41, was indicted on four counts of “Distribution of Heroin.” Rock is accused of distributing heroin in Harrison County in July, September, and October 2016.
Rock faces up to 20 years incarceration and a fine of up to $1,000,000 for each count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Andrew R. Cogar is prosecuting the case on behalf of the government. The Federal Bureau of Investigation and the West Virginia State Police investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Grant County man indicted for firearms violationRead the Press Release
CLARKSBURG, WEST VIRGINIA – William Jonathan Turner, of Petersburg, West Virginia, was indicted by a federal grand jury today for a firearms charge, United States Attorney Bill Powell announced.
Turner, age 39, is charged with one count of “Unlawful Possession of Firearms.” Turner, a person prohibited from having a firearm, is accused of having three pistols and a rifle in March 2018 in Hampshire County.
Turner faces up to 10 years incarceration and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
This case was brought as part of Project Safe Neighborhoods (PSN). Project Safe Neighborhoods is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Assistant U.S. Attorney Lara Omps-Botteicher is prosecuting the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives, the West Virginia State Police, and the Potomac Highlands Drug & Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Four Peruvians Sentenced for Overseeing Spanish-Speaking Call Centers That Threatened and Extorted U.S. ConsumersRead the Press Release
Four residents of Lima, Peru, charged with overseeing a series of call centers that threatened and extorted Spanish-speaking victims in the United States, have been sentenced to prison, the Department of Justice and U.S. Postal Inspection Service announced.
Jesus Gutierrez Rojas, 37, Alexandra Podesta Bengoa, 38, Virgilio Polo Davila, 43, and Omar Portocarrero Caceres, 39, were extradited from Peru in April. Each pleaded guilty to extortion and has now been sentenced to prison by U.S. District Court Judge Roy K. Altman in Fort Lauderdale. As part of his guilty plea, Gutierrez admitted that he oversaw a series of affiliated call centers in Peru that falsely told Spanish-speaking victims across the United States that they had incurred debts and would suffer various consequences for failure to pay off the debts that they did not, in fact, owe. As part of their guilty pleas, Podesta, Polo, and Portocarrero admitted that they managed and supervised three of these affiliated call centers that used extortion to obtain money from vulnerable U.S. consumers.
Yesterday, Judge Altman sentenced Gutierrez to 51 months in federal prison for his role overseeing the affiliated call centers and sentenced Podesta and Polo to 46 months imprisonment. Judge Altman sentenced Portocarrero to 46 months in federal prison on July 24. Each defendant was also ordered to serve three years’ supervised release following their terms of incarceration and to make restitution payments to the victims of their scheme.
“The Department of Justice is committed to identifying and prosecuting foreign-based fraud schemes that target and extort U.S. consumers,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “Today’s prison sentences reflect that those who unlawfully take advantage of U.S. consumers by phone cannot escape justice by placing their calls from abroad. The Department of Justice’s Consumer Protection Branch will continue to work hand-in-hand with our Transnational Elder Fraud Strike Force partners to bring to justice international fraudsters who prey on vulnerable U.S. consumers.”
As part of their guilty pleas, Podesta, Polo, and Portocarrero each admitted that their Peruvian call centers contacted U.S. consumers, many of whom were elderly and vulnerable, using Internet-based calls. Falsely claiming to be attorneys and government representatives, Podesta, Polo, Portocarrero, and their employees falsely told victims that they failed to pay for or receive a delivery of products and threatened them into paying fraudulent settlements for nonexistent debts. The callers falsely threatened victims with lawsuits, negative marks on their credit reports, imprisonment, or immigration consequences if they did not immediately pay for the purportedly delivered products and “settlement fees.” Many victims made monetary payments based on these baseless extortionate threats.
Gutierrez was the general manager of a larger company where he worked in partnership with Podesta, Polo, Portocarrero, and others to facilitate their extortion scheme. The defendants’ associates in Miami collected the payments from thousands of victims across the U.S.
“The reach of our U.S. justice system is long,” said U.S. Attorney for the Southern District of Florida Ariana Fajardo Orshan. “The sentences imposed demonstrate that we are committed to prosecuting those individuals who threaten U.S. consumers no matter where they are located.”
“The U.S. Postal Inspection Service will continue to aggressively pursue and bring to justice international criminal enterprises that prey on our most vulnerable citizens by fraudulently using the U.S. Mail to further their schemes,” said Acting Miami Division Postal Inspector in Charge Lesley Allison.
At Portocarrero’s July 24 sentencing, Judge Altman said that the brazen, large-scale nature of the defendants’ scheme was “shocking.” Judge Altman noted that the defendants exploited “the most vulnerable people in our country” and said that their offense conduct was “terribly disgraceful.”
With yesterday’s three sentencings by Judge Altman, all five defendants who have been charged in connection with this large-scale extortion scheme have now been sentenced to terms of imprisonment.
Trial Attorney Phil Toomajian of the Department of Justice’s Consumer Protection Branch is prosecuting the case. The U.S. Postal Inspection investigated the case. The Criminal Division’s Office of International Affairs secured the extradition of the defendants, and the U.S. Attorney’s Office of the Southern District of Florida, the Diplomatic Security Service, and the Peruvian National Police provided critical assistance.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. In particular, this past March the Department announced the largest elder fraud enforcement action in American history, charging more than 260 defendants in a nationwide elder fraud sweep. The Department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
Fort Wayne Woman Sentenced to 84 Months in PrisonRead the Press Release
FORT WAYNE- Wendi Flores aka Wendi Collins, 39, of Fort Wayne, Indiana was sentenced by U.S. District Court Chief Judge Holly Brady after pleading guilty to distribution of methamphetamine, announced U.S. Attorney Thomas L. Kirsch II.
Ms. Flores was sentenced to a total of 84 months in prison followed by 4 years of supervised release.
According to documents in this case, there were two controlled buys of ½ ounce of methamphetamine from Ms. Flores. Flores was stopped by the Fort Wayne Police Department and they located 16 grams of methamphetamine on her person. She has six prior convictions, all for controlled substance related offenses including one conviction for dealing in controlled substances.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives with the assistance of the Fort Wayne Police Department. This case was handled by Assistant United States Attorney Stacey R. Speith.
Fort Dodge Woman Sentenced to Repay Iowa Department of Human Services Nearly $35,000 in Supplemental Nutrition Program (SNAP) FundsRead the Press Release
A woman who unlawfully obtained SNAP funds for her household was sentenced September 3, 2019, to time served and restitution.
Jessica Martinez-Roque, age 34, from Fort Dodge, Iowa, received the sentence after a guilty plea to one count of theft of government funds.
In a plea agreement, Martinez-Roque admitted that between about May 1, 2014, and January 31, 2019, she knowingly lied on application forms to acquire Supplemental Nutrition Program (SNAP) funds, to which she knew she was not entitled, in the sum of $34,656.
SNAP, formerly Food Stamps, is a federally funded program, administered by the states, that assists households in purchasing food. Households must meet income, resource, and various non-financial eligibility criteria in order to qualify for said benefits. The amount of monthly assistance is dependent upon reported income and the number of individuals within the household. Martinez-Roque reported on her Iowa Department of Human Services (DHS) applications and review/recertification eligibility documents (RREDs) that she was not employed or only worked short periods of time. She failed to report the father of her three children was living in the home and working full time. Properly reporting his income would have made her household ineligible for benefits.
Martinez-Roque was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Martinez-Roque was sentenced to time served. She was ordered to make $34,656 in restitution to the Iowa Department of Human Services. She must also serve a 3-year term of supervised release.
The case was prosecuted by Assistant United States Attorney Kevin C. Fletcher and investigated by the United States Department of Agriculture, Office of Inspector General (USDA-OIG), the Department of Homeland Security, Bureau of Immigration and Customs Enforcement (ICE), and the Iowa Department of Inspections and Appeals (IDIA).
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-CR-03006.
Follow us on Twitter @USAO_NDIA.
Fort Dodge Man to Federal Prison for Meth and Gun ConvictionsRead the Press Release
A man who conspired to distribute methamphetamine while illegally possessing firearms was sentenced August 30, 2019, to 20 years in federal prison.
Wayne Quillen, age 49, from Fort Dodge, Iowa, was convicted of conspiracy to distribute methamphetamine; possession with intent to distribute methamphetamine; possession of a firearm in furtherance of a drug trafficking crime; and possession of a firearm by a felon. Quillen was previously convicted of robbery in the first degree in 1989 and possession of methamphetamine with intent to distribute in 2001, each in Webster County, Iowa.
At the plea hearing on March 12, 2019, Quillen admitted that from about 2017 through July 2018, he and others conspired to distribute more than three pounds of methamphetamine in the Fort Dodge area. On December 27, 2017, law enforcement executed a search warrant at the residence of a co-conspirator, Cody Groat, where Quillen was living. Officers seized ¾ pound of methamphetamine, three handguns, a modified (short) .410 shotgun with no serial number, and assorted 9mm ammunition. Two of the 9mm handguns had been stolen and the short shotgun possessed by defendant had a makeshift shoulder strap and was found just outside defendant’s bedroom in the basement.
Quillen was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Quillen was sentenced to 240 months’ imprisonment. He must also serve a 10-year term of supervised release after the prison term. There is no parole in the federal system. Quillen is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by the Fort Dodge Police Department, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Webster County, Iowa Sheriff’s Office, and Iowa Division of Criminal Investigations.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 18-3023. Follow us on Twitter @USAO_NDIA.
Former Supervisor at Richwood Correctional Center Sentenced for Violating Civil Rights of Five InmatesRead the Press Release
The Department of Justice today announced that defendant Christopher Loring, a former lieutenant at the Richwood Correctional Center, was sentenced to 46 months in prison in federal court today for his role in a conspiracy to cover up the abuse of five inmates by corrections officers. Loring, 37, of Winnsboro, Louisiana, pleaded guilty to conspiring with other officers to falsify documents with intent to obstruct and influence the investigation of a matter within federal jurisdiction.
According to his guilty plea, Loring failed to intervene when four other officers sprayed a chemical agent directly in the faces and eyes of five inmates while the inmates were handcuffed, compliant, kneeling on the floor, and not posing a physical threat to anyone. Following that abuse, Loring and the other officers conspired to hide their conduct by submitting false reports.
Loring was the last of the five officers to be sentenced by U.S. District Judge Terry A. Doughty of the Western District of Louisiana. Assistant Attorney General Eric Dreiband for the Civil Rights Division and U.S. Attorney for the Western District of Louisiana David C. Joseph made the announcement.
“The final sentencing in this conspiracy represents the Department of Justice’s commitment to prosecuting those who abuse their power,” said Assistant Attorney General Eric Dreiband. “The Civil Rights Division will continue to defend those who have had their civil rights violated.”
“I hope that the conclusion of this case demonstrates our commitment to ensure that Louisiana’s correctional officers follow the law and do not abuse the inmates under their supervision,” U.S. Attorney Joseph stated. “I want to commend the investigators and prosecutors who worked on this case.”
Assistant U.S. Attorney Mary Mudrick of the U.S. Attorney’s Office of the Western District of Louisiana and Trial Attorney Anita Channapati of the Civil Rights Division, Criminal Section, prosecuted the case. The Monroe Division of the FBI investigated the case.
Former Senior UAW Official Pleads Guilty to Taking over $1.5 Million in Bribes and KickbacksRead the Press Release
Michael Grimes, a former high-level official in the UAW’s General Motors Department, pleaded guilty today to conspiring with other UAW officials to engage in honest services fraud by taking over $1.5 million in bribes and kickbacks from UAW vendors and contractors and to conspiring to launder the proceeds of the scheme announced U.S. Attorney Matthew Schneider.
Joining in the announcement were Irene Lindow, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General, Rainer S. Drolshagen, Acting Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation, Manny Muriel, Special Agent in Charge of the Detroit, Michigan office of the Internal Revenue Service – Criminal Investigations, and Thomas Murray, District Director, U.S. Department of Labor – Office of Labor-Management Standards.
Michael Grimes, 65, of Ft. Myers, Florida, who is a native of Grand Blanc, Michigan, pleaded guilty to conspiring to engage in honest services wire fraud and to conspiring to launder money between 2006 and 2018. During the plea hearing, Grimes admitted that he conspired with two other high-level UAW officials in the UAW’s GM Department to take millions of dollars in bribes and kickbacks from vendors doing business with the joint UAW-GM Center for Human Resources. The Center for Human Resources is supposed to be a center for training UAW workers employed by GM. Grimes and the other UAW officials served on the Executive Board for the Center for Human Resources, and they were responsible for approving contracts with the vendors. Grimes admitted that over the course of the twelve year conspiracy, he and the other two UAW officials demanded bribes and kickbacks from the vendors in exchange for securing or maintaining contracts with the Center for Human Resources or with the UAW’s GM Department.
Grimes and his co-conspirators took bribes and kickbacks from the vendors in exchange for contracts with the UAW and/or the Center for Human Resources for watches, jackets, backpacks, and UAW stores at GM manufacturing facilities. For example, in 2011, Grimes and two other UAW officials demanded that a vendor give them a $300,000 kickback on a $6 million contract to purchase 50,000 jackets emblazoned with “Team UAW-GM.” Grimes collected the $300,000 kickback and delivered the proceeds to two other UAW officials. In addition, Grimes demanded an additional kickback for $525,000 from the same vendor for the same jacket contract.
In another corrupted contract, Grimes and his UAW co-conspirators demanded kickbacks on a $3.9 million contract for the Center for Human Resources to buy 58,000 watches for all UAW members employed by GM. The UAW officials demanded over $300,000 in kickbacks on the watch contract to be distributed between 2013 through 2016. Some of the kickbacks were distributed in the form of checks disguised as tens of thousands of dollars in payments for “antique furniture.” The majority of the kickbacks were distributed as cash. In 2014, the UAW-GM Center for Human Resources received the 58,000 watches from the vendor. However, the watches were never distributed to UAW members. Instead, the watches have been sitting in storage in a warehouse for over five years.
Besides conspiring with other UAW officials and vendors to the UAW, Grimes also admitted that he conspired to launder the proceeds of the kickback scheme by using various methods to conceal and disguise the bribes and kickbacks through a lengthy and complicated series of financial transactions involving millions of dollars.
Grimes is the ninth defendant to plead guilty in connection with the ongoing criminal investigation into illegal payoffs to UAW officials by FCA executives and corruption within the UAW itself. The following individuals have already pleaded guilty to their participation in the scheme and have been sentenced: former FCA Vice President for Employee Relations Alphons Iacobelli (66 months in prison), former FCA Financial Analyst Jerome Durden (15 months in prison), former Director of FCA’s Employee Relations Department Michael Brown (12 months in prison), former senior UAW officials Virdell King (60 days in prison), Keith Mickens (12 months in prison), Nancy A. Johnson (12 months in prison), Monica Morgan, the widow of UAW Vice President General Holiefield (18 months in prison), and former UAW Vice President Norwood Jewell (15 months in prison).
U.S. Attorney Schneider commended the outstanding work of the Internal Revenue Service – Criminal Investigations, the U.S. Department of Labor – Office of Labor-Management Standards and Office of Inspector General, and the Federal Bureau of Investigation in conducting a comprehensive criminal investigation into labor corruption activities involving a vital sector of the local and national economy.
“The hard-working members of the UAW deserve to be represented by leaders who give them true leadership — and that means leadership that isn’t driven by corruption and greed,” said United States Attorney Matthew Schneider. “Today’s guilty plea is another step in the right direction of our battle against corruption in the union leadership.”
“Michael Grimes abused his former fiduciary position as an International United Auto Workers Union official by demanding and accepting over $1.5 million in kickbacks from vendors. Grimes chose greed over bargaining in the best interest of UAW members to personally enrich himself. We will continue to work with our law enforcement partners to protect the financial integrity of labor organizations,” stated Irene Lindow, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.
"Today’s guilty plea highlights a years-long criminal investigation of wrongdoing between high ranking UAW officials and vendors,” said Acting Special Agent in Charge Drolshagen. “The FBI and our federal partners will remain vigilant in our efforts to expose these corrupt fraud schemes that continue to undermine the trust and hard work of union members.”
“For more than a decade Michael Grimes and other UAW officials were part of a corruption club that conspired to launder proceeds generated from the illegal kickback scheme. Grimes and others concealed the source of the money through a series of convoluted transactions totaling millions of dollars. This behavior served one purpose; self-enrichment and this greed became an epidemic throughout the corruption club,” stated Manny Muriel, Special Agent in Charge of Detroit’s IRS Criminal Investigation.
“Michael Grimes betrayed the trust of the union membership who rightfully expected him, as a union official, to protect and safeguard their union’s funds and assets instead of using his position to enrich himself and others within the UAW,” said Thomas Murray, District Director, U.S. Department of Labor, Office of Labor-Management Standards. “The charges filed against Grime leaves no question as to the agency’s commitment to seek justice when anyone puts personal financial gain ahead of the best interests of union members.”
The case is being prosecuted by Assistant U.S. Attorneys Frances Carlson, Eaton Brown and Adriana Dydell.
Former Rochester Bakery Owner Sentenced on Tax ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that William Cruz, 54, of Rochester, NY, who was convicted of subscribing false tax returns, was sentenced to serve two years of probation and perform 100 hours of community service by Chief U.S. District Judge Frank P. Geraci, Jr. The defendant was also ordered to pay $365,840 in restitution to the Internal Revenue Service, as well as penalties and interest.
Assistant U.S. Attorney Kyle P. Rossi, who handled the case, stated that Cruz operated the Borinquen Bakery in Rochester from approximately 2005 through 2018. From at least 2012 through 2017, the defendant hid more than $1,000,000 in income from the IRS by underreporting the bakery’s revenues. This resulted in an aggregate tax loss to the IRS of at least $365,840.00.
The sentencing is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of Jonathan Larsen, Special Agent-in-Charge, New York Field Office.
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Former Registered Nurse Pleads Guilty to Illegal Distribution of Opioids, Health Care Fraud, Aggravated Identity Theft, and Obstruction of JusticeRead the Press Release
ALBANY, NEW YORK – Sarah Brown, age 42, of Akra, Greene County, New York, pled guilty today to conspiring to distribute controlled substances, health care fraud, aggravated identity theft, and obstruction of justice.
The announcement was made by United States Attorney Grant C. Jaquith and Special Agent in Charge Ray Donovan, United States Drug Enforcement Administration (DEA), New York Division.
As part of her guilty plea, Brown, a former registered nurse, admitted that between 2015 and 2017, she worked with a co-conspirator, Dr. Myra Mabry, to obtain prescriptions for oxycodone, morphine, and hydromorphone, for no legitimate medical purpose, by impersonating Mabry’s patients at pharmacies, knowing that health care benefit programs would pay the cost of the drugs.
Brown also admitted that she attempted to obstruct a federal investigation by testifying falsely before a federal grand jury that she was blackmailing Mabry into providing the prescriptions. As Brown admitted in her guilty plea, that was a lie, because Mabry was not the subject of an extortionate scheme, and was a willing member of the conspiracy to distribute opioids for no legitimate medical purpose. Brown admitted that Mabry agreed to pay Brown for the false testimony in the hope of minimizing Mabry’s criminal exposure and keeping her medical license.
Brown faces a mandatory 2-year term of imprisonment on the aggravated identity theft charge, and up to 20 years in prison on the remaining charges, when she is sentenced by United States District Judge Mae A. D’Agostino. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
This case was investigated by the DEA, with assistance from the New York State Bureau of Narcotic Enforcement, and is being prosecuted by Assistant U.S. Attorney Wayne A. Myers.
Former Lackawanna County Prison Contract Employee Guilty of Providing Drugs to InmatesRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that Brenda Cruise, age 48, of Dunmore, pleaded guilty on September 3, 2019 before U.S. District Court Judge James M. Munley, to conspiracy to provide contraband to inmates at the Lackawanna County Prison.
According to United States Attorney David J. Freed, Cruise admitted that while she worked as a contract employee at the prison, she participated in a scheme to bring marijuana, suboxone, synthetic marijuana (“spice”), and tobacco to inmates at the prison between February 2018 and December 2018.
Cruise is the fourth person to be charged and plead guilty as a result of the investigation. Sentencing for Cruise is scheduled for December 4, 2019.
The case was investigated by the Federal Bureau of Investigation and the Pennsylvania State Police. Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
The maximum penalty under federal law is five years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Former Honduran National Police Officer Charged with Conspiring to Import Cocaine into the United States and Related Firearms OffensesRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Wendy Woolcock, Special Agent in Charge of the Special Operations Division of the U.S. Drug Enforcement Administration (“DEA”), announced today that former Honduran National Police officer MAURICIO HERNANDEZ PINEDA (“HERNANDEZ PINEDA”) was charged in Manhattan federal court with conspiring to import cocaine into the United States and related weapons offenses involving the use and possession of machineguns and destructive devices. The case is assigned to U.S. District Judge P. Kevin Castel.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Today’s charges against a high-ranking former Honduran National Police officer are disturbing. Honduras has long been a corridor for drug traffickers to ship their drugs to the United States from South America. As alleged, Mauricio Hernandez Pineda betrayed his obligations as a police officer to uphold his country’s laws and prevent trafficking through his country, and instead facilitated the shipments of tons of cocaine that eventually made its way to the U.S. Hernandez Pineda will soon have to answer for his alleged crimes in a U.S. court.”
DEA Special Agent in Charge Wendy Woolcock said: “DEA continues to uncover corruption at the highest levels of government and law enforcement across the world, including Honduras. This alleged criminal conspiracy involved huge amounts of cocaine trafficking into the United States. DEA will continue to attack global criminal networks who pose a direct threat to our safety and security. We look forward to seeing Mr. Hernandez-Pineda, a former high-ranking Honduran National Police official, face justice in a U.S. courtroom.”
As alleged in the Superseding Indictment unsealed in federal court:[1]
From 2000 up to and including 2018, multiple drug trafficking organizations in Honduras and elsewhere worked together, and with support from certain prominent public and private individuals, including Honduran politicians and law enforcement officials, to receive multi-ton loads of cocaine sent to Honduras from, among other places, Colombia via air and maritime routes, and to transport the drugs westward in Honduras toward the border with Guatemala and eventually to the United States. For protection from official interference, and in order to facilitate the safe passage through Honduras of multi-hundred-kilogram loads of cocaine, drug traffickers paid bribes to public officials, including certain members of the National Congress of Honduras.
HERNANDEZ PINEDA is a former high-ranking member of the Honduran National Police who participated in and supported the drug trafficking activities of, among others, his cousin, Juan Antonio Hernandez Alvarado, also known as “Tony Hernandez.” Among other things, HERNANDEZ PINEDA provided armed security, including individuals carrying machineguns, for multi-ton cocaine shipments sent through Honduras, and provided his co-conspirators with sensitive law enforcement information concerning planned operations so they could evade detection while transporting cocaine through Honduras. In exchange, HERNANDEZ PINEDA received hundreds of thousands of dollars in drug proceeds.
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HERNANDEZ PINEDA, 47, of Honduras, is charged with three counts: (1) conspiring to import cocaine into the United States, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; (2) using and carrying machine guns and destructive devices during, and possessing machine guns and destructive devices in furtherance of, the cocaine-importation conspiracy, which carries a mandatory minimum sentence of 30 years in prison and a maximum sentence of life in prison; and (3) conspiring to use and carry machine guns and destructive devices during, and to possess machine guns and destructive devices in furtherance of, the cocaine importation conspiracy, which carries a maximum sentence of life in prison.
The potential mandatory minimum and maximum sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the outstanding efforts of the DEA’s Special Operations Division Bilateral Investigations Unit, New York Strike Force, and Tegucigalpa Country Office, as well as the Office of International Affairs of the Justice Department’s Criminal Division.
This case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Emil J. Bove III, Amanda L. Houle, Mathew J. Laroche, and Jason A. Richman are in charge of the prosecution.
The charges contained in the Superseding Indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Superseding Indictment and the description of the Superseding Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Former Banker Pleads Guilty in Fraudulent Loan SchemeRead the Press Release
Memphis, TN – A former loan officer at Trustmark Bank pleaded guilty to a one-count information, which charged him in connection with a fraudulent loan scheme. U.S. Attorney D. Michael Dunavant announced the guilty plea today.
According to the information, Robert A. Whartenby, 58, of Memphis, was a loan officer at Trustmark’s main Memphis office. Whartenby appeared before United States District Judge Sheryl H. Lipman and admitted that between May 2017, and June 2018, he defrauded Trustmark of almost $400,000 through a scheme in which he submitted false paperwork in support of loans to Memphis Designs Group, LLC and Windridge Investments, fictitious companies he had created. The loan proceeds were then disbursed to accounts at Bank of America which Whartenby had opened in the names of the fictitious entities.
U.S. Attorney D. Michael Dunavant said, "The financial fraud committed by this defendant is disturbing. The abuse of his position of trust and authority as a bank loan officer for his own personal gain had a significant negative impact on the shareholders, employees and customers of Trustmark Bank. The U.S. Attorney’s Office places a high priority on protecting the security and integrity of transactions, deposits and assets of financial institutions, and this case demonstrates that commitment."
A sentencing hearing is set for 2:00 p.m. December 12, 2019, before U.S. District Court Judge Sheryl H. Lipman.
Whartenby faces a maximum penalty of 30 years imprisonment, a fine of $1,000,000 and five years supervised release.
This case was investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorney Carroll L. André III is prosecuting this case on behalf of the government.
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Florida Woman Indicted for Trafficking Drugs Through Eastern District of TexasRead the Press Release
BEAUMONT, Texas – A 41-year-old Ft. Lauderdale, Florida woman has been indicted for federal drug trafficking violations in the Eastern District of Texas announced U.S. Attorney Joseph D. Brown today.
Shenita Denise Peterson was indicted today and charged with possession with intent to distribute cocaine.
According to information provided in court, on Aug. 23, 2019, Peterson was stopped for a traffic violation on Interstate Highway 10 in Beaumont, Texas. A search of the vehicle revealed approximately 45 individual kilograms of cocaine, which were concealed in the door panels of the vehicle.
If convicted, Peterson faces up to life in federal prison.
This case is being investigated by the Beaumont Police Department and the U.S. Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney Robert L. Rawls.
It is important to note that a complaint, arrest, or indictment should not be considered as evidence of guilt and that all persons charged with a crime are presumed innocent until proven guilty beyond a reasonable doubt.
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Five Individuals Convicted for Participating in Global Fraud SchemeRead the Press Release
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, and Justin Green, Special Agent in Charge, Miami Field Office, U.S. Food and Drug Administration, Office of Criminal Investigations (FDA-OCI), announced the convictions of five defendants for various offenses relating to a global fraud scheme that relied upon false claims about the United States military and the Government of Afghanistan.
Six individuals were charged for their involvement in the global fraud scheme (Case No. 18-20668-CR-DMM). Byramji Javat, a citizen of Pakistan and Chairman of the Dubai-based Uniworld Group, pleaded guilty on August 19, 2019, to one count of conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section1349. Javat faces a maximum sentence of 20 years in prison, plus potential restitution and a fine of up to $250,000. Sunil Chopra and William Armando, both residents of California, each pleaded guilty on August 19, 2019, to one count of conspiracy to obtain pre-retail medical products worth $5,000 or more by fraud or deception, in violation of Title18, United States Code, Section 670(a)(6). They face a maximum statutory penalty of 15 years in prison. Emanuel Daskos, pleaded guilty on July 16, 2019, to also violating Title 18, United States Code, Section 670(a)(6). Luis Soto, a customs broker residing in Miami, Florida, was convicted by a trial jury on August 23, 2019, of one count of conspiracy to commit wire fraud, one count of conspiracy to obtain pre-retail medical products worth $5,000 or more by fraud or deception, two counts of wire fraud contrary to Title 18, United States Code, Section 1343, and two counts of obtaining pre-retail medical products by fraud or deception, contrary to Title 18, United States Code, Section 670(a)(1). The defendants have not yet been sentenced. One defendant, James Sipprell, a resident of Georgia, is awaiting trial and is presumed innocent.
According to the superseding indictment, between 2014 and 2017, Javat orchestrated a fraud scheme to purchase FDA-regulated products including medical devices from manufacturers in the United States at deeply discounted prices by lying to them about the destination and purpose of the goods. Javat represented that he was a large supplier of medical and food products to United States troops in Afghanistan, and sought deep discounts from the manufacturers by claiming that he could provide their goods to American troops in Afghanistan or to the Afghan people. In truth, Javat wanted to obtain these products at prices not generally offered in the United States in order to sell those products himself in this country – not abroad, and not to the military – at a significant profit.
To execute this scheme, the conspirators insisted that products be packaged for the United States market, falsely claiming to the manufacturers that this was required by the U.S. military, the Afghan government, or the “Buy American Act.” When the products nonetheless had stickers or other packaging on them stating that the items were for export only, the conspirators secretly removed those labels. After acquiring the products, Javat and the co-conspirators arranged for the diversion of the products to various locations in the United States. To conceal this activity, the conspirators typically shipped the products abroad and then had them immediately shipped back to the United States, or provided the victims with fraudulent shipping documentation showing that the products were exported when actually they had never left this country.
Javat admitted the allegations of the superseding indictment during his guilty plea. During Soto’s trial, the government proved these allegations to the jury and presented additional evidence about the defendants’ scheme. For example, the conspirators often represented that they were purchasing items on behalf of the Afghanistan Reconstruction and Development Services (“ARDS”), which at one time was an agency of the Afghan Government funded in part by the United States. That agency ceased to exist after 2014, yet the conspirators provided victims with fake documents supposedly from ARDS imposing extravagant demands that in reality only suited the conspirators’ needs. In 2016, Uniworld prepared an internal Powerpoint presentation expressly informing its staff that they had to be “good at lying.” Finally, because these goods were moving outside normal channels, they often were mishandled; for example, according to the conspirators’ own emails at the time, the defendants disregarded temperature requirements when transshipping over-the-counter pain medicines, one of the defendants kept a shipment of diabetic test strips that required refrigeration in his car trunk overnight and another shipment of medical products became covered in bird droppings. The products involved in Javat’s scheme included surgical instruments, professional dental care devices, bandages, and aspirin.
The evidence at trial demonstrated that Soto knew about Javat’s fraud scheme yet knowingly helped him by supplying paperwork to federal agencies including the FDA to facilitate the re-entry of the diverted products into the United States through the Port of Miami or Miami International Airport. Chopra, Armando and Daskos also knowingly furthered the scheme by helping to transport the products and remove export labels.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the FDA-OCI. The case is being prosecuted by Assistant U.S. Attorneys David Turken and John Shipley.
Financial Adviser Pleads Guilty to Defrauding Clients in Fake Investment SchemeRead the Press Release
Geoffrey S. Berman, United States Attorney for the Southern District of New York, announced today that ELIAS HERBERT HAFEN, a former financial adviser at two investment banks with offices in Manhattan, pled guilty today to investment adviser fraud in connection with having defrauded his clients out of hundreds of thousands of dollars. HAFEN surrendered to law enforcement and was presented before Magistrate Judge Debra Freeman in Manhattan federal court this afternoon, and he pled guilty before District Judge Alvin K. Hellerstein this afternoon.
U.S. Attorney Geoffrey S. Berman said: “Elias Hafen promised his investment clients significant returns in a ‘special’ fund. With fake statements and guaranteed returns, Hafen was every investor’s worst nightmare. He never invested his clients’ money and instead used it to fund his own lavish lifestyle. Today, Hafen admitted his crimes and he will soon likely spend time in prison for his misdeeds.”
According to allegations in the Information and other documents filed in federal court, as well as statements made in public court proceedings:
From 2013 until 2018, HAFEN engaged in a scheme to defraud at least 11 of his financial advisory clients into believing that HAFEN had access to a high-yield investment fund with guaranteed returns, which was not affiliated with the investment bank at which HAFEN worked. On HAFEN’s advice, these clients transferred hundreds of thousands of dollars directly to HAFEN’s personal bank account for investment in the purported investment fund over the years that HAFEN engaged in his fraudulent scheme. HAFEN also created fictitious “Investor’s Statements” bearing the name of a non-existent investment company purporting to detail the status of his victims’ investments. In reality, however, there was no investment fund at all; HAFEN was using the victims’ funds to pay for a lavish lifestyle including custom men’s accessories and an expensive collection of artwork.
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HAFEN, 64, of New Canaan, Connecticut, pled guilty to one count of investment adviser fraud, which carries a maximum penalty of five years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
HAFEN is scheduled to be sentenced by Judge Hellerstein on January 14, 2020.
Mr. Berman praised the investigative work of the FBI and thanked the Securities and Exchange Commission, which has filed civil charges in a separate action.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Jacob R. Fiddelman is in charge of the prosecution.
Federal Criminal Complaint Issued Against Saint Louis Corrections Officer for Drug Conspiracy and Illegal Firearm PossessionRead the Press Release
St. Louis, MO – A federal complaint was issued today charging Teneisha D. Moore, 26, with one count of conspiracy to distribute a controlled substance, in violation of Title 21, United States Code, Sections 841(a) and 846, and one count of aiding and abetting the possession of one or more firearms in furtherance of that drug trafficking crime, in violation of Title 18, United States Code, Sections 924(c) and 2.
According to court documents, a federal search warrant was executed at residence in the 4600 block of Farlin Avenue in the City of Saint Louis on September 4, 2019. The residence was occupied by Ms. Moore, a Corrections Officer with the Saint Louis City Department of Corrections currently assigned to the Medium Security Institution.
During the execution of the search warrant, law enforcement officials located and seized, among other things, approximately four ounces of a suspected fentanyl and heroin mixture; 57 grams of suspected marijuana; suspected ecstasy; a black, semi-automatic pistol; a rifle; a high-capacity, drum-style magazine; an additional approximately 15 grams of suspected heroin; and two balloons filled with a suspected mixture of heroin and fentanyl.
Charges set forth in the complaint are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
This case is being investigated by the Federal Bureau of Investigation; the Saint Louis Metropolitan Police Department; and Drug Enforcement Administration.
Elyria man sentenced to 14 years in prison for drug trafficking as part of Operation Synthetic Opioid SurgeRead the Press Release
An Elyria man was sentenced to 14 years in prison for drug trafficking.
Pierre Alston, 39, was sentenced to 169 months in prison. He previously pleaded guilty to two counts of distribution of crack cocaine, one count of distribution of cocaine, heroin and fentanyl, one count of possession with intent to distribute heroin and fentanyl, and one count of distribution of heroin and fentanyl.
Alston sold various mixtures of drugs between July and October 2018, according to court documents.
This case is one of dozens prosecuted as part of Operation Synthetic Opioid Surge (SOS), in in which any cases involving heroin, fentanyl or any synthetic opioid are prosecuted in federal court. Lorain County is one of 10 communities around the nation selected as a pilot for Operation SOS. The program demonstrates the Justice Department’s continued to commitment to working with local partners to make our community safer.
This case was investigated by the Elyria Police Department and FBI, with assistance from the Lorain County Prosecutor's Office, and was prosecuted by Assistant U.S. Attorneys Robert Corts and Vasile Katsaros.
Drug Maker Mallinckrodt Agrees to Pay over $15 Million to Resolve Alleged False Claims Act Liability for “Wining and Dining” DoctorsRead the Press Release
Pharmaceutical company Mallinckrodt ARD LLC (formerly known as Mallinckrodt ARD Inc. and previously Questcor Pharmaceuticals Inc. "Questcor"), has agreed to pay $15.4 million to resolve claims that Questcor paid illegal kickbacks to doctors, in the form of lavish dinners and entertainment, to induce prescriptions of the company’s drug, H.P. Acthar Gel (Acthar) from 2009 through 2013.
The Federal Anti-Kickback Statute prohibits a pharmaceutical company from offering or paying, directly or indirectly, any remuneration — which includes money or any other thing of value — with the intent to induce a health care provider to prescribe a drug reimbursed by a federal health care program, including Medicare. This prohibition extends to such practices as “wining and dining” doctors to induce them to write Medicare prescriptions of a company’s products.
The government alleged that, from 2009 to 2013, twelve Questcor sales representatives marketing Acthar provided illegal remuneration to health care providers in the form of lavish meals and entertainment expenses. The company paid this remuneration, the government alleges, with the intent to induce Acthar Medicare referrals from those health care providers, resulting in a violation of the Anti-Kickback Statute and the submission of false claims to Medicare.
“The Department of Justice will hold companies accountable for the payment of illegal kickbacks in any form,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “Improper inducements have no place in our federal healthcare system, which depends on physicians making decisions based on the healthcare needs of their patients and not on or influenced by personal financial considerations.”
“When companies buy off doctors, patients suffer. My Office is committed to rooting out this type of behavior and the Anti-Kickback Statute is a critical tool in that fight,” said U.S. Attorney McSwain. “We will continue to protect the integrity of our healthcare system by holding drug companies accountable for their conduct.”
“Paying kickbacks to win business, as contended in this case, cheats taxpayers and the patients who rely on government health care programs for essential care,” said Maureen R. Dixon, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “We will continue working with our law enforcement partners to hold accountable entities paying such kickbacks.”
The allegations that are the subject of yesterday’s settlement were originally alleged in two cases filed under the whistleblower, or qui tam, provision of the False Claims Act. The act permits private parties to sue for fraud on behalf of the United States and to share in any recovery. The act also permits the government to intervene in such actions, as the government previously did in the two whistleblower cases. The whistleblowers will receive approximately $2.926 million of the settlement. The government is continuing to pursue claims in these two matters alleging that Mallinckrodt violated the False Claims Act by using a foundation as a conduit to pay illegal kickbacks in the form of copay subsidies for Acthar. These claims are not being resolved by the settlement.
The government’s pursuit of these matters illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800‑HHS‑TIPS (800-447-8477).
This matter is being handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Eastern District of Pennsylvania, with assistance from the U.S. Department of Health and Human Services Office of Inspector General. The two lawsuits are captioned United States of America ex rel. Strunck et al. v. Mallinckrodt ARD, Inc., No. 12-CV-0175 (E.D. Pa.) and United States of America ex rel. Clark v. Questor Pharmaceuticals, Inc., No. 13-CV-1776 (E.D. Pa.).
The claims resolved by this settlement are allegations only and there has been no determination of liability.
Drug Maker Mallinckrodt Agrees to Pay $15.4 Million to Resolve False Claims Act Allegations for "Wining and Dining" DoctorsRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that pharmaceutical company Mallinckrodt ARD LLC (formerly known as Mallinckrodt ARD, Inc. and previously Questcor Pharmaceuticals, Inc. (“Questcor”)), has agreed to pay $15.4 million to resolve claims that Questcor paid illegal kickbacks to doctors from 2009 through 2013 in the form of lavish dinners and entertainment, to induce prescriptions of the company’s drug, H.P. Acthar Gel (“Acthar”) for the treatment of complications from multiple sclerosis.
The Federal Anti-Kickback Statute prohibits a pharmaceutical company from offering or paying, directly or indirectly, any remuneration—which includes money or any other thing of value—with the intent to induce a health care provider to prescribe a drug reimbursed by Medicare. This prohibition extends to such practices as “wining and dining” doctors to induce them to write Medicare prescriptions of a company’s products.
The government alleges that, from 2009 to 2013, twelve Questcor sales representatives marketing Acthar provided illegal remuneration to health care providers in the form of lavish meals and entertainment expenses. The company paid this remuneration, the government alleges, with the intent to induce Acthar Medicare referrals from those health care providers, resulting in a violation of the Anti-Kickback Statute and the submission of false claims to Medicare.
“Federal law protects patients from medical providers who write prescriptions so they can enrich themselves and from drug companies who do not play by the rules in their marketing and promotional efforts,” said U.S. Attorney McSwain. “Kickback schemes are a form of illegal pay-to-play business practices that have no place in our health care system; they interfere with physician-patient relationships and drive up the cost of health care.”
“The Department of Justice will hold companies accountable for the payment of illegal kickbacks in any form,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “Improper inducements have no place in our federal healthcare system, which depends on physicians making decisions based on the healthcare needs of their patients and not on or influenced by personal financial considerations.”
“Paying kickbacks to win business, as contended in this case, cheats taxpayers and the patients who rely on government health care programs for essential care,” said Maureen R. Dixon, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “We will continue working with our law enforcement partners to hold accountable entities paying such kickbacks.”
The allegations relevant to this settlement were originally alleged in two cases filed under the whistleblower, or qui tam, provision of the False Claims Act. The act permits private parties to sue for fraud on behalf of the United States and to share in any recovery. The act also permits the government to intervene in such actions, as the government previously did in the two whistleblower cases, which are captioned United States of America ex rel. Strunck et al. v. Mallinckrodt ARD, Inc., No. 12-CV-0175 (E.D. Pa.), and United States of America ex rel. Clark v. Questor Pharmaceuticals, Inc., No. 13-CV-1776 (E.D. Pa.). The government’s pursuit of these matters illustrates its emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800 HHS TIPS (800-447-8477). The whistleblowers will receive approximately $2.926 million of the settlement.
This matter is being handled by the Civil Division of the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Department of Justice’s Commercial Litigation Branch, with assistance from the U.S. Department of Health and Human Services’ Office of Inspector General, the Defense Criminal Investigative Service, the Federal Bureau of Investigation and the Office of Personnel Management. For the United States Attorney’s Office, the matter is being handled by Assistant United States Attorney Colin Cherico and Auditor George Niedzwicki.
The claims resolved by settlement are allegations only and there has been no determination of liability.
Drug Dealer Pleads Guilty to Gun ChargesRead the Press Release
NORFOLK, Va. – A Franklin man pleaded guilty today to possessing a firearm in furtherance of a drug-trafficking crime and being a drug user in possession of a firearm.
According to information before the court, Edward Andre Leonard, Jr., 30, is an armed, drug-dealing Franklin gang member. His brother’s gang-related murder in December 2018 started a war between the local Bloods and Crips sets. Leonard participated in at least two retaliatory shootings of local Crips members, and law enforcement recovered his spent shell casings from one of the shooting scenes. While police were executing a warrant for his residence based on the shooting investigation, they recovered several baggies of cocaine and marijuana that were packaged for distribution, a handgun, thousands of rounds of rifle ammunition, spent shell casings tied to one of the retaliatory shootings, and a bullet-proof vest.
Leonard faces a mandatory minimum of five years and a maximum of life in prison when sentenced on December 12. 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.
This case is part of Project Safe Neighborhoods (PSN), which 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.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Ashan M. Benedict, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, Michael K. Lamonea, Assistant Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Norfolk, and Robert Porti, Deputy Chief of the City of Franklin Police, made the announcement after U.S. Magistrate Judge Robert J. Krask accepted the plea. Assistant U.S. Attorney William B. Jackson is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:19-cr-121.
Doddridge County man admits to sex offender registry violationRead the Press Release
CLARKSBURG, WEST VIRGINIA – Tyler Patrick Pietschmann, of Greenwood, West Virginia, has admitted to failing to register as a sex offender, United States Attorney Bill Powell announced.
Pietschmann, age 21, pled guilty to one count of “Failure to Update Sex Offender Registration.” Pietschmann, a person required to register as a sex offender, admitted to traveling from Pennsylvania to West Virginia without updating his sex offender registration from December 2018 to February 2019.
Pietschamnn faces up to 10 years incarceration and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
This case is prosecuted as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys’ Offices, 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 identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Assistant U.S. Attorney Sarah E. Wagner is prosecuting the case on behalf of the government. The United States Marshal Service investigated.
Senior U.S. District Judge Irene M. Keeley presided.
Cumberland County Man Charged with Conspiracy to Defraud 30 Victims in Romance Fraud SchemeRead the Press Release
CAMDEN, N.J. – A Cumberland County, New Jersey, man was arrested today on charges that he allegedly defrauded more than 30 victims into wiring money to him and his conspirators after he and his conspirators met and wooed the victims on online dating sites, U.S. Attorney Craig Carpenito announced.
Rubbin Sarpong, 35, of Millville, New Jersey, is charged by complaint with one count of conspiracy to commit wire fraud. He is scheduled to make his initial court appearance today before U.S. Magistrate Judge Joel Schneider in Camden federal court.
According to documents filed in this case and statements made in court:
Between January 2016 and Sept. 3, 2019, Sarpong and his conspirators, several of whom reside in Ghana, allegedly participated in an online romance scheme, defrauding victims in New Jersey and elsewhere. Sarpong and the conspirators set up dating profiles on various dating websites, using fictitious or stolen identities and posing as United States military personnel who were stationed overseas. They contacted victims through the dating websites and then pretended to strike up a romantic relationship with them. After establishing virtual romantic relationships with victims on the online dating platforms and via email, the conspirators asked them for money, often for the purported purpose of paying to ship gold bars to the United States. Although the stories varied, most often Sarpong and the conspirators claimed to be military personnel stationed in Syria who received, recovered, or were awarded gold bars. The conspirators told many victims that their money would be returned once the gold bars were received in the United States.
Sarpong and the conspirators used myriad email accounts and Voice Over Internet Protocol phone numbers to communicate with victims and instruct them on where to wire money, including recipient names, addresses, financial institutions, and account numbers. Victims wired money to bank accounts held by Sarpong and others at financial institutions in the United States. Occasionally, victims also mailed personal checks and/or cashier’s checks to the conspirators and also transferred money to the conspirators via money transfer services, such as Western Union and MoneyGram. The funds were not used for the purposes claimed by the conspirators – that is, to transport non-existent gold bars to the United States – but were instead withdrawn in cash, wired to other domestic bank accounts, and wired to other conspirators in Ghana.
Federal law enforcement agents have identified more than 30 victims, with a total loss amount exceeding $2.1 million. Sarpong allegedly personally received $823,386 in victim funds into bank accounts that he owned or controlled. Sarpong posted photographs of himself on social media posing with large amounts of cash, high-end cars and expensive jewelry.The count of conspiracy to commit wire fraud is punishable by a maximum of 20 years in prison and a $250,000 fine.
U.S. Attorney Carpenito credited special agents of the FBI, Atlantic City Resident Agency, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; special agents of Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael in Newark; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur; with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Diana Vondra Carrig of the U.S. Attorney’s Office in Camden.The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense counsel: Lori M. Koch Esq., Assistant Federal Public Defender, Camden
Collinwood Tax Preparer Charged with Preparing False Tax ReturnsRead the Press Release
NASHVILLE, Tenn. – September 4, 2019 – Steve Lewis Newell, 72, of Collinwood, Tennessee, was charged today with three counts of preparing false tax returns, announced U.S. Attorney Don Cochran for the Middle District of Tennessee.
According to a criminal information filed today, Newell owned and controlled Tax Masters and Accounting in Collinwood, Tennessee, and assisted in the preparation of individual tax returns on behalf of his clients. Between 2014 and 2018, Newell prepared and filed more than 7,700 federal income tax returns, several of which contained inflated or fictitious deductions in Schedule A, including state and local taxes, charitable contributions, and employee business expenses. Newell also falsified other items on his clients’ tax returns, such as the filing status of the taxpayer. Each of these fraudulent misrepresentations served to lower the tax liability for his clients.
The scheme resulted in clients obtaining refunds, which they were not entitled to and caused a tax loss to the IRS of at least $230,000.
If convicted, Newell faces up to three years in prison and a $250,000 fine on each count.
This case was investigated by the IRS-Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Kathryn Booth.
The charges are merely an accusation and are not evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
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City of Atlanta Director of the Office of Contract Compliance pleads guilty to wire and tax fraudRead the Press Release
ATLANTA – Larry Scott has pleaded guilty to wire fraud for failing to disclose to the City of Atlanta that while he served as its Director of Contract Compliance, he also served as the business manager for a consulting firm seeking contracts in the Atlanta-metropolitan area. Scott also failed to report on his taxes the majority of the income earned from the consulting firm.
“Larry Scott betrayed the citizens of Atlanta by failing to disclose that when he served in an executive level position with the City of Atlanta, he was simultaneously working for a consulting firm for businesses who sought contracts in metro-Atlanta,” said U.S. Attorney Byung J. “BJay” Pak. “Scott’s divided loyalty undermined the integrity of the office he served at the City of Atlanta.”
“Deceitful and self-indulgent people have no place in public office at any level of government,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Today's plea doesn't mean our work is done, the FBI and our partners remain committed to ending public corruption in Atlanta and the Georgia community.”
“Public officials, whether elected or appointed, should expect to be held to a higher standard of trust in the eyes of the public. That trust is broken when these officials engage in malfeasance or commit crimes. Failure to disclose income and file a correct income tax return is a crime! No public official gets a free pass to ignore the tax laws, and IRS-CI works to ensure that everyone pays their fair share,” said Thomas J. Holloman, III, Atlanta Field Office Special Agent in Charge IRS-Criminal Investigations.
According to U.S. Attorney Pak, the charges and other information presented in court: the City of Atlanta - Mayor’s Office of Contract Compliance “serves as a liaison, linking Small, Minority, Female and Disadvantaged Businesses with City of Atlanta related business opportunities and encourages equal opportunity for all businesses and individuals in the Atlanta workplace,” and has a stated mission “to mitigate the effects of past and present discrimination against women and minority businesses … [and] to promote full and equal business opportunity for all persons doing business with the City of Atlanta.”
From 2002 to 2019, Scott held several positions with the City of Atlanta, including, serving as the: (a) Senior Contract Compliance Manager in the Office of Contract Compliance; (b) Director of Procurement in the Department of Watershed Management, and (c) the Director of the Office of Contract Compliance. In those positions, Scott earned between $57,000 and $98,000 per year. In total, from 2012 to 2017, Scott earned approximately $530,000 as an employee with the City of Atlanta.
On February 23, 2011, Scott incorporated Cornerstone U.S. Management Group, LLC (“Cornerstone”) with the Georgia Secretary of State as a for-profit corporation.
Cornerstone is a consulting firm for businesses seeking contracts in the Atlanta-metropolitan area and elsewhere. In its Articles of Organization, Cornerstone listed Scott as its organizer and registered agent. From 2012 until November 2017, Scott served as Cornerstone’s business manager. In that role and during that six-year period, Cornerstone paid Scott between approximately $1,000 and $5,000 per month. In total, from 2012 to 2017, Scott earned approximately $220,000 as Cornerstone’s business manager.
According to the City of Atlanta’s Code of Ethics, certain City of Atlanta officials and employees must disclose all “positions of employment held by the official or employee in any business . . . for all or any portion of the year, including a description of the type of business and the existence and nature of any business done by the employer entity with the city.” The City of Atlanta’s Code of Ethics further requires that these officials and employees disclose “[e]ach and every source of income from any business received by such official or employee in excess of $5,000 derived from any single source in the preceding calendar year.”
As the City of Atlanta’s Senior Contract Compliance Manager, Director of Procurement, and Director of Contract Compliance, the City of Atlanta required Scott to complete annually a Financial Disclosure Statement listing any outside employment and sources of income of more than $5,000 per year for calendar years 2012 to 2017.
From 2012 to 2017, Scott electronically filed six (6) false Financial Disclosure Statements, each executed under penalty of perjury. On each Financial Disclosure Statement, Scott knowingly failed to disclose that he had been employed by Cornerstone and that he had received more than $5,000 in annual income from Cornerstone.
From 2012 to 2017, Scott earned approximately $220,000 from Cornerstone while serving as a full-time management or executive level employee with the City of Atlanta. Scott never disclosed to the City of Atlanta his employment with and income from Cornerstone. Scott knew that if he had disclosed his income from Cornerstone on his annual Financial Disclosure Statements, the City of Atlanta could have terminated Scott.
From 2012 to 2017, Scott also filed six (6) false and fraudulent federal income tax returns – in that Scott failed to report the majority of the income that he earned from Cornerstone on his tax returns. For example, in 2015, Scott earned approximately $156,036 in income – (a) $99,136 as the City of Atlanta’s Director of Contract Compliance; and (b) $56,900 as Cornerstone’s business manager. Yet, on his 2015 federal income tax return, Scott falsely listed his “total income” as only $101,630.
Based on his conduct, Larry Scott, 54, of Atlanta, Georgia, was charged with, and pleaded guilty to, one count each of wire and tax fraud.
The Federal Bureau of Investigation and Internal Revenue Service Criminal Investigation are investigating this case.
Assistant U.S. Attorneys Jeffrey W. Davis, Stephen H. McClain, and Sekret Sneed are 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.
Cincinnati Man Sentenced to Prison for Hate CrimesRead the Press Release
CINCINNATI – A Cincinnati man was sentenced in federal court this morning for violating the Fair Housing Act through force, by willfully intimidating two homeowners based on their race, color and familial status.
Samuel Whitt, 43, was sentenced in U.S. District Court to 54 months in prison for criminal interference with the right to fair housing.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Todd A. Wickerham, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, and Cincinnati Police Chief Eliot K. Isaac announced the sentence handed down today by U.S. District Judge Michael R. Barrett.
Whitt was indicted in May 2017 and pleaded guilty in January 2019 to criminal interference with the right to fair housing, in part by the use or attempted use of fire or an explosive.
Whitt destroyed a rental home owned by an inter-racial couple in Price Hill in November 2016. According to court documents, Whitt broke into the rental home and spray-painted the walls with messages including “die n****r” and “white power,” as well as images of swastikas. Whitt also poured quick-drying concrete into the bathroom drains and toilet; stabbed a knife into the floor; removed plumbing traps from the sinks and left the water running; turned on the gas stove in the upstairs kitchen, poured paint into the burners, and attempted to remove the smoke detector above the stove.
“I want this conviction and sentence to send a message to racists in the Southern District of Ohio,” said U.S. Attorney Glassman. “It’s your right to wallow in noxious beliefs to your heart’s content, but act on those thoughts with violence and you will go to federal prison for a long time. Together with our law enforcement partners at all levels, this office will enforce the federal laws against hate crimes vigorously and to their fullest extent.”
As part of his sentence, the Court also ordered that Whitt pay more than $66,000 in restitution and serve three years of supervised release following his prison sentence, including one year of home confinement.
U.S. Attorney Glassman commended the cooperative investigation by the FBI and Cincinnati Police, as well as Assistant United States Attorneys Megan Gaffney and Kyle Healey, who are representing the United States in this case.
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Cheektowaga Surgeon Pleads Guilty to Drug Charge and Lying to the DEARead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Dr. Anthony Leone, 55, of Clarence, NY, pleaded guilty before U.S. District Judge Elizabeth A. Wolford to unlawful possession of a controlled substance and making material false statements. The charges carry a maximum penalty of five years in prison and a $250,000 fine.
Assistant U.S. Attorney Laura A. Higgins, who is handling the case, stated that on September 8, 2016, the defendant, who was a licensed spine and general orthopedic surgeon and Drug Enforcement Administration registrant, completed a controlled substance form for Henry Schein, a commercial distributor of controlled substances. One of the questions on the form asked Leone if he uses “any controlled substances ordered to treat family members,” to which he responded “no.” That statement was false. Leone in fact ordered zolpidem for treatment of an identified family member.
Further, the form asked the defendant whether he uses any of the controlled drug items he orders for his own personal use, to which he responded “no.” That statement was also false. Leone ordered Adderall XR, tramadol, and clonazepam to use himself.
Finally, the form asked the defendant whether his office performs surgery or any other in office procedures that require the use of controlled substances, to which he responded with the following: “Procedures performed on an outpatient basis: Epidural steroid injections and facet injections, outpatient procedure: lumbar and [illegible word] spine reconstructive surgery.” That statement was also false in that Leone did not administer or dispense controlled substances in his office, but instead, wrote patients prescriptions for fulfillment at a pharmacy.
Thereafter, the defendant ordered and received bulk quantities of Adderall XR, hydrocodone, both Schedule II controlled substances, and clonazepam, tramadol, and zolpidem, all Schedule IV controlled substances from Henry Schein.
On April 24, 2018, the Drug Enforcement Administration conducted an administrative search at Leone’s offices located at 934 Cleveland Drive in Cheektowaga, NY. During that search, the defendant told DEA agents that he ordered quantities of hydrocodone, which he dispensed to patients. In truth and fact, Leone was transporting the hydrocodone from his medical office to his residence on Cobblestone Drive in Clarence, where he stored them for his own personal use.
“As with many of those whose judgment is impaired as a result of their need to feed their addiction, the defendant lied to get what he wanted,” stated U.S. Attorney Kennedy. “Sadly, this case serves as another example of the debilitating and destructive power of addiction, whether its prescription pills or other dangerous, illegal opiates. Simply put – addiction knows no boundaries. That is why it is imperative that we in law enforcement continue vigorously to enforce the law while also continuing to work with our partners in treatment and prevention to battle this epidemic.”
The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Ray Donovan, Special Agent-in-Charge, New York Field Office.
Sentencing is scheduled for December 16, 2019, before Judge Wolford.
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Champaign Man Indicted on Charge of Attempted Enticement of a MinorRead the Press Release
Springfield, Ill. – A federal grand jury in Springfield today returned an indictment that charges Thomas L. Bishop, 60, of the 1600 block of West Bradley Ave., in Champaign, Ill. with attempted enticement of a minor. Bishop is scheduled to appear for arraignment tomorrow, Sept. 5, 2019, in Urbana, before U.S. Magistrate Judge Eric I. Long.
Bishop was arrested on Aug. 23, 2019, and charged by criminal complaint. According to the affidavit filed in support of the complaint, on Aug. 20, Bishop allegedly initiated a text message conversation with an online covert profile of a law enforcement officer on a popular online dating / chatting application. Following the initial contact, the defendant and the undercover officer engaged in numerous sexually explicit text message conversations, including conversations in which the defendant allegedly requested that the minor send sexually explicit photos of himself to the defendant. The affidavit alleges that on Aug. 23, the defendant believed he was meeting a 15-year-old boy at a pre-determined location in Champaign to take the minor to his residence for a sexual encounter. Instead, law enforcement officers arrested Bishop.
The indictment returned today charges Bishop with the offense of attempted enticement of a minor, from Aug. 20 to Aug. 23, 2019, using the internet and a cellular telephone, both means of interstate commerce, to knowingly entice a minor under the age of 18 to engage in sexual activity for which any person can be charged with a criminal offense. If convicted, the statutory penalty for the offense is 10 years to life in prison plus a fine of up to $250,000.
Following his arrest, Bishop made his initial court appearance on Aug. 26, 2019, before U.S. Magistrate Judge Long, who ordered that Bishop be detained. Bishop has remained in the custody of the U.S. Marshals Service since his arrest.
The case is being prosecuted by Assistant U.S. Attorney Elly M. Peirson, The charge is the result of investigation by the Federal Bureau of Investigation with the assistance of the Champaign Police Department’s Street Crimes Unit.
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.
The case was brought as part of Project Safe Childhood, a nationwide initiative to combat child sexual exploitation and abuse launched in May 2006 by the Department of Justice. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
California Man Guilty of Heroin Trafficking ConspiracyRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania, announced that Crispin Fernandez, age 26, a California resident, pleaded guilty on August 30, 2019, to participating in a conspiracy that transported more than a kilogram of heroin from California to Carbon County, Pennsylvania, before U.S. District Court Judge Malachy E. Mannion.
According to United States Attorney David J. Freed, Fernandez admitted to conspiring with others to send more than one kilogram of heroin via couriers between July 2018 and the present. A kilogram of heroin is equivalent to approximately 40,000 retail bags of heroin.
Fernandez was charged in a superseding information with conspiracy to distribute and possess with intent to distribute in excess of one kilogram of heroin. Agents seized close to three kilograms during the investigation in Pennsylvania and Illinois.
Judge Mannion ordered a presentence investigation to be completed. Sentencing will be scheduled at a later date.
The charge against Fernandez resulted from an investigation by the Drug Enforcement Administration (DEA), the Pennsylvania State Police, and the Illinois State Police. Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
This case is also a part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
This case was also brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
The maximum penalty under federal law is life imprisonment. The charge also carries a mandatory minimum penalty of 15 years in prison. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Buffalo Woman Pleads Guilty to Narcotics ConspiracyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Nina Rosario, 21, of Buffalo, NY, pleaded guilty before Chief U.S. District Judge Frank P. Geraci, Jr. to conspiracy to possess with intent to distribute, and to distribute, heroin. The charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine.
Assistant U.S. Attorney Brendan T. Cullinane, who is handling the case, stated that beginning in April of 2018 and continuing until April 28, 2018, Rosario conspired with others to sell heroin, a Schedule I controlled substance. On April 28, 2018, the defendant spoke with her co-conspirator via telephone regarding their drug distribution conspiracy. In particular, Rosario confirmed that she met with a source of supply and received approximately 20 grams of heroin, all of which the defendant and her co-conspirator intended to distribute in Western New York.
The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division.
Sentencing is scheduled before Judge Geraci for December 12, 2019, at 11:30 a.m.
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Bergen County Man Admits to Fraudulent Short Sale Scheme to Defraud Mortgage Lenders and Tax EvasionRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man today admitted his role in a scheme with his son to use straw buyers and short sales on properties to defraud mortgage lenders out of hundreds of thousands of dollars and to avoid paying taxes on the proceeds of the scheme, U.S. Attorney Craig Carpenito announced.
George Bussanich Sr., 60, of Park Ridge, New Jersey, pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to a superseding information charging him with one count of bank fraud conspiracy and one count of tax evasion. His son, George Bussanich Jr., 39, of Upper Saddle River, New Jersey, pleaded guilty to tax evasion before Judge Cecchi in October 2017 and is scheduled to be sentenced Sept. 25, 2019.
According to documents filed in this case and statements made in court:
Between 2009 and 2012, Bussanich Sr. and Bussanich Jr. conspired to defraud mortgage lenders through the sham short sales of two properties located on Jefferson Avenue in Emerson, New Jersey, and Lillian Street in Park Ridge.
Bussanich Sr. controlled various purported medical clinics and surgical centers in New Jersey. He recruited his business partner and an employee from a sleep clinic in Cliffside Park, New Jersey, to pose as legitimate, unrelated buyers of the properties. In order to conceal his involvement, Bussanich Sr. used a business entity he controlled to fund each short sale transaction and the subsequent repurchase of those properties. Bussanich Jr., the owner of record of both properties, negotiated the short sales with the lenders using materially false information that misrepresented the circumstances of the short sales, the relationships of the parties, and the source of funding for the transactions.
Approximately two years after the fraudulent short sales, Bussanich Sr. bought the properties back from the straw purchasers using money that he owed his business partner from an earlier venture.
Bussanich Sr. also failed to disclose on his tax returns hundreds of thousands of dollars in income that he received from his purported medical clinics and surgical centers. He used those funds to purchase high-end luxury vehicles worth a total of over $300,000, including two Land Rover sport utility vehicles and a Ferrari Spyder. He also used those funds to purchase official bank checks to fund the fraudulent short sales.
The bank fraud conspiracy charge carries a maximum potential penalty of 30 years in prison and a maximum potential fine of $1 million. The tax evasion charge carries a maximum potential penalty of five years in prison and a maximum potential $250,000 fine. Sentencing is scheduled for Jan. 23, 2020.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Ari B. Fontecchio of the Office’s Economic Crimes Unit, and Nicholas P. Grippo, Attorney in Charge of the Trenton Office.
Bangladeshi National Arrested in Texas to Face Charges for a Conspiracy to Bring Aliens into the United StatesRead the Press Release
A Bangladeshi national residing in Tapachula, Mexico, was arrested Aug. 31 on arrival at George Bush Intercontinental Airport in Houston, Texas, to face a superseding criminal indictment for his role in a scheme to smuggle aliens into the United States.
The unsealed superseding indictment alleges that from March 2017 to August 2018, Milon Miah conspired to bring and brought 15 Bangladeshi nationals to the United States at the Texas border in exchange for payment. Miah allegedly maintained a hotel in Tapachula, Mexico, where he housed and fed aliens and provided them with plane tickets to locations in northern Mexico where the aliens were met by other smugglers who transported them to the U.S. border. One of Miah’s co‑conspirators in the smuggling operation, Moktar Hossain, pleaded guilty last week to conspiracy to bring an alien to the United States as well as several related smuggling charges.
“Human smuggling rings endanger the security of the United States,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “This arrest sends a strong message that the Department is dedicated to holding accountable those who conspire to subvert our nation’s immigration laws for their own profit.”
“Securing our borders is a national security and law enforcement priority,” said U.S. Attorney Ryan K. Patrick for the Southern District of Texas. “Often, disparate organizations cooperate in an effort to exploit our border. The great investigative work by multiple agencies stopped this group and is able to bring foreign based defendants to justice.”
“The arrest of Milon Miah represents a significant joint effort in ensuring national security and public safety,” said Special Agent in Charge Shane Folden of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) San Antonio. “HSI remains steadfast in vigorously investigating and dismantling transnational criminal networks that pose a threat to our nation. We will continue to work with our law enforcement partners to maintain the integrity of our border and ensure the safety of our communities.”
Miah was presented yesterday before U.S. Magistrate Judge Dena H. Palmero in the Southern District of Texas for his initial appearance. At the hearing, Judge Palmero ordered that Miah be held pending transfer to Laredo for further criminal proceedings.
HSI Laredo is conducting the investigation with assistance from HSI Mexico City, HSI Monterrey, HSI Houston, HSI Calexico, Customs and Border Protection, Border Patrol and the U.S. Marshals Service. The investigation is being conducted under the Extraterritorial Criminal Travel Strike Force (ECT) program, a joint partnership between the Justice Department’s Criminal Division and HSI. The ECT program focuses on human smuggling networks that may present particular national security or public safety risks or present grave humanitarian concerns. ECT has dedicated investigative, intelligence and prosecutorial resources. ECT coordinates and receives assistance from other U.S. government agencies and foreign law enforcement authorities.
Trial Attorneys James Hepburn and Erin Cox of the Criminal Division’s Human Rights and Special Prosecutions Section are prosecuting the case with assistance from the U.S. Attorney’s Office for the Southern District of Texas.
The charges contained in the indictment are merely allegations and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Bangladeshi National Arrested in Texas to Face Charges for Conspiracy to Bring Aliens into the U.S.Read the Press Release
HOUSTON - A Bangladeshi national residing in Tapachula, Mexico, was arrested Aug. 31 on arrival at George Bush Intercontinental Airport in Houston to face a superseding criminal indictment for his role in a scheme to smuggle aliens into the United States.
The unsealed superseding indictment alleges that from March 2017 to August 2018, Milon Miah, 39, conspired to bring and brought 15 Bangladeshi nationals to the United States at the Texas border in exchange for payment. Miah allegedly maintained a hotel in Tapachula, Mexico, where he housed and fed aliens and provided them with plane tickets to locations in northern Mexico where the aliens were met by other smugglers who transported them to the U.S. border. One of Miah’s co-conspirators in the smuggling operation, Moktar Hossain, pleaded guilty last week to conspiracy to bring an alien to the United States as well as several related smuggling charges.
“Human smuggling rings endanger the security of the United States,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “This arrest sends a strong message that the Department is dedicated to holding accountable those who conspire to subvert our nation’s immigration laws for their own profit.”
“Securing our borders is a national security and law enforcement priority,” said U.S. Attorney Ryan K. Patrick. “Often, disparate organizations cooperate in an effort to exploit our border. The great investigative work by multiple agencies stopped this group and is able bring foreign based defendants to justice.”
“The arrest of Milon Miah represents a significant joint effort in ensuring national security and public safety,” said Special Agent in Charge Shane Folden of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) San Antonio. “HSI remains steadfast in vigorously investigating and dismantling transnational criminal networks that pose a threat to our nation. We will continue to work with our law enforcement partners to maintain the integrity of our border and ensure the safety of our communities.”
Miah was presented yesterday before U.S. Magistrate Judge Dena H. Palmero in the Southern District of Texas for his initial appearance. At the hearing, Judge Palmero ordered Miah be held pending transfer to Laredo for further criminal proceedings.
HSI Laredo is conducting the investigation with assistance from HSI Mexico City, HSI Monterrey, HSI Houston, HSI Calexico, Customs and Border Protection, Border Patrol and the U.S. Marshals Service. The investigation is being conducted under the Extraterritorial Criminal Travel Strike Force (ECT) program, a joint partnership between the Justice Department’s Criminal Division and HSI. The ECT program focuses on human smuggling networks that may present particular national security or public safety risks or present grave humanitarian concerns. ECT has dedicated investigative, intelligence and prosecutorial resources. ECT coordinates and receives assistance from other U.S. government agencies and foreign law enforcement authorities.
Trial Attorneys James Hepburn and Erin Cox of the Criminal Division’s Human Rights and Special Prosecutions Section are prosecuting the case with assistance from the U.S. Attorney’s Office for the Southern District of Texas.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless and until convicted through due process of law.Austin Man Sentenced to Federal Prison for Sexual Exploitation of a MinorRead the Press Release
In Austin today, U.S. District Judge Robert Pitman sentenced 25–year–old Olin Dee Cubit, Jr., to 15 years in federal prison followed by ten years of supervised release for sexually exploiting a minor, announced U.S. Attorney John F. Bash and Austin Police Chief Brian Manley.
On April 2, 2019, Cubit pleaded guilty to one count of sex trafficking of a minor and one count of sexual exploitation of a minor for producing videos of a minor engaged in sexually explicit conduct. By pleading guilty, Cubit admitted that between January 15, 2018, and February 15, 2018, he and his co-defendant , 23-year-old Kaylan Nichole Hill of Austin, caused a minor to engage in repeated sexually explicit activity for Cubit’s own financial gain.
On July 26, 2019, Judge Pitman sentenced Hill to five years in federal prison followed by five years of supervised release for sex trafficking a minor and possession of child pornography.
“There is far too much child sexual abuse in our country. I am proud of the many successful prosecutions that our office has handled, such as this one. But I fear that as a society we are not taking this problem seriously enough,” stated U.S. Attorney Bash.
The Austin Police Department’s Human Trafficking Unit investigated this case. Assistant U.S. Attorney Grant Sparks prosecuted this case on behalf of the Government.
“I am proud of all the work done by the Austin Police Department’s Human Trafficking Unit,” said Chief Manley. The unit is grateful to the U.S. Attorney’s office for their efforts in this matter. A dangerous criminal has been removed from the community of Austin, and justice has been sought for the survivor of this heinous crime.”
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.