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10 July 2019
Lake county man sentenced to 31 years in prison for offenses involving the sexual and physical abuse of a minor in connection with marijuana traffickingRead the Press Release
SAN FRANCISCO – Ryan Alan Balletto was sentenced to 372 months in prison today for his role in a conspiracy to manufacture, possess with intent to distribute, and distribute marijuana; his possession of firearms in furtherance of narcotics trafficking; and his employment of a minor to violate drug laws, announced United States Attorney David L. Anderson and Homeland Security Investigations (HSI) Special Agent in Charge San Francisco and Northern California) Ryan Spradlin. The sentence was handed down by the Honorable Charles R. Breyer, Senior United States District Judge.
Balletto, 36, of Lake County, Calif., pleaded guilty to the charges on December 7, 2018. According to his plea agreement, Balletto admitted he worked with others to grow more than 1,300 plants of marijuana in 2013 in Lake County with the intention of selling the marijuana for profit. In connection with the marijuana-growing operation, Balletto coerced a female minor (then 15 years old) into working in the marijuana grow. Balletto initially met the 15-year-old victim in Los Angeles, and offered to let her live with his family in Northern California. Instead, he drove her to his rural marijuana cultivating site in Lake County and coerced her into helping with marijuana cultivation. In connection with this coercion, Balletto admitted to physically abusing the minor victim, including by forcibly confining her in a small, metal tool chest for an extended period of time, restraining her, and electrically shocking her. In addition, Balletto admitted to sexually abusing the minor victim by having non-consensual sex with her while requiring her to work on the marijuana grow.
In addition, Balletto admitted to possessing numerous firearms, including two .223 caliber assault rifles, in furtherance of the marijuana-growing operation.
Balletto further admitted that, upon learning that the police were looking for the minor victim, a co-conspirator instructed her to call 9-1-1 and tell them that she was with friends and was “all right.”
A federal grand jury handed down an indictment on August 1, 2013, charging Balletto with one count of each of conspiracy to manufacture, possess with intent to distribute, and distribution of marijuana, in violation of 21 U.S.C. § 846; manufacturing marijuana, in violation of 21 U.S.C. § 841(b)(1)(A); possession of firearms in furtherance of narcotics trafficking, in violation of 21 U.S.C. § 924(c); employment of a minor to violate drug laws, in violation of 21 U.S.C. § 861. Balletto pleaded guilty to all counts except the substantive distribution charge. Balletto has been in custody since his arrests in May 2013 and will begin serving his prison term immediately.
Also charged in the August 1, 2013, indictment was Balletto’s co-defendant Patrick Stephen Pearmain, 31, of Lake County. On October 23, 2018, Pearmain, pleaded guilty to employment of a minor to violate drug laws and conspiracy to manufacture, possess with intent to distribute, and distribute marijuana. On April 19, 2019, Judge Breyer sentenced Pearmain to serve 150 months in prison for his role in the scheme.
The female, minor victim was rescued, and both men were arrested, as a result of the joint efforts of the Department of Homeland Security – Homeland Security Investigations, the Drug Enforcement Administration, the Department of Defense – Criminal Investigation Service, the Lake County Sheriff’s Department, the Los Angeles Police Department, and the West Sacramento Police Department. The men were prosecuted by the United States Attorney’s Office for the Northern District of California with significant assistance from the Lake County District Attorney’s Office.
Assistant U.S. Attorneys Matthew L. McCarthy and Kevin J. Barry are prosecuting the case on behalf of the United States Attorney’s Office, with assistance from the Lake County District Attorney’s Office. The prosecution is the result of an investigation by Homeland Security Investigations, with the cooperation of the law-enforcement agencies listed above.
Jacksonville Man Sentenced to 30 Years in Prison After Conviction for Crack Cocaine ConspiracyRead the Press Release
GREENVILLE – Robert J. Higdon, Jr., United States Attorney for the Eastern District of North Carolina, announces that yesterday Senior United States District Judge Malcolm J. Howard sentenced, ANTHONY DEPREE SMITH, also known as “Straight,” a 45-year-old resident of Jacksonville, to 360 months imprisonment followed by 5 years of supervised release. SMITH was convicted on January 30, 2019, following a two-day trial, of Conspiracy to Possess with the Intent to Distribute Two Hundred Eighty (280) Grams or More of Cocaine Base (Crack).
The evidence at trial showed that SMITH had operated a decades-long crack cocaine organization in the city of Jacksonville, North Carolina, supplying multiple people with crack cocaine for resale on the street. Members of the Jacksonville Police Department conducted over a dozen controlled purchases of crack cocaine from members of SMITH’s organization and ultimately linked those drugs back to their supplier, SMITH. At trial, the evidence included a financial investigation which showed that SMITH had deposited over $118,000 in cash into a bank account that could not be accounted for from other, legitimate sources.
The following additional individuals were charged in relation to the drug conspiracy as part of Operation Straight Outta Niru, and their sentences are listed below:
- Cotomi Jamel Cooper of Jacksonville, North Carolina – 156 months in prison
- Leroy Edward Dinkins of Jacksonville, North Carolina – 65 months in prison
- Jesse Lee Parker of Jacksonville, North Carolina – 84 months in prison
- Matthew Smith of Jacksonville, North Carolina – 60 months in prison
- Kenneth Sylvester Dennis of Jacksonville, North Carolina – 86 months in prison
- Angelina Renee Diehl of Jacksonville, North Carolina – 72 months in prison
- Horace Cox of New Bern, North Carolina – 68 months in prison
- Terry Humphrey of Jacksonville, North Carolina – 24 months in prison
- Yvonda Jean Lewis of Jacksonville, North Carolina – 6 months in prison
Mr. Higdon commented: “The prosecution of Anthony Smith, and others like him, highlights our focus as we seek to take our communities back from drug traffickers and violent criminals. Smith controlled a significant portion of the illegal drug trade which plagued Jacksonville for many years. His conviction is an important step in helping law enforcement and the people of Jacksonville to eliminate this problem and it is an important step in our effort to “Take Back North Carolina.”
This case was brought using the Take Back North Carolina Initiative of the United States Attorney’s Office for the Eastern District of North Carolina. This initiative emphasizes the regional assignment of federal prosecutors to work with law enforcement and District Attorney’s Offices on a sustained basis in those communities to reduce the violent crime rate, drug trafficking, and crimes against law enforcement.
The case was investigated by the Jacksonville Police Department, the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), and the United States Marshals Service. Laura S. Howard prosecuted the case on behalf of the United States.
Illegal Alien Receives Significant Sentence for Unlawfully Being in the CountryRead the Press Release
BROWNSVILLE, Texas – A 44-year-old Mexican national has been ordered to federal prison for being an aggravated felon who illegally re-entered the United States, announced U.S. Attorney Ryan K. Patrick.
Juan Ramon Arevalo-Guzman pleaded guilty Dec. 21, 2018. He has a history of violent felony robberies in Hidalgo County and was previously deported and ordered not to return.
Today, U.S. District Judge Rolando Olvera ordered Arevalo-Guzman to serve an 84-month term of imprisonment. Not a U.S. citizen, he is expected to again face deportation proceedings following the sentence.
Arevalo-Guzman had aggravated felony convictions in 2002 and 2008. He had terrorized and robbed U.S. citizens at knife point, including one instance in which he committed carjacking and forced the victim to drive him to another city before stealing the vehicle.
On more than 15 separate occasions, Arevalo-Guzman robbed or caused disturbances at a local Hidalgo County church by assaulting the members in the parking lot.
Following his last conviction, he had been removed from the United States – Feb. 15, 2017.
However, he re-entered the country illegally on or about Nov. 1, 2018. At that time authorities found Arevalos-Guzman in the Rio Grande River area near Donna.
He has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Border Patrol conducted the investigation. Assistant U.S. Attorney Justin Schorr Dinsdale prosecuted the case.
Honduran Man Sentenced for Immigration CrimeRead the Press Release
BECKLEY, W.Va. – A Honduran man was sentenced to “time served” for an immigration crime, announced United States Attorney Mike Stuart. Elmer Hernandez, 30, entered a guilty plea to the felony offense of Reentry of a Removed Alien on May 15, 2015 and has been in federal custody for four months. He was immediately remanded to ICE officials for removal proceedings. Stuart commended the work of U.S. Immigration and Customs Enforcement (ICE) and the West Virginia State Police.
“Like so many others, Hernandez returned to the United States illegally after a previous removal,” said United States Attorney Mike Stuart. “We will continue to prosecute line skippers until they follow our laws.”
On March 9, 2019, a West Virginia State Police trooper saw a car that was stopped at Mile Marker 52 on the West Virginia Turnpike outside of Beckley, Raleigh County, West Virginia. Three men were standing outside a car with its emergency blinkers on. When the trooper pulled in, the men ran to the car and began to drive away. The trooper asked the driver what was happening and for a drivers license. The driver could not communicate with the trooper due to a language barrier and did not have a drivers license. The trooper contacted a translator service provided by ICE to assist. The driver and two other individuals spoke with ICE agents telephonically and all three were found to be in the United States illegally. All three men were taken into custody and fingerprinted. Hernandez, one of the three men, was found to be a prior reentry. Specifically, his prints matched a prior removal from Pennsylvania in 2015. Hernandez further admitted to ICE agents that he was in the United States illegally and had not obtained permission to legally enter the United States. He had not otherwise sought legal status or citizenship. Hernandez further admitted to ICE agents that he was a Honduran citizen.
United States District Judge Irene C. Berger presided over the hearing. Assistant United States Attorney Erik S. Goes is responsible for the prosecution.
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Heir Location Services Company and Co-Owner Plead Guilty to Antitrust Charge for Long-Running Agreement Not to CompeteRead the Press Release
Kemp & Associates Inc., a Salt Lake City-based heir location services provider, and its co-owner, Daniel J. Mannix, pleaded guilty to allocating customers with another heir location services firm, the Department of Justice announced today.
Kemp & Associates and Mannix pleaded guilty to a one-count felony indictment filed on Aug. 17, 2016 in the U.S. District Court in Salt Lake City. The indictment charged Kemp & Associates and Mannix with conspiring with a competitor to suppress and eliminate competition by agreeing to allocate customers of heir location services sold in the United States between 1999 and 2014. With today’s pleas, three executives and two companies have entered guilty pleas as a result of the federal antitrust investigation into customer allocation, price fixing, bid rigging, and other anticompetitive conduct in the heir location services industry.
“For over a decade, the defendants conspired to enrich themselves and to deprive heirs pursuing their rightful inheritances of the benefits of competition,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “Allocation schemes distort markets and cheat customers. The Division will not waver in its commitment to protect consumers in all markets from schemes long-condemned as per se illegal.”
Heir location firms identify people who may be entitled to an inheritance from the estate of someone who died without a will. The heir location firms then enter into agreements with those people to help secure their inheritances in exchange for a fee. Kemp & Associates, Mannix, and their co-conspirators implemented their conspiracy when they contacted the same heir that had not yet signed with an heir location company. The company that was second to contact that heir then stopped competing for that and certain remaining unsigned heirs to the estate. In exchange for not competing, the second company received from the first company a portion of the fees ultimately collected from those heirs.
Kemp & Associates and Mannix previously challenged the application of the per se rule in this matter. Under the per se rule, certain restraints of trade are condemned as categorically illegal. In June 2017, the U.S. District Court for the District of Utah ruled the customer allocation alleged in the indictment would be tried under the rule of reason. The Division appealed the decision to the Tenth Circuit. In October 2018, the Tenth Circuit found it did not have jurisdiction to address the application of the rule of reason, but encouraged the district court to “reconsider its rule of reason order.” In February 2019, the district court granted the United States’ Motion to Reconsider and found the per se rule applies to the horizontal customer allocation agreement alleged in the indictment.
Kemp & Associates agreed to pay a $1.53 million criminal fine for its role in the conspiracy. In a separate plea agreement, Mannix also agreed to pay a $77,595.93 criminal fine. Mannix and the Antitrust Division have jointly agreed to allow the Court to determine an appropriate sentence regarding incarceration. The terms of the plea agreements are subject to the approval of the Court.
A criminal violation of Section 1 of the Sherman Act carries maximum penalties of a $100 million fine for corporations and 10 years in prison and a $1 million fine for individuals. The maximum 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 pleas are the result of the investigation into the heir location services industry conducted by the Antitrust Division’s Chicago Office and the FBI’s Salt Lake City Division, with assistance from the U.S. Attorney’s Office in Salt Lake City and the U.S. Attorney’s Office in Chicago.
Anyone with information on customer allocation, bid rigging, price fixing, or other anticompetitive conduct related to the heir location services industry should contact the Antitrust Division’s Chicago Office at 312-984-7200.
Hearing Set for Michael Lambert Seabrooke in Federal CourtRead the Press Release
Greenville, South Carolina --- United States Attorney Sherri A. Lydon announced today that Michael Lambert Seabrooke, of Columbia, was arrested on a federal criminal complaint and charged with possessing firearms (destructive devices) which are not registered to him in the National Firearms Registration and Transfer Record.
Seabrooke will have a detention and preliminary hearing at 10:00 a.m. on Monday, July 15, 2019, on the third floor of the Clement F. Haynsworth Federal Courthouse, 300 East Washington Street, Greenville, South Carolina. United States Magistrate Judge Kevin McDonald will preside.
This case is being investigated by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Pickens Police Department. It is being prosecuted by Assistant United States Attorney Max Cauthen of the Greenville Office.
U.S. Attorney Lydon stated that all charges in this case are merely allegations and that the defendant is presumed innocent until and unless proven guilty.
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Harrison County man sentenced for firearms chargeRead the Press Release
CLARKSBURG, WEST VIRGINIA – Jesse Pack, of Clarksburg, West Virginia, was sentenced today to 21 months incarceration for a firearms charge, United States Attorney Bill Powell announced.
Pack, age 24, pled guilty to one count of “Unlawful Possession of a Firearm” in March 2019. Pack, an unlawful user of a firearm, admitted to having a .9mm pistol in Harrison County in June 2018.
This case was brought as part of Project Safe Neighborhoods (PSN). Project Safe Neighborhoods is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Assistant U.S. Attorney Zelda E. Wesley prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Greater Harrison Drug & Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
The investigation was funded in part by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
U.S. District Judge Thomas S. Kleeh presided.
Green Bay Man Sentenced for Threatening and Obscene Telephone Calls to Daycare CentersRead the Press Release
United States Attorney Matthew D. Krueger of the Eastern District of Wisconsin, announced that on July 8, 2019, Michael J. Propst (age: 46) of Green Bay, Wisconsin was sentenced to 84 months in federal prison by Chief District Judge William C. Griesbach.
Propst was convicted of two counts of “Threatening Interstate Communications,” in violation of Title 18, United States Code, Section 875(c), and a single count of “Making Obscene or Harassing Telephone Calls,” in violation of Title 47, United States Code, Section 223(a)(1)(C). The charges stemmed from telephone calls made by Propst to two different daycare facilities in the State of Indiana. Propst phoned the daycare facilities and claimed that he had one of their pupils in his custody and was at that time violently raping the child causing the toddler to bleed and suffer internal injuries. The panicked daycare workers were forced to quickly perform a head-count of the children while they contacted authorities.
The Green Bay Office of the F.B.I. became involved and discovered that a federal investigation into Propst’s actions was underway in the State of Delaware. The investigation revealed that authorities linked Propst to similar obscene and threatening telephone calls in fifteen states stretching from Maine to California. Propst’s job as a long-haul trucker made it practically impossible for local authorities to investigate his obscene and threatening phone calls given that he and his telephone were constantly moving through different legal jurisdictions.
At the sentencing hearing, the government demonstrated an almost 20 year pattern of Propst engaging in telephone calls to daycare centers, schools, and retail establishments depicting the violent rape of young children. Records reflect that Propst was convicted by local authorities in the State of Florida in 1999 for making virtually identical obscene and threatening telephone calls while living in Polk County, Florida. In 2002, he was convicted by federal authorities in the Middle District of Florida and sentenced to 41 months of imprisonment. It appeared the calls only ceased while Propst was incarcerated. The evidence showed and Propst admitted that these calls were made for the purpose of his own sexual gratification.
In handing down the sentence, Chief Judge Griesbach noted the defendant’s pattern of criminal activity was very serious and far more than merely harassing in nature. Rather, the judge characterized Propst’s telephone calls as akin to “terrorism,” since they were intended to cause terror in the victims answering his calls. He cited Propst’s “poor character” and “less than credible statements of remorse” as justifying a substantial prison sentence of 84 months.
The judge’s sentence was more than two and a half times longer than is called for in the federal sentencing guidelines. Following his imprisonment, Propst will serve 36 months on federal supervised release.
This case was investigated by the F.B.I.’s Resident Agencies in Green Bay, Wisconsin, and Wilmington, Delaware, the U.S. Attorney’s Office for the District of Delaware, the Green Bay Police Department, and the Manitowoc County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Daniel R. Humble.
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Four KCMO Residents Plead Guilty to Armed RobberiesRead the Press Release
KANSAS CITY, Mo. – Four Kansas City, Missouri, residents have pleaded guilty in federal court to their roles in a series of armed robberies.
Brion L. McDonald, 30, and Felicia D. Green, 42, pleaded guilty today before U.S. District Judge Stephen R. Bough. McDonald pleaded guilty to one count of robbery. Green pleaded guilty to participating in a conspiracy to commit robbery and to possessing a firearm in furtherance of a crime of violence.
Co-defendant Clyde H. Jackson, Jr., 30, pleaded guilty yesterday to seven counts of robbery, one count of possessing a firearm in furtherance of a crime of violence, and one count of being a felon in possession of a firearm.
Co-defendant Thomas E. Davis, 42, pleaded guilty on July 1, 2019, to five counts of robbery and to possessing a firearm in furtherance of a crime of violence.
The defendants each admitted they were part of a group of individuals committing armed robberies in the Kansas City, Missouri, metropolitan area.
Jackson, Davis, and Green were involved in the armed robberies of Family Dollar, 5242 Blue Ridge Blvd. in Kansas City, on Jan. 12, 2018; Dollar General Store, 8716 Blue Ridge Blvd. in Kansas City, on Jan. 20, 2018; Family Dollar, 9120 E. 35th Street South in Independence, Missouri, on Jan. 22, 2018; and Family Dollar, 3017 Prospect Ave. in Kansas City, on Jan. 26, 2018 (Davis discharged a firearm during this robbery).
Jackson and McDonald each admitted he was involved in the armed robbery of Pizza Hut, 7624 Wornall Road in Kansas City, on March 19, 2018.
Davis was also involved in the armed robbery of Dollar General Store, 9101 E. 63rd St. in Raytown, Missouri, on Oct. 25, 2017. Davis brandished a knife during that robbery.
Jackson admitted he also was involved in an attempted robbery of the Pizza Hut at 7624 Wornall Road on March 20, 2018, and of Dollar General, 5008 N.E. Parvin Road in Kansas City, on March 20, 2018. Jackson also admitted that he was in possession of a Glock .45-caliber pistol and various rounds of ammunition on March 23, 2018. Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Jackson has prior felony convictions for larceny and robbery.
Under the terms of their plea agreements, Jackson and Davis are each subject to a sentence of at least 20 years in federal prison without parole, up to 30 years in federal prison without parole. Sentencing hearings for Jackson and Davis will be on Nov. 7, 2019. Sentencing hearings for Green and McDonald will be on Nov. 25, 2019.
This case is being prosecuted by Assistant U.S. Attorney Emily A. Morgan. It was investigated by the FBI, the Kansas City, Mo., Police Department, the Independence, Mo., Police Department, and the Raytown, Mo., Police Department.
Former Secretary of Puerto Rico Department of Education and Former Executive Director of Puerto Rico Health Insurance Administration Indicted with Four Others for Conspiracy, Wire Fraud, Theft of Government Funds, and Money LaunderingRead the Press Release
SAN JUAN, Puerto Rico– Julia Beatrice Keleher, former Secretary of the Puerto Rico Department of Education (“PR DOE”), Ángela Ávila-Marrero, former Executive Director of the Puerto Rico Health Insurance Administration (“ASES”), Alberto Velázquez-Piñol, Fernando Scherrer-Caillet, Glenda Ponce-Mendoza, and Mayra Ponce-Mendoza have been indicted and arrested for their participation in a conspiracy to steal and convert federal funds involving fraudulently obtained contracts from the PR DOE and ASES, announced U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico. The Federal Bureau of Investigation is handling the investigation with the United States Department of Education, Office of Inspector General, and the United States Department of Health and Human Services, Office of Inspector General.
The indictment returned yesterday, July 9, 2019, by a federal grand jury in the District of Puerto Rico, includes 32 counts against the following individuals:
- Julia Beatrice Keleher (“Keleher”), the Secretary of the Puerto Rico Department of Education (PR DOE) from January 2017 until April 2019;
- Ángela Ávila-Marrero (“Ávila-Marrero”), the Executive Director of the Puerto Rico Health Insurance Administration, from February 2017 until June 25, 2019;
- Alberto Velázquez-Piñol (“Velázquez-Piñol”), President of Azur, L.L.C. (“Azur”);
- Fernando Scherrer-Caillet (“Scherrer-Caillet”), managing partner of BDO, Puerto Rico, P.S.C.;
- Glenda E. Ponce-Mendoza, Special Assistant to PR DOE Secretary Keleher;
- Mayra Ponce-Mendoza, owner of Colón & Ponce, Inc., and sister of defendant Glenda E. Ponce-Mendoza.
The indictment alleges that the defendants used Keleher’s and Ávila-Marrero’s positions as Secretary of PR DOE and Executive Director of ASES, respectively, to benefit and enrich themselves and defraud the United States as follows:
- Count 1 of the Indictment charges a wire fraud conspiracy. The purpose of the conspiracy was to steer contracts between the PR DOE and Colón & Ponce, a company owned by Mayra Ponce Mendoza. This was accomplished through a corrupted bidding process pursuant to a Request for Proposal (“RFP”), wherein Colón & Ponce was provided with a competitive advantage over other bidders based in part, on the close relationship between Keleher, Glenda Ponce-Mendoza, and her sister Mayra Ponce-Mendoza. Despite being unqualified under the terms of the RFP, Colón & Ponce was awarded a $43,500 contract, which was later increased to $95,000. The increased amount was used to pay in part the salary of one of Keleher’s special assistants. Keleher pressured a PR DOE official identified as Individual B in the indictment to execute the Colón & Ponce contract on behalf of PR DOE. Counts 2 through 11 list the wire communications transmitted by Keleher and the Ponce-Mendoza sisters in order to perpetrate the scheme set forth in Count 1.
- Count 12 of the Indictment charges Keleher, Velázquez-Piñol, and Scherrer-Caillet with conspiring to violate 18 U.S.C. § 641 (theft and conversion of government money and property in excess of $1,000). The conspiracy and scheme to defraud involved federal funds paid by PR DOE to BDO for several contracts totaling over $13 million from January 2017 until April 2019. Despite express prohibitions in said contracts, BDO subcontracted other companies to perform the services, and paid Velázquez-Piñol, through his company Azur, a 10% commission for the contracts awarded through Velázquez-Piñol’s influence with government officials. By paying unauthorized commissions, the cost of government contracts was unnecessarily inflated and increased. Velázquez-Piñol, through Azur, received approximately $219,059 in commissions from BDO for the PR DOE contracts it was awarded. Counts 13 through 18 list the wire communications transmitted and caused to be transmitted in interstate commerce, all in furtherance of the conspiracy, scheme to defraud, and the theft of federal funds.
- Count 19 charges Ávila-Marrero, Velázquez-Piñol, and Scherrer-Caillet with conspiring to violate 18 U.S.C. § 641 (theft and conversion of government money and property in excess of $1,000). The conspiracy and scheme to defraud involved federal funds paid by ASES to BDO for several contracts totaling $2.5 million during the period between January 2017 and June 2019. Ávila-Marrero provided internal ASES information on several contracts to Velázquez-Piñol. BDO and other companies used this internal information, provided by Velázquez-Piñol, to submit proposals to ASES, and replace the existing contracts. During ASES board meetings, Ávila-Marrero recommended the cancellation of the contracts and the award of replacement contracts to BDO and another company represented by Velázquez-Piñol. Despite express prohibitions in said contracts, BDO subcontracted other companies to provide the services, and paid Velázquez-Piñol, through his company Azur, a 10% commission for the contracts awarded through Velázquez-Piñol’s influence with government officials. By paying unauthorized commissions, the cost of government contracts was unnecessarily inflated and increased. Velázquez-Piñol received approximately $710,000 in payments from BDO for the ASES contracts it was awarded. Counts 20 through 25 list the wire communications transmitted and caused to be transmitted in interstate commerce, all in furtherance of the conspiracy, scheme to defraud, and the theft of federal funds.
The indictment also includes a money laundering conspiracy charge against Velázquez-Piñol and Scherrer-Caillet, and six substantive money laundering counts against Velázquez-Piñol.
“Public corruption continues to erode the trust between government officials and our citizens. Defendants Keleher and Ávila-Marrero exploited their government positions and fraudulently awarded contracts funded with federal monies. The greed of the private individuals charged along with these former government officials, resulted in inflated government contracts which deprived our citizens of much needed education and health services,” said U.S. Attorney Rosa Emilia Rodríguez-Vélez. “Government officials are entrusted with performing their duties honestly and ethically. The charged offenses are reprehensible, more so in light of Puerto Rico’s fiscal crisis.”
“Yesterday’s indictment alleges that these individuals were involved in a public corruption campaign and profited at the expense of Puerto Rico’s children. That is completely unacceptable,” said Neil E. Sanchez, Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s Southern Regional Office. “OIG Special Agents will continue to aggressively pursue those who seek to enrich themselves at the expense of our nation’s students. America’s students, their families, and taxpayers deserve nothing less.”
“The illegal granting of contracts paid with monies from the Medicaid program is unacceptable. The Medicaid program is intended to provide health care benefits to low-income individuals and families, and any improper use of these funds will jeopardize its future availability. HHS-OIG and its law enforcement partners will continue to aggressively pursue to the fullest extent of the law those who seek to unlawfully enrich themselves from Medicaid funds,” said Scott Lampert, Special Agent in Charge of HHS-OIG New York Regional Office.
“Today’s efforts are the result of true team work. Thanks to the admirable dedication of our partners at the United States Attorney’s Office, and the Inspectors General for both the Departments of Education and Health and Human Services, new schemes have been uncovered, along with attempts to hide the proceeds of those schemes. Moving forward with the help of our local partners, the FBI will continue to make apprehending and exposing those who would do harm to the People of Puerto Rico our top priority,” said Douglas A. Leff, Special Agent in Charge of the FBI.
The case is being prosecuted by Assistant U.S. Attorneys José Capó-Iriarte and Marie Christine Amy. If found guilty, the defendants are facing possible sentences of up to 10 years for conspiracy and theft of government funds, and up to 20 years for wire fraud and money laundering. The charges contained in the indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty.
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Former Pharmacy Owner Pleads Guilty to Fraudulently Dispensing OpioidsRead the Press Release
ALEXANDRIA, Va. – A former pharmacy owner pleaded guilty today to fraudulently filling and dispensing thousands of prescription medications, including opioids, outside the usual course of professional practice.
According to court documents, Latif Mohamed Chowdhury, aka Gulam Latif Chaudhury, 28, operated, managed, directed, and controlled two now-defunct pharmacies known as Alexandria Care Pharmacy LLC (ACP-1) and Alexandria Care Pharmacy Store #2 LLC (ACP-2). Chowdhury has never been qualified to serve as a licensed pharmacist and has no medical qualifications. Nonetheless, between August 2015 and February 2016, Chowdhury fraudulently operated ACP-1 and ACP-2 by personally filling and dispensing thousands of dosage units of medications, including opioids, without a licensed pharmacist on-site. Chowdhury used the identities of licensed pharmacists, without their permission, to carry out his scheme.
Chowdhury admitted to fraudulently billing health insurance benefit programs, including Medicare and Medicaid, for refills of prescription medications that were not delivered to customers even though his pharmacies received payment for these prescriptions. Chowdhury also submitted fraudulent health insurance claims in the names of pharmacy customers for medications that were not authorized by any physician, and were not dispensed to any of the customers, in order to enrich himself through illicit profits generated by ACP-1 and ACP-2.
Furthermore, on several occasions, Chowdhury dispensed Schedule II controlled substances in the names of minors, including children as young as 7 and 8-years-old, outside the usual course of professional practice. During the execution of a search warrant, a loaded Colt .38-caliber firearm that belonged to Chowdhury was located in plain view on the pharmacy department shelves.
Chowdhury pleaded guilty to unlawful distribution of Schedule II controlled substances outside the usual course of professional practice, and also agreed to forfeit $500,000 as proceeds of his illegal conduct. He faces a maximum penalty of 20 years in prison when sentenced on September 27. 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, Charles Dayoub, Acting Special Agent in Charge, Criminal Division, FBI Washington Field Office, Jesse R. Fong, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, Maureen Dixon, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), and Colonel Gary T. Settle, Superintendent of Virginia State Police, made the announcement after the plea was accepted by U.S. District Judge Leonie M. Brinkema. Assistant U.S. Attorneys Raj Parekh and Monika Moore are 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 is 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-203.
Former Director of Operations of Rockford Non-Profit Organization Sentenced to Prison for FraudRead the Press Release
ROCKFORD — The former director of operations of a Rockford non-profit organization was sentenced Tuesday by U.S. District Judge Philip G. Reinhard to 37 months in prison for mail fraud and tax fraud.
LEILANI HILLIS, 60, formerly of Rockford, was also ordered to pay restitution of $632,718.99 on the mail fraud charge and $151,186.91 on the tax fraud charge. Hillis pleaded guilty to the charges in March.
The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; and Tara Sullivan, Acting Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago. The government was represented by Assistant U.S. Attorney Scott R. Paccagnini.
According to a written plea agreement, since 2001 Hillis was an employee of a non-profit organization whose mission was to attract, retain and expand jobs in the Rockford area. The organization received funding from private sources and local governments. During her employment, Hillis handled the organization’s payroll, human resource matters and accounting, and oversaw the annual audit. As of 2009, Hillis had signatory authority on the organization’s bank account and access to the organization’s PayPal account. The organization issued employees, including Hillis, a credit card in the employee’s name. From 2009 through April 2018, Hillis used her employee issued credit card to make unauthorized purchases for her personal benefit totaling $632,718.99. Hillis concealed her crime by using the organization’s accounting codes to make it appear the purchases were for the organization’s benefit, and she forged the initials of the organization’s president on the expense reports. Hillis issued and signed checks from the organization’s account to the bank, knowing the payments included money to pay for her unauthorized purchases made with the organization’s credit card.
Hillis also admitted that she did not report as income the money from the organization that she used to pay the organization’s credit card for her unauthorized personal purchases. As a result, for the tax years 2014 to 2017, Hillis failed to pay $151,186.91 in federal income taxes.
Floyd County Man Sentenced to 180 Months for Armed Drug TraffickingRead the Press Release
PIKEVILLE, Ky. — On Monday, James William Miller was sentenced to 180 months in federal prison, by United States District Judge Robert E. Wier, for possession with intent to distribute methamphetamine, possession of a firearm in furtherance of drug trafficking, and felon in possession of a firearm.
The investigation revealed that Miller was trafficking in methamphetamine for approximately two years in and around Floyd County. A search of Miller’s residence in August of 2018, revealed eight firearms, including a semi-automatic AR-15, digital scales, distribution baggies, and a distribution quantity of methamphetamine. Miller had a prior conviction for Trafficking in a Controlled Substance, from December of 2014 in Floyd County Circuit Court. As a result of that conviction Miller was prohibited from possessing firearms.
Under federal law, Miller must serve 85 percent of his prison sentences. Upon his release, he will be under the supervision of the United States Probation Office for an additional four years.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; James Robert Brown, Jr., Federal Bureau of Investigation Special Agent in Charge for the Louisville Field Division; Richard Sanders, Kentucky State Police Commissioner and John Hunt, Floyd County Sheriff, jointly made the announcement. The United States was represented by Assistant United States Attorney Jenna E. Reed.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The PSN program was reinvigorated as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Florida-Based Doctor Charged with Fraudulently Ordering Genetic TestsRead the Press Release
NEWARK, N.J. – A doctor based in Gainesville, Florida, was charged with conspiracy to commit health care fraud for ordering genetic tests for patients he never saw or treated, U.S. Attorney Craig Carpenito announced today.
Matthew S. Ellis, 53, of Gainesville, Florida, is charged by complaint with one count of conspiracy to commit health care fraud. Ellis made his initial appearance today before U.S. Magistrate Judge Mark Falk in Newark federal court and was released on $250,000 unsecured bond.
According to documents filed in this case and statements made in court:
Ellis served as the chief medical officer for Ark Laboratory Network LLC, a company that purported to operate a network of laboratories that facilitated genetic testing. Two conspirators who operated Ark, Edward Kostishion, 59, and Kacey Plaisance, 37, both of Florida, were each charged by complaint on Jan. 15, 2019, with one count of conspiracy to commit health care fraud.
In October 2018, Kostishion and Plaisance contacted a clinical laboratory in New Jersey and proposed sending the laboratory 10 DNA swabs for genetic tests in return for approximately 50 percent of the total Medicare payments the laboratory received as a result of the tests. Kostishion later sent 10 test orders to the laboratory that listed Ellis as the “Ordering Physician” and contained a certification from Ellis that the tests were medically reasonable and necessary. The test requests contained fraudulent information regarding medical histories and conditions, and falsely represented that Ellis provided the patients with information regarding genetic testing.
One of the test requests, relating to “Patient 1,” indicated that Patient 1 had a personal history of breast cancer at age 44, a prerequisite for Medicare coverage of the particular test requested. However, on Nov. 29, 2018, Patient 1 confirmed to law enforcement officials that the information on the test request was false; Patient 1 never had cancer and never told anyone about having cancer. Patient 1 also stated that Patient 1 submitted to the DNA swab after seeing an advertisement on Facebook that offered a $100 gift card for people interested in genetic testing. Patient 1 stated that the DNA swab was not taken at a medical office, but rather in a “plain old office building” and that “some random guy” took the swab. Patient 1 confirmed never seeing or speaking to a treating physician about the genetic testing, and never saw or spoke to Ellis, the ordering physician listed on the test request.
Ellis practices medicine in Florida, but Patient 1 was located in Oklahoma. All 10 of the patients in the test requests were located in Oklahoma, Arizona, Tennessee, or Mississippi. None of the patients were located in Florida. Additional investigation revealed that Ellis was not licensed to practice medicine in Oklahoma.
The health care fraud count carries a maximum penalty of 10 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense.
U.S. Attorney Carpenito credited the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott Lampert; and special agents of the U.S. Attorney’s Office for the District of New Jersey, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Bernard J. Cooney of the Health Care and Government Fraud Unit of the U.S. Attorney’s Office in Newark.
The charges and allegations against the defendants are merely accusations, and they are presumed innocent unless and until proven guilty.
Flathead County man with five pounds of meth in vehicle sentenced to 12 years in prisonRead the Press Release
MISSOULA—A Flathead County resident who admitted possessing methamphetamine for distribution after law enforcement found five pounds of the drug in his vehicle was sentenced today to 12 years in prison and to five years of supervised release, said U.S. Attorney Kurt Alme.
James William Quen, 49, of Coram, pleaded guilty in March to possession with intent to distribute meth.
U.S. District Judge Donald W. Molloy presided.
The prosecution said in court records that Quen’s vehicle was stopped for a traffic violation on Dec. 16, 2017 in St. Regis. A search warrant was later served on the vehicle and law enforcement recovered five pounds of meth inside. Five pounds of meth is the equivalent of about 18,120 doses. Investigators also received information that Quen had gone to Oregon to get the meth and had supplied pound quantities to another person, who had seen Quen in possession of 10 pounds of meth.
Assistant U.S. Attorney Tara Elliott prosecuted the case, which was investigated by Homeland Security Investigations and the Northwest Montana Drug Task Force.
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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Felon Sentenced to 19 1/2 Years in Prison for Facilitating the Sales of Methamphetamine in RenoRead the Press Release
RENO, Nev. – A felon who was found guilty for his involvement in a drug trafficking conspiracy to distribute methamphetamine in the Reno and Sparks area was sentenced today to 19 years and six months in federal prison to be followed by five years of supervised release, announced United States Attorney Nicholas A. Trutanich for the District of Nevada.
Edward Smith, aka “Smitty,” 51, was convicted by a jury in November 2018, of conspiracy to possess and distribute at least 50 grams of methamphetamine, illegal use of a communication facility, money laundering, distribution of at least 50 grams of methamphetamine, and distribution of at least five grams of methamphetamine. Smith has 12 prior convictions. United States District Judge Howard D. McKibben presided over the jury trial and sentencing hearing.
According to court documents and evidence presented during the three-day trial, Smith, an inmate at the Northern Nevada Correctional Center, arranged for his niece's ex-boyfriend, whom he referred to as his “nephew,” to sell methamphetamine to another inmate’s associate in the Reno community. Smith told his “nephew” how much to sell the methamphetamine for, how to sell the drugs, and to smuggle an ounce or two of methamphetamine to him each time the “nephew” sold it. His “nephew” sold methamphetamine to the associate in Sparks, Nevada, with the last sale involving a pound of methamphetamine for $7,000.
The Drug Enforcement Administration, with the assistance of the Nevada Department of Corrections, and the Washoe County Sheriff’s Office, investigated the case. Assistant U.S. Attorney James Keller prosecuted the case.
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FBI New Haven Task Force Investigation Results in Narcotics Charges against 25 IndividualsRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, Brian C. Turner, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, and New Haven Police Chief Otoniel Reyes today announced that a grand jury in New Haven returned a 15-count indictment yesterday charging 25 individuals with federal narcotics offenses related to the distribution of crack cocaine, cocaine and heroin in Connecticut and Massachusetts.
This matter stems from an investigation headed by the FBI’s New Haven Safe Streets/Gang Task Force and New Haven Police Department that targeted drug trafficking and related acts of violence by members, former members and associates of the “Island Brothers” street gang in New Haven. The investigation, which included court-authorized wiretaps and controlled purchases of narcotics, also revealed that the drug trafficking organization had established a base of operation in Fitchburg, Massachusetts. The investigation subsequently identified a second drug trafficking network that involved the large-scale distribution of heroin.
Charged in the indictment are:
TOMMY JULIUS, a.k.a. “General” and “J,” 36, of New Haven
CARL MERRITT, a.k.a. “C,” 39, of New Haven
FRANK CARR, a.k.a. “FL,” 52, of Hamden
BRIAN K. BACKMAN, a.k.a. “B,” “NYB” and “New York B,” 54, of New Haven
ANDERSON ATKINSON, a.k.a. “Barry,” 58, of Hamden
BRYANT WILLIAMS, 44, of New Haven
JEFFREY BRAZIER, 49, of Hamden
ERIC BURRUSS, a.k.a. “E,” 40, of New Haven
MERVIN BRANDY, 52, of Hamden
PRISHONNA TURNER, a.k.a. “Nonnie,” 23, of Hartford
SHARMAINE CROSLEY, a.k.a. “Shar,” 35, of New Haven
JESSENIA ROMAN, a.k.a. “Red,” 32, of New Haven
THEODORE SMITH, a.k.a. “Ted,” 36, of New Haven
WANDA CARTER, a.k.a. “WaWa,” 40, of Hamden
GERARD SENIOR, 20, of New Haven
SHAVAR BELLAMY, a.k.a. “Lil B,” “LB” and “Little Black,” 33, of New Haven
MATTHEW MOORE, a.k.a. “Matt,” 44, of Fitchburg, Mass.
SHAUN ARMSTRONG, 39, of Fitchburg, Mass.
JAMAINE JACKSON, a.k.a. “Jack,” 45, of Bridgeport
MAKENE JACOBS, a.k.a. “Mac” and “Bridgeport,” 43, of West Haven
TYRESE STANLEY, a.k.a. “Scoot,” 29, of New Haven
MELVIN ROBERTS, a.k.a. “Psycho” and “Mel,” 62, of New Haven
DENA DRAUGHN, 55, of HamdenEighteen of the defendants were arrested today, five defendants were already in custody and two defendants are still being sought.
“As alleged, these drug trafficking networks have been responsible for the distribution of significant quantities of heroin, crack and cocaine in Connecticut and Massachusetts,” said U.S. Attorney Durham. “The U.S. Attorney’s Office will continue to work with our federal, state and local partners to stem the drug trade in our cities, and the violence associated with it, by prosecuting those involved in this criminal behavior.”
“Today’s takedown is yet another example of our great working relationship with the New Haven Police Department and all of our law enforcement partners across the state,” said FBI Special Agent in Charge Turner. “All of our efforts are aimed at improving the quality of life of all law abiding residents of Connecticut.”
“On behalf of the New Haven Police Department, I want to thank the FBI and all of our law enforcement partners for their work in this investigation and for the ongoing collaboration to reduce gun violence and improve the quality of life for the citizens of New Haven,” said Chief Reyes.
The indictment charges Julius, Merritt, Carr, Backman, Atkinson, Williams, Brazier, Burruss, Brandy, Turner, Crosley, Roman, Smith, Carter, Senior, Bellamy, Moore and Armstrong with one count of conspiracy to distribute, and to possess with intent to distribute, cocaine base (“crack”), cocaine and heroin. If convicted of this offense, based on the type and quantity of narcotics charged, Julius, Merritt, Carr, Burruss, Crosley and Bellamy face a minimum term of imprisonment of five years and a maximum term of imprisonment of 40 years. The other defendants, if convicted of this charge, face a maximum term of imprisonment of 20 years.
The indictment also charges Backman, Atkinson, Jackson, Jacobs, Stanley, Roberts and Draughn with one count of conspiracy to distribute, and to possess with intent to distribute, heroin. If convicted of this offense, based on the quantity of heroin charged, Backman, Atkinson and Draughn face a minimum term of imprisonment of five years and a maximum term of imprisonment of 40 years. The other defendants, if convicted of this charge, face a maximum term of imprisonment of 20 years.
On June 16, 2019, Atkinson and Draughn were arrested in connection with the seizure of approximately 10,000 bags of heroin.
The indictment also charges several defendants with one or more counts related to the distribution of various narcotics.
In addition, Merritt is charged with one count of possession of a firearm in furtherance of a drug trafficking offense, which carries a mandatory consecutive sentence of at least five years, and one count of possession of a firearm by a previously convicted felon, which carries a maximum term of imprisonment of 10 years. On April 12, 2019, Merritt was arrested after a search of his vehicle revealed a Berretta 9mm pistol and two loaded gun magazines. It is alleged that Merritt’s criminal history includes multiple felony convictions for assault, risk of injury and robbery.
At the time of Merritt’s arrest, he also possessed $73,343 in cash and six cell phones. The indictment seeks the forfeiture of the cash and Merritt’s 2018 Nissan Maxima.
U.S. Attorney Durham stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the FBI’s New Haven Safe Streets/Gang Task Force, New Haven Police Department, Milford Police Department, Hamden Police Department, East Haven Police Department, Connecticut State Police, Connecticut Department of Correction and the U.S. Drug Enforcement Administration.
This case is being prosecuted by Assistant U.S. Attorneys Anthony E. Kaplan, Peter D. Markle and Elena L. Coronado.
Driving Force in Conspiracy to Distribute Meth Brought to Iowa in Car Part Boxes Sentenced to 30 Years’ in PrisonRead the Press Release
A man who conspired with others to distribute ice methamphetamine was sentenced yesterday to 30 years’ in federal prison.
Robert Lewis, age 44, from Janesville, Iowa, received the prison term after an August 22, 2018, jury verdict finding him guilty of conspiracy to distribute at least 500 grams of a mixture of methamphetamine and 50 grams of actual methamphetamine.
The evidence at trial showed that in the summer of 2013, Lewis began working with various individuals to distribute ice methamphetamine throughout the Waterloo area. Lewis and his associates obtained methamphetamine from an out-of-state source of supply who shipped the methamphetamine via FedEx concealed in car part boxes. Each shipment contained multiple pounds of methamphetamine which Lewis and others would break down into smaller quantities for redistribution once it arrived in Iowa. Lewis also used his daughter to register a car for the head of the drug organization and allowed other members of the conspiracy access to his home, referred to at trial as the “clubhouse,” for the purpose of repackaging and distributing methamphetamine. Lewis left Iowa in the fall of 2013, but continued to receive methamphetamine from his co-conspirators. In January 2014, one co-conspirator attempted to send Lewis methamphetamine hidden in a Hamburger Skillet prepared meal box. FedEx employees flagged the package as suspicious and investigators ultimately seized ¼ ounce of methamphetamine from the inside of the box.
The evidence at sentencing showed that after trial, Lewis obstructed justice by threatening and intimidating multiple individuals who testified as witnesses at the trial. This included telling one witness that he “was a dead man.”
Lewis was sentenced in Cedar Rapids by United States District Court Chief Judge Leonard T. Strand. Lewis was sentenced to 360 months’ imprisonment. He must also serve a five-year term of supervised release after the prison term. There is no parole in the federal system.
Lewis is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Lisa C. Williams and was investigated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program of the United States Department of Justice through a cooperative effort of Federal Bureau of Investigation, Iowa Division of Narcotics Enforcement, and the Tri-County Drug Enforcement Task Force (Waterloo Police Department; Cedar Falls Police Department; Waverly Police Department; Bremer County Sheriff’s Office; Black Hawk County Sheriff’s Office; LaPorte City Police Department; Evansdale Police Department; Hudson Police Department).
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 17-CR-2084.
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Detroit Man Pleads Guilty to Drug CrimeRead the Press Release
CHARLESTON, W.Va. – A Detroit man pled guilty to a federal drug trafficking offense, announced United States Attorney Mike Stuart. Nekko Johnie Daniel, 31, pled guilty to possession with intent to distribute oxycodone before United States District Judge Irene C. Berger. Stuart commended the investigation conducted by the Metropolitan Drug Enforcement Network Team (MDENT), the Kanawha County Sheriff’s Department, the Charleston Police Department, and the West Virginia State Police.
“Another drug dealer nabbed off the Detroit Express,” said United States Attorney Mike Stuart. “Daniel will now be taking the bus to federal prison.”
Based on information presented in public court records and hearings, on December 12, 2016, Daniel traveled by bus from Detroit, Michigan, to the Greyhound station in Charleston, where he left in a car. Police investigators stopped Daniel’s car after it failed to maintain its lane while traveling south on Interstate 77. The investigators smelled a strong odor of marijuana coming from the vehicle and searched it, ultimately recovering a half-ounce of marijuana from Daniel’s person and 540 oxycodone pills in his bag.
Daniel faces up to 20 years in federal prison when he is sentenced on October 30, 2019. Assistant United States Attorney Drew O. Inman is handling the prosecution.
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Darknet Drug Dealer Sentenced to 86 Months in Federal PrisonRead the Press Release
PORTLAND, Ore.—Skylaar Daylan Ford, 24, of Portland, Oregon, was sentenced today to 86 months in federal prison and three years’ supervised release for using the darknet to sell ecstasy to customers across the U.S.
According to court documents, in June 2017, Ford was on post-prison supervision after a previous conviction for possession of a Schedule II controlled substance in Lane County Circuit Court. During a June 9, 2017 visit to and search of Ford’s Northeast Portland home, a Multnomah County Probation and Parole Officer found more than 100 grams of heroin. Upon discovery of the heroin, the probation and parole officer contacted the Portland Police Bureau for assistance. PPB officers and a Homeland Security Investigations (HSI) agent responded.
When the officers and agent arrived, they placed Ford under arrest and received consent to search his residence. During the search, the HSI agent located an unopened parcel addressed to Ford. The package was opened and found to contain nearly 500 grams of 3,4-methylenedioxymethamphetamine (MDMA) also known as “ecstasy” or “molly.” Ford admitted to purchasing the ecstasy from a vendor in the Netherlands and reselling on AlphaBay, a darknet marketplace. Investigators were later able to confirm that Ford had been an AlphaBay vendor since November 2016 and had completed more than 500 confirmed sales of ecstasy.
On January 9, 2019, Ford pleaded guilty to one count of possession with intent to distribute MDMA, a Schedule I controlled substance. As part of his plea agreement, Ford agreed to forfeit any property used to facilitate his crimes as identified by the government.
This case was investigated by HSI and the Portland Police Bureau. It was prosecuted by Scott M. Kerin, Assistant U.S. Attorney for the District of Oregon.
Chicago Woman Sentenced for Role as Leader of Sex Trafficking SchemeRead the Press Release
HAMMOND – Rita Law, 60, of Chicago, Illinois, was sentenced by U.S. District Court Judge Joseph S. Van Bokkelen today to serve 360 months in federal prison after being found guilty, following a 3-week jury trial in February 2017, of two counts of trafficking and servitude, one count of transporting a person across state lines with intent that they engage in prostitution, and one count of using an interstate facility to promote prostitution, announced U.S. Attorney Thomas L Kirsch, II.
The trial evidence established that Law provided and obtained the labor and services of two victims, HV and XC, by means of a scheme to cause them to believe that if they did not perform the labor and services she demanded, they would suffer serious harm or physical restraint. Law was convicted of causing both women to work at her “spas” in northwest Indiana, where they were expected to and did engage in sexual acts in exchange for money with Law’s predominantly male clientele. Law’s businesses were “Duneland Spa” in Lake Station and Gary, Indiana and “Fun Fun Feet” in Hobart, Indiana. In sentencing Law, the court took into consideration her attempt to flee from the United States to Hong Kong in October 2013 after learning she was under investigation.
In announcing Law’s sentence, U.S. Attorney Kirsch described her offense conduct as “nothing short of diabolical.” “She used the American dream to lure unsuspecting women to the United States so she could enslave them for her own financial benefit.” Kirsch also said “My office’s willingness to extradite Rita Law from Hong Kong and pursue additional charges against her thereafter should serve as a warning to all those committing crime in the Northern District of Indiana – attempting to flee the country will not prevent my office from bringing you to justice.” “Sex trafficking of foreign and domestic victims will not be tolerated in the Northern District of Indiana as long as I am United States Attorney” he concluded.
“Let this sentence serve as a reminder that modern day slavery will not be tolerated,” said Special Agent in Charge James M. Gibbons, Homeland Security Investigations Chicago. “HSI will continue to work relentlessly with its law enforcement partners to bring those to justice who attempt to circumvent the law for financial gain.”
"This sentence cannot begin to compare to the trauma these victims were subjected to, and the life altering consequences they now face because they put their trust and faith in the defendant,” said Grant Mendenhall, Special Agent in Charge of the FBI’s Indianapolis Division. “The FBI will continue working with our law enforcement partners to aggressively identify and pursue the perpetrators of the devastating crime of human trafficking.”
This case resulted from a joint investigation by Homeland Security Investigations and the Federal Bureau of Investigation along with assistance from the following additional law enforcement agencies: the Gary Indiana Police Department; the Oak Forest Illinois Police Department; the Hammond Indiana Police Department, the Hobart Indiana Police Department, the Lake Station Indiana Police Department, the Lake County Indiana Sheriff’s Office, the Indiana State Police, the United States Marshal’s Service, the Hong Kong Police and the HSI Hong Kong Attaché.
U.S. Attorney Thomas Kirsch, Homeland Security Investigations Special Agent in Charge James Gibbons, and Federal Bureau of Investigation Special Agent in Charge Grant Mendenhall also thanked the following community organizations for providing services to HV and XC during the investigation and prosecution: Asian Human Services of Chicago, IL; Haven House of Hammond, IN; Cornerstone Community Outreach of Chicago, IL; and Heartland Alliance in Chicago, IL.
This case was prosecuted by Assistant United States Attorneys Jill Koster and Abizer Zanzi.
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Cedar Rapids Man Pleads Guilty to Possessing Child PornographyRead the Press Release
A man who possessed child pornography pled guilty on July 8, 2019, in federal court in Cedar Rapids.
Troy French, age 29, from Cedar Rapids, was convicted of one count of possession of child pornography. At the plea hearing, French admitted that, between 2012 and 2017, he knowingly possessed child pornography, including one or more depictions of prepubescent children.
Sentencing before United States District Court Judge C.J. Williams will be set after a presentence report is prepared. French was taken into custody by the United States Marshal after the guilty plea and will remain in custody pending sentencing. French faces a possible maximum sentence of 20 years’ imprisonment, a $250,000 fine, $5,100 in special assessments, and supervised release for 5 years to life following any imprisonment.
This case is being prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Federal Bureau of Investigation.
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 19-5.
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Buffalo Business Owner Sentenced for Tax Fraud and Harboring an Illegal AlienRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y.- U.S. Attorney James P. Kennedy, Jr. announced today that Todd Cameron, 47, of Buffalo, NY, who was convicted of filing a false tax return and transporting and harboring an illegal alien, was sentenced to serve 51 months in prison by U.S. District Judge Richard J. Arcara. The defendant was also ordered to pay restitution in the amount of $508,340 to the IRS.
Assistant U.S. Attorney Russell T. Ippolito, who handled the case, stated that between June 2012 and December 2015, Cameron operated the Buffalo Remodeling & Construction Co. of W.N.Y. and Buffalo Roofing Co. For the tax years 2013-2015, the defendant failed accurately to report income generated from his businesses to the Internal Revenue Service.
In addition, between July 2015 and December 2015, Cameron transported and harbored six illegal aliens for the purpose of commercial advantage and private financial gain. The defendant paid for the illegal aliens to be transported from the State of Maryland here to the Western District of New York to work for his roofing business. Cameron then paid to house the illegal aliens, first at a local hotel, and then at a house owned by a business of the defendant.
The sentencing is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of Jonathan D. Larsen, Special Agent- in-Charge, and Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly.
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Boston Gang Member Pleads Guilty to Federal Firearm OffenseRead the Press Release
BOSTON – A Boston man affiliated with the Vine/Forest Street and Orchard Park gangs pleaded guilty today in federal court in Boston to illegally possessing a firearm and ammunition.
Quantae Elmore, 22, pleaded guilty to one count of being a felon in possession of a firearm and ammunition. U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for Oct. 10, 2019. Elmore was arrested and charged federally in July 2018 and has been in custody since.
On May 4, 2018, police officers encountered Elmore with a loaded firearm in his waistband on Zeigler Street in the Orchard Gardens neighborhood, in the company of other Vine/Forest Street and Orchard Park gang members. Elmore had previously been convicted of a crime punishable by more than one year in prison and was therefore prohibited by federal law from possessing a firearm and ammunition.
The charge of being a felon in possession of a firearm and ammunition provides for a sentence of no greater than 10 years in prison, three years 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; Kelly D. Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; and Boston Police Commissioner William Gross made the announcement today.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. PSN is part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Beaver Falls Drug Dealer Sentenced to 5 Years in Federal PrisonRead the Press Release
PITTSBURGH, PA - A resident of Beaver County has been sentenced in federal court to five years’ imprisonment and four years of supervised release on his conviction of violating the federal narcotics laws, United States Attorney Scott W. Brady announced today.
Senior United States District Judge Arthur J. Schwab imposed the sentence on Donavan McFrazier, 31, of Beaver Falls, Pennsylvania.
According to information presented to the court, on or about July 9, 2018, McFrazier possessed with intent to distribute a quantity of cocaine and cocaine base and 40 grams or more of fentanyl, all Schedule II controlled substances.
Assistant United States Attorney Brendan T. Conway prosecuted this case on behalf of the government.
A federally administered Organized Crime and Drug Enforcement Task Force (OCDETF) conducted the investigation leading to the indictments in this case. The task force is headed by the Drug Enforcement Administration and is comprised of members drawn from the Internal Revenue Service – Criminal Investigation, the United States Postal Inspection Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Lawrence County Drug Task Force, Pennsylvania Office of Attorney General, Borough of Baldwin Police Department, McKees Rocks Police Department, Munhall Police Department, Allegheny County Sheriff’s Office, Pittsburgh Bureau of Police, and the Pennsylvania State Police. The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
Bay City Vascular Surgeon Charged in Connection with $60 Million Health Care Fraud & Laundering More Than $49 Million Government Seeks Forfeiture of Approximately $39.9 Million Seized from DefendantRead the Press Release
An indictment unsealed today charges Dr. Vasso Godiali, age 56, vascular surgeon, with orchestrating a $60 million health care fraud scheme. Dr. Godiali is also charged with money laundering, for financial transactions involving approximately $49 million in proceeds he derived from the scheme. The indictment was announced by United States Attorney Matthew Schneider.
Schneider was joined in the announcement by Michigan Attorney General Dana Nessel, Special Agent in Charge Timothy R. Slater of the FBI’s Detroit Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office.
According to the Indictment, Godiali submitted false and fraudulent claims for the placement of stents in dialysis patients and for the treatment of arterial blood clots. The indictment further alleges that Godiali exploited medical billing software to improperly maximize payments from Medicare, Medicaid, and Blue Cross Blue Shield of Michigan. The indictment further alleges Godiali submitted false and fraudulent claims to Medicaid, Medicare, and Blue Cross for services not rendered and that he “unbundled” claims by exploiting modifier-59 to falsely claim he was performing many separate and distinct procedures, when in fact he was entitled to a single reimbursement for a single procedure.
The indictment further alleges that Godiali utilized six corporations through which he laundered approximately $49 million, which he ultimately used to fund investment accounts at multiple financial institutions. In addition, the Indictment alleges that he engaged in money laundering by using proceeds from his scheme to pay property taxes on a Houghton Lake, Michigan, residence.
"This is a large, significant and important prosecution. Health care fraud schemes, such as the one alleged to have been committed by Dr. Godiali, divert millions of dollars from public programs intended to help those in need for the sole purpose of lining the pockets of greedy doctors,” stated United States Attorney Matthew Schneider. “I salute Attorney General Dana Nessel and her staff, along with the entire law enforcement team that labored so tirelessly on this case. The work that culminated in to today’s indictment demonstrates cooperation and teamwork at its best.”
“Flagrant efforts to scam Medicare, Medicaid and Blue Cross Blue Shield of Michigan are despicable in any degree—but particularly so when tens of millions of dollars are involved. Thanks to United States Attorney Matthew Schneider and his team along with the efforts of our own Health Care Fraud Unit and the Michigan Department of Health and Human Services Office of Inspector General staff, which initiated the early investigation into this alleged health care fraud scheme, it has come to a halt,” said Michigan Attorney General Dana Nessel. “Once it became clear that the potential Medicare fraud exposure in this case was ten times what our own Medicaid fraud exposure was, we reached out to the U.S. Attorney’s Office to increase the depth and breadth of the investigation. I am proud of the efforts of everyone involved and look forward to making sure this doctor never sees another dime of taxpayer money.”
“Today’s indictment proves the collective resources of law enforcement and the private sector can successfully combat fraud in our health care system,” said Special Agent in Charge Slater. “Fraud schemes of this type cost tax payers billions of dollars each year and remain a top investigative priority of the FBI, HHS, and insurance companies across the country.”
“Healthcare fraud impacts everyone. The submission of false and fraudulent claims drives up the cost of healthcare and wastes vital taxpayer dollars”, said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General. “The OIG will continue to work with our federal, state, and private sector partners to identify fraud schemes and hold parties that execute these schemes accountable.”
The United States Attorney’s Office also filed a related civil lawsuit seeking the forfeiture of approximately $39.9 million seized from accounts controlled by the defendant or related to four separate real estate transactions.
An indictment is only a charge and is not evidence of guilt. Each defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
If convicted of a health care fraud charge, the defendant faces a maximum sentence of imprisonment of ten years, and a maximum fine of $250,000 on each count. If convicted of money laundering, the defendant faces a maximum sentence of twenty years of imprisonment, and a maximum fine of twice the amount laundered.
The case was investigated by Special Agents of the HHS and FBI, with cooperation and assistance from the Michigan Attorney General’s Office, Michigan Department of Health and Human Services - Office of Inspector General.
The case is being prosecuted by Assistant U.S. Attorneys Craig F. Wininger and Philip A. Ross.
Bay Area Man Sentenced to 10 Years in Prison for Methamphetamine Conspiracy and Possessing Firearms as A FelonRead the Press Release
SAN FRANCISCO –Michael Mauricio was sentenced to 120 months of imprisonment today for conspiring to distribute methamphetamine and being a felon in possession of a firearm announced United States Attorney David L. Anderson and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge Rayfield Roundtree. The sentence was handed down today by the Hon. Charles R. Breyer, United States District Judge. Judge Breyer also sentenced Mauricio to a 5-year term of supervised release.
Mauricio pleaded guilty to the charges on April 24, 2019. According to his plea agreement, Mauricio admitted the he and a co-conspirator distributed methamphetamine and guns in the San Francisco Bay Area. Mauricio attempt to avoid detection from law enforcement by using a co-conspirator to enter into transactions for him. For example, on November 1, 2018, Mauricio gave his co-conspirator 98 grams of methamphetamine and a handgun to sell to a customer. Similarly, on November 8, 2018, Mauricio gave 170 grams of methamphetamine to his co-conspirator to sell to a customer and on December 6, 2018, Mauricio gave his co-conspirator 226 grams of methamphetamine and several guns to sell to a customer. Mauricio also admitted he was a convicted felon, which made his mere possession of the firearms illegal.
On April 23, 2019, Mauricio was charged by superseding information with one count of conspiracy to distribute and possess with intent to distribute methamphetamine, in violation of 21 U.S.C. §§ 846 and 841(b)(1)(B)(viii), and two counts of being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1). Mauricio pleaded guilty to all three counts.
Assistant United States Attorney Neal C. Hong prosecuted the case with the assistance of Linda Love. The prosecution is the result of an investigation by the ATF and the San Mateo County Police Department.
Aptos Babysitter Sentenced to 30 Years in Prison for Production of Child Pornography, Conspiracy to Distribute Child PornographyRead the Press Release
SAN FRANCISCO - Ryan Michael Spencer was sentenced to 360 months in prison for production of child pornography, conspiracy to distribute and receive child pornography, and related charges, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The sentence was handed down today by the Hon. Charles R. Breyer, United States District Judge.
Spencer, 21, of Aptos, pleaded guilty to the charges on October 10, 2018. According to papers filed publicly in the case, the FBI began investigating after a witness reported to law enforcement that Spencer’s co-defendant, Bryan Petersen of Tiburon, had child pornography on his computer and in a Dropbox account. After executing a search warrant at Petersen’s residence, the FBI learned that Petersen had received thousands of images and videos containing child pornography from Spencer. The FBI also learned that the two men worked with children—Petersen as a babysitter, chess coach, and tutor in Tiburon and Spencer as a babysitter, camp counselor, and teacher-in-training in Aptos—and that they had been taking and exchanging pornographic images children entrusted to their care.
Further investigation revealed that, on several occasions, Spencer had molested at least two of the children he had babysat, including by raping one boy who was less than 10 years old at the time.
When the FBI executed a search warrant at Spencer’s residence in April 2017, several of the seized devices were encrypted and/or password-protected. United States Magistrate Judge Jacqueline Scott Corley ordered Spencer to decrypt the devices and Judge Breyer affirmed the magistrate judge’s order in April 2018. After Spencer continued to refuse to enter his passwords, the Court held Spencer in civil contempt and fined him $1,000 per day until he decrypted the devices. Spencer agreed to decrypt his devices twenty-two days after being held in civil contempt.
Spencer’s external hard drive contained tens of thousands of images and videos of child pornography downloaded from the internet. Further, his iPhone contained thousands more images of child pornography, including at least some of the child pornography Spencer had created himself. These images included dozens, and sometimes hundreds, of images of children’s genitalia that appeared to have been taken surreptitiously as boys—some as young as four or five—were attempting to change their clothes in camp cabins, pool locker rooms, and other locations. The iPhone also contained images of Spencer molesting one minor.
On May 31, 2018, a federal grand jury returned a superseding indictment charging Spencer with conspiracy to distribute and receive child pornography in violation of 18 U.S.C. § 2252(a)(2) and (b)(1), two counts of production of child pornography in violation of 18 U.S.C. § 2251(a), two counts of distribution of child pornography in violation of 18 U.S.C. § 2252(a)(2), receipt of child pornography in violation of 18 U.S.C. § 2252(a)(2), and possession of child pornography in violation of 18 U.S.C. § 2252(a)(4)(B). The superseding indictment also contained a criminal contempt charge based on Spencer’s refusal to comply with the Court’s decryption order.
In addition to the 30-year prison term, Judge Breyer imposed a 15-year term of supervised release and ordered Spencer to pay restitution to the victims in an amount to be determined at a later hearing.
On July 25, 2017, Petersen was charged by information with the same charges, except the contempt-of-court charge. On July 28, 2017, he pleaded guilty to all the charges pending against him. Judge Breyer has scheduled his sentencing for August 21, 2019.
Assistant U.S. Attorney Julie D. Garcia is prosecuting the case with the assistance of Tong Zhang. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
74-Year-Old Lapwai Man Sentenced to 46 Months for AssaultRead the Press Release
COEUR D'ALENE – Otto Mark Homan, 74, of Lapwai, Idaho, was sentenced yesterday to 46 months in federal prison for assault with a dangerous weapon and assault resulting in serious bodily injury, U.S. Attorney Bart M. Davis announced. Chief U.S. District Judge David C. Nye also ordered Homan to serve three years supervised release after he is finished serving his prison term. Homan was indicted by a federal grand jury on October 16, 2018.
According to court records, Homan walked to his neighbor’s house. He attacked the victim with a hammer/axe by hitting him once in the head. Homan then left. Homan, who was intoxicated at the time, mistakenly believed the victim had stolen his television. The victim suffered life-threatening injuries and spent over three months in various medical care facilities.
This case was investigated by the Federal Bureau of Investigation and the Nez Perce Tribal Police.
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9 July 2019
Webster City Doctor Pleads Guilty to Making False Statements about Medicare ClaimsRead the Press Release
A Webster City doctor who made false statements to the United States Attorney’s Office about Medicare claims that the doctor had billed for his nursing home patients pled guilty today in federal court in Cedar Rapids.
Dr. Joseph X. Latella, age 76, from Webster City, Iowa, was convicted of one count of making false statements relating to health care matters. At the time of the offense, Dr. Latella operated a private practice in Webster City, and he also was the Hamilton County Coroner and the medical director for multiple nursing homes in the Webster City area.
Dr. Latella admitted in a plea agreement that, in June 2018, the United States Attorney for the Northern District of Iowa was conducting a civil investigation about concerns that Dr. Latella was “upcoding” claims submitted to Medicare and Medicaid and billing for more intensive visits with patients at Webster City area nursing homes than he had performed. The United States Attorney’s investigation indicated that Dr. Latella was billing over 93% of his nursing home visits to Medicare under the most intensive and expensive claim code. For these claims to be valid, a doctor typically must spend 35 minutes at the patient’s bedside and on the patient’s facility floor or unit. Medicare paid more than $94 for these claims, but would only have paid no more than $32 if the least expensive claim code, for routine ten minute visits, had been billed. In July 2016, a Medicare contractor sent Dr. Latella a letter warning him that his billing patterns were significantly more expensive than other doctors.
In July 2018, Dr. Latella submitted sworn written answers to the United States Attorney, in which Dr. Latella falsely declared that, with respect to certain Medicare claims in 2017 and 2018, he had spent approximately 35 minutes for each of 12 patients’ care at two nursing homes. With respect to one particular date in October 2017, Dr. Latella falsely swore he “started visiting the nursing home patients at 7:30 a.m. and completed my visits with each patient at approximately 5:30 p.m.” In truth, a federal agent had conducted in-person surveillance of Dr. Latella on that date, and Dr. Latella only was on site at the first nursing home for a total of 47 minutes and did not visit the second nursing home at all on that date. The administrator of the first nursing home estimated that Dr. Latella spent approximately five minutes with each nursing home patient during his visits to that nursing home.
Dr. Latella made further false statements about claims in January and February 2018, which the Medicaid Fraud Control Unit discovered through videotaped surveillance. For example, Dr. Latella billed nine claims for services allegedly provided to nine Medicare patients, on February 2, 2018, at a nursing home, but the surveillance showed that Dr. Latella was only on site at the nursing home for a total of 14 minutes.
In total, Dr. Latella admitted that, between January 1, 2014, and November 30, 2018, he submitted 1,140 false claims to Medicare, which were not justified, and he was paid $107,980.59 by Medicare for those claims. Dr. Latella also admitted that he caused Medicaid to make unjustified payments in the total amount of $9,218.73 for these claims. As a part of his plea agreement, Dr. Latella has agreed to pay no less than $107,980.59 to Medicare and $9,218.73 to Medicaid for economic losses caused by his commission of the offense.
Sentencing before United States District Court Chief Judge Leonard T. Strand will be set after a presentence report is prepared. Dr. Latella remains free on bond pending sentencing. Dr. Latella faces a possible maximum sentence of five years’ imprisonment, a $250,000 fine, and three years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Tim Vavricek and was investigated by the Department of Health and Human Services, Office of the Inspector General, and the Iowa Medicaid Fraud Control Unit.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 19-CR-3030.
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U.S. Attorney to Join Federal, State, and Local Law Enforcement for Press Conference Tomorrow at 3:00 p.m.Read the Press Release
Charleston, South Carolina --- United States Attorney Sherri A. Lydon announced today that a press conference will be held tomorrow, Wednesday, July 10, 2019, at 3:00 p.m., at the North Charleston Police Department Headquarters/City Hall, 2500 City Hall Lane, North Charleston, South Carolina, 29406.
Represented at the press conference will be the U.S. Attorney’s Office for the District of South Carolina, Federal Bureau of Investigation, South Carolina Law Enforcement Division, Charleston Police Department, North Charleston Police Department, Mount Pleasant Police Department, Charleston County Sheriff’s Office, and Berkeley County Sheriff’s Office.
WHEN: Wednesday, July 10, 2019, at 3:00 p.m.
WHERE: North Charleston Police Department Headquarters/City Hall
2500 City Hall Lane
North Charleston, SC 29406
NOTE: Press inquiries regarding logistics should be directed to Lance Crick, 864-282-2105. All media must present a government-issued photo ID (such as a driver’s license). Members of the media wishing to attend the remarks should gather in the atrium of the City Hall complex at 2:30 p.m., 30 minutes in advance.
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Two Tennessee Men Sentenced for Possession of Counterfeit ObligationsRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Antwaun Anglin, age 39, of Nashville, Tennessee; and Christopher Marquis Rodgers, age 20, of Humboldt, Tennessee, were sentenced to 15 months’ imprisonment and 3 years’ supervised release, and 13 months’ imprisonment and 3 years’ supervised release, respectively. for Possession Of Counterfeit Obligation Of The United States, in violation of Title 18, United States Code, Sections 474(a) and 2. Rodgers was additionally sentenced for Uttering Counterfeiting Obligation of the United States, in violation of Title 18, United States Code, Sections 472 and 2. The charges arose from an investigation by the Atoka Police Department, the Caney Police Department, and the United States Secret Service.
The Indictment alleged that on September 13, 2018, the Defendants knowingly had in their possession and custody, with intent to sell or otherwise use, approximately 578 falsely made and counterfeited twenty-dollar Federal Reserve Notes, Series 2013, Serial No. MK12783752B, Quadrant # 4, Face Plate 28, Back Plate 22, Federal Reserve Bank K11, made after the similitude of obligations issued under the authority of the United States, in violation of Title 18, United States Code, Sections 474(a) and 2.
The Indictment also alleged that Christopher Marquis Rodgers, with intent to defraud, passed to Sonic Drive-In, located in Atoka, a falsely made, forged and counterfeited obligation of the United States, a Federal Reserve Note in the denomination of twenty dollars, Series of 2013, Serial No. MK12783752B, which he then knew to be falsely made, forged and counterfeited, in violation of Title 18, United States Code, Sections 472 and 2.
The investigation leading to the indictment and sentencing of Anglin and Rodgers began when an alert citizen noticed the money she received had an unusual appearance. She promptly called the Atoka Police Department to report the suspected counterfeit currency and describe the vehicle and the occupants involved. The Caney Police Department located the vehicle and occupants and Atoka Police conducted the investigation. Counterfeited twenty-dollar bill were located in the vehicle. The United States Secret Service assisted in the investigation.
The Honorable Ronald A. White, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. Assistant United States Attorney Clay Compton represented the United States.Two Individuals Sentenced for Roles in Distributing MethamphetamineRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Kevin Ruany Grijalva-Soto, age 29, and Leslie Azucena Rubio-Rodriguez, age 28, were sentenced to 135 months’ imprisonment and 3 years’ supervised release, and 58 months’ imprisonment and 3 years’ supervised release, respectively, for Possession With Intent To Distribute Methamphetamine. The charges arose from an investigation by the Oklahoma Highway Patrol (OHP) and the Drug Enforcement Administration.
The Indictment alleged that on or about September 18, 2018 the defendants knowingly and intentionally possessed with intent to distribute 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance. The investigation began when an Oklahoma Highway Patrol Trooper working in Sequoyah County stopped the vehicle occupied by the defendants. An OHP canine alerted, indicating the presence of controlled dangerous substances. The search that followed revealed approximately eleven pounds of methamphetamine.
United States Attorney Brian J. Kuester said, “Tens of thousands of dosage units of methamphetamine – intended destination cities, towns, communities and homes - were stopped due to the diligent work of the Oklahoma Highway Patrol. Those in the business of distributing poison for profit, as these defendants, will continue to be aggressively pursued and the consequences as dictated by our laws will be imposed.”
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. Assistant United States Attorney Dean Burris represented the United States.
Twin Cities Coin Dealer Sentenced to 30 Months in Prison for Counterfeit Coin Fraud SchemeRead the Press Release
United States Attorney Erica H. MacDonald today announced the sentencing of BARRY RON SKOG, 68, to 30 months in prison for perpetrating a counterfeit coin fraud scheme. SKOG, who pleaded guilty on February 21, 2019, was sentenced earlier today before Judge Wilhelmina M. Wright in U.S. District Court in St. Paul, Minnesota.
“The Minnesota Department of Commerce is proud of our role in uncovering this counterfeit coin fraud scheme,” said Matt Vatter, Minnesota Department of Commerce Assistant Commissioner of Enforcement. “Every day, our investigators in the Commerce Fraud Bureau are working to protect Minnesotans against these types of schemes and fraudulent activities and ensure a business climate where legitimate businesses can serve the needs of our citizens.”
According to the defendant’s guilty plea and documents filed in court, SKOG owned and operated a business which engaged in advertising and selling numismatic coins. Through his business, SKOG posted advertisements for coins in a publication called Numismatic News. When potential buyers responded to the ads, SKOG would mail them lists of available coins for purchase, many of which were counterfeit. In his communications with the victims, SKOG would often represent himself as an employee named “Ron Peterson,” when, in fact, there were no other owners or employees of the company other than SKOG. In total, SKOG stole more than $57,000 from his identified victims. SKOG also intended to create additional loss by advertising for sale 275 additional counterfeit coins at an advertised sale value of approximately $235,000.
This case is the result of an investigation conducted by the Minnesota Commerce Fraud Bureau and the Burnsville Police Department.
Based on the evidence obtained in this case, authorities believe there may be additional victims who have not yet been identified. Anyone with information about this matter is encouraged to call the Minnesota Commerce Fraud Bureau at 651-539-1617. Callers may remain anonymous.
Assistant U.S. Attorney Manda M. Sertich prosecuted the case.
Defendant Information:
BARRY RON SKOG, 68
Burnsville, Minn.
Convicted:
- Sale of counterfeit coins, 1 count
- Mail fraud, 1 count
Sentenced:
- 30 months in prison
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Tulsa Software Developer Pleads Guilty to Payroll Tax FraudRead the Press Release
A computer software development company owner pleaded guilty Monday to failing to account for and pay over employment taxes withheld from his employees’ wages announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney R. Trent Shores for the Northern District of Oklahoma.
According to documents and information provided to the Court, as the owner and operator of Tulsa-based Zealcon Corporation, Earenest J. Grayson Jr. was responsible for withholding, accounting for and paying over to the Internal Revenue Service (IRS) payroll taxes and withholdings due on the wages paid to Zealcon employees. For the period, January 2014 through June of 2016. Grayson intentionally caused a total tax loss of more than $1 million by intentionally not paying to the IRS income, Social Security and Medicare taxes withheld from Zealcon employees’ wages and Social Security and Medicare taxes due from Zealcon on those wages.
“Failing to account for or pay payroll taxes is not acceptable.” said Principal Deputy Attorney General Zuckerman of the Justice Department’s Tax Division. “The Department of Justice, working with the IRS, will ensure that our tax system is fairly enforced throughout the country.”
“Earenest Grayson is a dishonest employer who cheated both his employees and the United States government of more than $1 million in stolen payroll taxes. Some of those taxes were payments for the Social Security and Medicare coverage of the employees,” said U.S. Attorney Trent Shores. “I hope Mr. Grayson’s potential prison sentence will dissuade other business owners from trying to cheat the system. Millions of honest small businesses pay their fair share of taxes to finance government operations as well as Social Security and Medicare for the elderly. Unfortunately, Mr. Grayson’s choice not to do so has subjected him to criminal penalties.”
United States District Court Judge Claire V. Eagan scheduled Grayson’s sentencing for Oct. 3, 2019.
The case was investigated by special agents of IRS-Criminal Investigation. Assistant Chief Andrew Kameros of the Tax Division and Assistant U.S. Attorneys Victor A.S. Régal and Charles M. McLoughlin are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Tulsa Man Sentenced for Six Armed Robberies as Part of Project Safe Neighborhoods ProsecutionRead the Press Release
United States Attorney Trent Shores announced that Treveon Montrell Vaughn, 27, of Tulsa, was sentenced in U.S. District Court for obstructing commerce by robbery and to brandishing a firearm during six different robberies at local donut and Dollar General stores.
Chief U.S. District Judge John E. Dowdell sentenced Vaughn to 319 months in federal prison and further ordered him to pay restitution to the businesses in the amount of $60,000.
“Treveon Vaughn was a gun-toting serial armed robber whose crime spree was brought to an end by dedicated police work and diligent prosecution. Vaughn also admitted to influencing juveniles to participate in his criminal transgressions. Alpha Criminals like Vaughn are exactly who Project Safe Neighborhoods was designed to identify and hold accountable,” said U.S. Attorney Trent Shores “No longer will Vaughn be able to corrupt youths in our community nor violently rob our local businesses.”
Vaughn committed six armed robberies between June 24, 2018, and August 17, 2018, and at one point committed three robberies in one day. In each of the robberies, Vaughn wore a mask and brandished a firearm, threatening store employees and stealing cash from registers. Vaughn’s crime spree ended when Tulsa police officers were called to the scene of a robbery in progress at a Dollar General store on August 17, 2018, and Vaughn became trapped inside the store. At one point during the resulting stand-off with officers, the defendant started a small fire, trying to destroy evidence. He eventually surrendered and was taken into custody. He eventually admitted to influencing and leading a group of juveniles into his criminal activity, stating they would do anything for money.
The Tulsa Police Department and the FBI conducted the investigation. Assistant U.S. Attorney Ryan Roberts prosecuted the case.
This prosecution is a result of the Project Safe Neighborhoods (PSN) initiative. PSN was reinvigorated in 2017 as part of the Justice Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership the local community and with federal, state, local and tribal law enforcement to develop effective, locally-based strategies to reduce violent crime.
Toledo man sentenced to more than 14 years in prison for selling heroin that resulted in the fatal overdose of two womenRead the Press Release
A Toledo man was sentenced to more than 14 years in prison for selling heroin that resulted in the fatal overdose of two women.
Harold Sasse, 42, previously pleaded guilty to possession with intent to distribute a controlled substance resulting in death. He was sentenced to 174 months in federal prison and ordered to pay $13,600 in restitution.
Sasse sold heroin on March 29, 2017 to two people, identified in court documents as E.M. and T.W. Sometime between that day and March 30, 2017, the women ingested the heroin and died, according to court documents.
“Every death represents someone’s son or daughter, friend or neighbor,” said U.S. Attorney Justin Herdman. “This prison sentence of more than 14 years shows that those who profit from this drug epidemic will be held accountable for their actions.”
"Overdoses have killed far too many Americans,” said FBI Special Agent in Charge Eric B. Smith. “The FBI, in collaboration with the Toledo Police Department, is avidly committed to holding those like Harold Sasse accountable for selling the deadly drugs which are killing our fellow citizens."
This case was investigated by the Federal Bureau of Investigation and the Toledo Police Department. It is being handled by Assistant U.S. Attorney Tracey Ballard Tangeman.
Three Members of a Pike County Family Sentenced for Cocaine Trafficking ConspiracyRead the Press Release
PIKEVILLE, Ky. — Three members of a Pike County family have been sentence to federal prison for their involvement in a conspiracy to distribute cocaine in Pike County. On Monday, United States District Judge Robert E. Wier sentenced Roy Blankenship to 85 months in prison. Today, Blankenship’s wife, Shirley Blankenship, and his brother, Larry Blankenship, were sentenced to 34 and 33 months, respectively.
Each of the Blankenships pled guilty to the cocaine trafficking charges in March of 2019. The FBI’s investigation revealed that between 2010 and 2018, the Blankenships regularly obtained cocaine from out of state and sold it in the Stopover community of Pike County. This conviction marks the fourth federal felony conviction for Roy Blankenship, including a prior felony conviction related to cocaine trafficking.
Under federal law, the Blankenships must serve 85 percent of their prison sentences. Upon their release, the Blankenships will be under the supervision of the United States Probation Office.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; James Robert Brown, Jr., Federal Bureau of Investigation Special Agent in Charge for the Louisville Field Division; Richard Sanders, Kentucky State Police Commissioner; and Christopher Edmonds, Chief of the Pikeville Police Department jointly made the announcement. The United States was represented by Assistant United States Attorney Andrew H. Trimble.
Three Massachusetts Men Charged with Bank Fraud ConspiracyRead the Press Release
BOSTON – Three Massachusetts men were charged today in federal court in Boston in connection with schemes to use false identification documents to obtain funds from bank customers’ accounts.
Lindsley J. Georges, 26, and Dave Guillaume, 23, both of Everett, and Fesnel Lafortune, 30, of Milton, were each charged with one count of conspiracy to commit bank fraud. The defendants were arrested this morning and made an initial appearance in federal court in Boston.
According to the complaint charging Georges and Guillaume, in December 2017 and January 2018, two unindicted co-conspirators obtained four bank checks totaling nearly $800,000 from two Santander Bank customers’ accounts. Two other co-conspirators obtained two bank checks totaling more than $330,000 from a TD Bank customer’s account, by representing that they were the customers. It is alleged that Georges deposited two of the fraudulently-obtained Santander Bank checks into a business bank account he controlled, and thereafter withdrew about $200,000 in six cash withdrawals at six different bank branch offices. Guillaume deposited one of the fraudulently-obtained Santander Bank checks to a business bank account he had opened using a fake name. It is alleged that Guillaume thereafter withdrew about $46,000 in cash in five transactions at four different bank branches. Georges and Guillaume also each deposited one of the fraudulently-obtained TD Bank checks to a business bank account that Guillaume had opened using a fake name and driver’s license.
According to the complaint charging Lafortune, in April 2017, another unindicted co-conspirator obtained two bank checks totaling more than $340,000 from a Santander Bank customer’s account, using a fraudulent passport and credit card in the customer’s name. Lafortune deposited one of the checks in the amount of $175,500 to a business bank account he had opened using a false name, date of birth and Social Security number. Within days of depositing the check, Lafortune withdrew nearly $30,000 in cash in three transactions at three different bank branches.
The charge of conspiracy to commit bank fraud carries a sentence of no greater than 30 years in prison, up to five years of supervised release and a fine of up to $1 million. 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; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office; and Joseph W. Cronin, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. Assistant U.S. Attorneys Leslie A. Wright and Mark J. Balthazard of Lelling’s Securities and Financial Fraud Unit are prosecuting the cases.
The details contained in the charging documents are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Texas Man Convicted of Traveling to Engage in Sexual Activity with MinorsRead the Press Release
FRANKFORT, Ky. - A Texas man was convicted in federal court, on July 3, 2019, following a three day jury trial, for crossing a state line to engage in sexual acts with minors who had not attained the age of 12. Gregory Lee Hruby, of Brazoria, Texas, faces a mandatory minimum sentence of 360 months (30 years) on each of two counts of traveling across a state line to engage in a sexual act with a person under the age of 12. He also faces a potential twenty-year sentence for possession of visual depictions of minors engaging in sexually explicit conduct.
According to trial testimony, Hruby communicated with an undercover law enforcement agent, who responded to a post that Hruby had placed on the Whisper Application. In the communications, the undercover officer portrayed herself as the mother of 9 and 11 year-old daughters, who she was willing to permit Hruby to “teach how to be a woman.” Hruby engaged in text and telephone conversations with the undercover officer in which he indicated his interest in engaging in sexual intercourse with the fictitious minors. Hruby was arrested after law enforcement officers met him at the airport in Lexington, on October 19, 2018, following his arrival on a flight from Houston, Texas. Hruby also had child pornography images on his cell phone.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Steve Igyarto, Special Agent in Charge, Department of Homeland Security – Homeland Security Investigations (DHS-HSI); and Kentucky Attorney General Andy Beshear jointly announced the verdict.
The investigation was conducted by DHS-HSI and the Cyber Crimes Branch of the Office of the Attorney General of Kentucky. Assistant U.S. Attorneys David A. Marye and Tashena A. Fannin represented the federal government in the case.
Substance Abuse Treatment Center Owner Pleads Guilty to $57 Million Money Laundering Conspiracy in Connection with Hospital Pass-Through Billing SchemeRead the Press Release
The owner of a Jacksonville, Florida-area substance abuse treatment center pleaded guilty today for his role in a $57 million money laundering conspiracy associated with a pass-through billing scheme involving laboratory testing services.
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 Rachel Rojas of the FBI’s Jacksonville Field Office, Deputy Assistant Inspector General Thomas W. South of the U.S. Office of Personnel Management-Office of Inspector General (OPM-OIG), Special Agent in Charge Rafiq Ahmad of the U.S. Department of Labor-Office of Inspector General (DOL-OIG) and Special Agent in Charge Basil P. Demczak of the Amtrak Office of Inspector General (Amtrak-OIG) made the announcement.
Kyle Ryan Marcotte, 36, of Jacksonville Beach, Florida, pleaded guilty before U.S. Magistrate Judge Joel Toomey of the Middle District of Florida to a one-count information charging him with conspiracy to commit money laundering. As part of his guilty plea, Marcotte agreed to a forfeiture judgment of $10,220,281.42. Sentencing before U.S. District Judge Timothy Corrigan of the Middle District of Florida has not yet been scheduled.
According to admissions made as part of his guilty plea, Marcotte was the owner of a substance abuse treatment facility in Jacksonville Beach, Florida. In approximately 2015, Marcotte entered into an arrangement with a laboratory owner to send urine samples for the facility’s patients to the owner’s lab for urine drug testing (UDT), in exchange for receiving 40 percent of the insurance reimbursements. The lab owner, in turn, arranged with the managers of Campbellton–Graceville Hospital (CGH) and Regional General Hospital Williston (RGH), rural hospitals in Florida, to have the testing billed to private insurers through CGH and RGH and reimbursed at favorable rates under the hospitals’ in-network contracts with insurers. Marcotte also admitted that he brokered deals with other substance abuse treatment centers to have their UDTs billed through CGH and RGH in exchange for Marcotte receiving 10 percent of the insurance reimbursements, while the other substance abuse facilities would receive 30 percent of the insurance reimbursements.
The lab owner subsequently acquired Chestatee Hospital, in Dahlonega, Georgia, and other rural hospitals. Marcotte admitted that he continued to supply samples from his substance abuse treatment facility and continued to broker deals with other substance abuse treatment centers to have UDTs tested at the lab and billed to insurers through Chestatee and the other hospitals, all in exchange for a percentage of the insurance reimbursements. The reimbursements were transmitted from the hospitals to the lab, which then transmitted them to two companies Marcotte controlled, North Florida Labs and KTL Labs using financial transactions and bank accounts that Marcotte had established to facilitate the payments. Marcotte arranged to transfer a portion of the reimbursements from KTL Labs as kickbacks to the individuals and companies that controlled the substance abuse treatment centers in order to further the fraudulent scheme. Marcotte also transferred a portion of the reimbursements to himself and to purchase real estate and items of real property, he admitted.
Marcotte caused $50 million in payments to be made from KTL Labs’ bank accounts to at least 88 companies and individuals associated with substance abuse treatment centers that supplied urine samples for testing. The total amount of money that was part of the money laundering scheme was $57.3 million, Marcotte admitted.
The case was investigated by the FBI, OPM-OIG, DOL-OIG and Amtrak OIG. Trial Attorneys Gary A. Winters and James V. Hayes of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Tysen Duva of the Middle District of Florida are prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. 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.
Substance Abuse Treatment Center Owner Pleads Guilty to $57 Million Money Laundering Conspiracy in Connection with Hospital Pass-Through Billing SchemeRead the Press Release
Jacksonville, FL – The owner of a Jacksonville, Florida-area substance abuse treatment center pleaded guilty today for his role in a $57 million money laundering conspiracy associated with a pass-through billing scheme involving laboratory testing services.
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 Rachel Rojas of the FBI’s Jacksonville Field Office, Deputy Assistant Inspector General Thomas W. South of the U.S. Office of Personnel Management-Office of Inspector General (OPM-OIG), Special Agent in Charge Rafiq Ahmad of the U.S. Department of Labor-Office of Inspector General (DOL-OIG) and Special Agent in Charge Basil P. Demczak of the Amtrak Office of Inspector General (Amtrak-OIG) made the announcement.
Kyle Ryan Marcotte, 36, of Jacksonville Beach, Florida, pleaded guilty before U.S. Magistrate Judge Joel Toomey of the Middle District of Florida to a one-count information charging him with conspiracy to commit money laundering. As part of his guilty plea, Marcotte agreed to a forfeiture judgment of $10,220,281.42. Sentencing before U.S. District Judge Timothy Corrigan of the Middle District of Florida has not yet been scheduled.
According to admissions made as part of his guilty plea, Marcotte was the owner of a substance abuse treatment facility in Jacksonville Beach, Florida. In approximately 2015, Marcotte entered into an arrangement with a laboratory owner to send urine samples for the facility’s patients to the owner’s lab for urine drug testing (UDT), in exchange for receiving 40 percent of the insurance reimbursements. The lab owner, in turn, arranged with the managers of Campbellton–Graceville Hospital (CGH) and Regional General Hospital Williston (RGH), rural hospitals in Florida, to have the testing billed to private insurers through CGH and RGH and reimbursed at favorable rates under the hospitals’ in-network contracts with insurers. Marcotte also admitted that he brokered deals with other substance abuse treatment centers to have their UDTs billed through CGH and RGH in exchange for Marcotte receiving 10 percent of the insurance reimbursements, while the other substance abuse facilities would receive 30 percent of the insurance reimbursements.
The lab owner subsequently acquired Chestatee Hospital, in Dahlonega, Georgia, and other rural hospitals. Marcotte admitted that he continued to supply samples from his substance abuse treatment facility and continued to broker deals with other substance abuse treatment centers to have UDTs tested at the lab and billed to insurers through Chestatee and the other hospitals, all in exchange for a percentage of the insurance reimbursements. The reimbursements were transmitted from the hospitals to the lab, which then transmitted them to two companies Marcotte controlled, North Florida Labs and KTL Labs using financial transactions and bank accounts that Marcotte had established to facilitate the payments. Marcotte arranged to transfer a portion of the reimbursements from KTL Labs as kickbacks to the individuals and companies that controlled the substance abuse treatment centers in order to further the fraudulent scheme. Marcotte also transferred a portion of the reimbursements to himself and to purchase real estate and items of real property, he admitted.
Marcotte caused $50 million in payments to be made from KTL Labs’ bank accounts to at least 88 companies and individuals associated with substance abuse treatment centers that supplied urine samples for testing. The total amount of money that was part of the money laundering scheme was $57.3 million, Marcotte admitted.
The case was investigated by the FBI, OPM-OIG, DOL-OIG and Amtrak OIG. Trial Attorneys Gary A. Winters and James V. Hayes of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Tysen Duva of the Middle District of Florida are prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. 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.
St. Mary’s County Drug Dealer Sentenced to 10 Years in Federal Prison for Distributing Fentanyl Resulting in a Victim’s DeathRead the Press Release
Greenbelt, Maryland – U.S. District Judge Theodore D. Chuang today sentenced Matthew Joseph Lusby, age 46, of Mechanicsville, Maryland, to 10 years in federal prison, followed by three years of supervised release, for distribution of fentanyl. As a result of Lusby’s drug distribution, a victim died.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Jesse R. Fong of the Drug Enforcement Administration - Washington Field Division; and St. Mary’s County Sheriff Tim Cameron.
“Federal, state, and local law enforcement are working together to arrest and prosecute those who peddle deadly fentanyl,” said U.S. Attorney Robert K. Hur. “Fentanyl is killing thousands of people each year in Maryland. We must do everything we can to reduce overdose deaths from this drug and from all opioids.”
According to Lusby’s plea agreement, on May 18, 2018, Lusby distributed fentanyl to Victim 1. Victim 1 was found unresponsive in his home on May 19, 2018, next to hypodermic needles and a small bag of powder that tested positive for fentanyl. Shortly thereafter, the Victim 1 was pronounced dead. The medical examiner determined that the cause of death was fentanyl and morphine intoxication. Phone records showed that Victim 1 had a 10-minute phone conversation with Lusby the day before he died. Law enforcement then began investigating Lusby for distributing heroin and fentanyl in Southern Maryland.
As detailed in his plea agreement, on August 16, 2018, a confidential informant working at the direction of law enforcement, purchased heroin from Lusby in Lusby’s home. On September 6, 2018, a search warrant was executed at Lusby’s residence and law enforcement recovered 14 grams of heroin mixed with fentanyl, 30.9 grams of pure fentanyl, drug packaging materials, four digital scales, several needles, and a credit card in Lusby’s name with heroin and fentanyl residue.
United States Attorney Robert K. Hur praised the DEA and the St. Mary’s County Sheriff’s Office for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Gregory Bernstein and Jessica Collins, who prosecuted the case.
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St. Francis Woman Sentenced for Meth and Gun ChargesRead the Press Release
United States Attorney Ron Parsons announced that a St. Francis, South Dakota, woman convicted of Conspiracy to Distribute a Controlled Substance and Possession of a Firearm by a Prohibited Person was sentenced on July 1, 2019, by U.S. District Judge Roberto A. Lange.
Rainbow Stoneman, age 37, was sentenced to 100 months in federal prison, 4 years of supervised release, a $1,000 fine, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Stoneman was indicted by a federal grand jury on December 11, 2018. She pled guilty on April 16, 2019.
The conviction stemmed from a drug conspiracy that occurred beginning no later than October 15, 2018, and continuing to November 2, 2018, in which Stoneman knowingly and intentionally conspired with her co-defendants to distribute and possess with the intent to distribute methamphetamine, a Schedule II controlled substance, in the District of South Dakota. Further, Stoneman was an unlawful user of and addicted to a controlled substance, which prohibited her from possessing firearms, and she was in possession of a firearm at the time of her arrest. At the time of her arrest, law enforcement recovered 256 grams of methamphetamine, scales, baggies and other drug trafficking items.
Drug trafficking is an inherently violent activity. Firearms are tools of the trade for drug dealers. It is common to find drug traffickers armed with guns in order to protect their illegal drug product and cash, and enforce their illegal operations.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and local communities to develop effective, locally-based strategies to reduce violent crime.
This case was investigated by the Northern Plains Safe Trails Drug Enforcement Task Force and Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Meghan N. Dilges prosecuted the case.
Stoneman was immediately turned over to the custody of the U.S. Marshals Service.
South Florida Man Pled Guilty to Access Device Fraud and Aggravated Identity Theft SchemeRead the Press Release
South Florida man pled guilty to identity theft scheme.
Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida, Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Bryan Pegues, Chief, Aventura Police Department, made the announcement.
Wensley Edmond, 30, pled guilty to one count of unauthorized access device fraud and one count of aggravated identity theft. According to court documents, on February 27, 2015, Aventura Police Department officers arrested Edmond and found credit cards and debit cards in other individuals’ names on Edmond’s person. Additionally, Aventura Police Department officers found prepaid card envelopes with the handwritten names of other individuals, six different debit cards with card numbers that matched income tax return refunds issued in other individuals’ names, an ATM receipt utilizing one of the aforementioned cards at a different bank location earlier that same day, and approximately $6,000 in cash, in Edmond’s car. The victims did not give anyone permission to use their personal identification information, to use cards in their name, or to withdraw money using the cards in their names.
Edmond is scheduled to be sentenced on September 12, 2019 at 11:30 a.m., before U.S. District Judge Joan A. Lenard. Edmond faces up to 12 years in prison.
U.S. Attorney Fajardo Orshan commended the investigative efforts of IRS-CI and the Aventura Police Department. The case is being prosecuted by Assistant U.S. Attorney Frederic Shadley.
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 on http://pacer.flsd.uscourts.gov.
San Diego Man Sentenced to 20 Years in Federal Prison for Bringing 68 Pounds of Methamphetamine and Fentanyl to Torrance HotelRead the Press Release
LOS ANGELES – A San Diego man has been sentenced to 240 months in federal prison on narcotics trafficking charges after getting caught at a Torrance hotel carrying two suitcases filled with 59 pounds of methamphetamine and nearly nine pounds of fentanyl.
Salvador Delrio, 46, was sentenced at a Monday hearing by United States District Judge Percy Anderson. Delrio pleaded guilty on April 25 to three felonies: possession with intent to distribute methamphetamine, possession of a firearm in furtherance of a drug trafficking crime, and being a felon in possession of a firearm and ammunition.
On September 5, 2018, Delrio walked into a hotel in Torrance with two suitcases that contained 26.8 kilograms (59.1 pounds) of methamphetamine and four kilograms (8.9 pounds) of the synthetic opioid fentanyl. Delrio was subsequently arrested at the hotel as part of a law enforcement operation and also was found to be carrying a loaded .45-caliber Colt firearm in his waistband.
Delrio’s criminal history includes felony convictions in California state court for possession of methamphetamine in 1993, transportation and sale of a controlled substance in 1995, unlawful taking of a vehicle in 1996, and carjacking in 2003, according to court documents.
This matter was investigated by the Drug Enforcement Administration.
This case is being prosecuted by Assistant United States Attorneys Kevin B. Reidy and Matthew J. Rosenbaum of the General Crimes Section.
Rochester Man Who Recruited Minor to Work as Prostitute Going to Prison for over 15 YearsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Michael Williams, 52, of Rochester, NY, who was convicted of sex trafficking of a minor, was sentenced to serve 188 months in prison by Chief U.S. District Judge Frank P. Geraci, Jr.
Assistant U.S. Attorneys Melissa M. Marangola and Tiffany H. Lee, who handled the case, stated that between January and February 2012, the defendant enticed a minor victim (Victim 1), to engage in a commercial sex act. Williams recruited and enticed Victim 1 to live with him and to earn money working as a prostitute. Advertisements for Victim 1 were posted on Backpage.com. The investigation began when a family member saw an ad for Victim 1 online.
The sentencing is the result of an investigation by the Federal Bureau of Investigation, Rochester Office, under the direction of Special Agent-in-Charge Gary Loeffert, and the Monroe County District Attorney's Office, under the direction of District Attorney Sandra Doorley.
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Rochester Man Sentenced for Hacking Online Accounts of WomenRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y.—U.S. Attorney James P. Kennedy, Jr. announced today that Justin Potts, 37, of Rochester, NY, who was convicted of transfer of a means of identification, was sentenced to three years’ probation by U.S. District Judge Charles J. Siragusa.
Assistant U.S. Attorney Melissa M. Marangola, who is handling the case, stated that between March 2015 and December 2016, the defendant gained unauthorized access to various women’s digital accounts, all of which were password protected. During this time period, Potts used his technical knowledge and password breaking software to harvest the usernames and passwords of more than 100 women’s online accounts including Facebook accounts, iCloud accounts, Gmail accounts, Yahoo accounts and Hotmail accounts. The defendant entered these accounts without permission of the owners and used this access to obtain their personal information and personal photographs. Potts saved the personal information of the various women on his electronic devices.
Investigators believe 150 victims were targeted as a result of the computer intrusion scheme orchestrated by Potts.
The sentencing is the result of an investigation by the Federal Bureau of Investigation, Rochester Office, under the direction of Special Agent-in-Charge Gary Loeffert, and the Rochester Police Department, under the direction of Chief La’Ron Singletary.
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Rochester Man Pleads Guilty to Selling CocaineRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Harold A. Rodriguez, 44, of Rochester, NY, pleaded guilty before Chief U.S. District Judge Frank P. Geraci, Jr. to possessing with intent to distribute and distributing cocaine. The charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine.
Assistant U.S. Attorney Matthew T. McGrath, who is handling the case, stated that in 2017, law enforcement officers were alerted to the drug trafficking activities of the defendant. On January 25, 2018, Rodriguez sold approximately 64 grams of cocaine to an individual working with the Bureau of Alcohol, Tobacco, Firearms and Explosives in exchange for $2,700 in cash. In addition, Rodriguez sold a total of 63 grams of cocaine to the individual on two separate occasions between February 8 and March 15, 2018.
On April 20, 2019, the defendant was pulled over by a New York State Police Trooper on Route 490 in Rochester and arrested for Unlicensed Operation of a Motor Vehicle. During a search of the vehicle, the trooper found a Glock pistol and ammunition.
The plea is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge John B. Devito, and the New York State Police, under the direction of Major Eric Laughton.
Sentencing is scheduled for October 21, 2019, at 11:00 a.m. before Judge Geraci.
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Rochester Man Going to Prison on Drug and Gun Charges for 8 YearsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Emmanuel Madera, 29, of Rochester, NY, who was convicted of possession with intent to distribute cocaine and heroin, and being a felon in possession of firearms and ammunition, was sentenced to serve 96 months in prison by U.S. District Judge David G. Larimer.
Assistant U.S. Attorney Cassie Kocher, who handled the case, stated that the defendant was arrested on May 30, 2018, after police executed a search warrant at his Grape Street residence in Rochester. During the search, officers recovered approximately three grams of cocaine, three grams of heroin, $2,315 in cash, three handguns, a shotgun, and over 200 rounds of various ammunition. One of the handguns had a defaced serial number.
Previously, in 2016, Madera was convicted of Criminal Possession of a Controlled Substance in the Third Degree in Monroe County, and as a result of that conviction, he was legally prohibited from possessing a firearm.The case was brought by the U.S. Attorney’s Office as part of its Project Safe Neighborhoods (PSN) initiative. PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
The sentencing is the result of an investigation by Rochester Police Department, under the direction of Chief La’Ron Singletary, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division.
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