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Thursday 27 June 2019
Savannah man arraigned for 2018 murder on Fort StewartRead the Press Release
SAVANNAH, GA: A Savannah man charged with killing the wife of a deployed U.S. Army soldier on post at Fort Stewart has been ordered held without bond.
Stafon Jamar Davis, 27, of Savannah, was arraigned in U.S. District Court in Savannah where he entered a plea of not guilty to a charge of Premeditated Murder in the July 9, 2018 shooting death of Abree Boykin, 24, a resident of post housing at Fort Stewart Army Reservation, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. Davis also is charged with Possession of a Firearm by a Convicted Felon.
Magistrate Christopher L. Ray granted the prosecution’s motion and ordered Davis held without bond and remanded to the custody of the U.S. Marshals Service. He is being held at the Liberty County Jail.
The indictment alleges that Davis, while on Fort Stewart, “willfully, deliberately, maliciously, and with premeditation and malice aforethought, did unlawfully kill Abree Boykin, by shooting Abree Boykin with a 9mm firearm.” The body of Boykin, whose husband was a then-deployed soldier, was discovered by Military Police in her residence.
Davis was arrested West Palm Beach, Fla., and transported to the Southern District of Georgia for court proceedings.
FBI and CID continue to offer a reward of up to $20,000 for information leading to the recovery of Abree Boykin’s black 2018 Honda Accord, Georgia license plate RLQ1762. Those with information are encouraged to call the FBI Atlanta Field Office at (770) 216-3000, email [email protected], or call 1-844-ARMY-CID. Individuals wishing to remain anonymous will be protected to the degree allowable under the law.
A criminal indictment contains only charges; defendants are presumed innocent unless and until proven guilty.
The case is being investigated by the FBI and the Army Criminal Investigation Command, with assistance from the Savannah Police Department and the U.S. Marshals Service, and prosecuted for the United States by Assistant United States Attorney Jennifer G. Solari.
San Carlos Man Sentenced to 17.5 Years for Abusive Sexual Contact with a MinorRead the Press Release
PHOENIX – On June 20, 2019, Daniel James Salter, 20, of San Carlos, Arizona, was sentenced by U.S. District Judge Susan M. Brnovich to prison for 17.5 years followed by lifetime supervised release. Salter had previously pleaded guilty to Abusive Sexual Contact with a Minor.
On February 24, 2017, Salter, an enrolled member of the San Carlos Apache Tribe, sexually assaulted a minor victim, who is also an enrolled member of the San Carlos Apache Tribe.
The investigation in this case was conducted by the Bureau of Indian Affairs, the San Carlos Police Department and the Arizona Department of Public Safety. The prosecution was handled by Assistant U.S. Attorney Thomas Simon, District of Arizona, Phoenix.
Rodessa resident sentenced to serve 10 years in federal prison for drug chargesRead the Press Release
SHREVEPORT, La. – A Rodessa, Louisiana resident was sentenced in federal court Wednesday for possession of methamphetamine with intent to distribute, said U.S. Attorney David C. Joseph.
Stanley Simmelkjaer, 40, was sentenced by U.S. District Judge Donald E. Walter to 10 years in federal prison after pleading guilty on March 22, 2019. Walter also ordered the defendant to serve five years of supervised release following his incarceration.
According to information presented in court, Shreveport Police observed Simmelkjaer using three properties that he owned on Sumner Street in Shreveport to distribute illegal narcotics. Simmelkjaer sold marijuana from two of his Sumner Street properties between February 2018 through July 2018 while his tenant sold marijuana from his third property located on Sumner. During this time, police conducted surveillance on Simmelkjaer and observed him travel to two properties on East Front Street in Rodessa before and after the drug sales. Law enforcement agents executed search warrants on August 1, 2018, at all five locations and recovered digital scales and approximately 1 kilogram of methamphetamine, some of which appeared to be packaged for distribution, from one of the properties located on Sumner Street and one located on East Front Street.
Under federal law, certain drug charges carry mandatory minimum sentences. In this case, Simmelkjaer possessed more than 500 grams of a mixture and substance containing methamphetamine with the intent to distribute, which carries a mandatory minimum prison sentence of 10 years.
The DEA and the Shreveport Police Department conducted the investigation. Assistant U.S. Attorney Jessica D. Cassidy prosecuted the case.
Rhode Island Man Indicted for Somerville Armed Bank RobberyRead the Press Release
BOSTON – A Rhode Island man was indicted today by a federal grand jury in Boston in connection with the May 1, 2019, armed bank robbery in Somerville that resulted in shots fired.
Daniel Rosado, 32, of Providence, R.I., was indicted on one count of armed bank robbery, one count of brandishing and discharging a firearm during a crime of violence, and one count of being a felon in possession of a firearm. Rosado was arrested and charged by criminal complaint on May 23, 2019, and has been in custody since.
According to the charging documents, on May 1, 2019, a man, later identified as Rosado, entered the Middlesex Federal Savings Bank in Somerville, brandished a handgun, fired a shot into the ceiling, and pointed the firearm at customers and bank employees. It is alleged that Rosado yelled: “Get down!,” “Everybody on the ground!,” “Second Drawer,” “Hurry Up!” and “Give me money or I’ll shoot!” Customers and bank employees laid on the floor, while the robber approached a teller window, threw a backpack at the teller, and demanded money.
While the teller filled the backpack with money, a customer exited the bank and flagged down a marked police cruiser occupied by a uniformed Somerville Police officer. The officer entered the bank, pointed his gun at the robber, and ordered him to freeze. In response, it is alleged that Rosado faced the officer, pointed his gun in the officer’s direction, and fired one shot. The officer shot back. During the exchange of gunfire, Rosado exited the bank and the officer chased after him on foot.
According to the charging document, as Rosado fled down College Avenue, a bystander, noticing that Rosado was being pursued by a police officer, attempted to tackle Rosado, which caused Rosado to drop his backpack. Rosado kept running, and witnesses eventually lost sight of him.
Upon review of the backpack, law enforcement found a Webley revolver, loaded with four unfired rounds of ammunition, and two cartridge casings, as well as more than $500.
Further investigation, including forensic analysis of the backpack, linked the DNA profile found on the backpack to Rosado. A subsequent review of Rosado’s driver’s license photo matched the images of the robber captured on video surveillance at Middlesex Bank.
According to court records, Rosado has prior felony convictions, such as negligent operation of a motor vehicle, larceny from a person and witness intimidation, and assault by means of a dangerous weapon. Due to these prior convictions, Rosado is prohibited from possessing a firearm or ammunition.
The charge of armed bank robbery provides for a sentence of no greater than 25 years in prison, five years of supervised release and a fine of $250,000; the charge of brandishing and discharging a firearm during a crime of violence provides for a mandatory minimum of seven years to life in prison for brandishing and a mandatory minimum of 10 years to life for discharging, to be served consecutive to any other sentence imposed, and a fine of $250,000. The charge of being a felon in possession of a firearm provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office; Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police; and Somerville Police Chief David Fallon made the announcement today. Valuable assistance was provided by the United States Attorney’s Office for the District of Rhode Island and the Providence (R.I.) Police Department. Assistant U.S. Attorney Lindsey E. Weinstein of Lelling’s Major Crimes Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Pittsburgh Man Sentenced to 6 Years in Prison for Drug Trafficking and Firearms CrimesRead the Press Release
PITTSBURGH, PA – Marvin Dennis was sentenced to six years (72 months) in prison for committing heroin and crack cocaine trafficking and firearm crimes, United States Attorney Scott W. Brady announced today.
Dennis, age 23 of Pittsburgh, was sentenced by United States District Court Judge Arthur J. Schwab. Judge Schwab also sentenced Dennis to serve three years of supervised release after his prison term.
In February 2019, Dennis pleaded guilty to conspiring to distribute heroin and crack cocaine from September 2017 to April 3, 2018, and to possessing a firearm in furtherance of the drug trafficking conspiracy from September 2017 to April 3, 2018.
Assistant United States Attorney Craig W. Haller prosecuted this case on behalf of the United States.
The Pittsburgh Bureau of Police, the Federal Bureau of Investigation, and the Federal Bureau of Alcohol, Tobacco, Firearms, and Explosives conducted the investigation leading to the convictions and sentence in this case. This case was prosecuted as part of Project Safe Neighborhoods (PSN) which is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Pittsburgh Man Charged with Defrauding Area BanksRead the Press Release
PITTSBURGH, PA - A resident of Pittsburgh, Pennsylvania has been indicted by a federal grand jury in Pittsburgh on a charge of bank fraud, United States Attorney Scott W. Brady announced today.
The one-count Indictment named Robert Campoli, Jr, age 49, as the sole defendant.
According to the Indictment, from March 6, 2019 to March 20, 2019, Campoli, Jr. engaged in a scheme to defraud Citizens Bank, Huntington Bank and Key Bank. The indictment alleges Campoli, Jr. used forged and counterfeit checks payable to him to withdraw money from business accounts at the banks, even though he had no relationship with the businesses named on the checks.
The law provides for a maximum total sentence of 30 years in prison, a fine of $1,000,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Douglas C. Maloney is prosecuting this case on behalf of the government.
The United States Secret Service, along with members of the Moon Township, Brentwood Borough, Northern Regional, Penn Township, Peters Township, and Austintown, Ohio, Police Departments conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Pensacola Woman Pleads Guilty to Selling Counterfeit Contact LensesRead the Press Release
PENSACOLA, FLORIDA – Son Chu Gilliam, 51, of Pensacola, Florida, pleaded guilty today to misdemeanor charges of receipt of adulterated and misbranded devices, and sale of prescription devices without a prescription -- those devices being contact lenses. Lawrence Keefe, United States Attorney for the Northern District of Florida, announced the guilty plea.
Her sentencing hearing is currently set for September 10, 2019.
In May 2015, law enforcement seized approximately 600 counterfeit contact lenses that were being imported from China by Gilliam to her place of business, All about Ink, a tattoo shop in Pensacola, Florida. A number of the contact lenses seized were tested by the U.S. Food and Drug Administration (FDA), and determined to contain microbial contamination. FDA has determined that the types of bacteria found in the contact lenses can be hazardous.
Between July 2015, and October 2015, law enforcement made a number of undercover purchases of contact lenses from Gilliam and others working for Gilliam at All about Ink. Following the undercover purchases, a federal search warrant was executed at All about Ink, and approximately 200 pairs of contact lenses were seized. Samples of both the contact lenses purchased by undercover agents, and the contact lenses seized were tested by FDA, and a number of those also contained microbial contamination. In addition to agents determining that a number of the contact lenses were counterfeit and FDA determining that a number of the contact lenses were contaminated and that none of the contact lenses should have been sold without a prescription.
“American consumers rely on FDA oversight to ensure the safety of their medical devices, including contact lenses. Selling counterfeit contact lenses without a valid prescription puts patients’ health – and their vision – at risk,” said Acting Special Agent in Charge, H. Peter Kuehl, FDA Office of Criminal Investigations Miami Field Office. “The FDA is committed to working with our law enforcement partners to keep such products out of the U.S. marketplace.”
“This criminal was selling substandard, dangerous counterfeit contact lenses with no regard for the health and safety of consumers,” said HSI Tampa Deputy Special Agent in Charge Kevin D. Sibley. “Our agents are committed to collaborating with partner agencies, like U.S. Customs and Border Protection, the U.S. Food and Drug Administration and the Florida Department of Health, to conduct aggressive investigations into the distribution of fake goods that threaten the safety of our public.”
The case resulted from the investigation by the Homeland Security Investigations, the U.S. Food and Drug Administration Office of Criminal Investigations, U.S. Customs and Border Protection, and the Florida Department of Health. It was prosecuted by Assistant United States Attorney J. Ryan Love.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html
Parkville, Topeka Men Indicted for $346 Million Fraud SchemeRead the Press Release
KANSAS CITY, Mo. – Two men have been indicted by a federal grand jury for a conspiracy in which they fraudulently profited from hundreds of millions of dollars in federal government contracts they were not entitled to receive, which were set aside for small businesses owned and controlled by service-disabled veterans, and minorities.
Patrick Michael Dingle, 48, of Parkville, Missouri, and Matthew L. Torgeson, 46, of Topeka, Kansas, were charged in a 16-count indictment returned by a federal grand jury in Kansas City, Missouri, on Wednesday, June 26.
The federal indictment alleges that Dingle and Torgeson, along with Matthew C. McPherson, 43, of Olathe, Kan., operated companies with straw owners who qualified as socially and economically disadvantaged individuals or service-disabled veterans, but who did not actually control the companies. Conspirators fraudulently obtained small business program certifications and veteran-owned business certifications, the indictment says, which they used to obtain approximately $346 million in federal contract payments to which they were not entitled. McPherson has been charged and pleaded guilty in a separate, but related, case.
Dingle, Torgeson, and McPherson allegedly used Stephon Ziegler – an African-American service-disabled veteran – as the nominal owner of Zieson Construction Company, headquartered in North Kansas City, Missouri. In reality, the indictment says, Dingle managed and controlled the daily operations of Zieson Construction Company and Dingle, Torgeson, and McPherson controlled the long-term decision making for Zieson Construction Company. They fraudulently obtained approximately 199 set-aside contracts from 2009 through 2018, for which the government paid Zieson Construction Company approximately $335 million. Ziegler has been charged and pleaded guilty in a separate, but related, case.
Dingle, Torgeson, and McPherson, individually or through their entities, allegedly received approximately $11 million from Zieson Construction Company using false and fraudulent invoices.
In February 2014, when Zieson Construction Company was growing too large to compete for federal small business contracts, Dingle, Torgeson, and McPherson allegedly used the minority status of a Zieson Construction Company employee, Native American Rustin Simon, 43, of Smithville, Missouri, to form Simcon. Simon, the indictment says, was Simcon’s nominal owner; Dingle managed and controlled the daily operations of Simcon and Dingle, Torgeson, and McPherson controlled the long-term decision making for Simcon. The indictment alleges they used Simcon to fraudulently obtain two set-aside contracts in 2016 valued at approximately $l1.3 million. Simon has been charged and pleaded guilty in a separate, but related, case.
Dingle, Torgeson, and McPherson, individually or through their entities, allegedly received approximately $959,598 from Simcon using false and fraudulent invoices.
Torgeson was the president of an electric company in Topeka from 2000 to 2017, when he sold the business to its employees. Torgeson formed another business in 2011. Approximately $3.1 million was deposited into this business’s bank account from Zieson Construction Company and Simcon between February 2016 and February 2018, the indictment says, which was traceable to federal government funds induced by fraudulent misrepresentations and awarded to Zieson and Simcon for set-aside contracts.
Dingle formed METS, LLC, in 2010. Approximately $6.1 million was deposited into this business’s bank account from Zieson and Simcon between July 2010 and February 2018, the indictment says, which was traceable to federal government funds induced by fraudulent misrepresentations and awarded to Zieson and Simcon for set-aside contracts. Those funds were subsequently used to fund Dingle’s personal banking and retirement accounts.
In addition to the wire fraud conspiracy, Dingle and Torgeson are charged together in nine counts of wire fraud and are each charged with three counts of money laundering. The indictment also contains a forfeiture allegation, which would require Dingle and Torgeson to forfeit to the government any property obtained as a result of the alleged fraud, including approximately $688,626 in bank accounts controlled by Dingle, $5,930,992 in bank accounts controlled by Torgeson, and $1,841,095 in bank accounts controlled by Zieson Construction Company. They would also forfeit to the government a 2015 Porsche Cayenne, a 2017 Toyota Tacoma, two Rolex watches, Dingle’s residential property in Parkville and his property in Palm Beach Gardens, Florida.
The charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorneys Stacey Perkins Rock and Paul S. Becker. It was investigated by the Department of Veterans Affairs, Office of Inspector General; the Department of Defense Criminal Investigative Service; the U.S. General Services Administration, Office of Inspector General; the U.S. Small Business Administration, Office of Inspector General; the Army Criminal Investigation Command, Major Procurement Fraud Unit; the Department of Agriculture, Office of Inspector General; IRS-Criminal Investigation; the U.S. Secret Service; the Air Force Office of Special Investigations, Procurement Fraud; the Naval Criminal Investigative Service; the Defense Contract Audit Agency - Operations Investigative Support (OIS); the U.S. Department of Labor, Office of Inspector General; and the Department of Labor, Employee Benefits Security Administration (EBSA).
Owner of Tampa-Area Medical Marketing Company Found Guilty in $2 Million Medicare Fraud SchemeRead the Press Release
A federal jury found the owner of a Tampa, Florida-area medical marketing company guilty today for his role in an over $2.2 million Medicare fraud scheme involving the payment of kickbacks and bribes to medical clinics in Miami in exchange for the referral of DNA swabs that were obtained from Medicare beneficiaries.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Maria Chapa Lopez of the Middle District of Florida, Special Agent in Charge Michael McPherson of the FBI’s Tampa Field Office and Assistant Inspector General Shimon Richmond of the U.S. Department of Health and Human Services Office of the Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.
Following a four-day trial, David Brock Lovelace, 49, of Land o’ Lakes, Florida, the owner of DBL Management LLC was found guilty of one count of conspiracy to pay health care kickbacks and one count of structuring currency transactions to avoid reporting requirements. Lovelace is expected to be sentenced on Oct. 2, 2019, by U.S. District Judge Susan C. Bucklew of the Middle District of Florida, who presided over the trial..
According to the evidence presented at trial, Lovelace was paid by Clinical Laboratory Company A for each DNA swab that Lovelace arranged to be referred to the laboratory. In order to obtain DNA swabs, Lovelace paid cash kickbacks and bribes to medical clinics in Miami in exchange for the referral of DNA swabs that were obtained from Medicare beneficiaries. Lovelace directed the owners of the medical clinics to collect the DNA of all of the patients at the clinics, regardless of medical necessity.
In the first phase of the scheme, from November 2013 to May 2014, the evidence at trial showed that Lovelace paid these cash kickbacks directly. In the second phase of the scheme, from May 2014 to November 2014, after his arrest on other charges, Lovelace established shell companies, including Healthcare Marketing Florida of Melbourne, Florida, and conspired with nominee owners to facilitate the payment of kickbacks, receipt of fraud proceeds, and transfer of unlawfully obtained DNA samples for medically unnecessary testing. Over the course of the entire conspiracy, Clinical Laboratory Company A submitted over $2.2 million in genetic testing claims and paid Lovelace a percentage of the Medicare reimbursements that it received.
In order to conceal his payment of illegal cash kickbacks, the evidence at trial showed that Lovelace would travel to different ATM’s and bank branches throughout Southern Florida and make separate withdrawals of thousands of dollars in cash in order to avoid the filing of U.S. Department of Treasury “currency transaction reports” for an individual withdrawal of over $10,000.
Lovelace was previously found guilty by a jury in December 2015 of various health care fraud, money laundering and identity theft charges in a case handled by the Criminal Division’s Fraud Section. He is currently serving 14 years in prison.
The case was investigated by the FBI and HHS, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the U.S. Department of Justice, Criminal Division, Fraud Section and the U.S. Attorney’s Office for the Middle District of Florida. The case is being prosecuted by Trial Attorney John Michelich and Acting Assistant Chief Jacob Foster of the Fraud Section.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Owner of Engineering Firm Sentenced to Five Years for Tax SchemeRead the Press Release
HONOLULU – Wagdy A. Guirguis was sentenced today to five years in prison for conspiracy to defraud the United States announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and United States Attorney Kenji M. Price for the District of Hawaii. As part of his sentence, Guirguis must serve three years of supervised release, and pay $3,308,868.00 in restitution to the Internal Revenue Service (IRS) and $6,730.24 in prosecution costs.
On November 20, 2018, a jury convicted Guirguis and co-conspirator Michael Higa, who was a certified public accountant, of conspiracy. In addition, Guirguis was also convicted of three counts of filing false corporate income tax returns, one count of failure to file a corporate income tax return, three counts of tax evasion, one count of corruptly endeavoring to obstruct and impede the IRS, and one count of witness tampering. The convictions arose from a scheme to divert funds from Guirguis’ business entities for his own personal benefit and to avoid the payment of federal employment taxes, corporate and individual income taxes, and IRS penalties.
According to evidence presented at trial, Guirguis and Higa used nominee entities to divert more than $1 million in funds from Guirguis’ businesses for Guirguis’ personal use. Guirguis made numerous false statements to IRS employees over the years during their attempts to collect taxes. In addition, to impede the criminal investigation into his tax violations, Guirguis falsely told an employee, who had testified before the grand jury, that he did not know about the false backdating in the books of the nominee entity, and asked the employee to sign a false statement to that effect.
Sentencing for Michael Higa is scheduled for July 1.
The case was investigated by the IRS-Criminal Investigation Division. It was prosecuted by Tax Division Senior Litigation Counsel John Sullivan and Trial Attorney Anahi Cortada and Assistant U.S. Attorney Rebecca Perlmutter for the District of Hawaii.
Olde Philly Pharmacy and its Owner to Pay $350,000 to Resolve Alleged Violations of Controlled Substance ActRead the Press Release
PHILADELPHIA, PA – United States Attorney William McSwain announced that Olde Philly Pharmacy has agreed to pay $350,000 to resolve allegations that three of its pharmacy stores located in Philadelphia violated the Controlled Substances Act (CSA) by failing to maintain complete and accurate records of controlled substances, including nearly 100 missing oxycodone and hydrocodone prescriptions. James Cirillo, managing pharmacist and co-owner of Olde Philly Pharmacy, is also a party to the settlement agreement.
The United States’ investigation involved three Olde Philly Pharmacy locations – 2923 East Thompson Street, 1427 East Susquehanna Avenue, and 2036-38 South 3rd Street.
As part of the settlement, Olde Philly Pharmacy has entered into a three-year Memorandum of Agreement (MOA) with the Drug Enforcement Administration, which includes additional responsibilities regarding the handling of controlled substances. The MOA imposes compliance obligations significantly more stringent than those in the applicable laws and regulations.
“Pharmacies that fail to maintain proper records of narcotics like oxycodone and hydrocodone contribute to the opioid crisis. At best, this poor record-keeping creates conditions ripe for diversion; at worst, it is a symptom of diversion itself,” said U.S. Attorney McSwain. “Pharmacies and pharmacists have a responsibility to ensure that all controlled substances are tracked through the distribution chain. For this reason, our Office is committed to ensuring total compliance with the Controlled Substances Act and we will vigorously enforce violations wherever we find them.”
Congress enacted the CSA to deter the illegal importation, manufacture, distribution, possession, and improper use of controlled substances, including prescription medications, and requires individuals and entities registered with the DEA to maintain complete and accurate records of all controlled substances and security systems so that controlled substances are not lost, stolen, or inappropriately dispensed.
The investigation was conducted by the Drug Enforcement Administration’s Philadelphia Field Division, Diversion Regulatory Group 2 (D72), and the investigation and settlement were handled by Assistant United States Attorney David A. Degnan.
New Orleans Man and Woman Charged with Conspiracy to Commit Theft of Government Funds and to Make False Statements, and Theft of Government FundsRead the Press Release
ELIJAH CHARLES SORINA (“ELIJAH”), age 29, and LISA SORINA (“LISA”), age 53, both of New Orleans, Louisiana, were charged by a federal grand jury in a three (3) count superseding indictment on Friday, June 21, 2019, with Conspiracy to Commit Theft of Government Funds and to Make False Statements, and Theft of Government Funds, announced United States Attorney Peter G. Strasser.
According to the superseding indictment, on September 21, 2015, ELIJAH and LISA SORINA completed a SSA Form SSA-821-BK, Work Activity Report, in which they claimed ELIJAH stopped working due to his “physical and/or mental condition.” However, ELIJAH and LISA SORINA failed to disclose ELIJAH’s employment as a school bus driver with a local transportation company to the SSA. In addition, on November 5, 2015, LISA and ELIJAH SORINA completed a SSA Form SSA-454-BK, Continuing Disability Review Report, and listed his daily activities as, “I get up about 12:00 pm eat, take a shower, watch TV, then at 8 pm (sic) back to bed.” The two defendants also claimed ELIJAH had difficulty with many daily tasks including but not limited to dressing, bathing, completing chores, driving, walking, and understanding or following directions.
U. S. Attorney Strasser reiterated that the superseding indictment is merely a charge and that the guilt of the defendants must be proven beyond a reasonable doubt.
If convicted, ELIJAH and LISA face a maximum penalty of ten (10) years imprisonment, followed by up to three (3) years of supervised release, and a $250,000.00 fine.
U.S. Attorney Peter G. Strasser praised the work of the Social Security Administration, Office of Inspector General and the Louisiana State Police. The prosecution of this case is being handled by Assistant U. S. Attorney Brian M. Klebba, Supervisor of the Financial Crimes Unit.
New Orleans Man Sentenced to 50 Months for Possession of Child PornographyRead the Press Release
CHARLES F. HALL (“HALL”), age 61, of New Orleans, Louisiana, was sentenced yesterday for Possession of Child Pornography, in violation of Title 18, United States Code, Section 2252(a), announced United States Attorney Peter G. Strasser.
The case against HALL began on April 12, 2018, when HALL entered the Social Security Administration’s (“SSA”) offices located on the fifth floor of 400 Poydras Street, in New Orleans, Louisiana. The SSA offices are leased by the General Services Administration (“GSA”) and are within the jurisdiction of the Federal Protective Service (“FPS”), a department of the U.S. Department of Homeland Security. The SSA office employs an administrative security screening process for all visitors whereby Paragon Systems Incorporated Protective Security Officers (“PSO”) conduct a search for weapons and explosives. As part of this screening process, HALL was instructed to take all metal items out of his pockets prior to passing through the magnetometer. When HALL produced a cellular phone from his pocket, the PSOs asked HALL to silence his cellular phone while he was in the office. When HALL accessed his cellular phone to silence it, the screen lit up and displayed an image depicting the sexual victimization of a prepubescent child. HALL was taken into custody by officers with the FPS, Louisiana Bureau of Investigation, and Homeland Security Investigations. A subsequent computer forensic search of HALL’s phone revealed he was in possession of 195 images and two videos of child pornography.
HALL was sentenced to 50 months by United States District Judge Sarah S. Vance. HALL was also sentenced to a period of seven (7) years of supervised release after his term of imprisonment. Judge Vance also ordered HALL to register as a sex offender pursuant to the Sex Offender Registration Notification Act.
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.”
U.S. Attorney Peter G. Strasser praised the work of the U.S. Department of Homeland Security, Homeland Security Investigations, the Federal Protective Service, Paragon Systems Incorporated Protective Security Officers, and the Louisiana Bureau of Investigation in investigating this matter. The prosecution of this case is being handled by Project Safe Childhood Coordinator and Financial Crimes Unit Supervisor, Assistant U.S. Attorney Brian M. Klebba.
New Kensington Man Charged with Distributing Fentanyl and Fentanyl AnaloguesRead the Press Release
PITTSBURGH, PA - A resident of Westmoreland County, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh, Pennsylvania, on charges of violating federal narcotics laws, United States Attorney Scott W. Brady announced today.
The one-count Indictment, returned on June 25, named Thomas Vaughn Kelly, Jr., 33, formerly of New Kensington, PA.
According to the Indictment, on or about March 12, 2019, Kelly possessed with the intent to distribute and distribute 10 grams or more of a mixture and substance containing fentanyl analogues and fentanyl.
The law provides for a minimum of five years in prison, a fine of $5,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history of the defendant.
Assistant United States Attorney Yvonne M. Saadi is prosecuting this case on behalf of the government.
The Pittsburgh Bureau of Police and the Drug Enforcement Administration conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Minnesota Man Charged with Child Sexual Exploitation OffensesRead the Press Release
Terrance Nordwall, age 50, of Faribault, Minnesota, has been charged with attempted sex trafficking of children, attempted enticement of minors, and travel for the purpose of engaging in illicit sexual conduct. The charges are contained in an Indictment unsealed on June 19, 2019, in United States District Court in Cedar Rapids.
The Indictment alleges that, between March 2019 and April 2019, Nordwall attempted to solicit and entice two persons he believed to be under 18 to engage in commercial sex acts and acts constituting sexual abuse under Iowa law. The Indictment also alleges that, in April 2019, Nordwall traveled across a state line for the purpose of engaging in illicit sexual conduct. The Indictment also alleges that, in two different counties in Minnesota in 2004, Nordwall was convicted of three counts of criminal sexual conduct and one count of possession of pornographic work involving minors.
If convicted, Nordwall faces a mandatory minimum sentence of 10 years’ imprisonment and a possible maximum sentence of life imprisonment, a $750,000 fine, and at least five years and up to life on supervised release following any imprisonment.
Nordwall appeared on June 25, 2019, in federal court in Cedar Rapids and was held without bond. Nordwall’s next appearance for trial is set for August 26, 2019.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
This case is being prosecuted by Assistant United States Attorney Mark Tremmel and is being investigated by the Iowa Division of Criminal Investigation and Homeland Security Investigations.
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.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 19-57.
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Mexican National Sentenced to 30 Years for Meth Trafficking, Illegally Reentering the U.S.Read the Press Release
KANSAS CITY, Mo. – A Mexican national was sentenced in federal court today for attempting to sell about 15 pounds of methamphetamine to an undercover law enforcement officer after illegally reentering the United States.
Javier Corona-Verduzco, 36, of Montclair, Calif., was sentenced by U.S. District Judge Stephen R. Bough to 30 years in federal prison without parole. The court also sentenced Corona-Verduzco to 20 years of supervised release following incarceration.
On Jan. 15, 2019, Corona-Verduzco was convicted at trial of possessing methamphetamine with the intent to distribute and of illegally reentering the United States after being deported following his incarceration for two earlier drug trafficking convictions. Corona-Verduzco was still on supervised release for those earlier convictions when he was arrested in this case.
Following his conviction, incarceration, and deportation to Mexico, Corona-Verduzco illegally reentered the United States and was again actively engaged in trafficking large quantities of methamphetamine.
Corona-Verduzco attempted to sell pound quantities of methamphetamine to a confidential informant. Corona-Verduzco told the confidential informant that he had a large quantity of methamphetamine and was looking for customers to purchase multiple pound quantities.
The confidential informant told Corona-Verduzco that he/she knew someone who was interested in purchasing pounds of methamphetamine. Corona-Verduzco agreed to meet the confidential informant and this acquaintance, who was actually an undercover law enforcement officer, on March 31, 2016. Corona-Verduzco met with the confidential informant and the undercover officer at a location in Kansas City, Kansas, and offered to sell 15 pounds of methamphetamine for approximately $80,000.
Corona-Verduzco and the confidential informant drove to a house in Kansas City, Mo., so that the confidential informant could check the quality of the methamphetamine for sale. At that location, the confidential informant saw approximately 2.5 pounds of methamphetamine in a bag.
Corona-Verduzco was arrested the next day. He had told both the confidential informant and the undercover officer that the 15 pounds of methamphetamine he was attempting to sell them was in a gray Chevrolet Tahoe. Law enforcement officers located the Tahoe parked behind the Kansas City, Mo., residence where Corona-Verduzco had taken the confidential informant the day before. Law enforcement officers found seven packages of methamphetamine, totaling 6.814 kilograms (approximately 15 pounds), hidden in a hollow compartment behind the driver’s side rear panel. Officers also found 400 grams of methamphetamine inside the residence.
Corona-Verduzco also has a prior conviction in an unrelated case for witness intimidation where he threatened the lives and families of co-defendants.
This case was prosecuted by Assistant U.S. Attorney Jeffrey Q. McCarther and Special Assistant U.S. Attorney Sean T. Foley. It was investigated by the Kansas City, Kan., Police Department, the Blue Springs, Mo., Police Department, the Drug Enforcement Administration, Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the Jackson County Drug Task Force.
Massachusetts Man Pleads Guilty to Conspiracy to Transport Stolen GoodsRead the Press Release
CONCORD – Conery Alan Morse, 32, of Wilbraham, Massachusetts, pleaded guilty in federal court to participating in a conspiracy to transport stolen goods, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, between approximately April of 2018 and approximately December of 2018, Morse conspired with James Falk to steal high-value items from large retail stores throughout New England and send the items to a person associated with an online marketplace for eventual sales to online customers.
To carry out the conspiracy, Morse and Falk entered large retail stores, chose high-value items (such as thermostats, alarm systems, electronics, hardware, and tools), and left the stores without paying for all of the items. To steal goods inside the stores, Morse and Falk hid stolen goods in larger boxes and containers. In addition, Morse and Falk used containers that caused radio frequency interference in an attempt to defeat the stores’ security alarm sensors. Morse and Falk shipped stolen goods to an address in Maplewood, New Jersey, for eventual sale to online consumers. Morse and Falk later received payments for the stolen items.
Morse and Falk caused a total loss to the victim stores of approximately $54,000.
Morse is scheduled to be sentenced on October 10, 2019. Falk previously pleaded guilty on May 30, 2019, and is scheduled to be sentenced on September 13, 2019.
“Interstate theft and fraud are serious crimes,” said U.S. Attorney Murray. “We will remain vigilant in our efforts to protect businesses and consumers in the Granite State from such wrongdoing. I want to thank the law enforcement officers whose work put an end to this criminal scheme.”
This matter was investigated by the New Hampshire State Police and the United States Department of Commerce. The case is being prosecuted by Assistant U.S. Attorney John Davis.
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Massachusetts Laboratory and Its Owners Pay over $1.5 Million to Settle False Claims Act AllegationsRead the Press Release
U.S. Attorney John H. Durham, Special Agent in Charge Phillip Coyne of the U.S. Department of Health and Human Services, Office of Inspector General, and Connecticut Attorney General William Tong today announced that CLINICAL SCIENCE LABORATORY, INC. and its owners, STANLEY ELFBAUM and LOUIS AMORUSO, have entered into a civil settlement agreement with the federal and state governments and have paid $1,508,106 to resolve allegations that they violated the federal and state False Claims Acts.
Clinical Science Laboratory, Inc. (“CSL”), located in Mansfield, Massachusetts, provides laboratory-testing services, specifically urine drug testing services, for substance abuse patients enrolled in the Connecticut Medicaid program. The government alleges that CSL, Elfbaum and Amoruso violated Connecticut’s so-called “Most Favored Nation” regulation (Conn. Agencies Regs. § 17b-262-649), which provides, in essence, that clinical laboratories should not seek payment from Connecticut Medicaid for services at a price that is higher than the lowest price the laboratory charges for the same or similar services from other third parties. Specifically, the government alleges that CSL regularly accepted payments from Connecticut Medicaid for urine drug screen testing at the rate of $38 per test, while at the same time charging substance abuse treatment clinics approximately $2 per test
To resolve the governments’ allegations under the federal and state False Claims Acts, CSL, Elfbaum and Amoruso agreed to pay $1,508,106, which covers claims submitted to the Connecticut Medicaid program from October 1, 2016, through May 23, 2017.
“We must ensure that taxpayers’ health care dollars used for substance abuse treatment are properly spent,” said U.S. Attorney Durham. “Clinical laboratories should not charge government health care programs a higher price than they charge to other providers for the same or similar services, and those who do so will be held accountable.”
“With the deadly impact of addictive drugs reaching crisis proportions, every dollar for treatment programs must be fiercely guarded,” said Special Agent in Charge Coyne. “Taxpayers and patients depending on state treatment programs should expect nothing less. Working with our state and federal partners, we will continue to hold accountable those who profit by overbilling Medicaid.”
“Clinical Science Laboratory was billing the state's Medicaid program 19 times what it charged to other customers—diverting taxpayer resources away from other critical needs. Connecticut has been disproportionately devastated by the opioid epidemic, and we must ensure we are getting the absolute most out of every treatment dollar spent,” said Attorney General Tong. “I want to thank our federal law enforcement partners and the DSS Office of Quality Assurance for their joint efforts in this investigation and strong settlement.”
This matter was investigated by the Office of Inspector General for the Department of Health and Human Services. The case is being prosecuted by Assistant U.S. Attorney Richard M. Molot, and Assistant Attorneys General Michael Cole and Gregory O’Connell of the Connecticut Office of the Attorney General.
People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS.
Manhattan U.S. Attorney Settles Civil Fraud Lawsuit Against Physical Therapy Center and Its CEO for Improper Medicare BillingRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s New York Region (“HHS-OIG”), announced today that the United States filed and settled a civil fraud lawsuit against FUSION PHYSICAL THERAPY AND SPORTS WELLNESS, P.C. (“FUSION”), and its founder and CEO, CAROLYN SUE MAZUR (“MAZUR”), alleging that FUSION and MAZUR violated the False Claims Act by fraudulently billing Medicare for physical therapy services that were not reimbursable under that program. Specifically, FUSION and MAZUR falsely claimed to Medicare that various services had been provided or supervised by a physical therapist who was credentialed in the Medicare program and therefore authorized to bill Medicare for reimbursement when, in fact, the services were provided or supervised by other non-credentialed personnel. Under the settlement, approved yesterday by U.S. District Judge Ronnie Abrams, FUSION and MAZUR admitted to the wrongful conduct and agreed to pay $37,500.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Medicare requires all health care providers accurately to report information relating to claimed services. This requirement is critical to ensure quality of care and patient safety. Fusion Physical Therapy side-stepped this rule by lying to Medicare about who actually provided the services, and is now being held accountable.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “Health care professionals are expected to bill the taxpayer-funded Medicare program correctly. Along with our law enforcement partners, HHS-OIG will continue to ensure individuals and entities billing federal health care programs do so in an honest manner.”
According to the Government’s Complaint-in-Intervention, MAZUR and FUSION knew that Medicare rules prohibited them from billing Medicare for services performed or supervised by non-credentialed physical therapists. MAZUR and FUSION also knew that Medicare rules prohibited them from misrepresenting to Medicare the individual physical therapist who had provided the services underlying a claim for reimbursement. In spite of this knowledge, FUSION and MAZUR billed Medicare for services that had been rendered by non-credentialed providers and made false representations regarding the true identity of the providers who rendered the services.
As part of the settlement, MAZUR and FUSION agreed to pay $37,500 and admitted that:
- Defendants understood that they were prohibited by Medicare rules from submitting claims for reimbursement for certain professional services provided by a healthcare provider other than the individual associated with the National Provider Identifier (“NPI”) listed on each claim.
- Defendants also understood that, in order to receive reimbursement from Medicare for physical therapy services, the physical therapist listed on each relevant claim must be enrolled as a provider in the Medicare program at the time the services are rendered.
- Defendants submitted to Medicare false claims for services that had been performed by physical therapists other than the physical therapist whose NPI was listed on the claim.
- In some cases, the physical therapist who actually provided the claimed services was not enrolled as a Medicare provider at the time the claimed services were rendered.
* * *
Mr. Berman praised the outstanding investigative work of HHS-OIG. This case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Charles S. Jacob and Jessica Jean Hu are in charge of the case.
- Defendants understood that they were prohibited by Medicare rules from submitting claims for reimbursement for certain professional services provided by a healthcare provider other than the individual associated with the National Provider Identifier (“NPI”) listed on each claim.
Man Sentenced Prison for Drug and Firearm CrimesRead the Press Release
NEWPORT NEWS, Va. – A Newport News man was sentenced today to seven years in prison for possession with intent to distribute cocaine and possession of a firearm in furtherance of a drug trafficking crime.
According to court documents, Thomas Jarrell Mays, 30, was at home in Newport News when law enforcement executed a search warrant based on complaints of drug trafficking from the residence that were confirmed by police surveillance. In addition to the arrest of Mays, the search yielded a loaded Glock 22 .40 caliber handgun with an additional high-capacity drum magazine loaded with 50 cartridges of ammunition; cooking paraphernalia coated with residue; multiple boxes of baking soda; narcotics packaging materials; multiple digital scales; approximately 5.8 grams of cocaine base; and more than 40 grams of cocaine that Mays unsuccessfully attempted to flush down a toilet when law enforcement entered his home.
This case is part of Project Safe Neighborhoods (PSN), which is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Jesse R. Fong, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, made the announcement after sentencing by U.S. District Judge Rebecca Beach Smith. Assistant U.S. Attorney Peter Osyf prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:19-cr-10.
Lynn Man Sentenced for Multi-Million Dollar Lottery Ticket ScamRead the Press Release
BOSTON - A Lynn man was sentenced yesterday in federal court in Boston in connection with a “ten-percenting” scheme, in which he purchased millions of dollars’ worth of winning Massachusetts state lottery tickets at a discount in order to help the ticket holders avoid taxes on the winnings.
George Kinslieh, 69, was sentenced by U.S. District Court Judge Leo T. Sorokin to one year of probation. On October 10, 2018, Kinslieh pleaded guilty to one count of filing false tax returns.
Co-conspirator Bhavna Patel was sentenced in May 2019 to one year of probation and ordered to pay a fine of $1,000 after pleading guilty to one count of conspiracy. Co-conspirator Clarance Jones, 80, pleaded guilty in May 2019 to conspiring to commit tax fraud and filing false tax returns and is scheduled to be sentenced on Aug. 13, 2019.
From at least 2013 through 2017, Kinslieh and Patel, who were convenience store owners purchased winning lottery tickets from the ticket holders for cash, at a discount to the value of the tickets, thereby allowing the ticket holders to avoid reporting the winnings on their tax returns – a scheme known as “ten-percenting.” Kinslieh and Patel gave the winning tickets to Jones, who presented them to the Massachusetts State Lottery Commission as his own, and collected the full winnings. Kinslieh did not report to the Internal Revenue Service or pay taxes on the income that he received from the ticket scheme.
United States Attorney Andrew E. Lelling; Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police, made the announcement today. The Massachusetts State Lottery Commission provided assistance with the investigation. Assistant U.S. Attorney Sara Miron Bloom of Lelling’s Securities and Financial Fraud Unit prosecuted the case.
Livingston Parish Man Sentenced to Federal Prison for Child Pornography ConvictionRead the Press Release
BATON ROUGE, LA –United States Attorney Brandon J. Fremin announced that United States District Court Chief Judge Shelly D. Dick sentenced Colt Gibson, age 35, of Livingston Parish, Louisiana, to serve 73 months in federal prison following his conviction for receipt of child pornography. Following his release from imprisonment, GIBSON will serve a 5-year term of supervised release.
As set forth in GIBSON’s plea agreement, GIBSON used file-sharing software to download a video from the internet of a prepubescent female engaged in sexually explicit conduct with an adult male. A subsequent forensic examination of the defendant’s computer and other electronic devices revealed at least 300 additional videos of child pornography, including depictions of toddlers and prepubescent females, which the defendant had downloaded from the internet.
U.S. Attorney Fremin stated, “Online child sexual exploitation investigations and prosecutions will continue to be priority for this office and those who engage in such vile behavior will be held accountable. Those who receive or possess child pornography contribute to the continuing victimization of child victims and create demand for future exploitation which will not be tolerated. I greatly appreciate the excellent and hard work of the prosecutors and agents who handle these challenging cases.”
Eric J. Rommal, FBI New Orleans Special Agent in Charge stated, "Locating and apprehending child predators and pornographers has always remained a top priority in the FBI. Through the New Orleans Child Exploitation and Human Trafficking Task Force, we work closely with our federal, state, and local law enforcement partners to identify, investigate, and arrest individuals engaged in the exploitation of our children."
"As a father, I know I would do anything to protect my son," said Louisiana Attorney General Jeff Landry. "Since taking office, I have teamed with law enforcement partners to protect Louisiana's children. I thank the work of my team and the U.S. Attorney's Office in bringing this child predator to justice.”
This matter was investigated by the Federal Bureau of Investigation and the Louisiana Attorney General’s Office Cyber Crime Unit, with assistance from the Livingston Parish Sheriff’s Office and Louisiana State Police. This case was prosecuted by Assistant United States Attorney Elizabeth E. White.
These federal charges are part of Project Safe Childhood, a nationwide initiative by the U.S. Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc. Click on the “Resources” tab for information about Internet safety education.
Lecompte man sentenced on firearms crime after tyring to dispose of pistol during arrestRead the Press Release
ALEXANDRIA, La. – A Lecompte man who pleaded guilty to possession of a firearm by a convicted felon on March 8, 2019, after trying to dispose of the firearm during his arrest, was sentenced Tuesday to serve time in federal prison, said U.S. Attorney David C. Joseph.
United States District Judge Dee D. Drell sentenced Timothy Jackson Van Mol, 35, to 18 months in prison followed by three years of supervised release. According to federal law, as a convicted felon, Van Mol is not allowed to possess a firearm or ammunition.
Rapides Parish Sheriff’s deputies made contact with Van Mol on March 5, 2018 on Lamourie Road near Lecompte while executing an outstanding state warrant for non-support. Upon exiting his vehicle, Van Mol removed a chrome handgun from his waistband and threw it toward a nearby ditch full of water. The firearm retrieved by officers just off the bank of the ditch was a Sig Sauer, model SP2022, .40-caliber pistol. Van Mol has multiple felonies in state court in 2009 including burglary and drug possession.
The ATF and Rapides Parish Sheriff’s Department conducted the investigation. Assistant U.S. Attorney Brandon B. Brown prosecuted the case.
Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. Project Safe Neighborhoods 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.
Leaders of Brooklyn and Manhattan Chapters of the United Brotherhood of Carpenters Charged in Rampant Admissions-Bribery SchemeRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Michael C. Mikulka, Special Agent-in-Charge of the U.S. Department of Labor, Office of Inspector General, New York Region (“DOL-OIG”), Andriana Vamvakas, New York Regional Director, U.S. Department of Labor Office of Labor-Management Standards (“DOL-OLMS”), and Margaret Garnett, Commissioner, New York City Department of Investigation (“DOI”), announced today the unsealing of an Indictment charging leaders of two local chapters of the United Brotherhood of Carpenters and Joiners of America (the “Union”) with accepting tens of thousands of dollars in cash bribes in return for guaranteeing admission to hundreds of prospective union members. SALVATORE TAGLIAFERRO, the president of the Local 926 chapter of the Union, and JOHN DEFALCO, the vice president of the Local 157 chapter of the Union, were each charged with one count of honest services wire fraud, one count of conversion of union assets, and one count of conspiracy, in connection with their involvement in a scheme to solicit cash bribes in exchange for union membership. DEFALCO was also charged with one count of witness tampering and one count of obstruction of justice, in connection with his attempts to interfere with the investigation of the scheme. TAGLIAFERRO and DEFALCO, who were arrested this morning, are expected to be presented later today.
U.S. Attorney Geoffrey S. Berman said: “As alleged, the defendants abused their leadership positions to line their pockets at the expense of their union and its members, whose interests they were duty bound to protect. By allegedly demanding and accepting cash bribes in return for union membership, the defendants not only betrayed their union, but personally profited off the needs of those seeking work. The charges announced today reflect our tireless commitment to working with our law enforcement partners to root out corruption in union leadership and our commitment to bringing to justice those who corrupt their positions.”
DOL-OIG Special Agent-in-Charge Michael Mikulka said: “An important mission of the Office of Inspector General is to investigate allegations relating to labor racketeering and corruption in labor unions. We will continue to work with our law enforcement partners to investigate these types of allegations.”
DOL-OLMS New York Regional Director Andriana Vamvakas said: “Safeguarding financial integrity and combatting financial malfeasance in labor unions is a very high priority for OLMS. This indictment sends a clear message that OLMS will fully investigate and seek justice when anyone attempts to use their union position for personal financial gain at the expense of union members.”
DOI Commissioner Margaret Garnett said: “These defendants allegedly conspired to sell sought-after union memberships for thousands of dollars, giving those who paid the steep price unearned access to coveted union construction projects and other exclusive benefits while the defendants collected the cash, according to the charges. Organized labor must be safeguarded from corruption that attempts to undermine its mission to protect the rights of working New Yorkers. DOI was proud to assist its partners at the Office of the U.S. Attorney for the Southern District of New York, the U.S. Department of Labor and the U.S. Department of Labor Inspector General in investigating this case.”
According to the Indictment[1] unsealed today in Manhattan federal court:
From at least in or about 2017 up through and including in or about June 2019, TAGLIAFERRO and DEFALCO abused their positions as officers of local chapters of the Union by soliciting and accepting cash bribes from prospective Union members in exchange for securing the bribe payers’ admission to the Union. In particular, DEFALCO and other co-conspirators identified prospective members and solicited cash payments from them, often in the amount of $1,500. Then, once prospective members made the payments, DEFALCO sent those individuals’ names to TAGLIAFERRO, who used his authority as president of the Local 926 to ensure that they were accepted into the Local 926 and received Union membership cards, even though many such bribe payers did not have Union jobs and were not eligible for admission to the Union. Hundreds of new members were admitted to the Local 926 as a result of this scheme. DEFALCO and TAGLIAFERRO shared the bribe payments and made at least tens of thousands of dollars from the scheme.
DEFALCO and TAGLIAFERRO also took numerous steps to conceal their conduct from investigators, and DEFALCO attempted to tamper with witnesses and obstruct the federal investigation. Among other things, DEFALCO pressured one co-conspirator to sign an affidavit falsely exculpating him and directed that co-conspirator falsely to exculpate DEFALCO, TAGLIAFERRO, and others if questioned. DEFALCO and TAGLIAFERRO also discussed a false cover story to explain the involvement of another co-conspirator in the scheme, and DEFALCO instructed that co-conspirator to repeat this false cover story to a federal grand jury investing his conduct. DEFALCO also instructed a co-conspirator to delete incriminating text messages between them that were responsive to a federal grand jury subpoena served on the co-co-conspirator.
* * *
TAGLIAFERRO, 54, of Staten Island, New York, and DEFALCO, 51, of Secaucus, New Jersey, each are charged with one count of conspiracy, which carries a maximum sentence of five years in prison; one count of conversion of union assets, which carries a maximum sentence of five years in prison; and one count of honest services wire fraud, which carries a maximum sentence of 20 years in prison. DEFALCO alone is also charged with one count of witness tampering and one count of obstruction of justice, each of which carries a maximum penalty of 20 years in prison.
The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the judge.
The charges contained in the Indictment are merely accusations, and TAGLIAFERRO and DEFALCO are presumed innocent unless and until proven guilty.
Mr. Berman praised the investigative work of DOL-OIG, DOL-OLMS, and DOI.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Jarrod Schaeffer and Thomas McKay are in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and its description set forth below constitute only allegations, and every fact described should be treated as an allegation.
La Crosse Dentist Indicted for Tax EvasionRead the Press Release
MADISON, WIS. - A federal grand jury in Madison, Wisconsin, indicted a La Crosse, Wisconsin dentist yesterday for tax evasion, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Scott C. Blader for the Western District of Wisconsin.
According to the indictment, Frederick G. Kriemelmeyer, 70, operated a dental practice in La Crosse, Wisconsin. In 2007, Kriemelmeyer was ordered by the U.S. District Court for the Western District of Wisconsin to pay $135,337 to the Internal Revenue Service (IRS) for unpaid individual income taxes. By December 2012, the IRS had assessed Kriemelmeyer more than $450,000 in taxes, interest and penalties. Beginning in approximately 2011, Kriemelmeyer allegedly took a number of actions to evade payment of this assessment. The indictment also charges that for the years 2013 through 2015 Kriemelmeyer failed to file tax returns and attempted to evade the taxes due on income from his dental practice. Kriemelmeyer allegedly sought to conceal his income from the IRS, by among other things, directing his patients to pay in cash or with personal checks that left the payee line blank and by paying his business and personal expenses with cash and third-party checks.
An indictment merely alleges that crimes have been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
If convicted, Kriemelmeyer faces a statutory maximum sentence of five years in prison for each of the tax evasion counts.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Blader commended special agents of IRS Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Elizabeth Altman and Trial Attorney Eric C. Schmale of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website .
Jury Convicts San Antonio Man on Federal Child Pornography and Obscenity ChargesRead the Press Release
Reynaldo Salinas, age 27 of San Antonio, faces federal prison time after a jury this afternoon found him guilty of attempted enticement of a minor and attempted transfer of obscene material to a minor, announced U.S. Attorney John F. Bash.
A federal jury in San Antonio convicted Salinas on both charges. Evidence presented during the four–day trial revealed that on September 27, 2017, Salinas used a mobile messaging application in an attempt to entice a female he believed was a 14-year-old dependent living on Ft. Sam Houston into engaging in sexual activity. Salinas also transferred a sexually explicit photograph of himself to the individual he believed was a minor. In reality, the individual Salinas believed to be a child was an undercover agent for the Air Force Office of Special Investigations. On October 20, 2017, Salinas, a non-active member of the Texas Army National Guard who had privileged access to military installations, showed up at a pre-arranged location on Lackland Air Force Base to meet the 14-year-old for sex. Agents were there waiting for him and arrested him.
Salinas faces mandatory ten years and up to life in federal prison for the enticement charge and up to ten years in federal prison for the obscene material charge. Salinas remains in federal custody pending sentencing, which is scheduled for September 30, 2019, before Senior U.S. District Judge David A. Ezra.
U.S. Air Force Office of Special Investigations agents investigated this case. Assistant U.S. Attorneys Bettina Richardson, Eric Yuen and Antonio Franco, Jr., are prosecuting this case on behalf of the Government.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Judge Sends Verona Man to Prison for 15 Years for Producing, Distributing and Possessing Child PornographyRead the Press Release
PITTSBURGH, PA - A former resident of Allegheny County, Pennsylvania, has been sentenced in federal court 15 years’ (180 months’) incarceration to be followed by 15 years of supervised release to violating charges of production, distribution and possession of material depicting the sexual exploitation of minors, United States Attorney Scott W. Brady announced today.
Senior United States District Judge Arthur J. Schwab imposed the sentence on John O’Donnell, 51, formerly of Verona, PA.
According to information presented to the court, O’Donnell distributed material depicting the sexual exploitation of a minor on Facebook. When authorities searched his home, he was found to be in possession of nearly 300 images and videos depicting the sexual exploitation of minors. During the investigation into his illegal activities, authorities also learned that, through the use of a hidden camera, O’Donnell secretly videotaped a 12-year-old girl in his bathroom.
Assistant United States Attorney Shanicka L. Kennedy prosecuted this case on behalf of the government.
The Federal Bureau of Investigation, the Pennsylvania Attorney’s General Office, the Allegheny County Police Department and the Allegheny County District Attorney’s Office conducted the investigation leading to the prosecution of O'Donnell.
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 (CEOS), 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.
Jefferson County Woman Pleads Guilty to Sexual Exploitation CrimesRead the Press Release
UTICA, NEW YORK – Amber Decker, age 25, of Antwerp, New York, pled guilty today to all counts of a seven-count indictment charging that she, together with her husband, conspired to sexually exploit, and sexually exploited, a 2-year-old child for the purpose of producing images and videos of the abuse.
The announcement was made by United States Attorney Grant C. Jaquith and James N. Hendricks, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
As a part of her guilty plea, Decker admitted that on several occasions in July and August 2018, while she was living in Jefferson County, New York, and her husband was located in Sioux Falls, South Dakota, she videotaped her sexual abuse of the 2-year-old, and uploaded the video files to a cloud storage account for her husband to view.
United States District Judge David N. Hurd will sentence Decker on October 24, 2019. Her husband, Logan Decker, is charged with the same offenses, and is scheduled for trial on September 30, 2019. The charges in the indictment against Logan Decker are merely accusations. Logan Decker is presumed innocent unless and until proven guilty
Each of the seven crimes to which Amber Decker pled guilty carries a mandatory minimum sentence of 15 years, and a maximum sentence of 30 years in prison, a fine of up to $250,000, and a term of post-imprisonment supervised release of at least 5 years and up to life. She will also be required to register as a sex offender. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case is being investigated by the FBI, the New York State Police, the Jefferson County Sheriff’s Office, and the Sioux Falls, South Dakota Police Department, and is being prosecuted by Assistant U.S. Attorney Lisa M. Fletcher, Project Safe Childhood Coordinator for the Northern District of New York.
Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), and is designed to marshal 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 https://www.justice.gov/psc.
Indian Businessman Charged with Drug Importation, Smuggling, and Money Laundering OffensesRead the Press Release
PITTSBURGH, PA - A citizen and resident of Mumbai, India, has been indicted by a federal grand jury in Pittsburgh on charges of violating the federal narcotics, smuggling, and money laundering laws, United States Attorney Scott W. Brady announced today.
The eight-count Indictment, returned on June 26, named Jeetendra Harish Belani, aka Jeetu, age 36, of Mumbai, India, as the sole defendant. He is charged with conspiracy to import Schedule II and Schedule IV controlled substances, conspiracy to smuggle drugs into the United States, conspiracy to commit money laundering, and various substantive counts of drug importation, smuggling, and money laundering.
According to the Indictment, Belani operated a drug-distribution entity based in India called LeeHPL Ventures. Between 2015 and 2019, Belani and his co-conspirators, through LeeHPL Ventures, allegedly imported and smuggled into the United States various drugs available only by prescription in the United States, including Tapentadol, a Schedule II controlled substance, as well as Tramadol, Carisoprodol, and Modafinil, all Schedule IV controlled substances. The Indictment also alleges that between 2015 and mid-2017, Belani conspired with William Kulakevich and Julia Fees to unlawfully smuggle a drug known as Etizolam into the United States for re-sale by Kulakevich and Fees via a website they operated—www.etizy.com. Etizolam is part of a class of drugs similar to benzodiazepines, which are often used to treat insomnia and anxiety and carry a potential for abuse and overdose. To evade detection by United States Customs and Border Protection officials, Belani and his co-conspirators also allegedly used false customs declarations that mischaracterized and undervalued the contents of packages sent to the United States by LeeHPL Ventures. In addition, according to the Indictment, Belani caused drug shipments to be broken into smaller quantities and shipped to multiple addresses to help ensure delivery and avoid interception by United States customs authorities. Belani also caused co-conspirators to initiate payments totaling tens of thousands of dollars from accounts in the United States to accounts controlled by Belani in India or other locations outside the United States, all as a means to promote Belani’s continued efforts to smuggle drugs into the United States.
The most serious offenses with which Belani is charged, involving importation of a Schedule II controlled substance, carry a maximum sentence of not more than twenty years in prison, a fine of not more than $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Eric G. Olshan is prosecuting this case on behalf of the government.
The United States Food and Drug Administration – Office of Criminal Investigations and Homeland Security Investigations conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Illinois Man Found Guilty of 15 Counts Involving Pipe Bombs, Stalking, Domestic Violence, Interstate Truck Theft, and Tampering with a Witness and EvidenceRead the Press Release
DAVENPORT, IA- On Monday, June 24, 2019, a jury found Chad Eric Mink, age 43, of Rock Island, Illinois, guilty of fifteen (15) separate federal offenses including interstate transportation of a stolen motor vehicle, stalking (two counts), interstate domestic violence (two counts), possession of unregistered destructive devices (pipe bombs) (two counts), being a prohibited person in possession of explosives (two counts), fraudulent use of a means of identification of another person, malicious use of explosives, possession of a destructive device in furtherance of a crime of violence, carrying explosive materials during commission of a federal felony, tampering with a witness, and obstruction of official proceedings.
The jury trial commenced on June 10, 2019. The Government presented more than 70 witnesses, including several forensic experts who testified about Mink using a stolen truck to ram a vehicle occupied by a former intimate partner and her boyfriend, possessing multiple pipes bombs, planting a pipe bomb near his former intimate partner’s room at the Quad City Inn in Davenport, and attempting to influence a witness to destroy evidence and to fabricate evidence. Sentencing is presently scheduled for November 14, 2019 at 1:30 p.m. The defendant faces up to life in prison and mandatory minimum sentences of five years, 10 and 30 years, all to be served consecutively to each other and any other sentence imposed.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Quad City Bomb Squad, Davenport, Milan (IL), Moline (IL), and Rock Island (IL) Police Departments, Scott County and Rock Island County Sheriff’s Departments, Illinois State Police, and the Federal Bureau of Investigation. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Hartford Man Pleads Guilty to Federal Gun ChargeRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that MARTIN NUNEZ, 41, of Hartford, pleaded guilty today before U.S. District Judge Kari A. Dooley in Bridgeport to one count of unlawful possession of a firearm by a convicted felon.
According to court documents and statements made in court, on October 15, 2018, state parole officers, with the assistance of Hartford Police, conducted a compliance check of Nunez at his residence. A search of the residence revealed a .380 caliber handgun, a firearm magazine, and five rounds of ammunition in a dresser drawer in Nunez’s bedroom. Nunez was arrested at that time.
Nunez’s criminal history includes four state felony convictions for distributing narcotics and one conviction for assault in the first degree.
It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
Judge Dooley scheduled sentencing for September 18, 2019, at which time Nunez faces a maximum term of imprisonment of 10 years.
Nunez has been detained since his arrest.
This matter is being investigated by the FBI’s Northern Connecticut Violent Crimes Gang Task Force and the Hartford Police Department. The FBI Task Force includes members of the Hartford Police Department, East Hartford Police Department, Connecticut State Police and Connecticut Department of Correction.
This case is being prosecuted by Assistant U.S. Attorney Hal Chen.
This prosecution has been brought through Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make neighborhoods safer for everyone.
Gun Violence Sends Man to Federal PrisonRead the Press Release
A man with a history of violence who possessed a firearm and ammunition was sentenced today, to more than five years in federal prison.
Keith Taylor, age 37, from Sioux City, Iowa, received the prison term after a guilty plea to one count of possession of a firearm and ammunition by a prohibited person on November 19, 2018.
Evidence at the detention, change of plea, and sentencing hearings revealed on May 1, 2018, Taylor unlawfully entered the apartment of a former girlfriend, terrorized her, her friends, and her child who were with in the apartment with her; and got into a physical altercation with another person in the apartment. During the altercation Taylor pulled out a gun, pointed it at the other person, and threatened him. A struggle ensued and the weapon was discharged into the ceiling of the apartment. Taylor fled the scene, but Taylor’s vehicle was located nearby, police found a revolver with five live rounds and one spent round in the cylinder of the revolver in the trunk of the vehicle.
Before May 1, 2018, Taylor had been convicted of numerous crimes, including convictions for offenses involving assault, drugs and guns.
Taylor was sentenced in Sioux City by Chief United States District Court Judge. Taylor was sentenced to 75 months’ imprisonment. He must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
Taylor is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was investigation by the Sioux City, Iowa Police Department and prosecuted by Assistant United States Attorney Forde Fairchild.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 18-CR-4071.
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Greenfield Man Charged with Sexual Exploitation of ChildrenRead the Press Release
BOSTON - A Greenfield man was charged in federal court in Springfield yesterday with sexual exploitation of children and receipt of child pornography.
Charles Fox, 44, was charged with one count of sexual exploitation of children and one count of receipt of child pornography. Fox was arrested yesterday and appeared in federal court in Springfield. He was remanded to custody while the Judge takes the matter of detention under advisement.
According to the charging document, Fox induced a minor to engage in sexually explicit conduct for the purpose of producing an image or video of that conduct. It is also alleged that Fox received child pornography.
As a previously-convicted sex offender Fox faces a mandatory minimum sentence of 25 years and up to 50 years in prison, a lifetime of supervised release and a fine of $250,000. The charge of receipt of child pornography, carries a mandatory minimum sentence of 15 years and up to 40 years in prison, a lifetime of supervised release and a $250,000 fine. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston made the announcement today. Assistant U.S. Attorney Alex J. Grant of Lelling’s Springfield Branch Office is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Grand Jury Returns IndictmentsRead the Press Release
MADISON, WIS. -- A federal grand jury in the Western District of Wisconsin, sitting in Madison, returned the following indictments yesterday. You are advised that a charge is merely an accusation and that a defendant is presumed innocent until and unless proven guilty.
New York Woman Charged with Conspiracy & Causing the Introduction of Misbranded Drugs into Interstate Commerce
Ursula Wing, 41, New York City, is charged with conspiracy to defraud the United States and causing the introduction of misbranded drugs into interstate commerce. The indictment alleges that Wing illegally smuggled into the United States misbranded prescription drugs from India, which were not approved by the Food and Drug Administration (FDA) for distribution in the United States, and that she sold these misbranded prescription drugs to customers in the United States and around the world.
The indictment alleges that the prescription drugs sold by Wing were misbranded in that they were dispensed without a valid prescription from a practitioner licensed by law to administer such drugs, and that the labeling of the drugs lacked adequate directions for use by a lay person. The indictment alleges that Wing did not possess a valid wholesale drug distribution license, a valid pharmacy license, or a license to prescribe prescription drugs.
The indictment further alleges that Wing attempted to disguise the nature of her sale of prescription drugs by 1) creating a fake company called “Fatima’s Bead Basket,” which she listed as the shipper on the envelope going to the customer; 2) by inserting a necklace or other item of jewelry in the shipping envelope to serve as the cover piece of merchandise being mailed to the customer; 3) by packaging the misbranded drugs in a smaller packet that was in a hidden panel and taped to the inside of the shipping envelope; 4) by disguising the nature of the item being purchased by listing on the invoice alternate jewelry product names, each of which had a code to indicate the actual item being ordered; 5) by mailing these misbranded drugs from the United States to customers around the world, and falsely characterizing the exports on U.S. Customs forms as jewelry; and 6) by creating a fake online jewelry business for use as a cover for selling the misbranded drugs, allowing her clients to pay for the misbranded drugs using their credit cards, with the sales showing up on the merchant account as jewelry.
The indictment alleges that from June 2016 through June 2018, Wing conspired to defraud the United States by impeding lawful functions of federal law enforcement and regulatory agencies, and that from January 2018 through February 2018, Wing caused the introduction of unapproved, misbranded prescription drugs mifepristone and misoprostol into interstate commerce by sending the drugs from the state of New York to Wisconsin.
If convicted, Wing faces a maximum penalty of five years in federal prison on the conspiracy charge, and three years on the felony charge of causing the introduction of misbranded drugs into interstate commerce. The charges against Wing are the result of an investigation by the FDA Office of Criminal Investigations, U.S. Postal Inspection Service, U.S. Immigration and Customs Enforcement's Homeland Security Investigations, and IRS Criminal Investigation. The prosecution of this case is being handled by Assistant U.S. Attorney Daniel Graber.
Janesville Man Charged with Sex Trafficking of Minor
Corey Hereford, 47, Janesville, Wisconsin, is charged with recruiting an individual who was a minor and would be caused to engage in a commercial sex act. The indictment also charges him with committing this felony offense involving a minor while being required to register as a sex offender.
If convicted, Hereford faces a mandatory minimum penalty of 10 years in federal prison on the sex trafficking of a minor charge, and a mandatory consecutive 10 year sentence on the charge of committing a felony offense involving a minor while being required to register as a sex offender.
The charges against Hereford are the result of an investigation by the Janesville Police Department and the Wisconsin Department of Justice Division of Criminal Investigation. The prosecution of this case is being handled by Assistant U.S. Attorney Julie Pfluger.
Two Dane County Men Charged with Drug Crimes Involving Heroin, Fentanyl & Cocaine
Cortez Jackson, 39, Sun Prairie, Wisconsin, and Van Williamson, 42, Madison, Wisconsin, are charged with conspiring to distribute a mixture of heroin and fentanyl, and cocaine. The indictment alleges that the amount of the mixture of heroin and fentanyl involved in the conspiracy that was attributable to the defendants’ conduct is 40 grams or more, and that the conspiracy operated from February 2019 to June 6, 2019.
The indictment also charges Jackson with eight counts of distributing a mixture of heroin and fentanyl, with three of the counts also alleging the distribution of cocaine. The indictment further alleges that one of the counts involved the distribution of 40 grams or more of heroin and fentanyl. The indictment charges Williamson with one count of distributing heroin and fentanyl, as well as cocaine, and one count of distributing cocaine.
If convicted, Jackson and Williamson face a mandatory minimum five years and a maximum of 40 years in federal prison on the charges alleging 40 grams or more of heroin and fentanyl. Each of the distribution charges carry a maximum penalty of 20 years.
The charges against Jackson and Williamson are the result of an investigation by the Dane County Narcotics Task Force, Drug Enforcement Administration, and Sun Prairie Police Department. The prosecution of this case is being handled by Assistant U.S. Attorney David Reinhard.
La Crosse Man Charged with Distributing Methamphetamine
James A. Conner III, 43, La Crosse, Wisconsin, is charged with two counts of distributing methamphetamine, and one count of possessing 50 grams or more of methamphetamine with the intent to distribute. The indictment alleges that he distributed methamphetamine in December 2018 and January 2019, and that he possessed the methamphetamine on April 4, 2019.
If convicted, Conner faces a mandatory minimum penalty of five years and a maximum of 40 years in federal prison on the count alleging the possession of 50 grams or more of methamphetamine, and 20 years on each distribution charge. The charges against him are the result of an investigation by the La Crosse Police Department and Wisconsin Department of Justice Division of Criminal Investigation. The prosecution of this case is being handled by Special Assistant U.S. Attorney Chadwick Elgersma.
La Crosse Man Charged with Drug Crimes Involving 500 Grams of Methamphetamine
Andrew R. Henke, 35, La Crosse, Wisconsin, is charged with distributing methamphetamine, and possessing 500 grams or more of methamphetamine with the intent to distribute. The indictment alleges that he distributed and possessed methamphetamine on March 26, 2019.
If convicted, Henke faces a mandatory minimum penalty of 10 years and a maximum of life in federal prison on the charge alleging 500 grams or more of methamphetamine, and 20 years on the distribution charge. The charges against him are the result of an investigation by the La Crosse Police Department and Drug Enforcement Administration. The prosecution of this case is being handled by Assistant U.S. Attorney Corey Stephan.
Minnesota Man Charged with Possessing Methamphetamine With Intent to Distribute
William Huff, 54, South St. Paul, Minnesota, is charged with possessing 50 grams or more of methamphetamine with the intent to distribute. The indictment alleges that he possessed methamphetamine on April 20, 2019.
If convicted, Huff faces a mandatory minimum penalty of five years and a maximum of 40 years in federal prison. The charge against him is the result of an investigation by the Wisconsin Department of Justice Division of Criminal Investigation and Dunn County Sheriff’s Office. The prosecution of this case is being handled by Assistant U.S. Attorney Aaron Wegner.
Stevens Point Man Charged with Producing and Possessing Child Pornography
Nicholas Kvatek, 40, Stevens Point, Wisconsin, is charged with two counts of using a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct. The indictment alleges that he produced the child pornography in January 2019.
The indictment further charges Kvatek with possessing child pornography. The indictment alleges that on April 2, 2019, he possessed a cell phone containing child pornography, and that at least one of the depictions involved a minor who had not attained 12 years of age.
If convicted, Kvatek faces a mandatory minimum sentence of 15 years and a maximum of 40 years in federal prison on the production charges, and a maximum of 20 years on the possession charge. The charges against him are the result of an investigation by the Stevens Point Police Department and Portage County Sheriff’s Office. The prosecution of the case is being handled by Assistant U.S. Attorney Elizabeth Altman.
Glastonbury Man Sentenced to More Than 12 Years in Federal Prison for Child Exploitation OffensesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that JAMES RIPBERGER, 63, of Glastonbury, was sentenced today by U.S. District Judge Victor A. Bolden in Bridgeport to 150 months of imprisonment, followed by 10 years of supervised release, for child exploitation offenses.
According to court documents and statements made in court, on October 12, 2017, law enforcement officers conducted a search of Ripberger’s Glastonbury residence and seized computers and electronic storage devices. Analysis of the seized items revealed more than 2,200 images and videos of child pornography, more than 17,000 images of child erotica, and multiple images and videos of a minor victim who Ripberger surreptitiously recorded in various states of undress.
Ripberger has been detained since December 15, 2017, when he was arrested on a federal criminal complaint. On January 16, 2019, he pleaded guilty to one count of receipt of child pornography.
This investigation was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), the Glastonbury Police Department and the Connecticut Center for Digital Investigations. The case was prosecuted by Assistant U.S. Attorney Nancy V. Gifford.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
Former Senior Official Pleads Guilty to Stealing Government MoneyRead the Press Release
ALEXANDRIA, Va. – An Alexandria man pleaded guilty today to stealing over $40,000 in government money during 2018, while he was employed as a senior government official at the U.S. Agency for Global Media (USAGM) in Washington, D.C.
According to court documents, Haroon K. Ullah, 41, admitted that he fraudulently obtained thousands of dollars in government funds by submitting falsified hotel invoices, falsified and inflated taxi and Uber receipts, and by billing the government for personal travel and for travel that had already been paid by third parties.
Additionally, Ullah admitted that he created a falsified letter from a real medical doctor purportedly claiming that Ullah needed to fly in business class at government expense because of a sore knee. By submitting the forged letter from the doctor, Ullah fraudulently obtained costly business class upgrades at government expense, including on lengthy international flights. Ullah admitted to creating many of the false documents on his government-issued laptop computer. As part of the plea, Ullah also admitted that he submitted falsified invoices and repair estimates to an insurance company regarding a claim for repairs to his home in Alexandria.
A former employee of the U.S. Department of State, Ullah became a member of the Senior Executive Service when he joined USAGM as its Chief Strategy Officer (CSO). Ullah committed his crime from February through October 2018, while serving as CSO. Ullah is no longer employed with USAGM.
Ullah pleaded guilty to theft of government money and faces a maximum penalty of 10 years in prison when sentenced on October 11. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Steve A. Linick, Inspector General for the Department of State, made the announcement after U.S. District Judge T.S. Ellis, III, accepted the plea. Special Assistant U.S. Attorney Russell L. Carlberg is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:19-cr-183.
Former Port Huron Pharmacist Pleaded Guilty to Fraudulently Obtaining Powerful PainkillersRead the Press Release
Kyle Wilhelm, 40, a former pharmacist, pleaded guilty yesterday to obtaining controlled substances, including opioids, by fraud U.S. Attorney Matthew Schneider announced today.
Schneider was joined in the announcement by Acting Special Agent in Charge Keith Martin of the Drug Enforcement Administration, Detroit Field Division.
Wilhelm pleaded guilty before United States District Judge Mark A. Goldsmith and is scheduled to be sentenced on October 2, 2019.
According to the plea agreement, between February 2015 and February 2018, Wilhelm utilized his position as a hospital pharmacy manager to fill prescriptions for fictitious patients using false birthdates, false addresses, and by the unauthorized use of a medical doctor’s DEA registration number. He failed to compensate his employer for more than $35,000 in controlled substances he fraudulently obtained. In total, he obtained more than 200,000 dosage units of controlled substances such as oxycodone, hydromorphone, and hydrocodone acetaminophen.
Wilhelm faces a maximum sentence of imprisonment of eight years, and a maximum fine of $250,000.
The case was investigated by DEA’s Tactical Diversion Squad. The case is being prosecuted by Assistant U.S. Attorney Philip A. Ross
Former Massachusetts Man Pleads Guilty to IRS Fraud SchemeRead the Press Release
BOSTON – An Illinois man, who previously lived in Massachusetts, pleaded guilty yesterday in federal court in Worcester to charges associated with a wire fraud scheme whereby victims were told they owed money to the Internal Revenue Service (IRS).
Ashokkumar Patel, a/k/a Andy Patel, 30, of Hoffman Estates, Ill., and formerly of Worcester and Plainville, Mass., pleaded guilty to one count of conspiracy to commit wire fraud, two counts of wire fraud and one count of money laundering. Sentencing is scheduled for Sept. 23, 2019. In June 2017, Patel was arrested and charged. He was released from custody on conditions.
From December 2013 to October 2014, Patel was part of a conspiracy whereby victims in the United States were contacted by individuals, primarily in India, and falsely told that they owed money to the IRS. The victims were told that in order to avoid imminent arrest, they had to purchase MoneyPak, or other types of prepaid stored value cards, load thousands of dollars onto the cards, and provide the serial numbers to the callers. After doing so, the victims’ money was quickly transferred to a prepaid debit card, such as Green Dot Debit Cards, which were then used to purchase money orders. Patel was responsible for purchasing the prepaid debit cards, using them to purchase money orders and then depositing the purchased money orders into various bank accounts, including his own.
The charges of conspiracy to commit wire fraud and wire fraud each provide for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000. The charge of money laundering provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $500,000, or twice the value of the property involved in the transaction. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistant U.S. Attorney Michelle L. Dineen Jerrett of Lelling’s Worcester Branch Office is prosecuting the case.
Former HUD Assistant Inspector General Indicted for Concealing Procurement Fraud SchemeRead the Press Release
A seven-count indictment was returned yesterday charging a former Assistant Inspector General for the U.S. Department of Housing and Urban Development, Office of Inspector General, with engaging in a scheme to conceal material facts, making false statements and falsification of records.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Acting Assistant Director in Charge John P. Selleck of the FBI’s Washington Field Office and Michael K. Atkinson, Inspector General of the Intelligence Community made the announcement.
According to the indictment, between early 2012 and mid-2016, Eghbal “Eddie” Saffarinia engaged in a scheme to conceal material facts, including the nature and extent of Saffarinia’s financial relationship with a personal friend who was the owner and chief executive officer of an information technology company in Virginia. During a period in which Saffarinia received payments and loans from his friend totaling $80,000, Saffarinia disclosed confidential internal government information to his friend and undertook efforts to steer government contracts and provide competitive advantages and preferential treatment to his friend’s company. Saffarinia also failed to disclose this financial relationship and another large promissory note on his public financial disclosure forms.
The case is being investigated by the FBI’s Washington Field Office and the Office of the Inspector General of the Intelligence Community. Trial Attorneys Edward P. Sullivan and Rosaleen T. O’Gara of the Criminal Division’s Public Integrity Section are prosecuting the case.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former Financial Services Executive Pleads Guilty to Rigging Bids for Financial Instruments in Violation of Antitrust LawRead the Press Release
Larry D. Meyers, the former head of the securities lending desk at Banca IMI Securities Corp., pleaded guilty to a criminal antitrust charge for his involvement in a bid-rigging conspiracy for certain financial instruments, the Department of Justice announced.
Meyers admitted that, from at least as early March 2012 until at least August 2014, he and his counterparts at other broker-dealers conspired to submit rigged bids to borrow pre-release American Depository Receipts (ADRs). Meyers’ plea is the third in the ongoing investigation; Banca IMI and Industrial and Commercial Bank of China Financial Services LLC previously pleaded guilty on May 10, 2019, and June 14, 2019, respectively.
Worldwide, thousands of publicly traded companies list their shares of common stock only on foreign stock exchanges. Most U.S. investors are unable to purchase or sell such foreign shares. The U.S. Securities and Exchange Commission, however, permits four U.S. depository banks to create ADRs, which represent foreign ordinary shares and can be traded in the United States. Through the purchase and sale of ADRs, U.S. investors are able to gain exposure to — including the ability to receive dividends from — companies whose common stock is listed only on foreign exchanges.
Meyers pleaded guilty to conspiring to borrow pre-release ADRs from U.S. depository banks at artificially suppressed rates. During the conspiracy, a U.S. depository bank began using an auction-style process for pre-release ADRs and invited Banca IMI and other broker-dealers to submit competitive bids for rates to borrow ADRs. In response, Meyers and his co-conspirators intensified their coordination in an effort to artificially increase their profits under the auction-style process. On at least 30 occasions, Banca IMI reached an agreement with one or more co-conspirators as to the bids they would submit to U.S. depository banks. On many occasions, the conspirators agreed that they all would submit the same bid. Meyers and his co-conspirators reached these agreements using, among other means, private chat rooms and text messages.
“The guilty plea announced today represents the commitment of the Division and its law enforcement partners to hold accountable for market-corrupting collusion not just the companies that benefit from that unlawful activity, but also the executives who carry it out,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division.
“This guilty plea highlights just how thorough FBI investigations truly are,” said Assistant Director Robert Johnson of the FBI’s Criminal Investigative Division. “Individuals engaged in corrupt activity cannot expect to hide behind their companies. The FBI is committed to pursuing all those who use criminal means to enrich themselves at the expense of U.S. investors.”
“The FBI is committed to investigating companies and executives when they operate outside the law and attempt to play by different rules in the marketplace,” Charles A. Dayoub, Acting Special Agent in Charge of the Criminal Division at the FBI’s Washington Field Office. “I would like to thank the dedicated FBI agents and analysts who have worked on this investigation and are committed to holding those accountable who ignore the rule of law in the United States.”
A criminal violation of Section 1 of the Sherman Act carries a maximum term of imprisonment of 10 years and a maximum fine of $1 million for individuals. The fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
The Washington Criminal II Section of the Antitrust Division and the FBI’s International Corruption Squad in Washington, D.C., are conducting the investigation into bid rigging in the market for pre-release ADRs. Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal II Section at 202-598-4000 or visit www.justice.gov/atr/contact/newcase.html.
Former Equifax employee sentenced for insider tradingRead the Press Release
ATLANTA - Jun Ying, the former Chief Information Officer of Equifax U.S. Information Solutions, has been sentenced to federal prison for insider trading.
“Ying thought of his own financial gain before the millions of people exposed in this data breach even knew they were victims,” said U.S. Attorney Byung J. “BJay” Pak. “He abused the trust placed in him and the senior position he held to profit from inside information.”
“If company insiders don’t follow the rules that govern all investors, they will face the consequences for their actions. Otherwise the public’s trust in the stock market will erode,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI will do everything in its power to stop anyone who takes unfair advantage of their insider knowledge.”
According to U.S. Attorney Pak, the charges and other information presented in court: Equifax Inc. is a consumer credit reporting agency headquartered in Atlanta, Georgia. During the summer of 2017, Equifax was the victim of a data breach, where hackers acquired names, Social Security numbers, birth dates, and addresses of over 145 million Americans. At the time, Jun Ying was the Chief Information Officer of Equifax U.S. Information Solutions. In that role, he was provided sensitive information that led him to conclude that Equifax was the victim of the data breach before it was made public.
On Friday, August 25, 2017, Ying texted a co-worker that the breach they were working on “sounds bad. We may be the one breached.” The following Monday, Ying conducted web searches on the impact of Experian's 2015 data breach on its stock price. Later that morning, Ying exercised all of his stock options, resulting in him receiving 6,815 shares of Equifax stock, which he then sold. He received proceeds of over $950,000, and realized a gain of over $480,000, thereby avoiding a loss of over $117,000. On September 7, 2017, Equifax publicly announced its data breach, which resulted in its stock price falling.
Jun Ying, 44, of Atlanta, Georgia, was sentenced to four months in prison to be followed by one year of supervised release, ordered to pay restitution in the amount of $117,117.61, and fined $55,000. Ying was convicted on these charges on March 7, 2019, after he pleaded guilty.
Ying is the second Equifax employee found guilty of insider trading relating to the data breach, following Sudhakar Reddy Bonthu, a former manager at Equifax, who pleaded guilty on July 23, 2018.
This case was investigated by the Federal Bureau of Investigation. The U.S. Securities and Exchange Commission contributed to the case.
Assistant U.S. Attorney Christopher J. Huber, Deputy Chief of the Complex Frauds Section, and former Assistant U.S. Attorney Lynsey M. Barron prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Border Patrol Agent Pleads Guilty to Distribution, Receipt and Possession of Child PornographyRead the Press Release
SYRACUSE, NEW YORK – Keith E. Hook, age 55, of Oswego, New York, pled guilty today to distributing, receiving and possessing child pornography, announced United States Attorney Grant C. Jaquith and Kevin Kelly, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI).
United States Attorney Grant C. Jaquith stated: “It is a sad day when a federal agent sworn to protect the public violates that duty in such a profound way. Former Border Patrol Agent Hook exploited the most vulnerable members of our community, our children, by trading child pornography both on and off duty. Thanks to the hard work of our law enforcement partners, Hook will now be held fully accountable for his despicable conduct.”
HSI Special Agent in Charge Kevin Kelly stated: “The actions of an individual officer sworn to protect the public should in no way tarnish the excellent reputation of the overwhelming majority of those who wear the badge. This case should however demonstrate that HSI will hold accountable all of those involved in these crimes, regardless of the position they hold in the community.”
In entering his guilty plea today in United States District Court, Hook, formerly a Border Patrol Agent, admitted that he used the Kik Messenger application to distribute and receive child pornography from other Kik users from January 2018 through July 2018. Hook, using his iPod Touch, traded images of child pornography using a Wifi connection both at his home and while on duty at the Oswego Port of Entry. Forensic analysis of Hook’s iPod revealed that at the time of his arrest he possessed on his iPod 138 images and 4 video files depicting minors engaged in sexually explicit conduct. In addition to those images, Hook also had 10 video files and over 200 image files saved in his iCloud storage account and another 3 images stored on his laptop computer. The images and videos included depictions of the rape and sodomy of prepubescent children and toddlers.
United States District Judge David N. Hurd will sentence Hook on October 24, 2019. He faces at least 5 years and up to 20 years in prison for the distribution and receipt charges and up to 20 years in prison on the possession charge; a term of post-release supervision of at least 5 years and up to life; and a fine of up to $250,000. Hook will also be required to register as a sex offender.
This case is being investigated by HSI Syracuse with assistance from Department of Homeland Security Office of Inspector General, U.S. Customs and Border Protection Office of Professional Responsibility, New York State Police Computer Crimes Unit, and the New York State Police-Troop D, and is being prosecuted by Assistant U.S. Attorney Geoffrey J. L. Brown.
This case is being prosecuted as part of Project Safe Childhood. Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), and is designed to marshal 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 https://www.justice.gov/psc.
Florida Man Pleads Guilty to Wire Fraud ConspiracyRead the Press Release
BOSTON – A Florida man pleaded guilty yesterday in federal court in Boston in connection with the fraudulent abuse of the U.S. Postal Service’s (USPS) Informed Delivery electronic notification system.
Kevens Louis, 26, of Plantation, Fla., pleaded guilty to one count of conspiracy to commit wire fraud and one count of aggravated identity theft. Sentencing is scheduled for Sept. 26, 2019. Louis and his co-conspirators, Fred Alcius, Lucson Appolon, and Peter Belony were charged with conspiracy to commit wire fraud on April 9, 2019. Co-conspirators Appolon and Louis were arrested on April 16, 2019. Belony was arrested on April 26, 2019 and pleaded guilty on June 14, 2019. Alcius remains a fugitive.
Informed Delivery is a free electronic notification service provided by the USPS that gives residential and P.O. Box customers the ability to digitally preview their incoming mail and manage their packages.
According to the indictment, the defendants accessed victims’ personal identifying information, including names, Social Security numbers, dates of birth, and addresses on the “dark web” and then used the information to open credit cards in the victims’ names. The defendants then subscribed to Informed Delivery using the victims’ personal identifying information and a fraudulent email address created to track the delivery of credit cards to the victims’ residential mailboxes. The defendants subsequently intercepted the credit cards at the victims’ mailboxes before the victims could receive them and used those credit cards at ATMs and to purchase gift cards and other items for resale at Apple and Walmart, among other retail establishments. The defendants traveled to states across the East Coast in furtherance of the fraud, including New Hampshire, Maine, and Massachusetts.
The charge of conspiracy to commit wire fraud carries a sentence of no greater than 20 years in prison, up to three years of supervised release, and a fine of up to $250,000. The charge of aggravated identity theft carries a mandatory minimum sentence of two years in prison, to be served consecutive to any other sentence imposed, one year of supervised release, and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Joseph W. Cronin, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. Valuable assistance was provided by the Federal Bureau of Investigation, Boston Field Office; Homeland Security Investigations in Boston; the Concord, Fort Lauderdale (Fla.), Harvard, Kittery (Maine), Norfolk, Plantation (Fla.), Sherborn, and Weston Police Departments. Assistant U.S. Attorney Mackenzie A. Queenin of Lelling’s Cybercrime Unit is prosecuting the case.
The details contained in the indictment are allegations. The remaining defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Five Dominican Nationals Arrested for Identity TheftRead the Press Release
BOSTON – Five Dominican nationals were charged in federal court in Boston as a result of a federal investigation targeting offenders of document and benefit fraud. The defendants have allegedly used the identities of U.S. Citizens from Puerto Rico as their own. All five defendants have been previously arrested on drug charges under the names of the victims whose identities they have stolen.
The following individuals have each been charged with aggravated identity theft and false representation of a Social Security number:
- Jesus Ernesto Barbosa Pimental, 54, a Dominican national residing in South Boston. According to court records, Barbosa Pimental obtained a Massachusetts identity card in the name of a U.S. citizen.
- Edward Obispo Garcia, 38, a Dominican national residing in Roxbury. It is alleged that Obispo Garcia obtained a Massachusetts driver’s license in the name of a U.S. citizen.
- Juan Jose Heureaux Carmona, 27, a Dominican national residing in Roxbury. It is alleged that Heureaux Carmona obtained a Massachusetts ID card in the name of a U.S. citizen.
- Jose Narciso Rosario Maria, 47, a Dominican national residing in Boston. According to court documents, Rosario Maria obtained a Massachusetts driver’s license in the name of a U.S. citizen.
- Jesus Alberto Baez Pimental, 37, a Dominican national residing in Fitchburg. It is alleged that Baez Pimental obtained a Massachusetts driver’s license in the name of a U.S. citizen, and MassHealth records reflect an application for health benefits under this same name.
The investigation was conducted by Homeland Security Investigation’s Document and Benefit Fraud Task Force (DBFTF), a specialized field investigative group comprised of personnel from various local, state, and federal agencies with expertise in detecting, deterring, and disrupting organizations and individuals involved in various types of document, identity, and benefit fraud schemes.
The DBFTF is currently investigating suspected aliens who are believed to have obtained stolen identities of United States citizens born in Puerto Rico. The DBFTF has investigated individuals who have used stolen identities to obtain public benefits which they would not otherwise be eligible to receive, including Massachusetts Registry of Motor Vehicles identity documents, Social Security numbers, MassHealth benefits, public housing benefits, and/or unemployment benefits.
In July 2018, a DBFTF-led investigation resulted in the arrests of 25 individuals on charges of identity theft and Social Security fraud, and in April 2019, a separate DBFTF-led investigation resulted in 11 additional arrests.
The charge of aggravated identity theft carries a mandatory two-year prison sentence that must run consecutively to any other sentence imposed, up to one year of supervised release, and a fine of up to $250,000. False representation of a Social Security number provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Peter C. Fitzhugh, Special Agent in Charge of Homeland Security Investigations in Boston; and Phillip M. Coyne, Special Agent in Charge of the U.S. Department of Health & Human Services, Office of Inspector General, made the announcement today. Valuable assistance was provided by the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; U.S. Department of Housing and Urban Development, Office of Inspector General, Northeast Regional Office; U.S. Department of Labor, Office of Inspector General, Office of Investigations; U.S. Department of State, Diplomatic Security Service, Boston Field Office; U.S. Postal Inspection Service; U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations, Boston; U.S. Citizenship and Immigration Services, District 1; HSI Country Attaché Santo Domingo, Dominican Republic; HSI Santo Domingo Transnational Criminal Investigative Unit; and the Massachusetts State Police. Assistant U.S. Attorney David Tobin and Special Assistant U.S. Attorney Karen Burzycki of Lelling’s Major Crimes Unit are prosecuting the cases.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Firearms violations sends Miles City man to prisonRead the Press Release
BILLINGS—A Miles City man who admitted possessing stolen and shortened firearms in Billings and Miles City was sentenced today to 45 months in prison and three years of supervised release, said U.S. Attorney Kurt Alme said.
Chet Joseph Leatherberry, 35, pleaded guilty in February to possession of stolen firearms and to possession of unregistered firearms.
U.S. District Judge Susan P. Watters presided.
The prosecution said Leatherberry violated firearms laws through a series of offenses. In December 2016, Leatherberry possessed a stolen .380-caliber pistol in Billings. Yellowstone County sheriff’s deputies found the pistol next to Leatherberry’s bed while serving a search warrant on his residence for stolen goods. During the search, officers also found stolen electronic equipment, methamphetamine and drug paraphernalia. Leatherberry told officer that he took the pistol from two people who wanted to sell it, had a few potential buyers and thought it was stolen. The pistol’s lawful owner lives in Bozeman and didn’t realize the gun was gone until he was called by law enforcement.
Leatherberry also admitted that he possessed three modified or shortened firearms in Miles City in July 2018 and additionally possessed two stolen pistols a month later. When arrested on an outstanding warrant in August 2018, Leatherberry told Miles City law enforcement that he had two handguns in a backpack at the time of his arrest. The investigation found that both of the handguns were loaded and had been stolen.
Assistant U.S. Attorney Paulette Stewart prosecuted the case, which was investigated by the Yellowstone County Sheriff’s Office, Billings Police Department, Miles City Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The case is part of Project Safe Neighborhoods (PSN), which is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
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Federal Jury Convicts Former Honolulu Prosecutor Katherine Kealoha, Former Police Chief Louis Kealoha and Two Police Officers of CorruptionRead the Press Release
Special Attorneys Michael Wheat (619) 546-8437, Joseph Orabona (619) 546-7951, Janaki Gandhi (619 546-8817) and Colin McDonald (619) 546-9144
HONOLULU, Hawaii – A federal jury has found former Honolulu Deputy Prosecutor Katherine Kealoha and her husband, former Honolulu Police Chief Louis Kealoha, guilty of abusing their power by conspiring with two police officers to frame her uncle for a crime he did not commit in a desperate attempt to discredit his claim that the Kealohas stole a substantial amount of money from him and his mother.
Following a six-week trial that included testimony of 70 witnesses, the jury deliberated for one day and convicted the Honolulu power couple and police officers Derek Hahn and Minh-Hung “Bobby” Nguyen of conspiracy and three counts of attempted obstruction of an official proceeding. The jury found that the officers helped the Kealohas facilitate the set up and cover up involving the uncle, Gerard Puana.
“The Kealohas’ extraordinary greed inspired astonishing corruption,” said U.S. Attorney Robert Brewer. “The audacity of this couple to use the power vested in them as law enforcement officials to fund a lavish lifestyle and satisfy their personal vendettas was unconscionable. These two were supposed to be the good guys. They were supposed to enforce the law - not break it. Instead, they broke the community’s faith in a monumental way. This city has been harmed by their deception and greed, but the jury has spoken, and it has loudly said NO to corruption. NO to abuse of power. NO to special treatment. NO to injustice.”
“Unfortunately there are no winners in this case,” said FBI Acting Special Agent in Charge Rafael A. Riviere. “The betrayal of trust by the former prosecutor and former Chief of Police will linger for some time. However, justice has been served and the jury, through this verdict, has said that no one is above the law and this behavior will not be tolerated in the State of Hawaii. The FBI would like to thank the United States Attorney Office (USAO) Hawaii, USAO for the Southern District of California, as well as the men and woman of the jury for their swift and decisive verdict.”
During trial, the prosecution relied on current and former police officials, federal agents, victims Gerald and Florence Puana, experts, city and county officials, defense attorneys, and Puana family members, among others, as witnesses to prove the story of corruption, abuse of power, greed and manipulation.
The financial entanglement with the uncle started back in 2007, when Katherine Kealoha told her uncle she would safeguard and invest his substantial savings in an her alleged hui. To give the false appearance of investment returns, she periodically withdrew cash from the bank account holding the uncle’s money and paid the money as a “return” on his investment. Despite his requests, Katherine Kealoha never returned over $70,000 of his investment principal.
In 2009, another financial opportunity arose and Katherine Kealoha seized the moment to insert herself by advising her grandmother, Florence Puana, on how to help her son (the same uncle who had invested money with Katherine Kealoha) purchase a condominium despite his lack of credit. Katherine Kealoha’s solution was a convoluted five-step process: (1) the grandmother would obtain a reverse mortgage; (2) Katherine Kealoha would use the proceeds to buy the condo outright; (3) the Kealohas would use the remaining funds to “consolidate” their debts (thereby allowing them to improve their credit); (4) the Kealohas would obtain a mortgage on the condo and the uncle would make mortgage payments to them; and (5) the Kealohas would repay the reverse mortgage within three to six months.
The grandmother agreed to Katherine Kealoha’s plan, and obtained a reverse mortgage totaling more than $513,000. A portion of the funds was used to purchase a condo; the remainder, approximately $153,000, was supposed to be used to consolidate the Kealohas debts in order for the Kealohas’ to obtain a mortgage on the condo. However, Katherine Kealoha kept none of her promises. Instead, she spent the entire amount within six months for her and her husband’s lavish lifestyle. Katherine never obtained a mortgage on the condo; however, she collected mortgage payments from her uncle and again pocketed most of his money. Lastly, she did not repay the reverse mortgage which continued to substantially increase and diminish the equity in grandmother’s family home. The grandmother and uncle’s discovery of this skyrocketing loan balance led to a confrontation with the Katherine Kealoha, and their subsequent civil lawsuit. This dispute motivated the Kealohas to frame the uncle for the mailbox theft, have the grandmother declared incompetent, and discredit both the uncle and grandmother in the civil case.
The Kealohas used the grandmother’s stolen money to pay a variety of personal expenses, including their mortgage and tens of thousands of dollars in bank loans; car payments for a Mercedes and a Maserati; Elton John concert tickets; travel expenses, restaurant meals and a trip to Disneyland; donations to charity; and a $23,000 brunch tab at the Sheraton Waikiki to celebrate Louis Kealoha’s induction as Honolulu Police Chief in 2009.
The uncle and grandmother suspected they had been duped and began to voice their concerns and seek legal remedies by filing a civil lawsuit, accusing the Kealohas of stealing their money. The Kealohas sought to discredit the Puanas and orchestrated an elaborate cover up that involved falsely portraying the uncle as a drug-addicted criminal, and the grandmother as an incompetent senior who needed a financial guardian. To protect their public images and conceal their greed, the Kealohas and two police officers from the elite Criminal Intelligence Unit framed the uncle for stealing the Kealohas’ mailbox, supposedly to obtain bank statements from a joint account held by Katherine Kealoha and her grandmother - statements that were relevant to the civil lawsuit. The alleged theft sparked a police investigation and federal prosecution that resulted in a mistrial against the uncle. The idea was to discredit the uncle by giving him a felony conviction so that the civil jury would never believe his testimony.
The mistrial in the uncle’s federal case resulted in an FBI investigation into the civil rights violations of the uncle. During the FBI investigation, the Kealohas and the two police officers continued to engage in a conspiracy to obstruct the FBI and the federal grand jury seeking to uncover the truth behind this set up and cover up. This led to their indictment in October 2017.
Today, the jury found that the Kealohas used their considerable power plus members of the police department’s elite Criminal Intelligence Unit to frame him for that bogus theft of their mailbox on June 21, 2013. The evidence demonstrated that the defendants staged the “theft,” then selectively edited the grainy surveillance video to conceal their preparation of the mailbox for the taking, falsely identified Gerard Puana as the culprit captured by the video, falsified police reports, withheld or failed to investigate critical evidence, and lied to federal investigators and prosecutors to frame the uncle. The defendants were also involved in the destruction of surveillance footage contained on hard drives from the case by recording over it with six days of a ceiling and office space at police headquarters. At one point, the Kealohas assigned approximately 30 Honolulu police officers to conduct 24-hour surveillance on Gerard Puana.
But according to key evidence presented by the prosecution, the Puanas had no motive to steal a mailbox to obtain bank statements. The evidence showed they had already obtained the bank statements in question in February of 2013 – four months prior to the mailbox theft on June 21, 2013. Katherine Kealoha knew that she had closed that joint bank account on January 24, 2013, and the last statement was mailed to Katherine’s post office box in Kahala in February 2013 – not to her residence where the mailbox was stolen.
“As we’ve often seen, the cover up was worse than the original crime,” U.S. Attorney Brewer said. “The most troubling aspect of this case was the way these powerful defendants manipulated the justice system for their own purposes.”
An indignant Katherine Kealoha responded to the accusations of her financial fraud in a letter to her grandmother that prosecutors presented to the jury as a roadmap to her motives:
I WILL seek the highest form of legal retribution against ANYONE and EVERYONE who has written or verbally uttered those LIES about me! They will rue the day that they decided to state these TWISTED LIES!
The jury found that Katherine Kealoha made good on that promise.
Chief U.S. District Judge J. Michael Seabright of the District of Hawaii, who presided over the trial, set sentencing for Katherine Kealoha on October 7, 2019 at 1:30 p.m.; Louis Kealoha on October 15, 2019 at 2:15 p.m.; Derek Hahn on October 21, 2013 at 1:30 p.m.; and Minh-Hung “Bobby” Nguyen on October 28, 2019 at 1:30 p.m.
During the hearing, the prosecution moved to remand Katherine Kealoha. The judge scheduled a detention hearing for June 28, 2019 at 10 a.m. The other defendants were allowed to remain free until sentencing.
The Kealohas are facing a second trial on October 21, 2019 on charges of bank fraud, aggravated identity theft, and obstruction of justice in connection with the alleged theft of a $167,000 inheritance of two children for whom Katherine Kealoha served as financial guardian. Katherine Kealoha also faces charges related to allegations that she and her brother, Rudolph Puana, trafficked in opioids and that Kealoha used her position as a Deputy Prosecutor to hide it.
U.S. Attorney Brewer praised prosecutors Michael Wheat, Joseph Orabona, Colin McDonald, Janaki Gandhi, former prosecutor Eric Beste and FBI agents in Honolulu for their excellent work on this case.
DEFENDANTS Case Number 17cr0582-JMS
Katherine P. Kealoha Age: 48 Honolulu, Hawaii
Louis M. Kealoha Age: 58 Honolulu, Hawaii
Derek Wayne Hahn Age: 47 Honolulu, HI
Minh-Hung “Bobby” Nguyen Age: 45 Kaneohe, Hawaii
SUMMARY OF CHARGES
Count 1
Conspiracy to Commit Offenses Against the United States – Title 18, U.S.C., Section 371
Maximum penalty: Five years imprisonment, $250,000 fine
Guilty – Katherine P. Kealoha, Louis M. Kealoha, Derek Wayne Hahn, Minh-Hung “Bobby” Nguyen
Counts 2, 6 and 8
Obstruction of Official Proceeding – Title 18, U.S.C., Section 1512 (c)
Maximum penalty: Twenty years’ imprisonment, $250,000 fine
Guilty – Katherine P. Kealoha (Counts 2, 6, 8); Louis M. Kealoha (Counts 2, 6, 8); Derek Wayne Hahn (Counts 2, 6, 8); Minh-Hung “Bobby” Nguyen (Counts 2, 6, 8)
AGENCY
Federal Bureau of Investigation
Honolulu, Portland, and San Diego Divisions
Federal Judge Finds Davenport Man Guilty of Distributing Fentanyl to a Drug User Resulting in His DeathRead the Press Release
DAVENPORT, IA- On Wednesday, June 26, 2019, the Honorable Stephanie M. Rose, United States District Court Judge for the Southern District of Iowa, found Jonas Ross, III, age 38, of Davenport, guilty of one count of distribution of a controlled substance resulting in death.
Beginning on May 4, 2019, a bench trial was held before Judge Rose. The evidence showed the victim, who was familiar with Ross, had traveled to Davenport from Ohio on or about November 30, 2017, and checked into the Days Inn on Northwest Boulevard. The victim had contacted Ross to obtain heroin. On December 2, 2017, the victim’s body was discovered in his motel room. Forensic evidence revealed the victim had overdosed and died from ingesting fentanyl. The police recovered heroin, fentanyl, and furanyl-fentanyl in the victim’s room.
Ross had previously entered guilty pleas to three counts of distribution of heroin, some of which contained fentanyl and acryl-fentanyl. The defendant faces a maximum sentence of 30 years each for the three counts of distribution of heroin and a mandatory life sentence for distribution of a controlled substance resulting in death. Sentencing is presently scheduled for October 29, 2019 at 3:00 p.m.
The investigation was conducted by the City of Davenport Police Department, Iowa Division of Criminal Investigation, and the Iowa State Medical Examiner’s Office. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Federal Inmate Sentenced to 15 More Months in Prison for Possessing BuprenorphineRead the Press Release
JOHNSTOWN, Pa. – An inmate at the Federal Correctional Institution in Loretto, Pa., pleaded guilty in federal court in Johnstown to a charge of possession of a prohibited object in prison, and immediately following, was sentenced to 15 months in prison, consecutive to the current prison term he is serving, and three years’ supervised release, United States Attorney Scott W. Brady announced today.
Ryan S. Harris, 36, pleaded guilty to the indictment before United States District Judge Kim R. Gibson.
In connection with the guilty plea, on September 28, 2018, Harris possessed a quantity of Buprenorphine.
Assistant United States Attorney Arnold P. Bernard, Jr. prosecuted this case on behalf of the government.
Mr. Brady commended the Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Federal Correctional Institution, Special Investigative Staff, for the investigation leading to the successful prosecution of Harris.
Executive Director and CEO of Sponsor Organization Sentenced to 10 Years’ Imprisonment, and Owner of Catering Company Sentenced to 8 Years’ Imprisonment, for Their Roles in $26 Million Scheme to Defraud Federal Food Program for Underprivileged ChildrenRead the Press Release
The former executive director and CEO of a sponsor organization for the federally-funded Child Care Food Program (“CCFP”) and the former owner of a catering company that was awarded contracts to provide nutritious food for needy children were sentenced today for their roles in a complex fraud, kickback, bribery, and money laundering scheme that victimized the CCFP and the children it was meant to serve.
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Brian Swain, Special Agent in Charge, U.S. Secret Service (USSS), Miami Field Office, Karen Citizen-Wilcox, Special Agent in Charge, U.S. Department of Agriculture (USDA), and Rick Maglione, Chief, Fort Lauderdale Police Department, made the announcement.
Sandra Ruballo, 47, of Davie, Florida, was sentenced to 120 months in prison followed by three years of supervised release. Ruballo was also ordered to pay a $900 special assessment, restitution, and a forfeiture money judgment of $26 million. Carlos Andres Montoya, 48, of Miramar, Florida, was sentenced to 97 months in prison followed by three years of supervised release. Montoya was also ordered to pay a $200 special assessment, restitution, and a forfeiture money judgment of $13 million.
For more than six years, Ruballo and Montoya defrauded the federally funded Child Care Food Program, which provides free and reduced meals to underprivileged children at hundreds of daycare centers in Florida. As part of the scheme, the conspirators falsified paperwork, entered into various kickback arrangements, manipulated the catering contract bid process, and inflated annual budgets, all in order to receive millions of dollars of falsely and fraudulently obtained federal funds for their own personal use and benefit.
On February 27, 2019, Ruballo pleaded guilty, without a plea agreement, to all counts of the superseding indictment, including: one count of conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349; three counts of wire fraud, in violation of Title 18, United States Code, Section 1343; one count of conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h); and four counts of money laundering, in violation of Title 18, United States Code, Section 1956(a)(1)(B)(i).
On March 29, 2019, following a four-week jury trial, Montoya was convicted of one count of conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349, and one count of federal program bribery, in violation of Title 18, United States Code, Section 666(a)(2) (Case No. 18-CR-20393-Cooke(s)).
According to court documents and evidence presented at trial, the purpose of the Child Care Food Program (CCFP) is to provide nutritious meals and snacks for underprivileged, low-income children in daycare centers across Florida. For many children in the CCFP, the subsidized food served at daycare centers is their only source of food each day. As such, the CCFP provides children classified at or below a certain family income level with daily meals and snacks, at a free or a reduced rate. The government pays vastly higher reimbursement rates for children classified as “free,” as opposed to “non-needy,” for example, up to nine times more per meal. Daycare centers often contract with a sponsoring organization to process and submit their program paperwork. In those situations, the sponsoring organization enters into an agreement to operate the CCFP, and assumes administrative and financial responsibility on behalf of the center. These sponsor organizations occupy trusted roles, and are only paid government funds because they are supposed to perform oversight functions akin to regulators.
Ruballo was the owner and operator of Highland Food Resources, Inc. (HFR), a sponsoring organization of more than two hundred child daycare centers that participated in the CCFP, covering the geographic area from Key West to West Palm Beach and across the State to Florida’s West Coast. In this role, HFR processed paperwork and electronically submitted monthly reimbursement claims for the centers. It was Ruballo – and HFR’s – job to ensure that the claims accurately reflected the neediness levels of the children and the volume of children served meals, and Ruballo was supposed to ensure that the caterer would only be reimbursed for qualifying meals. Once HFR was reimbursed with federal funds, they paid the daycare centers, less HFR’s fee, which is a percentage of the total monthly meal reimbursements. Thus, the size of HFR’s payment was driven, in part, by the number of meals claimed by daycare centers that are multiplied by a higher reimbursement rate for the free and reduced meals/snacks.
On behalf of HFR, Ruballo was personally responsible for soliciting meal catering companies and awarding contracts through a competitive, anonymous bidding process.
Montoya was the owner and operator of Montoya Holdings, Inc., d/b/a Healthy Children Catering and Pelota Café and Pizzeria. The record evidence showed that Montoya, Ruballo, and others conspired to rig the catering bid process and award contracts to Montoya from 2012 to 2016. As a result of the bid-rigging scheme, Montoya Holdings received lucrative contracts, and was paid more than $13 million in federal funds, via HFR, which were supposed to be used for providing nutritious meals to children at daycare centers in South Florida.
Ruballo, Montoya and others conspired to rig the catering bid process through materially false and fraudulent representations to the CCFP. For example, because of their collusion, Montoya outbid his competitor for a lucrative blanket catering contract by one penny per meal. Over the years, Montoya was awarded numerous blanket contracts that in total were valued at more than $16 million. While Ruballo was supposed to be overseeing the fairness of this process and ensuring that food complied with the CCFP rules, instead, she looked the other way, as Montoya paid her more than approximately $2 million in kickbacks over the course of the scheme. Montoya and co-conspirators withdrew more than $1.6 million in cash during the conspiracy, and hundreds of thousands of dollars of cash, in turn, were deposited into accounts controlled by Ruballo – including into an account for Ruballo’s husband’s purported mobile car wash business.
Montoya’s bribes bought him protection from regulating agencies, most notably, the Florida Department of Health, and ensured that HFR and Ruballo did not terminate contracts despite repeated complaints about spoiled food. Indeed, the evidence showed that Ruballo and other employees at HFR, at Ruballo’s direction, created falsified reports about other caterers and submitted them to the Department of Health in an attempt to detract attention from Montoya when investigators became suspicious.
After Montoya Holdings caused a staph-induced foodborne illness outbreak in November 2016, affecting more than 140 preschool children in Miami-Dade and Broward Counties, the Department of Health and regulators ultimately banned Montoya Holdings from participating in the CCFP. Despite this prohibition, the bribery continued. In February 2017, Montoya paid a $160,000 bribe to Ruballo and HFR, which the co-conspirators attempted to disguise as a “donation” or “settlement.”
In addition, Montoya failed to report more than $27 million in income to the IRS for Montoya Holdings from 2013-2016. Evidence at trial also showed that he used the proceeds of the crime to fund personal expenditures, including visits to the Seminole Hard Rock Casino, a strip club, homes, cars, and jewelry.
Separate and apart from the kickback and bribery part of the scheme, Ruballo and other co-conspirators also falsified paperwork for children enrolled at daycare centers in order to qualify more kids for free and reduced meals under the CCFP, and steal more money for themselves. This fraudulent paperwork was used as the basis for inflated monthly reimbursement claims that Ruballo submitted to the program, for which HFR received reimbursement from the CCFP. In total, through this over inflation fraud, the CCFP paid HFR approximately $12 million that it was not entitled to. Put differently, HFR was paid a total reimbursement of approximately $50 million, but if the paperwork had been completed accurately, it would only have received approximately $38.
Finally, Ruballo stole additional federal funds for herself by falsely and fraudulently inflating the HFR budget. Specifically, she added non-existent companies and ghost employees to the budget, including her own former nanny, to illegally obtain additional program funds. All told, Ruballo caused a loss to the CCFP of at least $26 million, and personally received at least $3 million in ill-begotten gains.
U.S. Attorney Fajardo Orshan commended the investigative efforts of IRS, USSS, USDA and the Fort Lauderdale Police Department. The case is being prosecuted by Assistant U.S. Attorneys Lisa H. Miller and Daniel J. Marcet.
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.
Erie Man Pleads Guilty in Project Safe Neighborhoods CaseRead the Press Release
ERIE, Pa. - A resident of Erie, Pennsylvania, pleaded guilty in federal court to a charge of violating federal firearms laws, United States Attorney Scott W. Brady announced today.
Jonathan Dominic Mull, 20, pleaded guilty to one count before United States District Judge Susan Paradise Baxter.
In connection with the guilty plea, the court was advised that on December 4, 2018, Mull possessed a firearm which he was precluded from possessing because of an active protection from abuse order and as a result of being a convicted felon.
Judge Baxter scheduled sentencing for October 22, 2019 at 1:30 p.m. The law provides for a total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued Mull on bond.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The United Marshal’s Service conducted the investigation that led to the prosecution of Mull with assistance from the Bureau of Alcohol, Tobacco, Firearm and Explosives.
This case is being prosecuted as part of Project Safe Neighborhood (PSN), the centerpiece of the Department of Justice’s violent crime reductions 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 prevent and reentry programs for lasting reductions in crime.