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Monday 8 July 2019
Former Rapid City Priest Charged with Wire Fraud, Money Laundering, and Transporting Stolen MoneyRead the Press Release
United States Attorney Ron Parsons announced that a Kent, Washington, man was charged in federal district court with 50 counts of Wire Fraud, nine counts of Money Laundering, and one count of Transportation of Stolen Money.
Marcin Stanislaw Garbacz, age 41, a former Rapid City priest, was charged on May 21, 2019. Garbacz appeared before U.S. Magistrate Judge Daneta Wollmann on July 3, 2019, and pleaded not guilty to the charges.
The maximum penalty upon conviction is 20 years in federal prison and/or a $500,000 fine, 3 years of supervised release, and $6,000 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to Garbacz, while employed as a pastor with the Diocese of Rapid City, defrauding the Diocese by stealing cash donations made by parishioners for his own personal use between July 2012 and April 2018.
The charges are merely accusations and Garbacz is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation. Assistant U.S. Attorney Benjamin Patterson is prosecuting the case.
Garbacz was detained pending trial. A trial date has not been set.
Former Clay County High School Teacher Sentenced to 11 Years in Federal Prison for Distributing Child Sex Abuse Video over the InternetRead the Press Release
Jacksonville, Florida – United States District Judge Timothy J. Corrigan has sentenced Christopher Shawn Potter (50, Jacksonville) to 11 years in federal prison for distributing child pornography. Potter was also ordered to serve a 20-year term of supervised release, and must pay $3,000 in restitution to a victim of his offense. Potter had pleaded guilty on April 8, 2019.
Potter worked as a teacher at Clay High School in Green Cove Springs from 2016 to 2017, and was a teacher at Orange Park High School from 1997 to 2004.
According to court documents, in February 2018, using the screen name “Mr. Fireball,” Potter engaged in online conversations with an undercover officer who was posing as a 14-year-old child. During these conversations, Potter discussed meeting the “child” for sex. Potter sent the “child” a video depicting a young child being sexually abused, and also sent a video of Potter performing a sexual act.
On September 20, 2018, HSI agents and other law enforcement officers executed a search warrant at Potter’s residence and seized several electronic devices. During an interview, Potter admitted sending child pornography and stated that he fantasizes about sexual acts with young girls. Potter’s smart phone contained 15 videos and 6 images depicting child pornography, as well as logs of online conversations on social media in which Potter discussed his sexual fantasies involving children.
“This child predator has worked in positions of trust and authority, so to get him off our streets and out of our local schools has made the community safer for everyone,” said HSI Tampa Special Agent in Charge James C. Spero. “This case is an example of HSI working with our local law enforcement partners to bring criminals to justice.”
This case was investigated by the U.S. Department of Homeland Security, Homeland Security Investigations, the Orange Park Police Department, the Putnam County Sheriff’s Office, the Clay County Sheriff’s Office, and the Palatka Police Department. It was prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Former Carroll County Public School Teacher Sentenced to 22 Years in Federal Prison for Production of Child PornographyRead the Press Release
Baltimore, Maryland – U.S. District Judge Richard D. Bennett today sentenced Kenneth Brian Fischer, age 41, of Westminster, Maryland, to 22 years in federal prison, followed by lifetime supervised release, for production of child pornography. Judge Bennett also ordered Fischer to pay restitution of $3,000 to each of the 11 identified victims, for a total of $33,000. Upon his release from prison, Fischer will be required to register as a sex offender in the places where he resides, is an employee, and is a student, pursuant to the Sex Offender Registration and Notification Act (SORNA), and the laws of the state of his residence.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office; Colonel William M. Pallozzi, Superintendent of the Maryland State Police; Sheriff James T. DeWees of the Carroll County Sheriff’s Office; Colonel Edwin C. Roessler Jr. of the Fairfax County, Virginia Police; Carroll County State’s Attorney Brian DeLeonardo; and Fairfax County Commonwealth's Attorney Raymond F. Morrogh.
“Kenneth Fischer was a teacher who exploited children by enticing them to engage in sexually explicit conduct for his own gratification,” said United States Attorney Robert K. Hur. “Now he faces years in federal prison, where there is no parole—ever. Law enforcement will continue to work to identify and prosecute those who prey on our children.”
According to his plea agreement, Fischer was a resident of Carroll County, Maryland and at the time of the conduct was employed as a teacher by the Carroll County School System. In August 2017, Fischer was identified by law enforcement after he communicated with an undercover agent posing as a minor male on a social networking application geared toward gay and bisexual men. In his chats with the undercover detective, Fischer attempted to arrange a meeting with the detective posing as a minor male, in order to engage in sexually explicit conduct. Fischer also sent the detective a sexually explicit photo of an adult male, wearing a green shirt with white lettering. The face of the individual was not visible in the photo.
On September 13, 2017, law enforcement executed a search warrant at Fischer’s residence, and seized numerous electronic devices and a green t-shirt with white lettering that matches the t-shirt worn by the individual in the sexually explicit photo Fischer sent to the detective. A search of Fischer’s electronic devices revealed that Fischer had been communicating with five real minors beginning in November 2014 and continuing through his arrest in September 2017.
Fischer admitted that he enticed minor males to engage in sexually explicit conduct with him and took images and videos documenting that conduct. Fischer also attempted to entice two other minor males to engage in sexually explicit conduct with him. In addition, Fischer engaged in online chats with at least an additional nine minor males in which he either attempted to or did obtain sexually explicit photos of the minor males at his request. One minor male was 13 years old at the time the nude photos were exchanged.
Fischer was previously arrested in Westminster, Maryland on related charges and has been in custody since September 13, 2017.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about Internet safety education, please visit www.justice.gov/psc and click on the “resources” tab on the left of the page.
United States Attorney Robert K. Hur commended the FBI, the Maryland State Police, the Carroll County Sheriff’s Office, the Carroll County State’s Attorney’s Office, the Fairfax County Police, and the Fairfax County Commonwealth’s Attorney’s Office for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorney Ayn B. Ducao, who prosecuted the case.
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Former Arkansas State Senator Pleads Guilty to BriberyRead the Press Release
SPRINGFIELD, Mo. – A former Arkansas state senator pleaded guilty in federal court today to accepting multiple bribes in connection with a multi-district investigation spanning the Western District of Missouri and Eastern and Western Districts of Arkansas.
Jeremy Hutchinson, 45, of Little Rock, Arkansas, pleaded guilty before U.S. Magistrate Judge David P. Rush to one count of conspiracy to commit federal program bribery. Hutchinson, who was previously a state senator and representative, resigned in August 2018 after he was indicted in the Eastern District of Arkansas.
Hutchinson pleaded guilty today to his role in a multi-million-dollar public corruption scheme that involved embezzlement, bribes and illegal campaign contributions for elected public officials. Hutchinson admitted that he was hired by then-Chief Operating Officer Bontiea Goss as outside counsel for Preferred Family Healthcare, Inc. (formerly known as Alternative Opportunities, Inc.), and in exchange for payments and legal work, Hutchinson performed official acts on behalf of the Springfield, Missouri-based healthcare charity, including holding up agency budgets and drafting and voting on legislation. Goss, a former executive at the charity, is charged in the same superseding indictment to which Hutchinson pleaded guilty.
According to today’s plea agreement, the charity paid Hutchinson a monthly retainer from May 2014 until 2017. In total, Hutchinson was paid more than $350,000 in charity funds. Hutchinson also received hotel rooms and Major League Baseball tickets paid for by the charity, and the use of the charity’s luxury and recreational real estate.
Hutchinson further admitted as part of his plea that: he understood that he was paid by Alternative Opportunities, Inc., and Preferred Family Healthcare, Inc., primarily because of his position as an elected public official; that he worked to further the interests of the non-profit while in the Arkansas State Legislature; that Goss, along with Milton Russell Cranford (also known as “Rusty”) and Robin Raveendran, both of whom served as executives for the charity and have also pleaded guilty for their role in the bribery scheme, directed Hutchinson to move the charity’s political agenda forward in the Arkansas Senate; and that Hutchinson performed some legal work for the charity to conceal his corrupt arrangement with the charity’s executives.
Under federal statutes, Hutchinson is subject to a sentence of up to five years in federal prison without parole and a fine of up to $250,000. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
Hutchinson previously pleaded guilty on June 25, 2019, to bribery and tax fraud as part of a multi-district plea agreement. Hutchinson pleaded guilty to an information filed in the Western District of Arkansas, charging him with conspiracy to commit federal program bribery as part of a separate scheme involving an unidentified individual who owned and operated orthodontic clinics throughout the state of Arkansas, for whom Hutchinson had taken official action in exchange for bribes. He also pleaded guilty to one count of filing a false tax return that was part of a 12-count federal indictment in the Eastern District of Arkansas, charging him with devising a wire and tax fraud scheme in which Hutchinson stole and misappropriated thousands of dollars in state campaign contributions for his own personal use, and then filed false federal income tax returns to conceal his conduct.
The multi-district investigation was conducted by IRS-Criminal Investigation, the FBI, and the Offices of the Inspectors General from the Departments of Justice, Labor, and the Federal Deposit Insurance Corporation (FDIC). The cases are being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich of the Western District of Missouri; Trial Attorneys Marco A. Palmieri and Sean F. Mulryne of the Criminal Division’s Public Integrity Section; Assistant U.S. Attorneys Ben Wulff and Aaron Jennen of the Western District of Arkansas; and Assistant U.S. Attorneys Stephanie Mazzanti and Patrick Harris from the Eastern District of Arkansas.
Federal Government Conducts Unprecedented Seizure of Massive Cargo Ship After Finding Almost 20 Tons of Cocaine on BoardRead the Press Release
PHILADELPHIA – United States Attorney William M. McSwain announced today that, on July 4, 2019, U.S. Customs and Border Protection (CBP) executed a seizure warrant obtained by the U.S. Attorney’s Office for the Eastern District of Pennsylvania, and seized the cargo vessel MSC Gayane as being subject to possible forfeiture to the United States.
On June 17, 2019, federal, state, and local law enforcement agents boarded the MSC Gayane when it arrived at Packer Marine Terminal in Philadelphia and seized 19.76 tons of cocaine. Since that time, crew members of the MSC Gayane have been charged with knowingly and intentionally conspiring with each other and others to possess more than five kilograms of cocaine on board a vessel subject to the jurisdiction of the United States. The federal criminal investigation is ongoing.
As a result of this seizure, the MSC Gayane – a ship built in 2018 and measuring approximately two city blocks in length – has been placed under the custody of CBP and shall remain so until further proceedings or Order of the Court.
“A seizure of a vessel this massive is complicated and unprecedented – but it is appropriate because the circumstances here are also unprecedented. We found nearly 20 tons of cocaine hidden on this ship,” said U.S. Attorney McSwain. “When a vessel brings such an outrageous amount of deadly drugs into Philadelphia waters, my Office and our agency partners will pursue the most severe consequences possible against all involved parties in order to protect our district – and our country.”
“The MSC Gayane is the largest vessel seized in U.S. Customs and Border Protection’s 230-year history and follows the record seizure of almost 20-tons of cocaine discovered on the vessel,” said Casey Durst, CBP’s Director of Field Operations in Baltimore. “Seizing a vessel of this size is an unusual enforcement action for CBP, but is indicative of the serious consequences associated with an alleged conspiracy by crewmembers and others to smuggle a record load of dangerous drugs through the United States. This action serves as a reminder for all shipping lines and vessel masters of their responsibilities under U.S. and international law to implement and enforce stringent security measures to prevent smuggling attempts such as this.”
“The seizure of the MSC Gayane is another significant step toward holding accountable those who perpetuate drug smuggling crimes both here in Philadelphia and around the world,” said Marlon Miller, Special Agent in Charge of HSI Philadelphia. “HSI, in collaboration with CBP, the Coast Guard, and our state and local law enforcement partners continue to aggressively work with the U.S. Attorney’s Office for the Eastern District of Pennsylvania to comprehensively investigate this case and bring to justice those who had roles in this drug smuggling venture.”
The case is being investigated by the United States Customs and Border Protection and Homeland Security Investigations, together with a multi-agency team of federal, state, and local partners.
Ex-Northern Cheyenne Tribal President admits travel fraud schemeRead the Press Release
BILLINGS – Lawrence Jace Killsback, the former president of the Northern Cheyenne Indian Tribe, today admitted to a travel fraud scheme in which he is accused of getting an estimated $20,000 in improper reimbursements, U.S. Attorney Kurt Alme said.
Killsback, 40, of Busby, pleaded guilty to wire fraud and to false claims conspiracy during an arraignment and plea hearing.
U.S. Magistrate Judge Timothy J. Cavan presided and will recommend to U.S. District Judge Susan P. Watters that Killsback’s plea be accepted. Judge Watters will preside at sentencing. Judge Cavan continued Killsback’s release.
Killsback faces a maximum 20 years in prison, a $250,000 fine and three years of supervised release on the wire fraud crime and a maximum 10 years in prison, a $250,000 fine and three years of supervised release on the false claims conspiracy crime.
Prosecutors said in court documents that while serving as tribal president and in his previous job as the tribe’s health director, Killsback submitted false or fraudulent invoices to tribal, state and federal entities claiming travel expenses for travel he was already being reimbursed through either the tribe, state, other tribes or federal agencies, for travel that never occurred or for travel dates or rates that were inflated or exaggerated.
Killsback also conspired with at least one other person in devising and executing the schemes. Although Killsback disputed the amount, prosecutors said he received an estimated $20,000 in improper reimbursements from 2014 to 2017.
When interviewed by investigators in March 2019, Killsback admitted to submitting the same reimbursement forms and invoices to multiple agencies for travel expenses and to submitting fake invoices for reimbursement. In addition, Killsback noted that this travel fraud happens all of the time on the reservation. Killsback was aware of this scheme and described this as a culture of fraud.
In one scheme, Killsback double and triple dipped travel reimbursements between September 2015 and September 2017 on at least 10 trips he made while serving on various state and national boards. He received multiple reimbursements from various entities, including the Northern Cheyenne Tribe, state of Montana, the Blackfeet Tribe and the federal Department of Health and Human Services.
Another scheme involved Killsback falsifying hotel invoices by changing the number of days, rate or total expenses for trips through a software program used by Killsback or a co-conspirator. Investigators identified 28 trips that involved such fraudulent conduct by Killsback.
Assistant U.S. Attorneys Bryan Dake and Ryan Weldon prosecuted the case, which was investigated by Department of Health and Human Services, Office of Inspector General and Department of Interior, Office of Inspector General.
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Dauphin County Man Convicted of Sex TraffickingRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Miguel Scott Arnold, age 32, of Harrisburg, Pennsylvania, was convicted on June 21, 2019, of (1) conspiracy to commit sex trafficking by force, fraud, and coercion; (2) sex trafficking by force, fraud, and coercion; (3) conspiracy to possess with intent to distribute heroin and marijuana; and (4) possession with intent to distribute heroin, after a four-day trial before United States District Court Judge Sylvia H. Rambo.
According to United States Attorney David J. Freed, the jury returned with the guilty verdict after approximately one hour of deliberation. The evidence showed that Arnold was part of a significant sex trafficking operation that exploited over 20 victims, including juveniles. Arnold and his co-conspirators coerced the sex trafficking victims though fraud, physical assault, the deprivation of heroin to addicted victims, and threats of violence.
Following the entry of the verdict, Judge Rambo remanded Arnold to the custody of the U.S. Marshals, at the request of the U.S. Attorney’s Office. Arnold has been incarcerated on state charges since August 2016.
Arnold and four co-defendants, each of whom previously pleaded guilty to engaging in sex trafficking by force, fraud, and coercion, participated in a conspiracy that began in Harrisburg in the fall of 2015, and continued until it was dismantled in August 2016. Arnold and the co-conspirators rented hotel rooms and posted “escort” advertisements and photographs on backpage.com, a website that the FBI has since seized and which is no longer operational. Testimony taken at trial demonstrated that Arnold and his co-conspirators would frequently solicit women to engage in prostitution by lying to them about the services that they would be expected to perform. Arnold and his co-conspirators would also target victims who were vulnerable by virtue of their age, financial insecurity, or drug addiction. Testimony at trial indicated that at least three victims of the conspiracy were minors, one as young as 14 years old. Arnold and the others would take the majority of the money made during the course of the prostitution business, and distributed drugs to the women, including heroin.
In addition to Arnold, the four others charged in the indictment include Tevin Bynoe, Terrence Hawkins, Joshua Guity-Nunez, and Emonie Murphy, all from Harrisburg. Murphy, age 23, pleaded guilty to sex trafficking by force, fraud, and coercion on August 27, 2018. Bynoe, age 27, and Hawkins, age 26, pleaded guilty to sex trafficking by force, fraud, and coercion on September 20, 2018. Guity-Nunez, age 31, pleaded guilty to conspiracy to engage in sex trafficking by force, fraud, and coercion.
Sentencing proceedings for Arnold and his co-defendants remain to be scheduled.
The FBI coordinated the investigation and was aided by law enforcement agencies in the Harrisburg area. Assistant U.S. Attorneys Michael A. Consiglio and Christian T. Haugsby prosecuted the case on behalf of the United States.
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Couple admit producing child pornography while planning to sexually exploit young girlRead the Press Release
AUGUSTA, GA: A couple who admitted producing and sharing child pornography during a plot to sexually exploit an 8-year-old girl pled guilty to federal charges.
Charles Brandon Powell, 33, of Hephzibah, and Carrie Marie Minton, 25, of Cordoba, S.C., pled guilty Monday, July 8, to one count of Production of Child Pornography in U.S. District Court before Chief Judge J. Randall Hall, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. The charge carries a minimum sentence of 15 years in prison and a maximum of 30 years, followed by supervised release of five years to life. There is no parole in the federal system.
“The facts of this case are sickening and disturbing, revealing a cesspool of cooperative depravity,” said Christine. “Quick action from our federal and state law enforcement partners halted this scheme in the early stages, thankfully sparing further exploitation of two innocent children.”
As described in court documents and testimony, Powell and Minton, identified as a couple, held online discussions to plan a sexual encounter with an 8-year-old girl whom Minton planned to bring to Powell’s Hephzibah home from Neeses, S.C. After Minton sent an explicit photo of another juvenile, a 5-month-old girl, to Powell, the National Center for Missing and Exploited Children alerted authorities, who intervened as the plot was in motion. Powell and Minton were taken into custody without either of the children subjected to further harm.
“This case is an excellent example of how partnerships between the FBI and our state and local law enforcement agencies are essential in protecting our citizens and in particular, children, our most vulnerable citizens,” said Chris Hacker, Special Agent in Charge of the Atlanta FBI. “Keeping our children safe is a top priority for this office and I thank law enforcement for their quick work on this matter.”
After accepting please from Powell and Minton, Judge Hall remanded them to federal custody until a sentencing hearing is held. Both are in custody in the Jefferson County Jail.
The case is being investigated by the FBI, the Georgia Bureau of Investigation (GBI) and the South Carolina Office of the Attorney General. Assistant U.S. Attorney Tara Lyons is prosecuting the case for the United States.
California Woman Guilty of Heroin Trafficking ConspiracyRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that Briana Ramirez, age 22, of Simi Valley, California, pleaded guilty before U.S. District Court Judge Malachy E. Mannion, to conspiracy to distribute and possess with intent to distribute more than a kilogram of heroin.
According to United States Attorney David J. Freed, Ramirez admitted to participating in the conspiracy during July through November 2018. Ramirez also admitted that she agreed with others to transport the heroin from California to Carbon County, Pennsylvania. A kilogram of heroin is approximately equivalent to 40,000 retail bags of heroin.
Judge Mannion ordered a pre-sentence investigation to be completed. Sentencing will be scheduled at a later date.
The matter was investigated by the Drug Enforcement Administration, the Pennsylvania State Police and the Illinois State Police. Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
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 for this offenses is life imprisonment, a term of supervised release following imprisonment, and a fine. There is also a mandatory minimum sentence of 10 years’ imprisonment. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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California Man Sentenced to 18 Months in Prison for Role in Three-Year, Cross-Country Insider Trading Scheme that Netted More Than $3.9 MillionRead the Press Release
TRENTON, N.J. – A day trader from Oak Park, California, was sentenced today to 18 months in prison for his role in a multi-year insider trading scheme that made over $3.9 million in illicit profits by exploiting material information in violation of confidentiality agreements, U.S. Attorney Craig Carpenito announced.
Ronald Chernin, 70, of Oak Park, California, previously pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with one count of conspiracy to commit securities fraud and one count of securities fraud. Judge Shipp imposed the sentence today in Trenton federal court
According to documents filed in this case and statements made in court:
Chernin and co-defendant Steven Costantin, 58, of Farmingdale, New Jersey, worked as day traders for Costantin’s brother-in-law, Steven Fishoff, 62, of Westlake Village, California. Between May 2010 and August 2013, Chernin, Costantin, and Fishoff, as well as a business associate referred to as “Trader A,” expressed interest in participating in numerous stock offerings by publicly traded companies.
Chernin, Costantin, and other members of the day trading operation falsely characterized their trading entities as legitimate, full-service financial management firms with as much as $150 million in assets under management, in order to increase the likelihood that the investment bankers would solicit them to participate in the stock offerings.
Before providing confidential information concerning the companies or the terms of the proposed sales, the investment bankers first required that Chernin, Costantin, Fishoff, Trader A, and their associated trading entities, enter into confidentiality, or “wall-crossing,” agreements, whereby they agreed not to disclose or trade on the inside information and were brought “over the wall” for the narrow purpose of determining whether to purchase the offered securities.
Instead, Chernin, Costantin, and Fishoff violated the confidentiality agreements by directly or indirectly tipping each other and others with the inside information concerning the stock offerings; short selling the issuers’ stock in anticipation of a drop in price when the stock offerings were disclosed to the public; and covering their short positions once the stock offerings were disclosed. Additionally, Fishoff tipped his friend, Paul Petrello, 57, of Boca Raton, Florida, and another conspirator, Joseph Spera.
By trading on the nonpublic information, Chernin, Costantin, and their conspirators gained more than $3.9 million in illicit profits over the course of the three-year scheme. Chernin and Costantin shared 50 percent of their profits with Fishoff.
In addition to the prison term, Judge Shipp sentenced Chernin to three years of supervised release and fined him $2,000.
Costantin previously pleaded guilty to his role in the scheme and was sentenced to one year in prison. Petrello previously pleaded guilty to his role in the scheme and was sentenced to three years of probation. Fishoff pleaded guilty to his role in the scheme and was sentenced to 30 months in prison. Spera pleaded guilty to his role in the scheme and was sentenced to one year of probation.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s sentencing. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Marc Berger.
The government is represented by Nicholas P. Grippo, Attorney in Charge of the U.S. Attorney’s Trenton Office; Sarah Devlin, Chief of the Office’s Asset Recovery and Money Laundering Unit (ARMLU), and Senior Trial Counsel Barbara Ward of the ARMLU.
Buffalo Man Pleads Guilty for His Role in Heroin and Fentanyl 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 Reese Moore, 26, of Buffalo, NY, pleaded guilty before U.S. District Judge Lawrence J. Vilardo to conspiracy to distribute 40 grams or more of fentanyl. The charge carries a mandatory minimum penalty of five years in prison, a maximum of 40 years, and a $5,000,000 fine.
Assistant U.S. Attorney Joseph M. Tripi, who is handling the case, stated that the defendant conspired with others to distribute heroin and fentanyl for over two years in the City of Buffalo and surrounding areas. Many of the sales occurred on residential streets in Buffalo, in parking lots of businesses in Amherst and Lancaster, and several times at a local mall. The conspiracy is responsible for distributing thousands of doses of opiates and causing multiple overdoses.
Specifically, Moore communicated and coordinated with a co-defendant and used cellular telephones to coordinate sales of heroin and fentanyl to users and people who resold the drugs. The defendant sold fentanyl to an individual working with investigators on three separate occasions during March of 2016.
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 Division; the Amherst Police Department, under the direction of Chief John C. Askey; the New York State Police Community Narcotics Enforcement Team (CNET), under the direction of Major Mary Clark, and Lieutenant Kevin Reyes; the Lancaster Police Department, under the direction of Chief William J. Karn, Jr.; the Buffalo Police Department Narcotics Squad, under the direction of Commissioner Byron C. Lockwood; the Lockport Police Department, under the direction of Interim Police Chief Steve Preisch; the Depew Police Department, under the direction of Chief Jerome Miller; the Niagara County Sherriff’s Office and the Niagara County Drug Task Force, under the direction of Sheriff James Voutour; the Erie County Sherriff’s Office, under the direction of Sheriff Timothy Howard; and Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent-in Charge Kevin Kelly.
Sentencing is scheduled for November 15, 2019, at 1:00 p.m. before Judge Vilardo.
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Bridgeport Man Sentenced to More Than 12 Years in Federal Prison for Trafficking HeroinRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that CEWELL SHARPE, also known as “C.C.,” 36, of Bridgeport, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to 151 months of imprisonment, followed by three years of supervised release, for trafficking heroin.
According to court documents and statements made in court, in 2015, the FBI’s Bridgeport State Streets Task Force, Bridgeport Police Department and Connecticut State Police Statewide Narcotics Task Force initiated an investigation into several heroin distributors operating in Bridgeport. The investigation, which included court-authorized wiretaps, controlled purchases of heroin and physical surveillance, revealed that Sharpe and Harry Blake, also known as “Harry-O,” partnered to distribute large amounts of heroin in Bridgeport. Sharpe frequently carried firearms in connection with his drug trafficking activity.
On April 12, 2019, Sharpe pleaded guilty to one count of conspiracy to possess and distribute heroin.
Sharpe has been in federal custody since January 26, 2016, after he was charged during a separate investigation into heroin and crack cocaine trafficking in Bridgeport. He subsequently pleaded guilty and, on June 27, 2016, was sentenced to 48 months of imprisonment.
Judge Arterton ordered Sharpe’s 151-month sentence to run consecutively to the 48-month sentence he is currently serving.
On October 31, 2018, a jury found Blake guilty of one count of conspiracy to possess with intent to distribute 100 grams or more of heroin. On June 26, 2019, he was sentenced to 168 months of imprisonment.
This matter was investigated by the FBI’s Bridgeport Safe Streets Task Force and the Bridgeport Police Department, with the assistance of the Drug Enforcement Administration, Connecticut State Police, Stratford Police Department, Stamford Police Department and the Trumbull Police Department K-9 Unit. The case is being prosecuted by Assistant U.S. Attorneys Alina M. Reynolds and H. Gordon Hall.
Barboursville Man Pleads Guilty to Federal Drug and Gun ChargesRead the Press Release
HUNTINGTON, W.Va. – A Barboursville man pled guilty today to federal drug charges, announced United States Attorney Mike Stuart. Mathew Byrd, 32, entered a guilty plea to an indictment charging him with distribution of heroin and possessing a firearm in furtherance of a drug trafficking crime.
“Black tar heroin and a gun,” said United States Attorney Mike Stuart. “We don’t want drug dealers like Byrd in our communities.”
Byrd admitted that on January 31, 2019, he sold seven grams of black tar heroin to a confidential informant. Byrd also admitted to possessing a firearm in furtherance of a drug trafficking crime.
Byrd faces five to forty years in federal prison when he is sentenced on October 7, 2019.
The Violent Crime Drug Task Force West and the Putnam County Sheriff’s Department conducted the investigation. The plea hearing was held before United States District Judge Robert C. Chambers. Assistant United States Attorney Stephanie S. Taylor handled the prosecution.
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Baltimore Man Sentenced to More Than 10 Years in Federal Prison for Armed Robbery of a Restaurant During Which He Brandished a Gun, Pointing it at One of the VictimsRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell, III sentenced Jason Walker, age 31, of Baltimore, Maryland, today to 121 months in federal prison, followed by five years of supervised release, for an armed commercial robbery and for brandishing a firearm during and in relation to a crime of violence.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; and Commissioner Michael Harrison of the Baltimore Police Department.
“Jason Walker has learned a hard lesson—that gun crime leads to federal time, which has no parole, ever,” said United States Attorney Robert K. Hur. “We will continue to work with our law enforcement partners to remove those who would commit violence from our community. Please, put down the guns and save a life—maybe even your own.”
As detailed in guilty plea, on February 21, 2018, Walker and a co-conspirator robbed a restaurant in the 2200 block of Wilkins Avenue in Baltimore. Walker admitted that during the robbery he pointed a handgun at one of the victims, while his co-conspirator took all the money from the cash register. In addition, Walker and his co-conspirator took the victims’ personal cell phones before fleeing the restaurant.
After the 911 call, an officer with the Baltimore Police Department, who was canvassing the area, saw two men in an alley who matched the description provided by the victims. The men were standing by a wall counting cash. Officers detained the men and brought one of the victims to the location. That person identified Walker as one of the men that had committed the robbery. Walker was arrested and searched. Officers recovered $272 in cash, a plastic bag full of change, blue bandanas, two cellular telephones that belonged to two of the victims of the robbery, and a receipt from the restaurant. Officers also recovered a fully loaded revolver from the area where Walker was counting money. Walker admitted that it was the gun he brandished during the robbery of the restaurant.
Federal charges in connection with the robbery against co-defendant Joseph Coates, age 28, of Baltimore, remain pending. Trial is scheduled to begin on December 2, 2019. An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
United States Attorney Robert K. Hur commended the ATF and Baltimore Police Department for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorney Michael A. Goldsticker who is prosecuting the case.
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Baltimore Felon Sentenced to Nine Years in Federal Prison for Illegal Possession of A Stolen FirearmRead the Press Release
Baltimore, Maryland – U.S. District Judge Deborah K. Chasanow today sentenced Yusef Payne, age 35, of Baltimore, Maryland, to nine years in federal prison, followed by three years of supervised release, for illegal possession of a stolen firearm. Payne admitted that he had at least two previous felony convictions and was prohibited from possessing firearms or ammunition.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; and Commissioner Michael Harrison of the Baltimore Police Department.
“Yusef Payne knew that as a result of his previous convictions he was prohibited from possessing guns or ammunition. Now he faces nine years in federal prison,” said United States Attorney Robert K. Hur. “Armed criminals must know that gun crime will lead to federal time, which has no parole—ever. Please, put down the guns and save a life—maybe even your own.”
According to his guilty plea on October 30, 2017, Baltimore Police officers were patrolling and saw Payne, who had an open warrant from an October 15, 2017 handgun charge involving a 9mm handgun with a magazine containing ten 9mm cartridges.
When the officers pulled over to arrest Payne, he ran, discarding a handgun. One of the officers chasing Payne retrieved the weapon, which was a different 9mm handgun with a magazine containing seven cartridges. Payne admitted that he knew, or had cause to believe, that the gun was stolen.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
United States Attorney Robert K. Hur commended the ATF and the Baltimore Police Department for their work in the investigation and thanked the Maryland Department of Public Safety and Correctional Services for its assistance. Mr. Hur thanked Assistant U.S. Attorney Joan C. Mathias, who prosecuted the case.
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Arizona Man Sentenced for Attempted Receipt of Child PornographyRead the Press Release
United States Attorney Ron Parsons announced that a Glendale, Arizona, man convicted of Attempted Receipt of Child Pornography was sentenced on July 2, 2019, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Walter Curaba, age 49, was sentenced to 5 years in federal prison, followed by 5 years of supervised release, and was ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Curaba was one of five men who were arrested and federally indicted as a result of an undercover sex trafficking operation conducted during the 2014 Sturgis Motorcycle Rally, targeting persons willing to pay to have sex with underage girls obtained through the Internet. All five men were indicted for Commercial Sex Trafficking.
The conviction stemmed from Curaba responding to a Craigslist.com advertisement posted by Division of Criminal Investigation undercover agents, which purported to offer young girls for sex. Following several messages with a person Curaba believed to be associated with a 12-year-old girl, but who was in fact an undercover agent, he proceeded to negotiate the time and place they would meet, along with the price he would pay, which was $250.
The undercover operation and arrests were a joint effort between the South Dakota Division of Criminal Investigation, the Department of Homeland Security, the Federal Bureau of Investigation, the Rapid City Police Department, and the Pennington County Sheriff’s office. Assistant U.S. Attorney Sarah Collins prosecuted the case.
Curaba was immediately turned over to the custody of the U.S. Marshals Service.
Appling man admits to possessing child pornographyRead the Press Release
AUGUSTA, GA: An Appling man has pled guilty to a federal charge of possession of child pornography.
Ricardo Dale Alva, 64, entered a guilty plea Monday, July 8, in U.S. District Court in Augusta to one count of Possession of Child Pornography, said Bobby L. Christine, United States Attorney for the Southern District of Georgia.
The charge is punishable by up to 20 years in prison and a fine of up to $250,000, followed by no less than five years of supervised release. There is no parole in the federal system. A sentencing hearing will be held at a later date.
Alva was arrested March 7 after Richmond County Sheriff’s Office deputies were alerted by an online tip that led to a search of Alva’s Appling home by the FBI. The search discovered a cell phone containing images of minors engaged in sexually explicit conduct.
“Children exploited by pornography are victimized when their images are recorded, and again and again when those images are shared,” said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. “The successful resolution of this case leaves many other victimizers to pursue, and our office and investigative partners will never rest until we end this repulsive victimization of children.”
“Individuals who possess pornographic images of children for their own self-gratification support the further exploitation of the most innocent victims,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI will always make it a top priority to protect the most vulnerable in our society, our children,”
The case is being investigated by the FBI and prosecuted by Assistant United States Attorney Tara Lyons.
Activity in the United States Attorney's OfficeRead the Press Release
Chief Federal District Court Judge Scott W. Skavdahl sentenced HAROLD WAYNE WARREN, 51, of Spearfish, South Dakota on July 1, 2019 for conspiracy to distribute methamphetamine. Warren was arrested in Sheridan, Wyoming. He received one hundred twenty months of imprisonment, to be followed by sixty months of supervised release. The Wyoming Division of Criminal Investigation investigated this case.
Chief Federal District Court Judge Scott W. Skavdahl sentenced MILES WILLIAM HYNNE, 53, on July 2, 2019 for conspiracy to distribute methamphetamine. Hynne was arrested in Casper, Wyoming. He received one hundred fifty one months of imprisonment, to be followed by sixty months of supervised release, and ordered to pay restitution in the amount of $250.00 and a $100.00 special assessment. The Wyoming Division of Criminal Investigation investigated this case.
Friday 5 July 2019
West Monroe Man Sentenced to 10 Years in Federal Prison for Possessing Child Pornography ImagesRead the Press Release
MONROE, La. – United States Attorney David C. Joseph announced that Emerson Eugene Stanton, 56, of West Monroe, Louisiana, was sentenced Wednesday by U.S. District Judge Terry A. Doughty to 10 years in federal prison for possessing child pornography that included sexually explicit images of juveniles. Judge Doughty also sentenced Stanton to five years of supervised release following his incarceration.
According to information presented in court, Stanton’s employer found internet searches for nude images of children on the defendant’s cell phone, and took the phone that day to the West Monroe Police Department. Officers obtained and executed a search warrant for Stanton’s cell phone and discovered images of child pornography involving prepubescent minors. A search warrant was also executed at Stanton’s home where officers found another cell phone containing more images of child pornography involving prepubescent minors, including one of the same images officers found on the phone Stanton possessed at work. Stanton pled guilty to these charges on March 8, 2019.
Homeland Security Investigations and West Monroe Police Department conducted the investigation. Assistant U.S. Attorney Jessica D. Cassidy prosecuted the case.
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood combines 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.
The U.S. Department of Homeland Security and U.S. Immigration & Customs Enforcement (ICE) also encourage the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) 347-2423. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online by visiting their website at www.ice.gov/exec/forms/hsi-tips/tips.asp or through the Operation Predator smartphone application www.ice.gov/predator/smartphone-app. Tips may be submitted anonymously.
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Swiftbird Man Sentenced for Aggravated Sexual AbuseRead the Press Release
United States Attorney Ron Parsons announced that a Swiftbird, South Dakota, man convicted of Aggravated Sexual Abuse was sentenced on July 1, 2019, by U.S. District Judge Roberto A. Lange.
Raven Different Horse, age 28, was sentenced to 84 months in federal prison, followed by 5 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Different Horse was indicted by a federal grand jury on May 31, 2018. He pled guilty on April 3, 2019.
The conviction stemmed from an incident on January 23, 2018, when Different Horse accused his wife of being with another man. When Different Horse’s wife denied the allegation, Different Horse became more agitated, and both physically and sexually abused his wife over a three-day period.
This case was investigated by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Jay Miller prosecuted the case.
Different Horse was immediately turned over to the custody of the U.S. Marshals Service.
Rosebud Man Indicted on Assault ChargesRead the Press Release
United States Attorney Ron Parsons announced that a Rosebud, South Dakota, man has been indicted by a federal grand jury for Assaulting, Resisting, and Impeding a Federal Officer.
Michael Anthony Toledo, age 39, was indicted on March 12, 2019. He appeared before U.S. Magistrate Judge Mark A. Moreno on June 28, 2019, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 8 years in federal prison and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on April 18, 2017, Toledo did forcibly assault, oppose, impede, intimidate, and interfere with a law enforcement officer who was employed by the Rosebud Sioux Tribe Law Enforcement Services.
The charge is merely an accusation and Toledo is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Michael J. Elmore is prosecuting the case.
Toledo was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Rapid City Man Indicted for Failure to Register as a Sex OffenderRead the Press Release
United States Attorney Ron Parsons announced that a Rapid City, South Dakota, man has been indicted by a federal grand jury for Failure to Register as a Sex Offender.
Trevor Red Bird, age 30, was indicted on June 11, 2019. He appeared before U.S. Magistrate Judge Mark A. Moreno on June 28, 2019, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in federal prison and/or a $250,000 fine, 5 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
Red Bird was convicted of Abusive Sexual Contact in May 2008. As a result of this conviction, he is required to register as a sex offender. It is alleged that between April 7, 2019, and June 11, 2019, Red Bird, a person required to register under the Sex Offender Registration and Notification Act, and a sex offender by reason of conviction under Federal Law, failed to properly register as a sex offender and update his registration.
The charge is merely an accusation and Red Bird is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Kirk Albertson is prosecuting the case.
Red Bird was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Pine Ridge Man Sentenced for Drug ConspiracyRead the Press Release
United States Attorney Ron Parsons announced that a Pine Ridge, South Dakota, man convicted of Conspiracy to Distribute a Controlled Substance was sentenced on June 27, 2019, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Loren Shon Waters, age 46, was sentenced to 10 years in federal prison, followed by 5 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
From May 2016 through February 2018, Waters sold and distributed 500 grams or more of methamphetamine in western South Dakota, primarily on the Pine Ridge Reservation.
This case was investigated by the Federal Bureau of Investigation and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Gina Nelson prosecuted the case.
Waters was immediately turned over to the custody of the U.S. Marshals Service.
Parmelee Man Sentenced for Abusive Sexual ContactRead the Press Release
United States Attorney Ron Parsons announced that a Parmelee, South Dakota, man convicted of Abusive Sexual Contact was sentenced on July 1, 2019, by U.S. District Judge Roberto A. Lange.
Mason Neck, age 28, was sentenced to 72 months in federal prison, followed by 5 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Neck was indicted by a federal grand jury on February 14, 2018. He pled guilty on April 3, 2019.
The conviction stemmed from conduct that occurred between June 2016 and August 2016, wherein Neck knowingly engaged in sexual contact with a child who was between two and three years old.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Kirk Albertson prosecuted the case.
Neck was immediately turned over to the custody of the U.S. Marshals Service.
New York Doctor Will Pay Nearly $130,000 for Allegedly Engaging in an Illegal Kickback SchemeRead the Press Release
A New York doctor has agreed to pay the government $127,072.34 for allegedly accepting illegal kickback payments from OK Compounding, L.L.C., announced U.S. Attorney Trent Shores.
The U.S. Attorney’s Office in the Northern District of Oklahoma entered into a settlement agreement with George Lehner, 46, a medical doctor, in an effort to recoup the costs to the U.S. government resulting from the illegal kickbacks. This civil settlement resulted from an investigation into numerous health care providers writing prescriptions for pain creams compounded and sold by OK Compounding in return for kickback payments.
“OK Compounding was an epicenter of criminal and civil healthcare fraud in northeastern Oklahoma. Another week, another physician being held accountable. My team won’t rest until they’ve rooted out the corruption,” said U.S. Attorney Trent Shores.
Beginning in 2014 and continuing into 2015, Dr. Lehner prescribed compounded pain creams for his patients, facilitating the sale and distribution of the creams. As compensation for his services, OK Compounding paid Dr. Lehner what was characterized by the parties as “medical director fees” based upon an hourly rate. However, the payments Dr. Lehner received from the company were, in actuality, “kickbacks.” Because Dr. Lehner’s patients were insured with Medicare, a federal health insurance program for people over 65 years of age and for certain younger individuals with some disability status, the kickbacks were in violation of the False Claims Act. It is illegal to pay or receive “kickbacks” in conjunction with federal health care insurance.
Prohibitions against kickbacks are crucial to insure that financial motives do not undermine the medical judgment of physicians and other health care providers. The civil False Claims Act is an important tool used to protect the integrity of taxpayer-funded health care programs.
The settlement resolves allegations that Dr. Lehner had an illegal financial relationship with OK Compounding, concerning pain creams from April of 2014 through March of 2015.
Affirmative Civil Enforcement (ACE) refers to filing civil lawsuits on behalf of the United States. The purpose of these civil actions is to recover government money lost to fraud or other misconduct or to impose penalties for violations of Federal health, safety, civil rights or environmental laws.
To report fraud and abuse against the Federal government in the Northern District of Oklahoma, please contact the U.S. Attorney’s Office at 918-382-2700 and speak to a member of the ACE Unit.
This settlement was the result of a coordinated effort by Assistant U.S. Attorney Marianne Hardcastle for the Northern District of Oklahoma; the Defense Criminal Investigative Service; Department of Labor– Office of Inspector General (OIG), IRS– Criminal Investigation Division; U.S. Postal Service– OIG; FBI; Department of Veterans Affairs– OIG and the Department of Health and Human Services– OIG.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
New Orleans Resident Sentenced for Lying to FEMA to Receive Disaster Assistance BenefitsRead the Press Release
MONROE, La. – A New Orleans, Louisiana, resident was sentenced Wednesday to 71 months in prison and five years of supervised release for fraudulently obtaining disaster-assistance benefits from the Federal Emergency Management Agency (FEMA) following severe flooding in Monroe, Louisiana, announced United States Attorney David C. Joseph.
Chad Lightfoot, 47, was sentenced by U.S. District Judge Terry A. Doughty, who presided over the trial in this case. Judge Doughty also ordered the defendant to pay $23,684.71 in restitution to FEMA and a $10,000 fine. Lightfoot was convicted on March 14, 2019, after a four-day trial.
Evidence presented at trial showed that, after a federal disaster was declared on March 13, 2016 following severe flooding in Monroe, Louisiana, Lightfoot applied for disaster grant assistance with FEMA for damage to property he owned on South Fourth Street in Monroe. Lightfoot listed the property as his primary residence, when in reality, the property was abandoned and unoccupied and he lived in the New Orleans area. Prior to the property’s inspection by FEMA on March 30, 2016, Lightfoot obtained a Louisiana Identification Card to appear as though he lived there. He also submitted a fraudulent bill to FEMA from Cox Communications to establish proof of occupancy. A Cox representative testified at trial that Cox does not provide services in Monroe. As a result of his fraudulent claims, FEMA sent Lightfoot $23,684.71 for home repairs, rental assistance, and personal property. Lightfoot also submitted two appeals to FEMA, which included $115,669 and $122,500 in repair estimates.
The Department of Homeland Security, Office of Inspector General, conducted the investigation. Assistant U.S. Attorney Tennille M. Gilreath and Supervisory Assistant U.S. Attorney Allison D. Bushnell prosecuted the case.
Members of the public who suspect fraud, waste, abuse, or allegations of mismanagement involving disaster relief operations, or believe they have been the victim of fraud from a person or organization soliciting relief funds on behalf of disaster victims, should contact the National Disaster Fraud Hotline toll free at (866) 720-5721. You can also fax information to the Center at (225) 334-4707, or email it to [email protected] (link sends e-mail). Live operators are available 24 hours a day, seven days a week.
To learn more about the NCDF please visit the website at www.justice.gov/disaster-fraud.
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New Mexico Man Sentenced for Failure to Pay Child SupportRead the Press Release
United States Attorney Ron Parsons announced that a Pueblo of Acoma, New Mexico, man convicted of Failure to Pay Child Support was sentenced on July 1, 2019, by U.S. District Judge Karen E. Schreier.
Joseph A. Mesteth, age 50, was sentenced to 5 years of probation, $104,160.81 in restitution, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Mesteth was indicted by a federal grand jury on December 4, 2018. He pled guilty on April 12, 2019.
The conviction stemmed from the fact that Mesteth, who was to pay child support for his minor children who live in South Dakota, failed to willfully do so.
This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General. Assistant U.S. Attorney Ann M. Hoffman prosecuted the case.
Maryland Woman Pleads Guilty to Theft of Government Money and Aggravated Identity TheftRead the Press Release
Greenbelt, Maryland – Stephanie Twyman, age 47, of Clinton, Maryland, pleaded guilty on July 3, 2019, to theft of government money and aggravated identity theft, in connection with a tax fraud scheme.
The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur and Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to court documents, between 2011 and 2013, Stephanie Twyman was part of a conspiracy to fraudulently obtain tax refund checks by filing false tax returns with the Internal Revenue Service (IRS) using the names and Social Security numbers of unemployed individuals. Once the refund checks in these individuals’ names were obtained, Twyman sent runners to cash the checks at a check cashing business in Clinton, Maryland, where co-conspirators worked as tellers. The runners brought the proceeds back to Twyman, who then paid the tellers for cashing the fraudulently obtained checks. The total tax loss resulting from Twyman’s fraudulent conduct is approximately $566,261.
Twyman faces a maximum sentence of ten years in prison on the theft count and a mandatory two years in prison, consecutive to any other sentence, for the aggravated identity theft count. U.S. District Judge Paul W. Grimm has scheduled sentencing for October 4, 2019.
U.S. Attorney Hur and Principal Deputy Assistant Attorney General Zuckerman thanked agents of the Department of Treasury, Office of Inspector General, and IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Gregory Bernstein and Trial Attorney William Guappone, who are prosecuting the case.
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Man Sentenced for Sexual Abuse of a MinorRead the Press Release
United States Attorney Ron Parsons announced that a Oglala, South Dakota, man convicted of Sexual Abuse of a Minor was sentenced by Chief Judge Jeffrey L. Viken, U.S. District Court.
Wesley Blacksmith, age 42, was sentenced on July 1, 2019, to 17 1/2 years in federal prison, followed by 10 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Blacksmith was indicted by a federal grand jury in June 2018. The conviction stems from Blacksmith, who is a sex offender by reason of a previous conviction for Sexual Abuse of a Minor, having a sexual relationship with a 15 year-old female in 2017 in Oglala. A child was born in January 2018 from this relationship.
This case was investigated by the Bureau of Indian Affairs - Office of Justice Services. Assistant U.S. Attorney Megan Poppen prosecuted the case.
Blacksmith was immediately turned over to the custody of the U.S. Marshals Service.
Kitchen Supervisor Set to Appear in Court for Actions Related to Prohibited Relationship with Federal InmateRead the Press Release
LAREDO, Texas - A federal grand jury sitting in Laredo has indicted a 51-year-old Laredo resident for making a false statement and providing contraband in prison, announced U.S. Attorney Ryan K. Patrick.
A federal grand jury returned the indictment against Oralia Aparicio July 2, 2019. She is expected to make her initial appearance before U.S. Magistrate Judge Diana Song Quiroga at 9:00 a.m. today.
Aparicio was employed by GEO Group Inc. as a Kitchen Supervisor. According to the indictment, she engaged in a prohibited relationship with a federal inmate over a period of several months at the Rio Grande Detention Center in Laredo. GEO is a Florida-based company that contracts with the Office of the Federal Detention Trustee to operate private corrections facilities.
Aparicio allegedly made false representations in order to avoid detection. The charges allege she contributed money to and placed orders on the commissary account of a federal inmate with whom she was engaged in a prohibited romantic relationship. Aparicio also violated federal law when she provided the inmate with contraband items, such as a prescription medication, over-the counter medicine, a nasal inhaler and photographs of herself, according to the indictment.
If convicted, Aparicio could face up to five years imprisonment as well as a $250,000 maximum possible fine.
The FBI and Department of Justice - Office of the Inspector General conducted the investigation with the assistance of the U.S. Marshals Service.
Assistant U.S. Attorney Sebastian Edwards is prosecuting this case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Investigators offer assistance with victim identification related to former Boy Scout official accused of photographing children changing after swimmingRead the Press Release
Thomas Close is awaiting trial on charges of production of child pornography related to his alleged surreptitious recording of boys changing after swimming as part of Boy Scout activities.
Close, 40, lived in Richland County. He was known as “Aqua Joe” because he worked with the Boy Scouts of America, often with their swimming program.
Close is accused of secretly recording boys changing after they swam. His alleged crimes are believed to have happened in Ohio between 2011 and 2018. Close remains in jail pending the outcome of his federal criminal case.
If anyone suspects they or their children were recorded by the defendant, they are asked to email their contact information to Homeland Security Investigations at [email protected]. Please attach a photo of the child in question, preferably a photo that was taken around the years that CLOSE would have had contact with your child you or your child had contact with Mr. Close so investigators can positively identify or rule out if the child is associated with this case. A member of the investigative team will respond to your request.
The privacy of crime victims and survivors is of the utmost importance. The U.S. Attorney’s Office will do everything in its power to protect the privacy of anyone who responds to this inquiry.
Informational: Federal Court arraignmentsRead the Press Release
The U.S. Attorney’s Office announced that the following persons were arraigned or appeared this week before U.S. Magistrate judges on indictments handed down by the Grand Jury or on criminal complaints. The charging documents are merely accusations and defendants are presumed innocent until proven guilty:
Appearing in Billings before U.S. Magistrate Judge Timothy J. Cavan and pleading not guilty on July 1 was:
Dekker Karl Boeke, 26, of Roundup, on charges of prohibited person in possession of a firearm and unlawful user of controlled substance in possession of a firearm. If convicted of the most serious crime, Boeke faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Boeke was detained pending further proceedings. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Pacer case reference. 19-78.
Appearing on July 2 was:
Keyshaun Frank Left Hand, 19, of Crow Agency, on charges of assault resulting in substantial injury to a dating partner and kidnapping. If convicted of the most serious crime, Left Hand faces a maximum of life in prison, a $250,000 fine and five years of supervised release. Left Hand was detained pending further proceedings. The case was investigated by the FBI. Pacer case reference. 19-85.
Sarah Marie Guckeen, 36, of Billings, on charges of conspiracy to possess with intent to distribute meth and possession with intent to distribute meth. If convicted of the most serious crime, Guckeen faces a minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release. Guckeen was detained pending further proceedings. The case was investigated by the FBI task force and Eastern Montana High Intensity Drug Trafficking Area Task Force. Pacer case reference. 19-83.
Thomas Joseph Mascarena, 43, a transient in Billings, on charges of prohibited person in possession of a firearm. If convicted of the most serious crime, Mascarena faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Mascarena was detained pending further proceedings. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Pacer case reference. 19-70.
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
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Homestead Man Pleads Guilty to Possessing Multiple DrugsRead the Press Release
PITTSBURGH -A former resident of Homestead, Pennsylvania, pleaded guilty in federal court to a violation of federal narcotics laws, United States Attorney Scott W. Brady announced today.
Arrmon Davon Hagans, 38, pleaded guilty to one count before United States District Judge Nora Barry Fischer.
In connection with the guilty plea, the court was advised that on March 23, 2018, police executed a search warrant at Hagans’ residence in Homestead, Pennsylvania. There they located quantities of fentanyl and the fentanyl analogue para-fluoroisobutyryl fentanyl, as well as a separate mixture that contained heroin, fentanyl and cocaine. Law enforcement officers also located over $3,700 in cash and a box of ammunition.
Judge Fischer scheduled sentencing for Thursday, November 21, 2019 at 9 a.m. Because the defendant has been previously convicted of another felony drug offense, the law provides for a total sentence of up to 30 years in prison, a fine of not more than $2,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history of the defendant.
The defendant remains in jail pending the sentencing hearing.
Assistant United States Attorney Robert C. Schupansky is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation – Western District of Pennsylvania Opioid Task Force conducted the investigation leading to the conviction in this case. This Task Force is comprised of FBI Special Agents and state and local Task Force Officers, including officers from the Pittsburgh Bureau of Police, Allegheny County Sheriff’s Department, Allegheny County Police, Port Authority Police, Munhall Police Department, West Mifflin Police Department, Stowe Township Police Department, McKees Rocks Police Department, and Pennsylvania Attorney General’s Office.
Fort Thompson Man Sentenced for Possession of a Stolen FirearmRead the Press Release
United States Attorney Ron Parsons announced that a Fort Thompson, South Dakota, man convicted of Possession of a Stolen Firearm was sentenced on July 1, 2019, by U.S. District Judge Roberto A. Lange.
Jacob Hawk Wing, age 25, was sentenced to 26 months in federal prison, followed by 3 years of supervised release, restitution in the amount of $190, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Hawk Wing was indicted by a federal grand jury on September 11, 2018. He pled guilty on April 3, 2019.
The conviction stemmed from an incident on July 29, 2018, when law enforcement had heard gun shots and located Hawk Wing and Craig Ross. Hawk Wing fled the scene, but was later apprehended and ultimately admitted to stealing a rifle that law enforcement had found while searching for Hawk Wing. Based on his role in the offense, Ross plead guilty to being a felon in possession of a firearm and was sentenced on February 19, 2019, to 26 months in federal prison.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
This case was investigated by the Bureau of Indian Affairs, Crow Creek Agency and Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
Hawk Wing was immediately turned over to the custody of the U.S. Marshals Service.
Eric "Buterico" Lloyd Captured in PhiladelphiaRead the Press Release
WILMINGTON, Del. – Eric Lloyd was captured just before midnight on July 3, 2019 by the United States Marshals Service (“USMS”) Fugitive Taskforce and the Federal Bureau of Investigation (“FBI”), in Philadelphia, Pennsylvania. Lloyd was convicted of racketeering, money laundering, and related charges after a trial in New Castle County Superior Court in June of 2019. Lloyd was released on bail during the trial. He became a fugitive after he fled while the jury was deliberating and a warrant was issued for his arrest after the jury found him guilty.
Lloyd’s apprehension was the result of a collaborative effort between the USMS and FBI. The USMS was also assisted by the United States Attorney’s Office and the Delaware Department of Justice. The USMS Fugitive Taskforce is staffed by a number of local agencies, including the Wilmington Police Department. Lloyd is expected to appear in Federal Court on Friday, July 5, 2019, for an initial appearance related to a violation of his federal supervised release. Afterwards, he will likely be turned over to state custody to be sentenced for his latest convictions.
Michael McGowan, U.S. Marshal for the District of Delaware, stated, “This arrest is another great example of the collaborative efforts of our federal, state and local law enforcement partners. Investigators worked tirelessly to ensure jurisdictional lines did not impede the capture of this dangerous fugitive.”
U.S. Attorney Weiss stated, “The USMS and the FBI should be commended for the capture of Mr. Lloyd. The Marshals work relentlessly to apprehend priority fugitives for every law enforcement agency in Delaware, and this is the latest example of their dedication to bringing brazen criminals like Mr. Lloyd to justice.”
Columbus Men Charged with Internet Cafe Robberies Including One That Resulted in Deaths of OwnersRead the Press Release
COLUMBUS, Ohio – A federal criminal complaint unsealed today charges Dezhan Townsend, 20, with using a firearm during a crime of violence resulting in death in connection with the robbery of a Columbus internet café in which a husband and wife were murdered. A second man, Desjuan Harris, 24, is charged with robbery and brandishing a firearm during a crime of violence in connection with two other internet café robberies.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Todd Wickerham, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, acting Columbus Police Chief Thomas Quinlan, and Franklin County Prosecuting Attorney Ron O’Brien announced the charges unsealed today after the defendants appeared in federal court.
According to the complaint, two suspects wearing hoodies entered Players Paradise at 3439 E. Broad Street in Columbus at 4:06 a.m. on January 20, 2019. The two positioned themselves near the office door. One suspect sat at a game as if he was playing it. When a female employee attempted to enter the office, the suspects attacked. The suspects were armed with handguns and immediately confronted an armed security guard. A suspect shot both the male security guard and the female employee, Joseph and Karen Arrington.
Townsend and Harris are charged with robbing Players Paradise on December 10, 2018 and another internet café, Planet Jackpot, at 1245 Alum Creek Drive on January 7, 2019.
Columbus SWAT officers arrested Townsend and Harris on Wednesday, July 3. The charges were unsealed today after the defendants appeared before U.S. Magistrate Judge Chelsey M. Vascura, who ordered them held without bond.
“We will present the evidence gathered so far to a federal grand jury for a possible indictment against the defendants,” Glassman said. “If convicted, each man faces a possible life sentence for their crimes. The investigation is continuing.”
The criminal complaint charges Townsend with three counts of interfering with interstate commerce by robbery (Hobbs Act), three counts of brandishing a firearm during a crime of violence, and one count of use of a firearm during the commission of a crime of violence. Harris is charged with two counts of violating the Hobbs Act and one count of brandishing a firearm during a crime of violence.
U.S. Attorney Glassman commended the investigation of this case by the FBI and Columbus Police, as well as Assistant United States Attorneys David M. DeVillers and Kevin Kelley, and Special Assistant U.S. Attorney James Lowe with the Franklin County Prosecuting Attorney’s Office, who are representing the United States.
A complaint merely contains allegations, and the defendants are presumed innocent unless proven guilty in a court of law.
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California Man Sentenced for Illegally Possessing Firearms Stolen from the Rooster Sporting Good StoreRead the Press Release
United States Attorney Ron Parsons announced that an Elk Grove, California, man convicted of Possession of a Firearm by a Prohibited Person was sentenced by Chief Judge Jeffrey L. Viken, U.S. District Court.
Travis Jones, age 32, was sentenced on June 28, 2019, to 36 months in federal prison, followed by 3 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
The conviction stems from Jones, a previously convicted felon who is prohibited from possessing firearms, trading methamphetamine for two Kahr semi-automatic pistols, which had been stolen from The Rooster in Rapid City, South Dakota, in August 2018.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and local communities to develop effective, locally-based strategies to reduce violent crime.
Drug trafficking is an inherently violent activity. Firearms are tools of the trade for drug dealers. It is common to find drug traffickers armed with guns in order to protect their illegal drug product and cash, and enforce their illegal operations.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the South Dakota Department of Criminal Investigation, the Rapid City Police Department, and the Pennington County Sheriff’s Office. Assistant U.S. Attorney Ben Patterson prosecuted the case.
Jones was immediately turned over to the custody of the U.S. Marshals Service.
Brothers from Youngstown indicted for their roles in conspiracy to obtain cocaine from Puerto Rico and sell the drugs in the Youngstown areaRead the Press Release
Two people from Youngstown were indicted in federal court for their alleged roles in a conspiracy to obtain large amounts of cocaine from Puerto Rico and sell the drugs in the Youngstown area.
Amaury Calderon Santiago, 27, and Felix Calderon Santiago, 29, were each indicted on one count of conspiracy to distribute cocaine.
Amaury Calderon Santiago is also charged with two counts of distribution of cocaine while Felix Santiago is charged with one count of attempted possession with the intent to distribute cocaine.
According to the four-count indictment, Felix Santiago received cocaine from Puerto Rico, which he then provided to Amaury Santiago, who in turn sold the cocaine in the Youngstown area. This took place between May and June 2019, according to the indictment.
The Santiagos used a home on Bennington Avenue in Youngstown to receive and store the cocaine, according to the indictment.
Felix Santiago received and opened a package on June 11 that originally contained more than 500 grams of cocaine. On the same day, Amaury Santiago possessed $5,840 in cash and two loaded firearms, according to the indictment.
If convicted, the defendants’ sentence will be determined by the Court after review of factors unique to this case, including the defendants’ prior criminal record, if any, the defendants’ role in the offenses and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigation preceding the indictment was conducted by Drug Enforcement Administration and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Yasmine Makridis.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Wednesday 3 July 2019
West Hollywood Doctor Taken into Custody in Health Care Fraud Case Involving Human Growth Hormone for Patients with HIVRead the Press Release
LOS ANGELES – A doctor who operates a medical clinic in West Hollywood where he specializes in treating HIV patients has been taken into custody pursuant to federal charges that allege he engaged in a long-running scheme to defraud health insurance companies in connection with the brand-name human growth hormone Serostim.
James T. Lee, 71, of West Hollywood, was taken into custody on Tuesday afternoon after being escorted from Austria by federal law enforcement agents.
After a federal grand jury returned a 10-count indictment on June 6, Lee was arrested in Vienna at the request of the United States. Lee subsequently waived extradition and agreed to return to the United States.
The indictment against Lee charges him with one count of conspiracy to commit health care fraud, six counts of health care fraud, one count of making false statements relating to health care matters, and two counts of witness tampering.
The indictment was unsealed this morning and Lee’s arraignment on the charges is scheduled for this afternoon in United States District Court in downtown Los Angeles.
Lee allegedly engaged in a scheme to divert Serostim – an injectable human growth hormone that is FDA-approved for HIV-positive patients – from legitimate HIV patients to other people who purchased the drug for its purported anti-aging properties. The Food and Drug Administration has approved Serostim for use only by HIV patients with wasting or cachexia who are also receiving antiretroviral therapy.
According to the indictment, from at least May 2011 until February 2019, Lee wrote prescriptions for Serostim to HIV patients, who obtained the drugs and used their Medicare Part D benefits to pay for the drugs. Lee then then illegally purchased the Sersotim back from patients, so that he could re-sell the Serostim. Lee allegedly re-sold the Serostim for a significant profit to other patients who were not HIV-positive, and who used the human growth hormone to build muscle and for other cosmetic purposes.
The indictment alleges a second part of the scheme in which Lee allegedly submitted claims to health insurance companies for Serostim injections, claims that were fraudulent because Lee did not actually provide the Serostim injections to the patients at his office. According to the indictment, many of the patients did not receive the full amount of Serostim that Lee billed to the insurance companies, or they received Serostim that Lee had purchased from other patients.
Lee allegedly twice engaged in witness tampering during meetings with a patient that were recorded without Lee’s knowledge. During those meetings, Lee encouraged the patient to provide false information to federal agents who were investigating the case. Lee coached the patient to lie about the Serostim scheme, including by falsely stating that kickback payments from Lee were merely overpayments from the insurance companies, according to the indictment.
During the course of the conspiracy, Lee and his co-conspirators submitted at least $14.2 million in claims to the insurance companies for Serostim injections, which resulted in payments of approximately $5.9 million, according to the indictment. The scheme allegedly defrauded Health Net, which is a private health benefit plan, and the Government Employees Hospital Association, which is a health benefit plan that provides health insurance coverage to certain former United States government employees.
Medicare paid at least $1.4 million based on Serostim prescriptions that were issued by Lee and filled by patients who sold at least some of the drugs to Lee.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
Each of the health care fraud counts charged in the indictment carries a statutory maximum sentence of 10 years in prison. The false statement counts carries a statutory maximum sentence of five years in prison. The witness tampering counts each carry a statutory maximum sentence of 20 years in prison. The indictment also contains criminal forfeiture allegations that seek the forfeiture of the ill-gotten gains derived from the criminal offenses.
This case is being investigated by the Federal Bureau of Investigation; the Food and Drug Administration, Office of Criminal Investigations; and the Office of Personnel Management, Office of Inspector General.
The case is being prosecuted by Assistant United States Attorney Alexander F. Porter of the Major Frauds Section.
Warm Springs Man Sentenced to 25 Years in Federal Prison for the Repeated Sexual Abuse of a ChildRead the Press Release
PORTLAND, Ore.—Robert Glenn Warner, 36, a member of the Confederated Tribes of the Warm Springs Indian Reservation, was sentenced today to 300 months in federal prison and 10 years’ supervised release for the repeated sexual abuse and rape of an 11-year-old child.
“This young victim demonstrated tremendous courage in reporting Warner’s repeated abuse and fully participating in the judicial process. Her brave actions put in motion our ability to stop this heinous crime and prosecute the defendant. The U.S. Attorney’s Office remains fiercely committed to holding child predators accountable and safeguarding the rights and dignity of victims,” said Billy J. Williams, U.S. Attorney for the District of Oregon.
“Warner used his position of power to perpetrate multiple, violent sexual assaults on a victim who was vulnerable and accessible. We are thankful to the victim, who has shown great strength, and to our partners at the Warm Springs Tribal Police who help end the abuse of this child,” said Renn Cannon, Special Agent in Charge of the FBI in Oregon.
According to court documents, in July 2016, the victim, a minor member of the Warm Springs Tribe, told a friend’s mother that they had been repeatedly sexually abused and raped by Warner, a person known to the victim. Most recently, Warner raped the victim in a trailer parked in a wood cutting lot on the outskirts of the Warm Springs Reservation. The victim reported the abuse to the Warm Springs Tribal Police Department and Warner was arrested the same day.
On July 16, 2018, Warner pleaded guilty to one count of abusive sexual contact with a minor before U.S. District Court Judge Michael H. Simon.
This case was investigated by the Warm Springs Tribal Police Department and the FBI. It was prosecuted by Natalie Wight, Assistant U.S. Attorney for the District of Oregon.
Anyone who has information about the physical or online exploitation of children are encouraged to call the FBI at (503) 224-4181 or submit a tip online at tips.fbi.gov.
On March 3, 1994, the FBI initiated “Operation Safe Trails” with the Navajo Department of Law Enforcement in Flagstaff, Arizona. The operation, which would later evolve into the Safe Trails Task Force (STTF) Program, unites FBI and other federal, state, local, and tribal law enforcement agencies in a collaborative effort to combat the growth of crime in Indian Country. STTFs allow participating agencies to combine limited resources and increase investigative coordination in Indian Country to target violent crime, drugs, gangs, and gaming violations.
U.S. Attorney’s Office Concludes Investigation into Fatal Shooting of Armed Man Near Northeast Washington Recreation CenterRead the Press Release
WASHINGTON - The U.S. Attorney’s Office for the District of Columbia announced today that it has completed its review of the actions of an off-duty Metropolitan Police Department (MPD) Officer, who fatally shot Mr. D’Quan Young, who was armed with a firearm that he fired at the officer, on May 9, 2018, in Northeast Washington. After a careful review of all of the evidence, the U.S. Attorney’s Office has concluded that there is insufficient evidence to pursue federal criminal civil rights or District of Columbia charges against the officer.
According to the evidence, on May 9, 2018, at approximately 6:45 p.m., an MPD officer drove his personal vehicle to the 2300 block of 15th Street, Northeast, near the Brentwood Recreation Center, to attend a personal gathering at a residence in the area. The officer was off duty and dressed in civilian clothing, but he possessed his MPD issued service weapon in a holster located underneath a jacket. Because the officer was off duty, he was not wearing his body-worn camera. The evidence indicates that, while the officer walked up and down the block looking for the home of his host and looking at a cell phone, Young walked from the other side of the street, confronted the officer, and asked the officer who he was calling. The confrontation escalated into a verbal altercation and Young pulled out a firearm and pointed it at the officer. The officer removed his service weapon from his holster and pointed it back at Young while commanding him to drop his weapon. Young fired at the officer, who responded by shooting Young two times in the torso and three times in the leg. Young ran into the street and fell while the officer fired additional shots. Young dropped his firearm on the ground. A Special Police Officer at the Brentwood Recreation Center called 911. Young was pronounced dead at the scene of the shooting. The investigation uncovered no evidence that the officer and Young had ever met each other before this encounter.
The U.S. Attorney’s Office and MPD conducted a comprehensive review of the incident, including interviews of civilian and law enforcement witnesses; video footage and audio transmissions; autopsy, toxicology, and Department of Forensic Sciences’ reports; and physical evidence collected on the scene, to include an operable firearm and a loaded magazine from the street near where Young fell to the ground after being shot, along with a cartridge casing near where Young was standing before he was shot.
After a careful, thorough, and independent review of the evidence, federal prosecutors have found insufficient evidence to prove beyond a reasonable doubt that the off-duty officer acted under color of law or used excessive force under the circumstances, and therefore that civil rights charges cannot be filed. Federal prosecutors have also found insufficient evidence to prove beyond a reasonable doubt that the off-duty officer did not act in self-defense, and therefore that District of Columbia homicide charges cannot be filed.
Use-of-force investigations generally
The U.S. Attorney’s Office reviews all police-involved fatalities to determine whether sufficient evidence exists to conclude that any officers violated either federal criminal civil rights laws or District of Columbia law. To prove such violations, prosecutors must be able to prove that the involved officer acted under color of law—meaning that he exercised power possessed by virtue of his authority as an officer under the law—and willfully used more force than was reasonably necessary. Proving “willfulness” is a heavy burden. Prosecutors must not only prove that the force used was excessive, but must also prove, beyond a reasonable doubt, that the officer acted with the deliberate and specific intent to do something the law forbids. A conclusion that “there is insufficient evidence” is not meant to suggest anything further about what evidence, if any, exists.
The U.S. Attorney’s Office remains committed to investigating allegations of excessive force by law enforcement officers and will continue to devote the resources necessary to ensure that all allegations of serious civil rights violations are investigated fully and completely. The Metropolitan Police Department’s Internal Affairs Division investigates all police-involved fatalities in the District of Columbia.
Two Mexican Nationals Involved in Drug Ring Sentenced to PrisonRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that RAFAEL LOPEZ-MACIAS, 46, and his brother, JAIME LOPEZ, 37, both citizens of Mexico involved in trafficking narcotics, were sentenced today in Bridgeport federal court. U.S. District Judge Victor A. Bolden sentenced Lopez-Macias to 120 months of imprisonment and Lopez to 60 months of imprisonment.
According to court documents and statements made in court, Lopez-Macias, Lopez and others conspired to traffic large quantities of narcotics, including cocaine and methamphetamine.
In June 1998, Lopez-Macias was convicted in California state court of a cocaine trafficking offense. In February 2001, he was deported to Mexico. Lopez-Macias illegally reentered the U.S. and, in March 2009, was arrested in Connecticut for a forgery offense. In November 2009, he was again deported to Mexico.
Lopez-Macias again illegally reentered the U.S. and, between March and June 2018, he was intercepted on a court-authorized wiretap discussing the distribution of cocaine and methamphetamine.
On June 11, 2018, in New Rochelle, New York, Lopez-Macias and a co-conspirator sold a kilogram of cocaine and a sample of methamphetamine for $31,500 to an individual working with law enforcement.
On June 26, 2018, Lopez-Macias traveled from Norwalk to New Rochelle, picked up a kilogram of methamphetamine from his co-conspirator, and began driving back to Norwalk with the narcotics. While en route to Norwalk, Lopez-Macias was stopped by law enforcement and arrested for an immigration violation. Officers searched the vehicle and seized the kilogram of methamphetamine.
As to Lopez, he was intercepted on a court-authorized wiretap discussing the distribution of cocaine and, in May 2018, he was involved in the purchase of a kilogram of cocaine for approximately $28,000 from a source of supply in New Rochelle, New York.
Lopez-Macias has been detained since his arrest on June 26, 2018. On March 27, 2019, he pleaded guilty to one count of possession with intent to distribute, and distribution of, 500 grams or more of methamphetamine, and one count of reentry of removed alien.
Lopez has been detained since his arrest on October 11, 2018. On April 1, 2019, he pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 500 grams or more of cocaine.
Both defendants face immigration proceedings when they complete their prison terms.
This matter is being investigated by the Federal Bureau of Investigation, Drug Enforcement Administration, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Connecticut State Police, and the New Rochelle, Norwalk and Stamford Police Departments. The case is being prosecuted by Assistant U.S. Attorneys Anthony E. Kaplan and Lauren C. Clark.
Two D.C. Felons Convicted After Trial of Committing Two Armed Robberies in Prince George’s CountyRead the Press Release
Greenbelt, Maryland – A federal jury today convicted Ronnell Francis Lewis, a/k/a Punkin, age 45, and William David Hill, a/k/a Old Man and Tank, age 62, both of Washington, D.C., for conspiring to commit a commercial robbery; for using, carrying, brandishing, and discharging a weapon during and in relation to a crime of violence; for being felons in possession of firearms; and for interstate transportation of stolen vehicles, in connection with two armed robberies committed by the defendants in November 2016. Lewis was also convicted of witness tampering.
The convictions were announced by United States Attorney for the District of Maryland Robert K. Hur and Special Agent in Charge Jennifer C. Boone of the Federal Bureau of Investigation, Baltimore Field Office.
According to the evidence presented at the seven-day trial, Lewis, Hill and a co-conspirator robbed an auto repair business in Clinton, Maryland, on November 22, 2016. Specifically, the evidence proved that the robbers entered the business brandishing firearms and ordered two employees to get on the ground. The defendants took money from the victims’ pockets and then ordered them into the front office. One victim was then bound with zip ties and gagged with duct tape. The second victim fought, was shot by the robbers, and ultimately paralyzed. The robbers then fled in a vehicle they had stolen earlier that day.
As detailed at trial, on November 26, 2016, the defendants robbed a barbershop in Seat Pleasant, Maryland. According to the trial testimony, the two defendants entered the business, ordered everyone to the ground and then robbed them. During the robbery, the defendants threatened the victims with violence. According to the evidence, the robbers put the cash in a dark single strap duffle bag and fled in a stolen minivan. Police saw the minivan at a traffic light and attempted to stop the vehicle but the driver refused to stop, fleeing into Washington, DC. Three individuals exited the vehicle and attempted to run away. The driver and Lewis were captured. The third person, later identified as Hill, escaped but was apprehended later.
Police searched Lewis after his arrest and recovered his cell phone. From the floor of the minivan, Metropolitan Police officers recovered two loaded 9 millimeter handguns, one with an obliterated serial number.
Further, the evidence proved that after the robberies, and while he was detained, Lewis called several people from jail and asked them to visit the victims of the barbershop robbery to persuade them not to cooperate in the investigation, including not testifying before the federal grand jury.
Lewis and Hill each face a maximum sentence of life in prison. U.S. District Judge George J. Hazel has scheduled sentencing for October 21, 2019 at 10 a.m. and 12:00 p.m. They remain detained pending sentencing.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
United States Attorney Robert K. Hur commended the FBI for its work in the investigation and thanked the Prince Georges County Police Department, the Seat Pleasant Police Department, and the Metropolitan Police Department for their assistance. Mr. Hur thanked Assistant U.S. Attorneys Erin B. Pulice and Dwight J. Draughon, who are prosecuting the case.
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Two Baltimore County Men Indicted in Federal Court for Allegedly Distributing Fentanyl, Heroin, and Cocaine in MarylandRead the Press Release
Baltimore, Maryland – A federal grand jury has indicted Deandre Laquan Jones, a/k/a “Cuz,” age 26, of Towson, Maryland, and Tyrell Daront Curry, a/k/a “Mike,” age 28, of Baltimore, on the federal charges of conspiracy to distribute and possess with intent to distribute controlled substances, distribution of controlled substances, possession with intent to distribute drugs near a school, maintaining a drug-involved premises, as well as related firearms charges. The indictment was returned on June 25, 2019, and was unsealed at their initial appearances.
The indictment was announced by United States Attorney for the District of Maryland Robert K. Hur; Acting Special Agent in Charge Cardell T. Morant of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Baltimore; and Chief Melissa R. Hyatt of the Baltimore County Police Department.
U.S. Attorney Robert K. Hur stated, “Guns and drugs take far too many lives in our communities. All too often, guns and drugs go hand in hand—and both are killers. We will continue to work with our law enforcement partners to identify and disrupt drug trafficking organizations, especially those who use guns and sell drugs near our schools. Federal, state, and local law enforcement are united in our commitment to get guns, drugs, and violent criminals off our streets and to reduce violent crime in our neighborhoods.”
According to the indictment, from December 2018 to February 2019, Jones and Curry distributed fentanyl, heroin, and cocaine. On February 22, 2019, Jones allegedly possessed fentanyl, heroin, and cocaine which he intended to distribute within 1,000 feet of a public elementary school. The indictment alleges that during the time of the conspiracy Jones used an apartment in Parkville, Maryland, to manufacture and distribute fentanyl, heroin, crack cocaine, and powder cocaine. Finally, as alleged in the indictment, Jones illegally possessed firearms and ammunition in furtherance of drug trafficking.
If convicted, Jones faces a mandatory minimum sentence of 10 years and a maximum sentence of life in prison for the conspiracy and for possession with intent to distribute fentanyl, heroin, and cocaine; a mandatory minimum of five years and up to 80 years in prison for possession with intent to distribute drugs within 1,000 feet of a school; a maximum of 20 years in prison for maintaining a drug-involved premises and for distribution of drugs; a maximum of 10 years in prison for being a felon in possession of firearms and ammunition; and a mandatory minimum of five years and a maximum sentence of life in prison for possession of firearms in furtherance of drug trafficking.
If convicted, Curry faces a mandatory minimum sentence of five years and a maximum sentence of 40 years in prison for the conspiracy, and a maximum of 20 years in prison for both possession with intent to distribute heroin, and for distribution of cocaine, heroin, and fentanyl.
At their initial appearance in U.S. District Court in Baltimore yesterday, U.S. Magistrate Judge Stephanie A. Gallagher ordered that Jones and Curry be detained pending a detention hearing scheduled for July 5, 2019 at 2:00 p.m, and July 8, 2019 at 2:30 p.m., respectively.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Robert K. Hur commended HSI Baltimore and the Baltimore County Police Department for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Jeffrey J. Izant and Christopher J. Romano, who are prosecuting the case.
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Tahlequah Woman Pleads Guilty to Unlawful Use of Communication FacilityRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Jasmine Lea Meikle, age 38, of Tahlequah, Oklahoma, entered a guilty plea to Unlawful Use Of A Communication Facility in violation of Title 21, United States Code, Section 843(b), punishable by not more than 4 years imprisonment, a fine up to $250,000.00, or both.
The Information alleges that on or about September 24, 2018, in the Eastern District of Oklahoma, the defendant, did knowingly and intentionally use any communication facility, a cellular telephone, in facilitating the commission of any act or acts constituting a felony under Title 21, United States Code, Section 841(a)(1), that is Possession with Intent to Distribute Methamphetamine.
The charges arose from an investigation by the Tahlequah Police Department, the Cherokee County Sheriff’s Office, the Sequoyah County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The Honorable Steven P. Shreder, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Shannon Henson represented the United States.
Tahlequah Woman Pleads Guilty to ConspiracyRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Heather Leann Chuculate, age 24, of Tahlequah, Oklahoma, entered a guilty plea to Conspiracy, in violation of Title 18, United States Code, Section 371, punishable by not more than 5 years imprisonment, a fine up to $250,000.00, or both.
The Information alleges that from in or about September 2017, until in or about July 2018, in the Eastern District of Oklahoma and elsewhere, the defendant did knowingly and intentionally conspire, confederate and agree with others both known and unknown to commit offenses against the United States in violation of Title 21, United States Code, Section 841(a)(1), namely, Possession with Intent to Distribute and Distribution of Methamphetamine.
The charges arose from an investigation by the Tahlequah Police Department, the Cherokee County Sheriff’s Office, the Sequoyah County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The Honorable Steven P. Shreder, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Shannon Henson represented the United States.
St. Louis Man Pleads Guilty to Robbing Florissant Subway at GunpointRead the Press Release
St. Louis - Alonzo Lamar Payne, 37, of St. Louis, entered guilty pleas today to one count of Interference With Interstate Commerce by Means of Robbery and one count of Brandishing a Firearm in Furtherance of a Crime of Violence before United States District Judge Rodney W. Sippel.
According to court documents, on December 21, 2018, Payne entered a Subway restaurant in Grandview Plaza in the City of Florissant with his face partially concealed. After asking employees to direct him to the restroom, Payne instead entered an “Employees Only” area and demanded cash while brandishing a handgun.
Following the robbery, Payne fled from the Subway with an undetermined amount of money. Employees called 911. Florissant Police responded. Investigation into the crime quickly identified the robber as Payne who was the boyfriend of a former Subway employee.
On December 27, 2018, Florissant Police observed Payne leaving his girlfriend’s residence. He got into a car and began to drive away. Florissant officers stopped the vehicle and ordered Payne to show his hands. After refusing multiple orders, Payne was removed from the vehicle and discovered to be sitting on a handgun. Payne, who is on parole to the State of Missouri for a prior Robbery conviction, is prohibited from possessing a firearm. Payne subsequently confessed to robbing the Subway on December 21, 2018. Payne also admitted that he returned to the same Subway two days later and burglarized it.
Payne is scheduled to be sentenced on October 4th, 2019. He faces up to 20 years on the robbery charge and a mandatory minimum sentence of at least seven years on the firearm charge, which must be imposed consecutively to the robbery sentence.
United States Attorney Jeffrey B. Jensen praised the work of the Florissant Police Department, stating, “Alonzo Payne victimized two teenage-employees. The Florissant Police Department worked tirelessly to swiftly arrest Payne and prevent him from victimizing others in our community.” Florissant Police Chief Tim Fagan echoed Jensen’s sentiments, saying “We are proud of our Department’s work and appreciate the assistance of our Federal partners in addressing any dangerous, repeat offender who preys on the citizens of Florissant.”
This case was investigated by the Florissant Police Department.
South Texas Man Charged with Child Exploitation via Social Media AppsRead the Press Release
McALLEN, Texas — A 22-year-old Alton man has been indicted for coercion and enticement of a minor, announced U.S. Attorney Ryan K. Patrick.
Dan Eliud Moncada-Gonzalez was originally charged by criminal complaint June 11, 2019, as he arrived at a local spot to meet whom he thought was a 13-year-old female. Today, a federal grand jury returned the indictment charging him with one count of coercion and enticement of a minor. He is expected to appear for his arraignment before U.S. Magistrate Judge Ormsby July 11, 2019.
The complaint alleges that beginning June 11, 2019, Moncada enticed an individual he believed to be a 13-year-old female on a social media app. Moncada allegedly sent multiple unsolicited sexually explicit images of himself, and others, and requested to meet in person at an agreed upon location. The charges allege that in those conversations, he described sexual acts he desired to perform.
Moncada was taken into custody as he arrived at a local park, allegedly expecting to engage in sexual activity with a minor.
If convicted, Moncada faces a minimum of 10 years in federal prison.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation as part of the Rio Grande Valley Child Exploitation Investigations Task Force.
Assistant U.S. Attorneys Michael Mitchell and Claire Nguyen are prosecuting the case. This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
An indictment or criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.South Florida Resident Sentenced to 30 Years for $100 Million International Fraud Scheme that Led to the Collapse of One of Puerto Rico’s Largest BanksRead the Press Release
A Key Biscayne, Florida, resident and the former CEO and Chairman of a now-bankrupt multinational pharmaceutical company was sentenced to 30 years in prison followed by five years of supervised release yesterday for his role his role in a $100 million scheme to defraud Westernbank of Puerto Rico (Westernbank). The losses triggered a series of events leading to Westernbank’s insolvency and ultimate collapse.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG), Special Agent in Charge Michael J. DePalma of IRS Criminal Investigation (IRS-CI) for Miami and Puerto Rico, Special Agent in Charge Iván J. Arvelo of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in San Juan and Special Agent in Charge Douglas A. Leff of the FBI’s San Juan, Puerto Rico Field Office made the announcement.
Jack Kachkar, 56, was sentenced by U.S. District Judge Donald L. Graham of the Southern District of Florida, who also presided over the trial in this case. Judge Graham also ordered the defendant to pay $103,490,005 in restitution to the FDIC, as receiver for Westernbank. Kachkar was convicted on Feb. 4, 2019, after a three-week trial, of eight counts of wire fraud affecting a financial institution.
According to evidence presented at trial, from 2005 to 2007, Kachkar served as chairman and CEO of Inyx Inc., a publicly traded multinational pharmaceutical manufacturing company. Beginning in early 2005, Kachkar caused Westernbank to enter into a series of loan agreements in exchange for a security interest in the assets of Inyx and its subsidiaries. Under the loan agreements, Westernbank agreed to advance money based on Inyx’s customer invoices from “actual and bona fide” sales to Inyx customers, the evidence showed.
The trial evidence showed that Kachkar orchestrated a scheme to defraud Westernbank by causing numerous Inyx employees to make tens of millions of dollars worth of fake customer invoices purportedly payable by customers in the United Kingdom, Sweden and elsewhere. Kachkar caused these invoices to be presented to Westernbank as valid invoices. Kachkar made false and fraudulent representations to Westernbank executives about purported and imminent repayments from lenders in the United Kingdom, Norway, Libya and elsewhere in order to lull Westernbank into continuing to lend money to Inyx, the evidence showed. In fact, these lenders had not agreed to repay Westernbank’s loan. Kachkar made false and fraudulent representations to Westernbank executives that he had additional collateral, including purported mines in Mexico and Canada worth hundreds of millions of dollars, to induce Westernbank to lend additional funds, the evidence showed. In fact, this additional collateral was worth barely a fraction of that represented by Kachkar.
During the course of the scheme, Kachkar caused Westernbank to lend approximately $142 million, primarily based on false and fraudulent customer invoices. The evidence showed that the defendant diverted tens of millions of dollars for his own personal benefit, including for the purchase of, among other things, a private jet, luxury homes in Key Biscayne and Brickell, Miami, luxury cars, luxury hotel stays, and extravagant jewelry and clothing expenditures.
In or around June 2007, Westernbank declared the loan in default and ultimately suffered losses exceeding $100 million on the Inyx loans. According to trial evidence, these losses later triggered a series of events leading to Westernbank’s insolvency and ultimate collapse. At the time of its collapse, Westernbank had approximately 1,500 employees and was one of the largest banks in Puerto Rico.
This case was investigated by the FDIC-OIG, IRS-CI, HSI and FBI. The Department of Justice’s Office of International Affairs provided significant support in the investigation. The case is being prosecuted by Assistant U.S. Attorney Michael N. Berger of the Southern District of Florida and Trial Attorney Michael O’Neill of the Criminal Division’s Fraud Section. The Department acknowledges and appreciates the substantial assistance of the Royal Canadian Mounted Police and the U.K. Metropolitan Police.
South Florida Resident Sentenced to 30 Years for $100 Million International Fraud Scheme That Led to the Collapse of One of Puerto Rico’s Largest BanksRead the Press Release
A Key Biscayne, Florida, resident and the former CEO and Chairman of a now-bankrupt multinational pharmaceutical company was sentenced to 30 years in prison followed by five years of supervised release yesterday for his role his role in a $100 million scheme to defraud Westernbank of Puerto Rico (Westernbank). The losses triggered a series of events leading to Westernbank’s insolvency and ultimate collapse.
U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG), Special Agent in Charge Michael J. DePalma of IRS Criminal Investigation (IRS-CI) for Miami and Puerto Rico, Special Agent in Charge Iván J. Arvelo of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in San Juan and Special Agent in Charge Douglas A. Leff of the FBI’s San Juan, Puerto Rico Field Office made the announcement.
Jack Kachkar, 56, was sentenced by U.S. District Judge Donald L. Graham of the Southern District of Florida, who also presided over the trial in this case. Judge Graham also ordered the defendant to pay $103,490,005 in restitution to the FDIC, as receiver for Westernbank. Kachkar was convicted on Feb. 4, 2019, after a three-week trial, of eight counts of wire fraud affecting a financial institution.
According to evidence presented at trial, from 2005 to 2007, Kachkar served as chairman and CEO of Inyx Inc., a publicly traded multinational pharmaceutical manufacturing company. Beginning in early 2005, Kachkar caused Westernbank to enter into a series of loan agreements in exchange for a security interest in the assets of Inyx and its subsidiaries. Under the loan agreements, Westernbank agreed to advance money based on Inyx’s customer invoices from “actual and bona fide” sales to Inyx customers, the evidence showed.
The trial evidence showed that Kachkar orchestrated a scheme to defraud Westernbank by causing numerous Inyx employees to make tens of millions of dollars worth of fake customer invoices purportedly payable by customers in the United Kingdom, Sweden and elsewhere. Kachkar caused these invoices to be presented to Westernbank as valid invoices. Kachkar made false and fraudulent representations to Westernbank executives about purported and imminent repayments from lenders in the United Kingdom, Norway, Libya and elsewhere in order to lull Westernbank into continuing to lend money to Inyx, the evidence showed. In fact, these lenders had not agreed to repay Westernbank’s loan. Kachkar made false and fraudulent representations to Westernbank executives that he had additional collateral, including purported mines in Mexico and Canada worth hundreds of millions of dollars, to induce Westernbank to lend additional funds, the evidence showed. In fact, this additional collateral was worth barely a fraction of that represented by Kachkar.
During the course of the scheme, Kachkar caused Westernbank to lend approximately $142 million, primarily based on false and fraudulent customer invoices. The evidence showed that the defendant diverted tens of millions of dollars for his own personal benefit, including for the purchase of, among other things, a private jet, luxury homes in Key Biscayne and Brickell, Miami, luxury cars, luxury hotel stays, and extravagant jewelry and clothing expenditures.
In or around June 2007, Westernbank declared the loan in default and ultimately suffered losses exceeding $100 million on the Inyx loans. According to trial evidence, these losses later triggered a series of events leading to Westernbank’s insolvency and ultimate collapse. At the time of its collapse, Westernbank had approximately 1,500 employees and was one of the largest banks in Puerto Rico.
This case was investigated by the FDIC-OIG, IRS-CI, HSI and FBI. The Department of Justice’s Office of International Affairs provided significant support in the investigation. The case is being prosecuted by Assistant U.S. Attorney Michael N. Berger of the Southern District of Florida and Trial Attorney Michael O’Neill of the Criminal Division’s Fraud Section. The Department acknowledges and appreciates the substantial assistance of the Royal Canadian Mounted Police and the U.K. Metropolitan Police.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.