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15 April 2019
Alien Sentenced to Active Prison Time for Unlawful Voting in the 2016 General ElectionRead the Press Release
RALEIGH – Robert J. Higdon, Jr., United States Attorney for the Eastern District of North Carolina, announces that GUADALUPE ESPINOSA-PENA, age 61, of Mexico, residing in Wake County, North Carolina, was sentenced to one month imprisonment and one year supervised release by United States District Judge Louise W. Flanagan after a guilty plea to illegal voting by an alien.
According to court records, ESPINOSA-PENA is a lawful permanent resident whose application for United States citizenship had been denied. ESPINOSA-PENA attempted to register to vote in North Carolina previously, but was informed he could not register as he was not a United States citizen. Thereafter, ESPINOSA-PENA nonetheless completed a voter registration with an election official’s aid and registered to vote. The election official advised ESPINOSA-PENA that “if he wanted his voice to be heard, he needed to vote.” As detailed in the Indictment, ESPINOSA-PENA voted in the General Election of 2016 in Wake County, North Carolina held in part for the purpose of electing a candidate for the office of President of the United States.
The case was investigated under the framework of the Document and Benefit Fraud Task Force (DBFTF) in the Eastern District of North Carolina led by Homeland Security Investigations, among other agencies. The investigation as to voting fraud is ongoing.
13 April 2019
Tax Prosecutions Announced as the Income Tax Filing Deadline LoomsRead the Press Release
As the filing deadline for income taxes quickly approaches, United States Attorney Trent Shores announced that charges have been filed against four individuals for tax crimes.
“Tax Day is nearly upon us and millions of honest Americans will meet their tax obligations as required. However, there are those who will seek to cheat the system, and they must be held accountable. Those who file false returns, embezzle payroll taxes, commit identity theft to receive fraudulent refunds or fail to file tax returns at all can expect to be investigated and prosecuted."
During this tax season, the following individuals have been charged with fraudulent tax practices:
On April 3, 2019, Earenest J. Grayson Jr., 45, of Tulsa, Oklahoma, was indicted for 10 counts of failing to account for or pay over to the Internal Revenue Service (IRS) payroll taxes withheld from wages paid to employees of his business, Zealcon Corporation (Zealcon), during the years 2014, 2015, and 2016. Grayson was also indicted for three counts of failing to file corporate income tax returns for Zealcon for the years 2013, 2014 and 2015, and failing to file his own personal income tax returns for the years 2013, 2014 and 2015. The case was investigated by special agents of IRS-Criminal Investigation. Assistant Chief Andrew Kameros of the Tax Division is prosecuting the case, in coordination with Assistant United States Attorneys Charles M. McLoughlin and Victor A.S. Régal,
On April 4, 2019, Gina Lisa Preble, 59, of Bartlesville, was charged by Criminal Information with bank fraud and subscribing to a false tax return. Preble was employed as a clerk at TransWood Carriers Incorporated from 2011 until her termination in 2017. In an effort to disguise her intent to steal funds, Preble allegedly created fraudulent “draft checks” which she mixed in with legitimate business expense “draft checks” and provided to a supervisor for signature. Preble deposited draft checks totaling $394,058.20 into her personal checking account, and used the funds for her own personal gain. Additionally in 2016, Preble signed and submitted a false tax return, omitting the stolen funds as income. The case was investigated by special agents of IRS-Criminal Investigation and the FBI. Assistant U.S. Attorneys Charles M. McLoughlin and Catherine J. Depew are prosecuting the case.
On April 5, 2019, Kevin Glenn Petty, 54, of Sand Springs was charged by Criminal Complaint with Theft of Government Property. Petty allegedly filed fraudulent 2016 income tax returns under the name of taxpayer Woodson J. Nightwalker. The $3,800 tax refund amount was deposited into a Green Dot card account, which funded a Green Dot pre-paid debit account. Petty filed five additional fraudulent returns, which were intercepted by the IRS. The six false returns filed by Petty sought a total of $12, 303 in fraudulent refunds. The case was investigated by special agents of IRS-Criminal Investigation and the U.S. Postal Inspector. Assistant U.S. Attorney Charles M. McLoughlin is prosecuting the case.
On April 10, 2019, Jennifer Leann McCormick 44, of Nowata, was charged by Misdemeanor Criminal Information with failure to file a tax return for 2013. The case was investigated by special agents of IRS-Criminal Investigation. Assistant U.S. Attorney Charles M. McLoughlin is prosecuting the case.
A Criminal Information or Criminal Complaint is a set of allegations that, if a case were to proceed to trial, the government would need to prove beyond a reasonable doubt. The return of an indictment is a method of informing a defendant of alleged violations of federal law, which must be proven in a court of law beyond a reasonable doubt. Defendants are presumed innocent until proven guilty in a court of law.
12 April 2019
“Incognito Bandit” Sentenced for Armed Bank RobberyRead the Press Release
BOSTON – A man dubbed the “Incognito Bandit” was sentenced in federal court in Boston today for armed bank robbery.
Albert Taderera, 36, of Brighton, was sentenced by U.S. District Court Judge F. Dennis Saylor IV to 34 months in prison, three years of supervised release, and ordered to pay restitution of $11,561. In January 2019, Taderera pleaded guilty to one count of armed bank robbery. In March 2017, Taderera was arrested at Dulles International Airport in Virginia as he attempted to board an outbound flight to South Africa.
Between February 2015 and March 2017, 16 banks were robbed in the Metro-West and Greater Boston areas. In most of the robberies, the robber was disguised in a dark hooded sweatshirt, dark face mask/sunglasses covering his face, dark gloves and dark clothing. In each case, the robber entered the bank and made verbal demands for the banks’ money. In most of the robberies, the robber displayed what tellers described as a black semi-automatic handgun.
All of the robberies occurred in suburban settings where banks were freestanding and featured adjacent wooded areas or foliage. After many of these robberies, witnesses observed the robber leave the bank and enter the wooded areas. Witnesses also observed the robber flee the area in a black BMW sedan. Based on these similarities, investigators believed that the individual driving the black BMW was responsible for the robberies.
On March 16, 2017, the law enforcement observed a black BMW sedan sitting outside a local bank. They also noted that Taderera fit the general description of the individual responsible for numerous recent robberies. Police determined that the registration of the BMW was revoked and per Department policy, the vehicle was towed and inventoried.
On Wednesday, March 22, 2017, an individual identifying himself as Taderera, called the tow company and inquired about the status of his BMW. The tow company informed Taderera that the vehicle was in police custody.
On Thursday, March 23, 2017, at approximately 10:15 pm, law enforcement learned that Taderera had booked a flight, scheduled to leave on Friday, March 24, 2017, at 11:00 a.m., from Dulles International Airport to Addis Ababa, Ethiopia. During the morning of March 24, 2017, Taderera was en route to Dulles having taken a flight out of Boston. It was later learned that Taderera had rebooked his flight and was now planning to leave on March 24, 2017, at 5:45 p.m. from Dulles to Johannesburg, South Africa. Taderera was arrested prior to boarding the flight.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; William Ferrara, Director of Field Operations, U.S. Customs and Border Protection; and Concord Police Chief Joseph F. O’Connor made the announcement today. Assistant U.S. Attorney Kenneth G. Shine of Lelling’s Major Crimes Unit prosecuted the case.
Worcester Man Arrested on Fraud Charges Arising from Role in Running Employment AgencyRead the Press Release
BOSTON – A Worcester man was arrested today and charged in federal court on fraud charges arising from his role overseeing UT Services, a Worcester employment agency.
Tam Vuong, 43, was charged with two counts of wire fraud and will appear in federal court in Worcester later today.
According to the criminal complaint, while in his role overseeing and controlling UT Services, Vuong falsely told UT Services’ insurance carrier that the company had only one employee and an annual payroll of only $50,000, when in actuality, UT Services had dozens of employees and a significantly higher payroll. UT Services paid most of its workers in cash as part of a scheme to underreport wages, and thus fraudulently minimize its workers’ compensation insurance premium.
UT Services allegedly disseminated forged certificates of insurance to several clients and underreported its payroll on various state and federal filings.
According to court documents, Vuong previously operated other employment agencies, including Prime Labor Services, which had revenues of more than $25 million and also underreported its wages. Vuong shifted operations from Prime Labor Services to UT Services after federal agents executed search warrants in November 2017.
Each count of wire fraud carries a sentence of no greater than 20 years in prison, up to three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office; Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Anthony DiPaolo, Chief of Investigations, Insurance Fraud Bureau of Massachusetts, made the announcement today. Assistant U.S. Attorney Bill Abely of Lelling’s Criminal Division is prosecuting the case.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Woman who Embezzled over $720,000 Pleads Guilty to Filing False Tax Returns, Obtaining a Controlled Substance by FraudRead the Press Release
Ann E. Darling-Batson, 58, of Herrin, Illinois, has pleaded guilty to filing a false federal income tax return and fraudulently acquiring a controlled substance. Darling-Batson had been an office manager at New Horizons OBGYN, an obstetrics and gynecological practice group in Carbondale, Illinois. As part of the plea, she admitted embezzling in excess of $720,000 from her employer from 2012 through 2016 – income she acknowledged was not reported on her federal income tax returns for those years. She also confessed that in September 2016, she obtained acetaminophen/codeine #3, a Schedule III controlled substance, from a Walgreens pharmacy without a legitimate, authorized prescription.
Prior to the plea, the defendant made complete restitution to her employer.
Sentencing is scheduled for July 9, 2019. Batson-Darling, who is currently released on bond, faces a total of up to seven years imprisonment, three years of supervised release, and a maximum fine of $250,000.
This guilty plea is the result of an investigation conducted by IRS Criminal Investigation and the Drug Enforcement Agency. The prosecution is being handled by Assistant U.S. Attorney Norm Smith.
West Yellowstone woman sentenced to probation for defrauding employerRead the Press Release
MISSOULA—West Yellowstone resident Ann Bennett Hermanson was sentenced today to five years of probation and ordered to pay $479,730 restitution for embezzling from her employer over a seven-year period, U.S. Attorney Kurt Alme said.
Hermanson, 54, pleaded earlier to wire fraud.
Chief U.S. District Judge Dana L. Christensen presided.
Prosecution evidence showed that Hermanson worked for 15 years as a para-professional in the West Yellowstone office of a regional accounting and business services company. As a para-professional, Hermanson had access to bank account information and signature stamps for the company’s customers.
Starting in 2009 and continuing until April 2016, Hermanson embezzled about $630,327.88 from several accounts belonging to the company’s customers. She has repaid some of the money.
The thefts were discovered in April 2016 when a customer reported irregularities in her business account to the company’s corporate office.
Hermanson embezzled funds by writing checks to herself for personal credit card expenses and other bills and using customers’ signature stamps to sign the checks. She also obtained a duplicate credit card for one victim’s account and used it to make unauthorized purchases.
When approached by a company employee in April 2016 about suspicious transactions, Hermanson admitted to embezzling money. She also admitted the thefts to an FBI agent and identified five business accounts from which she stole money.
Assistant U.S. Attorney Timothy Racicot is prosecuting the case, which was investigated by the FBI.
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West Monroe felon pleads guilty to illegally possessing a pistol, ammunitionRead the Press Release
MONROE, La. – United States Attorney David C. Joseph announced that Devin Dewayne Williams, 27, of West Monroe, Louisiana, pleaded guilty Thursday before U.S. District Judge Terry Doughty for possession of a firearm by a convicted felon.
According to the guilty plea, during a traffic stop on Williams’ vehicle on September 24, 2017, a West Monroe Police officer found a handgun magazine in Williams’ front pocket and a Beretta, Model 21A, .25-caliber pistol under the driver’s seat. Williams is a felon who was convicted in Ouachita Parish on March 8, 2013 of simple kidnapping and on November 12, 2015 of possession with intent to distribute marijuana. Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of a firearm or ammunition.
Williams faces up to 10 years in prison, three years of supervised release and a $250,000 fine. Doughty set the sentencing date for August 7, 2019.
The ATF and West Monroe Police Department conducted the investigation. Assistant U.S. Attorney J. Aaron Crawford is prosecuting the case.
Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. Project Safe Neighborhoods is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
U.S. Attorney’s Office Seeks Preliminary Injunction to Stop Doctor from Illegally Prescribing Controlled SubstancesRead the Press Release
SALT LAKE CITY -- The U.S. Attorney’s Office in Salt Lake City filed a civil complaint in U.S. District Court afternoon morning against a doctor the complaint alleges is issuing prescriptions for controlled substances in violation of the Controlled Substance Act. To protect the public, the United States is also seeking a preliminary injunction to immediately stop the doctor from prescribing powerful controlled substances.
According to the complaint, Dr. Nicholas Carl Greenwood operates Greenwood Addiction Physicians in Murray. Greenwood Addiction Physicians claims on its website to be the premier outpatient program for the treatment of opioid dependence in the Western United States. In reality, the complaint alleges, Dr. Greenwood issues prescriptions for substances with no legitimate medical purpose and outside the usual course of professional practice.
Through his business, Dr. Greenwood claims to offer treatment options for opioid dependence, alcohol dependence, Benzodiazepine dependence, outpatient medical detox, and nicotine/tobacco dependence.
Dr. Greenwood has the authority to dispense and administer Schedule III drugs for maintenance or detoxification treatment. Currently, the only controlled substance approved for the treatment of narcotic addiction is Buprenorphine.
A Schedule III controlled substance, Buprenorphine and Buprenorphine combination products are manufactured by multiple companies, according to an affidavit filed in the case. The products are marketed under several trade names including Suboxone, Zubsolv, and Butrans. Suboxone is sold as a dissolvable film for the treatment of opioid dependence and should be used as part of a complete treatment plan including counseling and psychosocial support.
According to the complaint, on April 4, 2018, the Tooele County Sheriff’s Office told the DEA’s Tactical Division Squad that an inmate was organizing and paying individuals to obtain controlled substances from Dr. Greenwood.
Following the tip from the Tooele County Jail inmate, three separate agents with the DEA Tactical Diversion Squad visited Dr. Greenwood 20 times in an undercover capacity, according to the complaint. The complaint alleges that over the course of almost eight months, Dr, Greenwood wrote the undercover agents 19 prescriptions for 889 pills without a legitimate medical purpose and outside the usual course of professional practice. All prescriptions were for Buprenorphine. The agents visited Dr. Greenwood from June 28, 2018, through February 21, 2019.
The complaint alleges all of the agents’ visits with Dr. Greenwood followed the same pattern: Dr. Greenwood never performed a medical examination, never asked questions about the agent’s health or symptoms, and never reviewed prior medical records. Instead, Dr. Greenwood issued prescriptions for Buprenorphine to the undercover agents without any evidence of medical need. Dr. Greenwood issued most of the prescriptions without actually meeting with the undercover agents, according to documents filed in court.
Dr. Greenwood knew, or should have known, that the prescriptions he issued, essentially on a cash-and-carry basis, were not medically necessary and were being sold or traded on the street, documents filed in court allege. Dr. Greenwood believed that 25 to 50 percent of the prescriptions he issued were sold or traded, documents filed with the court allege. None of Dr. Greenwood’s prescriptions issued to the undercover investigators had a legitimate medical purpose, according to a motion and memorandum in support of a preliminary injunction filed with the court.
The United States is seeking to stop Dr. Greenwood from prescribing controlled substances. Accordingly, the United States moved for a preliminary injunction at the same time it filed the complaint against Dr. Greenwood. Dr. Greenwood will have 60 days to respond to the complaint and 14 days to respond to the motion.
The claims made in the complaint and other court filings are allegations only, and there has been no determination of liability.
U.S. Attorney’s Office Observes National Crime Victims’ Rights WeekRead the Press Release
Columbia, South Carolina – United States Attorney Sherri A. Lydon announced today that the United States Attorney’s Office has joined with state and local partners to honor National Crime Victims’ Rights Week. Events included the South Carolina Victims’ Rights Week Conference, held April 2-4, and a Unity Ceremony on April 2.
Each April, the Department of Justice and United States Attorneys’ offices observe National Crime Victims’ Rights Week nationwide by taking time to honor victims of crime and those who advocate on their behalf. This year’s observance takes place April 7-13, with the theme: Honoring Our Past. Creating Hope for the Future. The annual observance is an opportunity to bring victim advocates, law enforcement, and crime victims together to increase awareness of victims’ rights and provider services. It serves as a way to honor the courage and resilience demonstrated by those impacted by crimes and to pay homage to the advocates serving them.
“Victims of crime deserve justice. This Department works every day to help them recover and to find, prosecute, and convict those who have done them harm,” said Attorney General William P. Barr. “During this National Crime Victims’ Rights Week, we pause to remember the millions of Americans who have been victims of crime and we thank public servants who have served them in especially heroic ways. This week the men and women of the Department recommit ourselves once again to ensuring that crime victims continue to have a voice in our legal system, to securing justice for them, and to preventing other Americans from suffering what they have endured."
“The women and men in the U.S. Attorney’s Office work hard every day to uphold the rule of law, to keep the citizens of South Carolina safe, and to seek justice for victims of crime and their loved ones,” said U.S. Attorney Lydon. This National Crime Victims’ Rights Week, we are honored to join victim advocates, law enforcement, and the community in remembering victims of crime and paying tribute to the public servants and advocates who serve, encourage, and empower them. We are especially grateful to Brittany Todd, who shared the story of her assault and her daughter’s kidnapping and delivered an inspiring message of hope at this year’s Unity Ceremony. Our office will forever be amazed at Brittany’s strength and resilience.”
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The Department of Justice’s Office for Victims of Crime, within the Office of Justice Programs, leads communities across the country in observing National Crime Victims’ Rights Week each year. President Ronald Reagan proclaimed the first National Crime Victims’ Rights Week in 1981 to bring greater sensitivity to the needs and rights of victims of crime. More information about the Office of Justice Programs and its components can be found at www.ojp.gov. More information about Crime Victim’s Rights Week can be found at https://ovc.ncjrs.gov/ncvrw/.
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U.S. Attorney’s Office Dedicates the John K. Vincent Memorial Conference RoomRead the Press Release
SACRAMENTO, Calif. — Today, the U.S. Attorney’s Office dedicated the John K. Vincent Memorial Conference Room to honor the legacy of their friend and colleague.
John Vincent provided selfless service to the U.S. Attorney’s Office and his country for more than thirty-two years until his untimely death in 2018. His tenure in the office was marked by inspiring leadership, devoted service, tenacious advocacy on behalf of the United States, and steady guidance as the office’s moral and ethical guiding star in the pursuit of justice.
John Vincent was a public servant of the highest order. He came to the office as an Assistant U.S. Attorney (AUSA) in 1986 and was promoted to Chief of the Special Prosecutions Unit in 1997, a role he held until 2000. He was then promoted to First Assistant U.S. Attorney, and in 2001, he became Acting and then court-appointed U.S. Attorney until 2003. In 2003, Mr. Vincent became the district’s Criminal Chief, a role he held until 2018 while continuing to carry his own portfolio of complex cases and supervising the office’s National Security Unit. His contributions to the office were invaluable and helped to form and sustain the heart and soul of the office. Mr. Vincent exemplified integrity, and he personified the principle that the office’s mission is to always do the right thing for the right reason.
In recognition of his public service, Mr. Vincent was awarded the Director’s Award three times: in 1991 and 1996 for Superior Performance as an AUSA, and then in 2018 for Superior Performance in a Managerial Role. He worked tirelessly to pursue justice, and he embodied the best qualities of a prosecutor and a leader.
To recognize John Vincent’s many contributions to the Office, U.S. Attorney McGregor W. Scott chose to dedicate the main conference room in the U.S. Attorney’s Office in Sacramento in his honor. This facility is the heart of the office and is used almost continually to hold presentations, trainings, press conferences, staff meetings, and holiday events. It is the room that AUSAs enter on their first day of service to take their oath and where the office celebrates AUSAs as they bid their farewell. It is fitting that John Vincent’s name will overlook the many activities that will take place in this room.
U.S. Attorney, IRS Warn Taxpayers to Be on the Lookout for Fraud and Remain Tax CompliantRead the Press Release
MACON – As many people scramble to file their individual taxes prior to Monday’s deadline, federal officials are warning people to be on the lookout for tax scams, carefully protect their personal information from theft, and comply with federal tax laws to avoid penalties, criminal prosecution and even jail time. The U.S. Attorney’s Office for the Middle District of Georgia and the Internal Revenue Service-Criminal Investigation are actively investigating tax fraud cases in Middle and South Georgia, and are holding criminals accountable for identity theft and tax fraud.
“Tax cheats are becoming more sophisticated in their schemes and are finding new ways to swindle the system and even access unsuspecting victims’ personal and tax information for nefarious purposes,” said Charles “Charlie” Peeler, the United States Attorney for the Middle District of Georgia. “Our Office is working closely with our law enforcement partners at the IRS and local agencies to stop this criminal activity that has far-reaching consequences for both individual victims and our country.”
“We have IRS Special Agents located here in Georgia working around the clock to uncover, stop and work with the U.S. Attorney’s Office in prosecuting tax crimes. With the filing season coming to an end, it’s important that the public be aware of various tax schemes and report the scheme to either the IRS or their local police department,” said Thomas J. Holloman, Special Agent in Charge of IRS-CI, Atlanta Field Office.
Since last tax season, approximately twenty-two defendants have been sentenced for fraudulent tax schemes beginning in May 2018 in the Middle District of Georgia. Here are two recent examples of tax fraud cases prosecuted in the Middle District of Georgia during 2018:
1. Portia Powell of Columbus, GA, was sentenced in November 2018 to 18 months in federal prison, three years supervised release plus $159,000 restitution to the IRS in a stolen identity tax refund scheme. Between August and October 2013, Powell received approximately 71 stolen U.S. Treasury checks written to various taxpayers. These treasury checks were taxpayer refunds for the 2012 tax year totaling $159,000. The victims were all either students, disabled or unemployed.
2. Belinda Harris, Cynthia Clarkston and Susie Sherman Hall, all of Valdosta, GA, were involved in a tax fraud scheme. In 2018, Ms. Harris and Ms. Hall were each sentenced to 57 months in federal prison, and Ms. Clarkston was sentenced to 24 months imprisonment. All of the defendants were ordered to pay $258,914 to the IRS in restitution. The three defendants admitted to filing numerous fraudulent tax returns using stolen personal information, including 100 names obtained from an individual employed at Valdosta State University. IRS investigators determined 222 fraudulent federal income tax returns, filed for the 2010 and 2011 years, were directly linked to the conspiracy, claiming refunds totaling $670,860.00. Actual refunds of $258,914.00 were issued on those fraudulent returns. A number of victims said that the federal income tax returns filed in their names were completely false and that they did not authorize anyone to file or accept a tax refund in their names.
To learn more, visit https://www.irs.gov/newsroom/irs-concludes-dirty-dozen-list-of-tax-scams-for-2019-agency-encourages-taxpayers-to-remain-vigilant-year-round for information about the “Dirty Dozen” for the 2019 filing season. The deadline for taxpayers to file their income taxes is Monday, April 15, 2018 at midnight.
For in person interview requests or questions, please contact the Atlanta Field Office IRS-Criminal Investigation Public Information Officer at [email protected]. Additional questions can be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603 or Melissa Hodges, Public Affairs Director (Contractor), United States Attorney’s Office, at (478) 765-2362.
U.S. Attorney reminds taxpayers to be vigilant as tax day approachesRead the Press Release
ATLANTA - With the tax deadline quickly approaching for individual taxpayers, it is important to be aware of tax scams as well as the importance of being compliant in filing and paying federal taxes timely. Tax cheats are becoming more sophisticated in their schemes and are finding new ways to cheat the system as well as gaining access to your personal and tax information.
“Criminals continue use tax fraud schemes to steal from tax-payers,” said U.S. Attorney Byung J. “BJay” Pak. “Be honest and truthful in your tax filings, and beware of others who look to take advantage of you and the tax system.”
“We have IRS Special Agents located here in Georgia working around the clock to uncover, stop and work with the U.S. Attorney’s Office in prosecuting tax crimes. With the filing season coming to an end, it’s important that the public be aware of various tax schemes and report the scheme to either the IRS or their local police department,” said Thomas J. Holloman, Special Agent in Charge of IRS-CI, Atlanta Field Office.
The U.S. Attorney’s Office for the Northern District of Georgia, along with agents of IRS-Criminal Investigation and other law enforcement partners, is actively engaged in investigating and prosecuting tax fraud as well as combatting those criminals willing to steal identities and commit tax fraud on the unsuspecting public. Over the past year, multiple tax investigations were successfully resolved, with approximately 13 convicted individuals sentenced related to fraudulent tax schemes since May of 2018. The following are highlights of some of those cases:
Lakeisha Stone
On December 10, 2018, Lakeisha Stone of Fairburn, Georgia was sentenced to four years, two months in federal prison, to be followed by three years of supervised release and ordered to pay restitution of $392,174 to the IRS for her role in a scheme to defraud the IRS. Stone used two other individuals as nominee names to obtain fraudulent Electronic Filing Identifying Numbers and Preparer Tax Identification Numbers to prepare false income tax returns. Stone also stole the identities of some of her tax customers and cashed stolen treasury checks. Stone used the Atlanta-based businesses Taxes R’ Us, Taxs R’ Us, and Tax Tyme to commit her fraudulent activity.
Stephanie Parker
On November 15, 2018, Stephanie Parker of Atlanta, Georgia was sentenced to two years in federal prison, to be followed by one year of supervised release and ordered to pay $5,964 in restitution to the IRS for a scheme to use stolen identities to defraud the IRS. Parker was an employee of the IRS and worked in the IRS office located in Chamblee, Georgia. From September of 2012 through April of 2013, Parker accessed taxpayers’ personal identifying information (“PII”) while employed as a customer service representative for the IRS. Parker took those taxpayers’ PII and filed fraudulent tax returns with the IRS in those names.
Joseph Racine & Arnouse Merlien
On November 8, 2018, Joseph Racine, of Boynton Beach, Florida, was sentenced to three years, four months in federal prison, to be followed by three years of supervised release and Arnouse Merlien, also of Boynton Beach, was sentenced to three years in federal prison, followed by three years of supervised release and both were ordered to pay $3,854,915 in restitution to the IRS for conspiracy to defraud the IRS. Racine was the owner of JSR Westend Tax Services, located in Atlanta, and JSR Tax Services, located in Greenacres, Florida. Merlien was the office manager of JSR Tax Services in Florida. The IRS-CI investigation revealed that Racine was filing fraudulent returns involving multiple credits and deductions, including the fuel tax credit, refundable education credit, and unreimbursed employee business expenses. Racine requested refunds on 99 percent of the returns, a rate significantly higher than the average over the same years. In March 2017, IRS-CI determined that JSR Tax Services in Florida, where Merlien primarily worked, was filing federal tax returns displaying the same patterns of fraud as those prepared at JSR Westend Tax Services in Atlanta. The investigation revealed that Racine and Merlien engaged in this scheme to increase the amount of money they could charge their clients for preparing their returns.
Michael Jon Kell
On October 16, 2018, Michael Jon Kell of Powder Springs, Georgia was sentenced to one year, six months in federal prison, followed by one year of probation and ordered to pay $321,878 in restitution to the IRS for a twenty year tax scheme to funnel millions of dollars in assets through a church he created in order to evade filing federal tax returns. Dr. Kell developed numerous patented technologies and worked as a consultant, which generated millions of dollars in income over the years. In an attempt to hide this income, he founded and claimed to be the “pastor” of the First Meliorite Church, which he said was a branch of the Universal Life Church. Dr. Kell directed his substantial income and assets into bank accounts belonging to the church—all of which were under Dr. Kell’s exclusive control. He used these accounts to cover all of his personal expenses—including overseas vacations, dining out, high-end clothing purchases, online dating services, and private school tuition for his children. Dr. Kell also transferred ownership of his multi-million dollar residence in Vinings several times over the years to various entities he created and controlled, in an effort to protect the property from creditors, including the IRS.
Hanh Tran
On April 8, 2019, Hanh Tran of Lilburn, Georgia was sentenced to ten months of home confinement, to be followed by twelve months of supervised release and ordered to pay $124,812 in restitution to the IRS for willfully filing a false tax return with the IRS. For the tax years 2010 through 2014, Tran underreported his total income causing an underreporting of his tax liability of $124,812. Hanh Tran is the C.E.O. of Glamour Salon & Spa, Inc. located in Marietta, Georgia.
Go to https://www.irs.gov/newsroom/irs-concludes-dirty-dozen-list-of-tax-scams-for-2019-agency-encourages-taxpayers-to-remain-vigilant-year-round for more information on the Dirty Dozen for the 2019 filing season.
For Atlanta Field Office IRS-Criminal Investigation interview requests or questions, please contact their Public Information Officer at [email protected].
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
U.S. Attorney and ATF Target Those who “Lie-And-Try” to Purchase FirearmsRead the Press Release
TULSA, Okla. – United States Attorney Trent Shores announced that five “lie and try” defendants have pleaded guilty to violations of federal firearms laws that stemmed from “lie and try” charges filed in February. The charges were announced by U.S. Attorney Shores and law enforcement officials from the Bureau of Alcohol Tobacco Firearms and Explosives, U.S. Marshals Service, Tulsa Police Department, Tulsa County Sheriff’s Office and Delaware County Sheriff’s Office during a February press conference.
“All too often, illegally purchased guns are then used to commit violent crimes. From domestic violence to mass shootings, time and again we see that criminals committing these heinous acts should never have had a gun in the first place because they are a “prohibited person” under federal law. Our “lie-and-try” prosecutions seek to stop the firearms from ever making it into the hands of those prohibited persons,” said U.S. Attorney Shores. “The ATF has been and continues to be a great partner to hold accountable those who lie on federal forms and try to purchase a gun. The ATF’s efforts to stop “lie and try” purchases in Tulsa will help prevent violent gun crimes in our community. Every gun related crime or tragedy prevented through “lie and try” prosecutions is a victory for all of us.”
“Prior to stepping foot in a gun store, potential purchasers with eligibility concerns have access to a variety of information, reference materials and Q&A at www.atf.gov or by contacting their local ATF Office,” stated Dallas Division ATF Special Agent in Charge Jeffrey C. Boshek II. “The ATF Form 4473 questions are designed to identify prohibited persons and prevent the illegal transfer and possession of firearms. “Lie-And-Try”, or lying on the form about facts relevant to the transfer of a firearm is a felony, period.”
The following defendants were charged with making false statements in connection the attempted acquisition of a firearm and other firearm offenses: Glenville L. Albright, 50, of Pawhuska; Anthony Dale Brannon, 59, of Grove; Rufus Hicks, Jr., 39, of Tulsa, Christopher Manzanares, 28, of Broken Arrow; and Bradley Wikel, 31, of Jay.
Four of the men lied on the ATF Form 4473, answering no, when asked if they were convicted felons. The fifth man, Manzanares, lied when answering that he was not subject to a restraining order.
As a result of the ATF investigation, the men pleaded guilty to making false statements in connection with the attempted acquisition of a firearm or to other related federal firearms violations, including felon in possession of a firearm and possession of a firearm and ammunition while subject to a domestic violence restraining order.
The ATF Form 4473, specifically questions potential purchasers about their criminal history, for example, if they’ve been convicted of a felony, domestic abuse, and/or illegal drug use. The maximum penalty for making a false statement during the purchase of a firearm is 10 years in prison.
Additionally, Federal Firearms Licensees (FFLs), who sell or transfer a firearm to a prohibited person, allow a straw purchaser to buy a gun for someone else, or fail to keep proper records of who they sell firearms to, also face criminal prosecution.
All men have pleaded guilty this month to the following firearms violations:
- Albright: Felon in Possession of a Firearm
- Brannon: Felon in Possession of a Firearm
- Hicks: False Statement in Connection With the Attempted Acquisition of a Firearm
- Wikel: False Statement in Connection With the Attempted Acquisition of a Firearm
- Manzanares: Possession of a Firearm and Ammunition While Subject to a Domestic Violence Restraining Order
The ATF and the Broken Arrow Police Department are the investigative agencies. Assistant U.S. Attorneys Richard M. Cella, Eric O. Johnston, and Christopher J. Nassar and Victor A.S. Régal prosecuted the cases.
U.S. Attorney Attends Pilot Test of Micro-Jamming Technology in South Carolina PrisonRead the Press Release
Columbia, South Carolina --- United States Attorney Sherri A. Lydon announced today that the federal Bureau of Prisons conducted a pilot test of micro-jamming technology this week at the Broad River Correctional Institution in Columbia, South Carolina. The test was the first collaboration of its kind in a state corrections facility. It was conducted to determine if micro-jamming could disable cell signals and prevent wireless communication by inmates using contraband cellphones in a housing unit.
“I am so encouraged by what I observed firsthand standing in a cellblock beside SCDC Director Bryan Stirling, as federal officials tested cellphone micro-jamming technology,” said U.S. Attorney Lydon. “The technology was designed and deployed to block signals from contraband cellphones inside the prison, while ensuring that there was no interference with wireless signals used by the public outside the facility. It is incredibly promising to see the potential for technology to address contraband cellphones in prisons, which for years have threatened our corrections and law enforcement officers and our community.”
Contraband cellphones pose a significant safety threat to the general public, prison workers, and other inmates. In partnership with the South Carolina Department of Corrections (SCDC) and the South Carolina Law Enforcement Division (SLED), the U.S. Attorney’s Office for the District of South Carolina has brought a number of cases against both inmates using contraband phones to harm the public and SCDC employees smuggling contraband—including cellphones—into prisons. For example, the office has recently prosecuted inmates who have used contraband phones to move large quantities of methamphetamine from California to South Carolina; access the dark web and buy a mail bomb intended to kill an ex-wife; and defraud members of the military of over $560,000 through a “sextortion” scheme.
“I am so grateful to Director Stirling, who has led the effort to allow state and local prisons to jam cell signals and made the entire country aware of the need for this tool,” Lydon said. “He should be applauded for his tireless efforts to protect both the general public and the prison population from the safety threat posed by contraband cellphones. This is a game changer for law enforcement who work to protect the public from criminal enterprises run from within prisons.”
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U.S. Attorney and IRS Warn Potential Tax Cheats to Timely File Accurate and Complete Tax ReturnsRead the Press Release
HARRISBURG - With the deadline for filing income tax returns rapidly approaching, the U.S. Attorney’s Office for the Middle District of Pennsylvania, and the Philadelphia Field Office, IRS Criminal Investigation Division, jointly announced a warning to those who are thinking about breaking the law by committing tax crimes including listing recent tax fraud prosecutions and sentences.
“Individuals who fail to file tax returns in a timely manner are taking advantage of the honest taxpayers who finance the government’s operations, and subject themselves to criminal prosecution,” said U.S. Attorney David J. Freed. “We will continue to pursue those who fail to meet the obligations of paying their fair share.”
"As we approach the end of filing season, taxpayers are reminded that preparing and filing false tax returns will result in extremely negative consequences,” said Guy Ficco, Special Agent in Charge of the Philadelphia Field Office. “Whether you prepare your own tax return or utilize the services of a tax return preparer, remember, you the taxpayer are ultimately responsible for the accuracy of your tax return.”
Over the last year, the U.S. Attorney’s Office has prosecuted and convicted numerous individuals for filing false federal tax returns and committing tax evasion. Defendants have received substantial sentences for tax fraud, ranging from several years in prison to home confinement. Restitution is mandatory and often includes substantial interest and penalties. For example, the following individuals were charged and/or sentenced for tax fraud recently:
FILING FALSE TAX RETURNS AND TAX EVASION
- Jeremy Baney, age 48, an inmate at SCI Smithfield, Huntingdon, Pennsylvania, pleaded guilty on May 2, 2018, to aiding and assisting in making false statements to the IRS. Baney admitted to being involved in a prison tax scheme from November 17, 2009 through February 25, 2012. Baney obtained names and social security numbers of inmates to file false tax returns or would send that information to a former inmate who would then prepare and file the fraudulent 1040EZ tax returns with fictitious wages and holdings in order to get a tax refund. The government is alleging that Baney attempted to receive tax refunds totaling $236,407, to which he was not entitled to receive. Baney is awaiting sentencing.
- Atef Hussein, age 48, of Hagerstown, Maryland, former owner/operator of the Fairground Diner in Carlisle, Pennsylvania, was sentenced on May 30, 2018, to one year and one day imprisonment and ordered to pay restitution in the amount of $139,293, for income tax evasion. Hussein understated income and taxes due, resulting in false income tax returns for tax years 2011 through 2015, causing a tax loss of approximately $139,293.
- Hiteshkumar Patel, age 52, of South Abington Township, Pennsylvania, was sentenced on August 9, 2018, to serve 234 months’ imprisonment and ordered to pay restitution in the amount of $896,112, for conspiracy to commit wire and mail fraud, as well as aggravated identity theft in November 2017. The investigation revealed that beginning in or about August 2015 through May 2016, Patel was involved in a multi-faceted international conspiracy and devised a scheme to defraud that included individuals who falsely represented themselves as Internal Revenue Service (IRS) agents, as well as individuals associated with an illegitimate online loan business. Individuals who falsely claimed to represent the Internal Revenue Service (IRS) contacted unsuspecting victims throughout the United States. The victims were told that they had to immediately make a monetary payment in order to satisfy outstanding IRS tax debt and/or IRS penalty fees. Victims were told that there would be severe consequences if they did not immediately comply, such as federal agents knocking on their door, notification to employers, garnishment of wages, and even arrest. Victims of the online loan fraud scheme were instructed that in order to receive the proceeds of their online loan application, they had to first make monetary payments associated with the processing of the application, such as fees for expediting the loan and insurance. Some victims of the loan fraud scheme were also told that outstanding IRS debt had to be satisfied before their loan application could be processed. All of the victims were instructed to remit monetary payments to a number of different individuals via the U.S. Mail, Western Union, MoneyGram, and/or RIA (Walmart to Walmart). The monetary payments were received by Patel, or by members of the unlawful telemarketing organization and unindicted co-conspirators. The investigation identified 634 individuals directly tied to Patel’s criminal conduct from across the country. The victims collectively sustained a loss of nearly $900,000.
- Diane M. Fabian, age 67, of Middletown, Pennsylvania, pleaded guilty to tax evasion charges on August 14, 2018. Fabian admitted that from 2011 through 2015, she filed tax returns that understated her income resulting in a total tax due and owing to the United States of $45,100. Fabian is awaiting sentencing.
- James W. Pilsner, age 60, of Harrisburg, Pennsylvania, the former Vice President of Rite Aid, pleaded guilty on October 1, 2018, to vendor kick-back and tax evasion charges. In March 2014, Pilsner filed an income tax return with the IRS that did not report his receipt of $411,500 in kick-back money during 2013, thereby avoiding approximately $157,648, in federal income taxes. Pilsner paid $300,000 towards his tax restitution obligation for the period 2013-2017 of approximately $592,000, and agreed to pay the balance at sentencing.
- Al T. Hughes, age 60, of Scranton, Pennsylvania, was charged in a superseding indictment on January 30, 2018, and pleaded guilty on February 7, 2019, to tax evasion. Hughes admitted to diverting approximately $892,000 in corporate receipts to his personal benefit, and failed to report the diverted receipts as income on his federal tax returns. The resulting tax loss to the United States is approximately $231,000. Hughes also admitted that he began diverting corporate receipts in 2009 and continued through 2014, and that he cashed hundreds of customer checks, intended for payment of funeral home services, at various financial institutions, including a check cashing service in Scranton. Hughes diverted corporate receipts from four area funeral homes, including the Thomas J. Hughes Funeral Home, the Eagan-Hughes Funeral Home, the McGoff-Hughes Funeral Home, and the Davies & Jones Funeral Chapel. Sentencing is currently scheduled for June 7, 2019.
- James Famularo, age 61, of Swiftwater, Pennsylvania, Famularo was sentenced on April 2, 2019, to six months’ imprisonment to be followed by six months home detention and ordered to pay restitution to the IRS of $196,119, for income tax evasion spanning tax years 2012 through 2015. Famularo failed to report a total of $646,663.40 in income between tax years 2012 and 2015, and filed false Form 1040 Individual Income Tax Returns for each of tax years 2012, 2013, 2014 and 2015 resulting in a loss of $196,119 to the IRS.
STOLEN IDENTITY REFUND FRAUD
In addition to prosecuting tax evaders and fraudulent tax return preparers, the IRS and the U.S. Attorney’s Office are continuing to investigate and prosecute individuals who steal the identities of taxpayers and file fraudulent tax returns.
- Julio Polanco Suarez, age 41, of Allentown, Pennsylvania, was charged on April 10, 2018, with conspiring to defraud the government between March 1, 2009 – September 20, 2016; theft of government money; and aggravated identity theft on September 20, 2016, in Luzerne County. The indictment alleged that Suarez’s coconspirators stole individuals’ identities, used them to prepare and file false tax returns, and obtained the refund checks issued by the U.S. Treasury pursuant to those false tax returns. Suarez took possession of the refund checks, forged names and social security numbers on them, and cashed them at check cashing businesses in the Middle District of Pennsylvania. Suarez and his coconspirators are charged with cashing $522,613.80 in fraudulently obtained Treasury checks, and attempting to cash an additional $41,401.57 worth of checks. Suarez has signed a plea agreement and is awaiting his plea hearing.
Federal penalties for each count of conviction of tax crimes range from a maximum of one year in prison and a $100,000 fine for failure to file a tax return, false withholding exemptions, and delivering or disclosing false tax documents, to a maximum of 10 years in prison and a $250,000 fine for conspiracy to defraud with respect to false refund claims. Other penalties include a mandatory term of two years in prison and a $250,000 fine for aggravated identity theft charges, three years in prison and a $250,000 fine for obstructing or impeding an investigation and filing or preparing a false tax return, and a maximum of five years in prison and a $250,000 fine for tax evasion, failure to pay taxes, conspiracy to commit a tax offense or conspiracy to defraud.
TAX SCAM WARNING
The U.S. Attorney’s Office and the IRS remind tax payers to exercise caution during tax season to protect themselves against tax schemes ranging from identity theft to return preparer fraud. Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice to shutdown scams and to prosecute the criminals behind them. The IRS would like to warn taxpayers of a quickly growing scam involving a phone scam whereby criminals fake calls from the Taxpayer Advocate Service (TAS), an independent organization within the IRS.
Similar to other IRS impersonation scams, thieves make unsolicited phone calls to their intended victims fraudulently claiming to be from the IRS. In this most recent scam variation, callers “spoof” the telephone number of the IRS Taxpayer Advocate Service office in Houston or Brooklyn. Calls may be ‘robo-calls’ that request a call back. Once the taxpayer returns the call, the con artist requests personal information, including Social Security number or individual taxpayer identification number (ITIN).
TAS can help protect your taxpayer rights. TAS can help if you need assistance resolving an IRS problem, if your problem is causing financial difficulty, or if you believe an IRS system or procedure isn’t working as it should. TAS does not initiate calls to taxpayers “out of the blue.” Typically, a taxpayer would contact TAS for help first, and only then would TAS reach out to the taxpayer.
In other variations of the IRS impersonation phone scam, fraudsters demand immediate payment of taxes by a prepaid debit card or wire transfer. The callers are often hostile and abusive. Alternately, scammers may tell would-be victims that they are entitled to a large refund but must first provide personal information. Other characteristics of these scams include:
- Scammers use fake names and IRS badge numbers to identify themselves.
- Scammers may know the last four digits of the taxpayer’s Social Security number.
- Scammers spoof caller ID to make the phone number appear as if the IRS or another local law enforcement agency is calling.
- Scammers may send bogus IRS emails to victims to support their bogus calls.
- Victims hear background noise of other calls to mimic a call site.
- After threatening victims with jail time or with, driver’s license or other professional license revocation, scammers hang up. Others soon call back pretending to be from local law enforcement agencies or the Department of Motor Vehicles, and caller ID again supports their claim.
Here are some things the scammers often do, but the IRS will not do. Taxpayers should remember that any one of these is a tell-tale sign of a scam.
The IRS will never:
- Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.
- Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
- Demand that taxes be paid without giving taxpayers the opportunity to question or appeal the amount owed.
- Ask for credit or debit card numbers over the phone.
- Call about an unexpected refund.
For taxpayers who don’t owe taxes or don’t think they do:
- Please report IRS or Treasury-related fraudulent calls to [email protected] (Subject: IRS Phone Scam).
- Do not give out any information. Hang up immediately. The longer the con artist is engaged; the more opportunity he/she believes exists, potentially prompting more calls.
- Contact TIGTA to report the call. Use their IRS Impersonation Scam Reporting web page. Alternatively, call 800-366-4484.
- Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" in the notes.
For those who owe taxes or think they do:
- Call the IRS at 800-829-1040. IRS workers can help.
- View tax account online. Taxpayers can see their past 24 months of payment history, payoff amount and balance of each tax year owed.
Stay alert to scams that use the IRS or other legitimate companies and agencies as a lure. Tax scams can happen any time of year, not just at tax time. For more information visit Tax Scams and Consumer Alerts on IRS.gov.
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Two Men Charged with Drug ConspiracyRead the Press Release
BOSTON – Two Massachusetts men were charged in federal court in Boston yesterday with drug trafficking for their roles in a cocaine conspiracy.
John Jones, 42, of Taunton, and John Fisher, 46, of Berkley, were charged with one count of conspiracy to distribute and possess with intent to distribute cocaine. Jones is in state custody pending trial in another matter, and Fisher was arrested on April 11, 2019, and is in currently in custody. Fisher and Jones will appear for arraignment in federal court on April 16, 2019.
The charges are the result of a nine-month investigation aimed at attacking the increased volume of cocaine flooding Southern and Central Massachusetts. Ten defendants were charged in this conspiracy in April 2018, eight of whom have since pleaded guilty. Jones and Fisher are alleged to have been kilogram-level redistributors of a lucrative and sophisticated drug trafficking and distribution ring in the region.
The drug statute provides for a sentence no greater than 20 years in prison, at least three years and up to a lifetime 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; Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Division; and Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police, made the announcement today. Assistant U.S. Attorney Lauren A. Graber of Lelling’s Narcotics and Money Laundering Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Two Men Arrested for Conspiracy to Distribute FentanylRead the Press Release
BOSTON – A Dominican national and Lawrence man were arrested yesterday and charged in federal court in Boston with conspiracy to distribute and possess with intent to distribute fentanyl.
Aneudy Rios, 40, of Lawrence, and Luis Arias, 50, a Dominican national residing in Lawrence, were charged with conspiracy to distribute and to possess with intent to distribute fentanyl.
Over the course of several months, agents investigated Rios and Arias’ alleged fentanyl distribution operation, which culminated on April 11, 2019, when investigators arrested them in Lawrence. During Rios’ arrest, he attempted to swallow a large bag of suspected fentanyl. The bag, however, ripped and the suspected fentanyl covered Rios and the area around him. Investigators swiftly requested an ambulance for Rios and he was provided naloxone, commonly known as Narcan. Rios was transported to an area hospital and a hazmat response cleared the scene of the potentially deadly substance.
The charge of conspiracy to distribute and to possess with intent to distribute fentanyl carries a sentence of no greater than 20 years in prison, at least three years of supervised release, and a fine of $1 million. Arias will be subject to deportation upon completion of any sentence imposed. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew Lelling and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation’s Boston Field Office, made the announcement. During the course of this investigation, valuable assistance was provided by Homeland Security Investigations in Boston and the Lawrence, North Andover, Methuen, Billerica, Andover, Lowell, and Groton Police Departments. Assistant U.S. Attorney Philip C. Cheng of Lelling’s Narcotics and Money Laundering Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
Two Defendants Sentenced in Multi-Million Dollar Health Care Fraud ConspiracyRead the Press Release
PITTSBURGH, Pa. – Two residents of Pittsburgh, Pennsylvania, were sentenced in federal court for conspiracy to defraud the Pennsylvania Medicaid program, United States Attorney Scott W. Brady announced today.
United States District Judge Cathy Bissoon sentenced Autumn Brown, 31, and Brenda Lowry Horton, 48, to five years of probation, including six months of home detention, for their roles in a years-long conspiracy. Brown and Lowry Horton were also ordered to pay restitution to the Pennsylvania Medicaid program in the amount of $68,917.80 and $67,107.32, respectively.
During their respective plea hearings in December 2018, the defendants admitted that they were employees of one or more related entities operating in the home health care industry—Moriarty Consultants, Inc. (MCI), Activity Daily Living Services, Inc. (ADL), and Everyday People Staffing, Inc. (EPS). Each of these entities was owned or controlled by Arlinda Moriarty. MCI and ADL were approved under the Pennsylvania Medicaid program to offer certain services to qualifying Medicaid recipients ("consumers"), including personal assistance services (PAS), service coordination, and non-medical transportation, among other services. Between in and around January 2011 and in and around April 2017, MCI, ADL, and another related entity (Coordination Care, Inc.), collectively, received more than $87,000,000 in Medicaid payments based on claims submitted for these services, with PAS payments accounting for more than $80,000,000 of the total amount.
During that time, the defendants admitted that they participated in a wide-ranging conspiracy to defraud the Pennsylvania Medicaid program for the purpose of obtaining illegal Medicaid payments through the submission of fraudulent claims for services that were never provided to the consumers identified on the claims or for which there was insufficient or fabricated documentation to support the claims. The Court was further advised that the defendants conspired with, among others, various office workers at the companies, including Tiffhany Covington and Tia Collins. As part of the conspiracy, the defendants admitted that they fabricated timesheets to reflect the provision of in-home PAS care they provided to consumers but that, in fact, never occurred. In addition, at Arlinda Moriarty’s direction, certain co-conspirators, including Lowry Horton, stopped using their own names as the attendant on timesheets and instead used the names of "ghost" attendants, some of whom permitted their names to be used in exchange for a kickback of resulting fraudulent salary payments. Brown admitted that she allowed her name to be used in this manner and that she received a portion of the fraudulent proceeds from Ms. Covington. Lowry Horton further admitted that, as part of the conspiracy, she and others paid kickbacks to consumers in exchange for the consumers’ agreement to sign—or allow their names to be forged on—false timesheets.
To date, 16 people have been charged with offenses related to the conspiracy.
Assistant United States Attorney Eric G. Olshan and Special Assistant United States Attorney Edward Song are prosecuting this case on behalf of the government. The Federal Bureau of Investigation, Pennsylvania Office of the Attorney General – Medicaid Fraud Control Unit, Internal Revenue Service – Criminal Investigation, U.S. Department of Health and Human Services – Office of Inspector General, and United States Postal Inspection Service conducted the investigation of the defendants.
Twenty-Two Defendants Charged with Federal Drug Conspiracy and Related CrimesRead the Press Release
Defendants Allegedly Knew the Drugs They Sold Were Causing Overdoses
Baltimore, Maryland – A federal grand jury has returned a superseding indictment charging 22 defendants with participating in a drug conspiracy that allegedly distributed heroin, fentanyl, cocaine, and crack cocaine in Maryland and surrounding states, resulting in multiple overdoses, including five overdose deaths. According to the superseding indictment, the defendants possessed firearms in furtherance of their drug trafficking and purchased guns from customers in exchange for drugs. The superseding indictment was returned late on April 10, 2019, and unsealed yesterday.
The superseding indictment was announced by United States Attorney for the District of Maryland Robert K. Hur; Acting Special Agent in Charge Jennifer L. Moore of the Federal Bureau of Investigation, Baltimore Field Office; Assistant Special Agent in Charge Don A. Hibbert of the Drug Enforcement Administration, Baltimore District Office; Acting Chief Russell E. Hamill, III of the Montgomery County Police Department; and Commissioner Michael Harrison of the Baltimore Police Department.
“A supply chain that distributed opioids--including deadly fentanyl—throughout Maryland and in Virginia, West Virginia, and Pennsylvania, has been dismantled, and those charged with trafficking these poisons are now in federal custody,” said U.S. Attorney Robert K. Hur. “Drugs—especially opioids—are killing thousands of Marylanders a year. Federal, state, and local law enforcement are working together to reduce overdose deaths from fentanyl and from all opioids. Drug traffickers are on notice that dealing in fentanyl increases their odds of federal prosecution and federal time.”
"The FBI worked side-by-side with the Montgomery County and Rockville City Police Department and other federal, state and local partners to ensure we stopped these individuals from further distributing heroin, fentanyl, cocaine and crack cocaine in the region," said FBI Baltimore Acting Special Agent in Charge Jennifer L. Moore. "These dangerous drugs have a devastating effect on our communities and we will continue to work with our law enforcement partners to make Maryland a safer place."
According to the 23-count indictment, from 2016 to April 3, 2019, the defendants were members and associates of the Butler Drug Trafficking Organization (DTO) and distributed heroin, fentanyl, cocaine, and crack cocaine in Maryland, Virginia, West Virginia, and Pennsylvania. The indictment alleges that the members of the conspiracy conducted sales on a daily basis, operating in rotating shifts to ensure continuous availability. Members of the conspiracy allegedly used residences in and around Baltimore to process, cut, repackage, and prepare heroin, fentanyl, and cocaine base for distribution, and rotated the residences to minimize detection by law enforcement. The indictment alleges that in order to maximize their profits, the conspirators cut the heroin and crack cocaine with other substances, such as fentanyl and diphenhydramine (often found in sleeping pills).
As detailed in the superseding indictment, the defendants were aware that the drugs they distributed were causing overdoses. According to the superseding indictment, at least five overdose deaths are attributed to the distribution of drugs by members of the conspiracy, including the father of one of the conspirators.
According to the superseding indictment, members of the conspiracy possessed firearms in furtherance of their drug trafficking activities, sometimes purchasing firearms from drug customers and paying the customers with drugs in exchange for the firearms. In addition, the conspirators allegedly took steps to avoid detection by law enforcement, including: conducting counter-surveillance; rotating the use of vehicles and residences used to store narcotics; changing locations in Baltimore to conduct drug transactions; frequently changing cell phones; and using encrypted phone applications to prevent interception of drug-trafficking communications by law enforcement.
The following defendants are charged in the superseding indictment unsealed today:
Michael Bailey, age 30, of Winchester, Maryland; Donte Bennett, a/k/a Tay, age 27, of Baltimore, Maryland; Darlene Best, age 56, of Baltimore; Gregory Butler, a/k/a Sags and Little Dick, age 28, of Baltimore; Juawan Davis, a/k/a Fat Daddy, age 24, of Baltimore; Timothy Downing, age 35, of Mount Airy, Maryland; Edward Buddy Hall, a/k/a Gwar, age 54, of Baltimore; Syed Hussain, age 25, of Virginia; Ryan Johnson, age 26, of Montgomery County, Maryland; Cindy Legard, age 31, of Bunker Hill, West Virginia; Kareem Mack, a/k/a K Mack, age 29, of Baltimore; Terrance Medley, a/k/a Mazzi, age 35, of Baltimore; Russell Oliver, age 43, of Bunker Hill, West Virginia; Davon Owens, a/k/a Gusto, age 31, of Baltimore; Desmond Ringgold, a/k/a Worm and Fool, age 28, of Baltimore; James Henry Roberts, a/k/a Bub, age 29, of Baltimore; Tirrel Saunders, a/k/a Pretty, age 32, of Baltimore; Gary Smith, age 20, of Virginia; Ann Waugh-Hixon, age 48, of Berkeley County; Laura Warner, age 36, of Berkeley County; Emanuel Watkins, age 62, of Baltimore; and
John Wolfrey, age 39, of Berkeley County, West Virginia.Ten defendants face a maximum sentence of 40 years in prison, ten defendants face a maximum of life in prison, and two defendants face a maximum of 20 years in prison on the drug conspiracy charge. Legard, Hussain, Smith, Mack, Davis, Wolfrey, Bailey, Johnson, Warner, Waugh-Hixon, Owens, and Roberts also face a maximum sentence of 20 years in prison for possessing with intent to distribute heroin, crack cocaine, or fentanyl. Davis, Owens, Hall, Butler, Roberts, and Medley also face a mandatory minimum sentence of five years in prison, consecutive to any other sentence, and a maximum sentence of life in prison for possession of a firearm in relation to a drug trafficking crime. Finally, Owens, Hall, Butler, Roberts, and Medley face a maximum sentence of 10 years in prison for possession of a firearm and ammunition by a prohibited person.
Twenty-one defendants have been arrested. Eighteen of those defendants are detained, and two defendants have been released under the supervision of U.S. Pretrial Services. Emanuel Watkins is still being sought.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Robert K. Hur commended the FBI, the DEA, the Montgomery County and the Baltimore Police Department for their work in the investigation. Mr. Hur commended the U.S. Postal Inspection Service; the City of Rockville Police Department; the Baltimore County, Howard County, and Montgomery County Police Departments; the Frederick County Sheriff’s Office; the Maryland State Police; the West Virginia State Police; the Virginia State Police; the Warren County (VA) Sheriff’s Department; the Winchester (VA) and Front Royal (VA) Police Departments; and the Frederick County and Howard County State’s Attorney’s Offices. Mr. Hur thanked Assistant U.S. Attorneys Matthew DellaBetta and Michael Goldsticker, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
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Towson Woman Sentenced to Eight Years in Federal Prison for Obtaining More Than $4.3 Million in an Advance Fee Fraud Scheme and for Evading TaxesRead the Press Release
Baltimore, Maryland – U.S. District Judge Richard D. Bennett today sentenced Lauren Montillo, age 47, of Towson, Maryland, to eight years in federal prison, followed by five years of supervised release, for conspiracy to commit wire fraud and for tax evasion. Judge Bennett also ordered Montillo to pay restitution of $4,060,284.79 to the victims of the scheme, and $276,240 to the Internal Revenue Service.
Montillo admitted that from 2010 through 2015, she and her co-conspirators sought at least $8.7 million in advance fees from foreign and United States victims, purporting to offer access to exotic bank financial instruments. Victims paid $4,342,540 in advance fees into Hong Kong bank accounts or attorney escrow accounts and received nothing in return. For tax years 2012 through 2014, Montillo reported no income other than $100, evading a substantial amount of income taxes.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Acting Special Agent in Charge Jennifer L. Moore of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Kelly R. Jackson of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
According to her plea agreement and other court documents, Montillo and her co-conspirators created shell companies, with associated websites, email addresses, and bank accounts, which they used to perpetrate the fraud. Specifically, in February 2010, Montillo opened an account with GoDaddy, which provides web-hosting services. From 2010 to 2015, Montillo and other co-conspirators used GoDaddy to host websites for shell companies such as MLL Holdings, The Bussola Group, Worldwide Escrow Holdings, Ltd., International Insurance of Nebraska, Atlas Investment Bancorp, Entirety Capital, GPF Global, and Atlas-Gayle Trust. Each of these shell companies had associated email addresses, which Montillo and her co-conspirators opened and used.
Also in 2010, Montillo's father incorporated "Worldwide Escrow Holdings Limited" ("Worldwide Escrow") in Hong Kong and opened a bank account for Worldwide Escrow at the Hong Kong Shanghai Bank (HSBC), Hong Kong with Montillo as a signatory. Montillo’s father resigned from the company in April 2011. In March 2011, Montillo and a co-conspirator opened two more bank accounts in Hong Kong, the MLL Holdings and the Skywall bank accounts, also at HSBC. Montillo and her co-conspirators had on-line access to the Hong Kong bank accounts so that they could conduct banking transactions over the internet. In 2012, Montillo’s father also opened an escrow account in the name of his mother-in-law, a licensed attorney in Maryland who had stopped practicing law in approximately 2007. She was not aware that the escrow account had been opened in her name. The conspirators directed victims to wire-transfer their advance fees into the HSBC, Hong Kong bank accounts or the attorney escrow account.
Montillo’s co-conspirator, Eric Becker, was her former fiancé. Becker developed, and Montillo edited, websites for the various phony businesses, which purported to offer access to financial instruments, such as standby letters of credit, bank guarantees, bonds, or private placement trading platforms. Montillo and her co-conspirators had no access to any financial instruments. For example, Montillo and several co-conspirators obtained advance fee payments from a victim that would purportedly gain access to a private placement trading platform. The co-conspirators persuaded the victim, through several broker intermediaries, to send $1.7 million to a BB&T bank account in Florida. BB&T returned the funds to the victim. The victim, a Mexican national, was told that the funds were returned because the window had closed on the investment opportunity. Co-conspirators, including Montillo, then informed the victim, through his broker, that they could offer him a private placement trading platform in which he would receive profits and a charitable organization would use its portion of the profits to invest in its projects. The conspirators directed the victim to send his money to the Worldwide Escrow account at HSBC, Hong Kong. On May 8, 2012, the victim used his own and his family's funds to send $3,099,990 to the Worldwide Escrow Holdings account. The conspirators, including Montillo, moved more than $2 million of the funds to a bank account opened at Choice Bank in Belize.
To conceal the fraud and to reassure the victim and his brokers, co-conspirators including Montillo, created an insurance policy for a non-existent insurance company called International Insurance of Nebraska, which was back-stopped with a website hosted through Montillo's GoDaddy account. The insurance policy purported to show that the victim's investment funds would not be at risk because they were fully insured. In addition, co-conspirators, including Montillo, used her GoDaddy account to host the website “wweholdingsltd.com” to add an air of legitimacy to Worldwide Escrow. Both the insurance company and the private placement trading platform were bogus.
Over the next several years, Montillo and her co-conspirators continued with the advance fee scheme. The scheme had both foreign and U.S. victims. To protect her identity, Montillo frequently used the name “Kati Conti” in the frauds and used a “burner phone” so that after the scam was concluded, she could “go dark” and stop communicating with the victims. In all, the scheme sought at least $8.7 million from victims, and actually obtained $4,342,540.
For tax years 2012 through 2014, Montillo filed personal tax returns showing either no income or just $100 in income, and thus no income tax was owed. Montillo admitted that she was the signatory on bank accounts in the names of limited liability corporations into which victims' funds were wire transferred from Hong Kong, Choice Bank in Belize, the attorney escrow account, and other accounts controlled by co-conspirators. Montillo used the victim funds transferred to the limited liability accounts for living expenses. Montillo had no accounts in her own name. Montillo admitted that by failing to report her income for 2012 through 2014 to the Internal Revenue Service, she evaded a substantial amount of income taxes.
Three defendants were charged and sentenced in a related case in the Western District of Texas—James Edward Cox was sentenced to 78 months in prison and was ordered to pay $4,249,478 in restitution; and Kelly Ray Coronado and Gordon Richard Moscowitz were each sentenced to 46 months in prison sentence and were also ordered to pay restitution. Becker was indicted with Montillo but has since died. Montillo’s father died in 2016.
United States Attorney Robert K. Hur commended the FBI and IRS-CI for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Joyce K. McDonald and Sean Delaney, who prosecuted the case.
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Three ex-employees of Blackfeet Tribe’s Head Start Program sentenced in theft, fraudRead the Press Release
GREAT FALLS—Three former employees who had management positions with the Blackfeet Tribe’s Head Start Program were sentenced on April 11 to months in prison for their roles in an overtime pay scheme that defrauded the children’s assistance program of an estimated $174,000, U.S. Attorney Kurt Alme said.
U.S. District Judge Brian M. Morris presided at the sentencings for Theresa Marie Calf Boss Ribs, 51, of Browning, Patrick H. Calf Boss Ribs, Jr., 44, of Heart Butte, and Denise L. Sharp, 60, of Browning.
The three defendants each pleaded guilty earlier to theft from an Indian tribal government receiving federal funding and to wire fraud.
Morris sentenced Theresa Marie Calf Boss Ribs, who was the payroll manager, to 8 months in prison, two years of supervised release and ordered $139,096 in restitution.
Morris sentenced Patrick H. Calf Boss Ribs, Jr., who was the nutrition manager/payroll clerk, to 9 months in prison, two years of supervised release and ordered $139,096 in restitution and a $25,122 forfeiture.
Morris sentenced Sharp, who was the personnel manager, to nine months in prison, two years of supervised release and ordered $139,096 in restitution and a $29,033 forfeiture.
U.S. Attorney Alme said, “I hope that the sentencings of three former managers of the Blackfeet Head Start program will deter others from stealing from federally funds intended to help tribal members. The theft of $174,000 hurt the children enrolled in Head Start by prohibiting the purchase of books, barring the ability to obtain teaching materials and cutting food nutrition programs for those who need it most. We will continue to prosecute these cases to ensure that federal funds are used for the needs of those intended.”
The Blackfeet Tribe operates the Head Start Program with funding from the U.S. Department of Health and Human Services. Head Start provides early childhood education and other services for low-income children and their families.
During a 15-month period, starting in April 2013, the defendants and others falsely claimed 5,850 hours of overtime and received more than $174,000 in overtime pay from the Head Start program. When the fraud was uncovered, two different firms audited the Blackfeet Head Start program. Both audits questioned the overtime claims, identifying them as “beyond necessary and reasonable” and lacking any supporting documentation.
The Blackfeet Tribe did its own internal review, agreed it could not justify the overtime claims and repaid HHS $250,620.29 for disallowed costs and other expenses.
After an on-site review of the program by government authorities from Washington, D.C., the defendants along with others met in a conference room. Despite not actually working the hours, everyone present in the room agreed to continue claiming overtime.
Theresa Calf Boss Ribs and Patrick H. Calf Boss Ribs, Jr. were in charge of monitoring the time cards. At the end of the pay period, individuals in the group would stop by to sign their time cards for the pay period. The time cards were already completed by the defendants and included false overtime hours.
Other Head Start workers told investigators they never saw Blackfeet Head Start personnel working late nights or on weekends. The program’s board chairman was unaware of the overtime claims and was unaware of any needs that would have justified the overtime claims by the defendants. Because of insufficient funds, he also had to identify necessary budget cuts.
Assistant U.S. Attorney Ryan Weldon prosecuted the case, which was investigated by the FBI and the U.S. Department of Health and Human Services’ Office of Inspector General.
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Thai National Sentenced to Prison Term for Attempting to Unlawfully Export Firearm Parts from the United States to ThailandRead the Press Release
WASHINGTON –Thai national Apichart Srivaranon 34, was sentenced today in the District of Columbia to 26 months in prison on federal charges of conspiracy to defraud the United States and to export defense articles from the United States to Thailand.
The announcement was made by U.S. Attorney for the District of Columbia Jessie K. Liu, U.S. Attorney for the District of Maryland Robert K. Hur, and Acting Special Agent in Charge Cardell T. Morant of the Baltimore Field Office of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
Srivaranon pleaded guilty to charges in both Maryland and the District of Columbia in January and March 2019, respectively, as required by his plea agreement in each District.
In the District of Columbia, he was sentenced today by the Honorable Reggie B. Walton. In Maryland, he was sentenced on April 11, 2018 by the Honorable George J. Hazel, who imposed a sentence of 26 months of incarceration and a forfeiture of $10,000. The sentences imposed in both cases will be served concurrently. Following his prison terms, Srivaranon will be deported from the United States and returned to Thailand.
Srivaranon admitted that between 2012 and 2014, he conspired with individuals in the United States and Thailand to obtain firearm parts in the United States that were listed on the United States Munitions List (USML) and then exported, and attempted to export, the firearm parts to Thailand without having first obtained the required license or written authorization from the Directorate of Defense Trade Controls, an office in the United States Department of State.
As detailed in his plea agreements, during the conspiracy, Srivaranon and his co-conspirators ordered firearms parts on the USML from U.S.-based firearms parts retailers and caused those firearms parts to ship to addresses in the United States where co-conspirators lived, visited, or conducted business. At the direction of Srivaranon and others, co-conspirators would then repackage the USML firearms parts in the United States; falsely label United States Postal Services Form 2976 and Customs Declarations CN 22 (sender’s declarations forms) by using fake names for return addresses; falsely declare the contents of the packages and understate their value; and then ship the USML firearms parts to Thailand via the U.S. mail and private shipping companies. This was done to conceal the prohibited exports from detection by the U.S. government.
In the District of Columbia cases, Srivaranon admitted that to facilitate the scheme, he and others deposited funds into co-conspirators’ bank accounts in Thailand. The funds were deposited in Thai Baht currency. The co-conspirators would then withdraw U.S. dollars from automatic teller machines in the United States, as payment for their participation in the scheme.
Srivaranon was arrested in Las Vegas, Nev. on January 22, 2018, after flying there from Thailand to attend a trade show unrelated to the charges in the case. He has been in custody since his arrest.
In announcing the sentences, U.S. Attorney Liu, U.S. Attorney Hur, and Acting Special Agent in Charge Morant commended the work of those who investigated the case from the HSI’s Baltimore Field Office. They also expressed appreciation for the efforts of those who worked on the case from the District of Columbia, including Assistant U.S. Attorney Frederick Yette and Trial Attorney Rebecca A. Caruso of the Justice Department’s Criminal Division. They also commended the work of Assistant U.S. Attorneys Kelly Hayes and Bryan Foreman, who handled the related prosecution in the District of Maryland.
Thai National Sentenced to over Two Years in Federal Prison for Conspiring to Unlawfully Export Firearms Parts from the United States to ThailandRead the Press Release
Greenbelt, Maryland – Thai national Apichart Srivaranon, 34 years old, was sentenced to 26 months in federal prison for a conspiracy to export arms and munitions, and for unlawfully exporting arms and munitions, specifically for exporting firearms parts from the United States to Thailand. U.S. District Judge George J. Hazel imposed the sentence on April 11, 2019, and also ordered Srivaranon to forfeit $10,000. Today, U.S. District Judge Reggie B. Walton for the District of Columbia sentenced Srivaranon to the same sentence for conspiracy to defraud the United States and to export defense articles from the United States to Thailand. The sentences will be served concurrently. Upon his release from prison, Srivaranon will be deported from the United States and returned to Thailand.
The sentences were announced by United States Attorney for the District of Maryland Robert K. Hur; United States Attorney for the District of Columbia Jessie K. Liu; and Acting Special Agent in Charge Cardell T. Morant of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Baltimore.
Srivaranon pleaded guilty to charges in both Maryland and the District of Columbia in January and March 2019, respectively, as required by his plea agreement in each District.
Srivaranon admitted that between 2012 and 2014, he conspired with individuals in the United States and Thailand to obtain firearms parts in the United States that were listed on the United States Munitions List (USML) and then exported, and attempted to export, the firearm parts to Thailand without having first obtained the required license or written authorization from the Directorate of Defense Trade Controls, an office in the United States Department of State.
As detailed in his plea agreements, during the conspiracy, Srivaranon and his co-conspirators ordered firearms parts on the USML from U.S.-based firearms parts retailers and caused those firearms parts to ship to addresses in the United States where co-conspirators lived, visited, or conducted business. At the direction of Srivaranon and others, co-conspirators would then repackage the USML firearms parts in the United States; falsely label United States Postal Services (“USPS”) Form 2976 and Customs Declarations CN 22 (sender’s declarations forms) by using fake names for return addresses; falsely declare the contents of the packages and understate their value; and then ship the USML firearms parts to Thailand via the USPS and private shipping companies. This was done to conceal the prohibited exports from detection by the U.S. government.
In his guilty plea to the District of Columbia charges, Srivaranon admitted that to facilitate the scheme, he and others deposited funds into co-conspirators’ bank accounts in Thailand. The funds were deposited in Thai Baht currency. The co-conspirators would then withdraw U.S. dollars from automatic teller machines (ATMs) in the United States, as payment for their participation in the scheme.
Srivaranon was arrested in Las Vegas, Nevada on January 22, 2018, after flying there from Thailand to attend a trade show unrelated to the charges in the case. He has been in custody since his arrest.
United States Attorneys Robert K. Hur and Jessie K. Liu commended HSI Baltimore for its work in this investigation. They also expressed appreciation for the efforts of those who worked on the case from the U.S. Attorney’s Offices, including Assistant U.S. Attorneys Kelly Hayes and Bryan Foreman, who handled the prosecution in the District of Maryland, and Assistant U.S. Attorney Frederick Yette and Trial Attorney Rebecca A. Caruso of the Money Laundering & Asset Recovery Section (formerly a Special Assistant U.S. Attorney with the District of Columbia), who handled the case in the District of Columbia.
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Test Taker in College Admissions Case Pleads GuiltyRead the Press Release
BOSTON – The test taker in the college admissions case pleaded guilty today in federal court in Boston in connection with accepting payments to cheat on the ACT and SAT exams, and other tests.
Mark Riddell, 36, of Palmetto, Fla., pleaded guilty to one count of conspiracy to commit mail fraud and honest services mail fraud and one count of conspiracy to commit money laundering. U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for July 18, 2019 at 3:00 p.m.
From 2011 through February 2019, Riddell conspired with William “Rick” Singer and others to cheat on college entrance exams in the United States and Canada. As part of the scheme, Riddell secretly took college entrance exams in place of students, or corrected the students’ answers after they had taken the exam.
In many cases, Singer facilitated the cheating by counseling his clients to seek extended time on the exams, including by having their children purport to have learning disabilities in order to obtain the required medical documentation. Once the extended time was granted, Singer instructed the clients to change the location of the exams to one of two test centers: a public high school in Houston, Texas, or a private college preparatory school in West Hollywood, Calif. Singer had established relationships at those locations with test administrators Niki Williams and Igor Dvorskiy, who allegedly accepted bribes of as much as $10,000 per test in order to facilitate the cheating scheme. Specifically, Williams and Dvorskiy allowed Riddell to take the exams in place of the students, to give the students the correct answers during the exams, or to correct the students’ answers after they completed the exams. Singer typically paid Riddell $10,000 for each test. Singer’s clients paid him between $15,000 and $75,000 per test, with the payments structured as purported donations to the KWF charity controlled by Singer. In many instances, the students taking the exams were unaware that their parents had arranged for the cheating.
On March 22, 2019, Singer pleaded guilty to racketeering conspiracy, money laundering conspiracy, conspiracy to defraud the United States and obstruction of justice. He is scheduled to be sentenced on June 19, 2019, at 2:00 p.m. in Boston.
Updated information about this case can be found at https://www.justice.gov/usao-ma/investigations-college-admissions-and-testing-bribery-scheme.
The charge of conspiracy to commit mail fraud and honest services mail fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss, whichever is greater. The charge of conspiracy to commit money laundering provides for a sentence of up to 20 years in prison, up to three years of supervised release, and a fine of not more than $500,000 or twice the value of the property involved in the money laundering. 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 Division; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. Assistant U.S. Attorneys Eric S. Rosen, Justin D. O’Connell, Leslie A. Wright and Kristen A. Kearney of Lelling’s Securities and Financial Fraud Unit are prosecuting the case.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Tax business owner charged with preparing and filing false tax returnsRead the Press Release
ATLANTA – Local tax business owner Thomas Holmes has been arraigned on federal charges of willfully preparing and filing federal income tax returns that fraudulently claimed hundreds of thousands of dollars in tax refunds.
“Citizens expect tax preparers like Holmes to accurately prepare and file their returns,” said U.S. Attorney Byung J. “BJay” Pak. “His alleged abuse of the tax system for financial gain undermines public confidence in the system. We have dedicated resources to combat this kind of theft, and we will aggressively prosecute those who believe they can file false tax returns, thereby cheating everyone else.”
“Holmes took advantage of his clients’ trust and lined his pockets with fraudulent tax refunds. If you use a return preparer to file your taxes, ask to review the tax return before it is filed with the IRS and ask for a copy of the filed tax return. If you become suspicious that your return preparer isn’t filing the correct information, report that return preparer to the IRS,” said Steve S. Bahhur, Acting Assistant Special Agent in Charge of IRS-CI, Atlanta Field Office.
According to U.S. Attorney Pak, the charges, and other information presented in court: Thomas Holmes ran a tax preparation business in Austell, Georgia called TKO Tax Pros. Between 2013 and 2017, Holmes, through TKO Tax Pros, prepared and filed thousands of federal income tax returns on behalf of clients. The indictment alleges that on many of those returns, Holmes willfully listed false information, such as false Schedule C business losses and false Schedule A itemized deductions, causing the tax returns to claim thousands of dollars in refunds that taxpayers were not entitled to. When the Internal Revenue Service (“IRS”) issued refunds to these taxpayers, Holmes allegedly kept a portion of the fraudulent refunds for himself and paid the balance to his clients. During the relevant time period, Holmes made hundreds of thousands of dollars for his tax preparation services.
Thomas Holmes, 41, of Austell, Georgia, was arraigned before U.S. Magistrate Judge Janet F. King. He was indicted by a federal grand jury on April 10, 2019 on 22 counts of willfully preparing and filing fraudulent federal income tax returns on behalf of eight individual taxpayers.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Internal Revenue Service Criminal Investigation.
Assistant U.S. Attorney Annalise Peters is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Tax Preparer and Two Employees Indicted on Fraud ChargesRead the Press Release
A tax preparer and two employees were indicted on charges related to the preparation and filing of false tax returns.
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, and Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Olry Maurival, of West Palm Beach, Florida, Paula Pognon, also of West Palm Beach, Florida and Amos Regusme, of Felton, Delaware, have been indicted for conspiracy to defraud the United States, in violation of Title 18, United States Code, Section 371 (Case No. 19-80054-CR-Middlebrooks). Maurival and Pognon have also been indicted for aiding and assisting in the preparation of false tax returns, in violation of Title 26, United States Code, Section 7206(2) and Maurival has been indicted for filing false tax returns, in violation of Title 26, United States Code, Section 7206(1). Their initial appearances are scheduled for April 25, 2019, in West Palm Beach.
According to the allegations in the indictment, Maurival operated a tax preparation business where he, Pognon, and Regusme prepared taxes. From 2012 through 2015, they prepared and filed returns on which they claimed a variety of credits and deductions to which their clients were not entitled, including the Earned Income Credit, the Fuel Tax Credit, deductions for unreimbursed employee expenses, and deductions and credit for educational expenses. In addition, Maurival underreported his gross earnings from the operation of his tax business on his personal tax returns.
If convicted, the defendants face maximum possible statutory sentences of 5 years in prison, for the conspiracy. In addition, Maurival and Pognon face maximum possible statutory sentences of 3 years in prison on each of the other counts.
An indictment is only an accusation and a defendant is presumed innocent unless and until proven guilty in a court of law.
U.S. Attorney Fajardo Orshan commended the investigative efforts of IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Marc Osborne.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.
Sunnyvale-Based Network Security Company Agrees to Pay $545,000 to Resolve False Claims Act AllegationsRead the Press Release
SAN FRANCISO –Sunnyvale-based Fortinet, Inc. has agreed to a settlement valued at $545,000 to resolve allegations it violated the False Claims Act by falsely representing its products were in compliance with the Trade Agreements Act (TAA), 19 U.S.C. § 2501 et seq., announced United States Attorney David L. Anderson; Defense Criminal Investigative Service (DCIS) Special Agent in Charge Bryan D. Denny; General Services Administration Office of the Inspector General (GSA-OIG), Western Field Office, Special Agent in Charge Theresa Quellhorst; Director of the U.S. Army Criminal Investigation Command’s (USACIDC) Major Procurement Fraud Unit Frank Robey; and Department of Homeland Security Office of Inspector General (DHS-OIG) Special Agent in Charge Amanda Thandi.
According to the settlement agreement made public today, Fortinet acknowledged that during the more than seven years between January of 2009 and the fall of 2016, a Fortinet employee responsible for supply chain management (the “Responsible Employee”) arranged to have labels on certain products altered to make the products appear to be compliant with the TAA. A portion of the products were resold through distributors and subsequent resellers to U.S. government end users.
“Today’s announcement illustrates the continuing commitment of the U.S. Attorney’s Office and our law enforcement partners to identify and prosecute fraudulent schemes relating to the sale of goods to the United States,” said U.S. Attorney Anderson.
“Contractors that supply the U.S. Government with Chinese-made technology will be pursued and held accountable when violating the Trade Agreement Act,” said DCIS Special Agent in Charge Denny. “The DCIS and its law enforcement partners are committed to combatting procurement fraud and cyber risk within U.S. Department of Defense programs.”
“This settlement displays the steadfast commitment of our agents and our federal law enforcement partners,” said USACIDC Director Robey. “This settlement is a clear signal to the supply community doing business with the Department of the Army—fraud will not be tolerated in any way, shape or form.”
“Contractors who undermine American trade interest and pose a security risk by selling unauthorized foreign-made devices to the United States will be held accountable,” said DHS-OIG Special Agent in Charge Thandi. “Contracting companies that conduct business with the federal government must uphold our trade laws; any misrepresentation during this process undercuts its integrity.”
“This settlement reflects the GSA OIG’s commitment to work with our law enforcement partners to aggressively investigate and prosecute those who seek to fraudulently sell products to the federal government that do not meet the standards set by law,” said GSA OIG Special Agent in Charge Theresa Quellhorst.
The TAA generally prohibits certain government contractors from purchasing products that are not entirely from, or “substantially transformed” in, the United States or certain designated countries. Fortinet sells network security devices, some of which may be sold through distributors and subsequent resellers to U.S. government end users. In this case, Fortinet acknowledged the Responsible Employee directed certain employees and contractors to change product labels so that no country of origin was listed, or to include the phrases “Designed in the United States and Canada,” or “Assembled in the United States.” Fortinet acknowledged that the Responsible Employee’s actions involved products sold to certain distributors that subsequently sold them to resellers, which in turn sold a portion of them to U.S. government end users. The Responsible Employee has since been terminated from employment with Fortinet.
To settle the allegations, Fortinet has agreed to pay $400,000 and to provide the United States Marine Corps with additional equipment valued at $145,000.
The lawsuit was filed by Yuxin “Jay” Fang under the qui tam provisions of the False Claims Act. Under the act, private citizens can bring suit on or behalf of the government for false claims and share in any recovery. The act also permits the United States to intervene in and take over a whistleblower suit, as was done here.
This matter was investigated by the U.S. Attorney’s Office of the Northern District of California, along with the DCIS, GSA-OIG, Air Force Office of Special Investigations, USACIDC, DHS-OIG, the Department of the Navy, and the Coast Guard Investigative Service. Fortinet cooperated in the government’s investigation, including by sharing the results of its internal investigation in this matter. The settlement reflects Fortinet’s cooperation with the government in this and other matters.
Assistant U.S. Attorney Ellen London is handling the case with the assistance of Garland He, Jacqui Hollar, and Tina Louie.
Sulphur resident pleads guilty to illegally possessing a shotgun and pistolRead the Press Release
LAKE CHARLES, La. – United States Attorney David C. Joseph announced that James Bergeron, 29, of Sulphur, Louisiana, pleaded guilty Thursday day before U.S. Magistrate Judge Kathleen Kay for possession of a firearm and ammunition by a convicted felon.
According to the guilty plea, law enforcement officers executed a search warrant on October 19, 2018 at Bergeron’s Sulphur residence where they found a Browning 12-gauge shotgun and a Ruger .380-caliber semi-automatic pistol. Bergeron, a convicted felon, was present at the time of the search and admitted to ownership and use of the firearms. He was convicted in federal court in the Eastern District of Texas on September 26, 2013 for bank robbery and in the 14th Judicial District Court, Calcasieu Parish, on August 25, 2017 for possession of Methamphetamine. Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of a firearm or ammunition.
Bergeron faces up to 10 years in prison, three years of supervised release and a $250,000 fine. The court set the sentencing date for July 9, 2019.
The ATF, Lake Charles Police Department and Calcasieu Parish Sheriff’s Office conducted the investigation. Supervisory Assistant U.S. Attorney Myers P. Namie is prosecuting the case.
Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. Project Safe Neighborhoods is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for reductions in crime.
Sudbury Man Sentenced to 15 Months in Prison for Flying Without a Valid Pilot’s LicenseRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Angelo Efthimiatos, 49, of Sudbury, Vermont, was sentenced yesterday to serve 15 months in prison followed by a year of supervised release following his conviction at trial in December 2018 of flying without a valid pilot’s license. The sentence will be served concurrently with an 18 month sentence from the Southern District of Iowa for violating terms of his prior federal supervised release. Efthimiatos, who has been in custody since April 2018, will receive credit for time served.
According to the indictment in the case and information presented at trial, just after midnight on April 10, 2018, Efthimiatos landed a small plane at the Rutland Regional Airport in North Clarendon, Vermont. The flight originated in Nantucket, Massachusetts. Efthimiatos was intercepted by federal agents at the airport and was arrested. He has been detained since that time. At the time of his arrest, Efthimiatos did not have a valid pilot’s license or “airman’s certificate” from the Federal Aviation Administration (FAA). His airman’s certificate had been revoked by the FAA as of July 1, 2014.
The United States Attorney’s Office recognized the hard work of Special Agents from the Drug Enforcement Agency and the Department of Transportation’s Office of Inspector General to support the investigation and trial. The FAA also provided extensive support during the case.
At trial, the government was represented by Assistant U.S. Attorneys Nicole Cate and Eugenia Cowles. Mr. Efthimiatos was represented by Craig S. Nolan, Esq. of Sheehy, Furlong, and Behm, P.C.
St. Thomas Resident Pleads Guilty to Failing to Register as a Sex OffenderRead the Press Release
St. Thomas, USVI –Jeffrey Cole, 57, of St. Thomas, pleaded guilty in District Court before Judge Curtis V. Gomez, to failing to register as a sex offender, United States Attorney Gretchen C.F. Shappert announced.
According to court records, Cole was convicted for voyeurism in the State of Ohio in 2009. He moved to the State of Georgia where he registered as a sex offender. Cole relocated to the Virgin Islands in 2018, and failed to register as required by law.
Under federal law, Cole faces a maximum sentence of 10 years in prison and a maximum fine of $250,000.
This case was investigated by the United States Marshal Service. It is being prosecuted by Assistant United States Attorney Everard E. Potter.
Six Remaining Cherry Hill Hillside Gang Members Plead Guilty to Federal Racketeering Conspiracy ChargesRead the Press Release
Baltimore, Maryland – On Thursday, April 11, 2019, six Baltimore men pleaded guilty to conspiracy to participate in a racketeering enterprise related to their activities as members of the violent Hillside gang that operated in the Cherry Hill neighborhood of Baltimore. As part of their plea agreements, the defendants admitted to participating in murders; attempted murders, robberies; and the distribution of narcotics. The following defendants pleaded guilty:
Keenan Lawson, a/k/a BlackFace, age 27; Michael Evans, a/k/a Pee Wee, age 25; Kevin Horsey, a/k/a What What, age 26; Stevie Lawson, a/k/a GB, age 28; Terrell Luster, a/k/a Relly, age 31; and
Caesar Rice, a/k/a Stinky, age 27.Thirteen other Hillside gang members have previously pleaded guilty to their participation in the racketeering conspiracy. Of those, eight have been sentenced to between 10 and 30 years in federal prison.
The guilty pleas were announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Rob Cekada of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Baltimore Field Division; Commissioner Michael Harrison of the Baltimore Police Department; and Baltimore City State’s Attorney Marilyn J. Mosby.
“These gang members brought terror and death to Baltimore’s Cherry Hill neighborhood with guns and drugs. Federal, state, and local law enforcement are committed to working together to target those responsible for the most violence in Baltimore City,” said U.S. Attorney Robert K. Hur. “These defendants admitted that they were part of an organized criminal enterprise with leaders and members who dealt drugs and committed violent crimes using guns. Now they face lengthy sentences in federal prison, where there is no parole—ever. I urge anyone who’s thinking of following these defendants’ example: Please, put down the guns and save a life—maybe even your own.”
“Identifying, investigating, and incarcerating the armed gunmen that menace Baltimore’s communities is ATF’s primary focus,” said ATF Baltimore Special Agent in Charge Rob Cekada. “ATF is determined to collaborate with our law enforcement partners in our plight to ensure Baltimore neighborhoods can be free of violence.”
According to their plea agreements, the defendants were members and associates of the Hillside Enterprise, which they knew distributed powder and crack cocaine, heroin, oxycodone, and marijuana, primarily in the Cherry Hill Shopping Center, in other locations throughout Cherry Hill, and in west and southwest Baltimore City. The members of the Hillside Enterprise used the proceeds of their narcotics sales to purchase firearms, to enrich themselves, and to further the activities of the organization, including narcotics trafficking. Hillside members used residences in and around Cherry Hill to cut and package drugs for distribution, primarily heroin, powder cocaine, and crack. These locations included a house at 453 Roundview Road and an apartment at 2300 Terra Firma Road in Cherry Hill. Only trusted members of the Hillside Enterprise were admitted to these locations while the drugs were being prepared for sale. In an effort to distinguish their narcotics, members used colored topped vials or colored the drugs with food coloring. All six defendants admitted that they distributed drugs as a member of Hillside, and on behalf of the gang. Stevie Lawson is also captured on video in the stash houses on at least 16 occasions between November 2014 and June 2015, preparing controlled substances for distribution.
Members of the Hillside Enterprise routinely carried firearms and committed acts of violence in furtherance of the organization’s activities, including robberies, shootings, beatings, murders, and other violence in order to intimidate others who would interfere with their narcotics trafficking. Acts of violence were also committed to discipline members within the Hillside Enterprise for transgressions, real or perceived, against the conspiracy.
Hillside members and associates have been in a long-running dispute with persons not part of the gang, including Up Da Hill (“UDH”), the Lakebrook Circle Boys, and others. Members and associates of Hillside have routinely engaged in acts of violence, including murder, directed at members of these rival organizations, or persons who happen to be located on territory controlled by these rival organizations. The defendants all knew that these acts of violence, including the homicides, were committed by Hillside members and associates, including murders committed by Terrell Luster and Keenan Lawson. For example, Luster, Horsey, Rice, Keenan Lawson and Evans all admitted that they participated in, or were present at shootings, generally of individuals whom they and their fellow Hillside members believed to be rival gang members.
As part of their plea agreements, all of the defendants have agreed with the government to recommend a sentence to the Court, with the recommendations ranging from 12 years to 23 years in federal prison. U.S. District Judge George L. Russell III has scheduled sentencing for Evans, Luster, Rice, and Horsey on July 12, 2019, and scheduled sentencing for Keenan and Stevie Lawson on July 19, 2019.
According to the ATF, a reward of $10,000 each is available for information leading to the arrest of the final two defendants in this case, fugitives Travis Eugene Alewine, a/k/a Sticks, age 27; and Deaven Raeshawn Cherry, a/k/a Gotti, age 32, both of Baltimore, who are charged federally with drug and racketeering conspiracies, including murders. They are actively being sought by ATF Baltimore Special Agents and the U.S. Marshals Service. They should be considered armed and dangerous. Law enforcement believes they are likely still in the counties near Baltimore City, if not within the city itself. Anyone with information should contact ATF at (888) ATF-TIPS, [email protected], text “ATFBAL” to 63975, or contact ATF via the mobile reportit® app.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
United States Attorney Robert K. Hur commended the ATF, the Baltimore Police Department, and the Office of the State’s Attorney for Baltimore City for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Patricia C. McLane and Michael C. Hanlon, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
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Sioux Falls Man Sentenced for Possession of Firearms by a Prohibited PersonRead the Press Release
United States Attorney Ron Parsons announced that a Sioux Falls, South Dakota, man convicted of Possession of Firearms by a Prohibited Person was sentenced on April 5, 2019, by U.S. District Judge Karen E. Schreier.
Richard Joseph Long, Jr., age 45, was sentenced to 54 months in federal prison, 3 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Long was indicted by a federal grand jury on April 4, 2018. He pled guilty on January 17, 2019.
The conviction stemmed from an incident on or about between November 20, 2017, and December 6, 2017, when Long broke into his father's home and stole firearms and other property. Long was caught attempting to sell one of the firearms to a pawnshop in Sioux Falls. The pawn business was aware of the items reported stolen and immediately contacted the police. Long was prohibited from possessing any guns because he had previously been convicted of a felony.
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 the local community to develop effective, locally-based strategies to reduce violent crime.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorney Jeffrey C. Clapper prosecuted the case.
Long was immediately turned over to the custody of the U.S. Marshals Service.
Shreveport felon sentenced to 106 months in prison for drug, firearm chargesRead the Press Release
SHREVEPORT, La. – United States Attorney David C. Joseph announced today that Ellis Harp III, 44, of Shreveport, was sentenced by U.S. District Judge Elizabeth E. Foote to eight years and 10 months in prison for possession of cocaine with intent to distribute and possession of two firearms in furtherance of drug trafficking. Foote also sentenced Harp to five years of supervised release.
Law enforcement agents executed a search warrant on February 26, 2016 at Harp’s Earl Street residence in Shreveport and found 137.080 grams of powder cocaine, three sets of digital scales, a Ruger, model Super Blackhawk .44-caliber revolver and an Olympic Arms Inc. SGW & Safari Arms AR-15 in a shed on his property. Harp admitted to possessing the items located in the shed and admitted that he knew he was not allowed to possess a firearm or ammunition as a convicted felon. He was convicted in federal court in the Western District of Louisiana on September 16, 2010 for possession of a firearm by a felon. Harp pleaded guilty on November 29, 2018 for the current charges.
The ATF, DEA, Caddo Parish Sheriff’s Office and Shreveport Police Department conducted the investigation. Assistant U.S. Attorney Tennille M. Gilreath prosecuted the case.
Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. Project Safe Neighborhoods is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for reductions in crime.
San Antonio Man Pleads Guilty to Fraudulent Income Tax Return PreparationRead the Press Release
In San Antonio today, Richard Ortegon pleaded guilty to assisting in the preparation of a false U.S. Income Tax Returns which contained fraudulent deductions, announced U.S. Attorney John F. Bash and IRS-Criminal Investigation Special Agent in Charge Sarah Kull, Houston Field Office.
According to public records, the defendant owned and operated Aztec Tax Consulting Group, LLC and assisted clients in preparing their federal income tax returns. On the tax returns he prepared and submitted to the IRS, Ortegon admittedly included false Residential Energy Credits and inflated expenses on Schedule A and Schedule C forms. Specifically, on a client’s 2014 Individual Income Tax Return, Ortegon provided fraudulent figures--$8,092 in Residential Energy Credits and false expenses totaling $24,040. Ortegon further admitted that the total tax due and owing attributed to the false income tax returns he prepared is approximately $75,000.
“As we approach Monday’s deadline to file your taxes, remember: Intentionally falsifying your tax return is a serious federal crime,” stated U.S. Attorney Bash.
“Most return preparer businesses are operating to ensure taxpayers are reporting to the IRS correctly. Unfortunately, there are a few unscrupulous return preparers that violate their customers’ trust to benefit financially from the preparation and filing of false tax returns,” said IRS-Criminal Investigation Special Agent in Charge Kull. “IRS-Criminal Investigation is committed to identifying these individuals that are exploiting our tax system for their personal gain.”
Ortegon faces up to three years in federal prison and restitution to the IRS. Sentencing is scheduled for July 8, 2019.
Agents with the IRS—Criminal Investigation conducted this investigation. Assistant U.S. Attorney Sean O’Connell is prosecuting this case on behalf of the government.
Recycling Executive Sentenced to 3 Years in Prison for Scheming to Landfill and Re-Sell Potentially Hazardous WasteRead the Press Release
CHICAGO — A recycling executive has been sentenced to three years in federal prison for illegally landfilling potentially hazardous electronic waste as part of a scheme to re-sell the materials and avoid paying income taxes.
BRIAN BRUNDAGE owned Intercon Solutions Inc. and EnviroGreen Processing LLC, which purported to recycle electronic waste on behalf of corporate and governmental clients. Brundage represented to the clients that the materials would be disassembled and recycled in an environmentally sound manner. In reality, from 2005 to 2016, Brundage caused thousands of tons of e-waste and other potentially hazardous materials to be landfilled, stockpiled, or re-sold at a profit to companies who shipped the materials overseas. Brundage evaded $743,984 in federal taxes by concealing the income he earned from re-selling the e-waste and from paying himself funds that he falsely recorded as Intercon business expenses. Brundage spent the purported expenses for his own personal benefit, including wages for a nanny and housekeeper, jewelry purchases, and payments to a casino in Hammond, Ind.
Brundage, 47, of Schererville, Ind., pleaded guilty last year to one count of wire fraud and one count of tax evasion. U.S. District Judge Joan Humphrey Lefkow on Thursday imposed the three-year prison sentence and ordered Brundage to pay more than $1.2 million in restitution to his victims.
The sentence was announced by John C. Kocoras, First Assistant United States Attorney for the Northern District of Illinois; Jennifer Lynn, Special Agent-in-Charge of the U.S. Environmental Protection Agency’s Criminal Investigation Division; Gabriel L. Grchan, Special Agent-in-Charge of the Chicago office of the Internal Revenue Service Criminal Investigation Division; James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and Jeffrey Ryan, Special Agent-in-Charge of the U.S. General Services Administration’s Office of Inspector General, Great Lakes Regional Investigations Office. The Hong Kong Environmental Protection Department provided valuable assistance in the investigation. The government was represented by Assistant U.S. Attorneys Sean J.B. Franzblau and Kelly Greening of the Northern District of Illinois, and Special Assistant U.S. Attorney Crissy Pellegrin of the EPA.
Brundage admitted in a plea agreement that he caused employees of Chicago Heights-based Intercon and Gary, Ind.-based EnviroGreen to sell some of the e-waste and other materials to vendors who Brundage knew would ship the materials overseas. Some of the materials contained Cathode Ray Tubes, which are glass video display components of computer and television monitors, and which contain potentially hazardous amounts of lead. Brundage admitted causing multiple tons of CRT glass and other potentially hazardous materials to be destroyed in environmentally unsafe ways and later landfilled.
“Improper management of cathode ray tubes can pose risk to human health and the environment, as they contain significant quantities of lead,” said Special Agent-in-Charge Lynn. “This case demonstrates that EPA and our law enforcement partners are committed to protecting the environment and ensuring that companies follow the law.”
“The GSA Office of Inspector General will aggressively pursue contractors who make false representations in order to obtain federal business,” said Special Agent-in-Charge Ryan.
“This sentence should serve as a reminder that HSI will continue to work with its federal, state and local partners to pursue offenders who endanger others by engaging in fraud and deceit,” said Special Agent-in-Charge Gibbons.
Real Estate Developer Indicted on Federal Bribery Charges in Connection with Northwest Side Redevelopment ProjectRead the Press Release
CHICAGO — A real estate developer has been indicted on federal bribery charges for allegedly steering private legal work to a Chicago alderman in an effort to influence and reward the alderman in connection with a permit and tax increment financing for a Northwest Side redevelopment project.
CHARLES CUI, 48, of Lake Forest, is charged with one count of federal program bribery, one count of making a false statement to the Federal Bureau of Investigation, and two counts of using interstate commerce to facilitate bribery and official misconduct. The indictment was returned Thursday in U.S. District Court in Chicago. Arraignment has not yet been scheduled.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI. The City of Chicago Inspector General’s Office provided valuable assistance. The government is represented by Assistant U.S. Attorneys Amarjeet Bhachu, Diane MacArthur, Matthew Kutcher, Sarah Streicker and Timothy Chapman.
According to the indictment, Cui was the managing member of a company that owned property in the 4900 block of West Irving Park Road in the Portage Park neighborhood of Chicago. In 2016, the Chicago City Council passed an ordinance that approved a redevelopment plan for the property and provided Cui’s company with $2 million in tax increment financing. The City Council’s Finance Committee, which was chaired by the 14th Ward alderman, had recommended passage of the ordinance. The property was located outside of the 14th Ward.
The following year, Cui submitted an application for a permit to use an existing sign at the property. The sign would be used to advertise a retailer that contracted with Cui’s company to operate a store at the site. After the Department of Planning and Development denied the application, Cui emailed the 14th Ward alderman, asking the alderman to “look into the matter,” the indictment states. Cui’s email stated that the retailer “really needs it, otherwise they will either cancel the lease, or ask for significant rent reduction,” according to the indictment. Cui, on behalf of his company, had previously entered into an agreement with the retailer that provided for the rent reduction if Cui’s company was unable to obtain the permit, according to the charges. Cui estimated that the reduction would cost his company a total of $750,000, the indictment states.
The indictment states that in August 2017, Cui sent an email to a real estate attorney who had represented Cui with respect to the property. In the email, Cui asked the attorney if the alderman, who in addition to the City Council position operated a private law firm specializing in contesting real estate tax assessments, could take over the property tax work for the property, stating, “I have TIF deal going with the City and he is the Chairman of Finance Committee. He handled [sic] his tax appeal business card to me, and I need his favor for my tif money. In addition, I need his help for my zoning etc for my project. He is a powerful broker in City Hall, and I need him now. I’ll transfer the case back to you after this year.”
Less than two weeks later, Cui signed a contingent fee agreement with the alderman’s law firm that provided for Cui to retain the firm to perform real estate tax work, the indictment states.
According to the indictment, the false statement charge pertains to Cui’s November 2018 interview with the FBI, during which Cui falsely stated that he hired the alderman’s law firm “just because he is a good tax appeal lawyer.”
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Federal program bribery is punishable by up to ten years in prison. The false statement charge carries a maximum penalty of five years in prison. Using interstate commerce to facilitate bribery and official misconduct is punishable by up to five years in prison. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.
Rapid City Man Charged with Firearm and Drug CrimesRead the Press Release
United States Attorney Ron Parsons announced that a Rapid City, South Dakota, man was charged in federal district court with Possession with Intent to Distribute a Controlled Substance and Possession of a Firearm by a Prohibited Person.
Dana Standing Bear, age 40, was indicted on March 19, 2019. He appeared before U.S. Magistrate Judge Daneta Wollmann and pleaded not guilty to the charges. The penalty upon conviction is a minimum of 5 years up to 40 years in federal prison and/or a $5,000,000 fine, a minimum of 4 years up to lifetime supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to Standing Bear knowingly being in possession of two 9mm semi-automatic pistols as well as methamphetamine in February 2019 at Rapid City. The charges are merely an accusation and Standing Bear is presumed innocent until and unless proven guilty.
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.
The investigation is being conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Rapid City Police Department. Assistant U.S. Attorney Ben Patterson is prosecuting the case.
Standing Bear was detained pending trial. A trial date has not been set.
Recent Tax Prosecutions Serve as a Reminder to Accurately File and Pay Taxes as the April 15 Deadline ApproachesRead the Press Release
Matthew D. Krueger, United States Attorney for the Eastern District of Wisconsin, issued a statement reminding all Wisconsin residents to file accurate federal income tax returns as the deadline for filing is Monday, April 15. Although the filing season is nearing the end, the U.S. Attorney’s Office and the Internal Revenue Service’s Criminal Investigation Division work year round to protect the integrity of our nation’s tax system by investigating and prosecuting individuals who violate the tax laws.
“The funding of our government—and the vital protection and services it renders—depends upon taxpayers voluntarily complying with the tax laws,” said U.S. Attorney Krueger. “The millions of taxpayers who pay their taxes accurately deserve to know that cheating on taxes will not be tolerated. The Department of Justice and the IRS are committed to prosecuting dishonest individuals who seek to hide income, claim false deductions, or engage in other schemes to avoid their tax obligations. These prosecutions send a clear warning: Federal prison awaits those who cheat on their taxes.”
“Taxpayers thinking about participating in fraudulent tax schemes, such as failing to report all forms of income or falsifying deductions should take a good look at the serious and detrimental consequences of taking the next step,” stated Special Agent in Charge Gabe Grchan of the IRS Criminal Investigation Division. “Those who might consider preparing false and fraudulent tax returns should be aware of the extremely negative consequences that could result in prison time, large tax bills, including substantial fines, interest and penalties.”
As the tax filing season winds down, the following prosecutions over the last four month in the Eastern District of Wisconsin serve as a warning against filing a false or fraudulent tax return, and as a reminder to be wary of any schemes that would falsify income or deductions.
Alma Ramirez, formerly of Green Bay, Wisconsin, was sentenced March 5, 2019 to four years in prison, and ordered to pay $301,370 in restitution. Ramirez, and others working with her and at her direction, prepared and filed more than 60 false federal income tax returns in the names of various individuals. These tax returns included false information concerning the taxpayer’s employment, wages, the amount of federal taxes that had been withheld from those wages, dependents, and the taxpayer’s eligibility for various tax credits. Ramirez also committed identity theft by illegally using the names and social security numbers of unwitting individuals to commit her fraud offense.
Randy Usow of Mequon, Wisconsin, owner and operator of Randy Usow Accounting was sentenced February 21, 2019, to 30 months in prison and ordered to pay more than $600,000 in restitution. From 2011 to 2015, Usow filed at least four false federal income tax returns, fraudulently seeking more than $800,000 in federal income that he diverted to himself.
Deily Veras of Newark, New Jersey, was sentenced December 13, 2018, to 52 months in prison for fraudulently obtaining over $2.7 million in tax refund checks. Veras was also ordered to pay $2,766,926.15 in restitution. Veras committed the theft by fraudulently obtaining the identities and Social Security Numbers (“SSNs”) primarily of Puerto Rican residents.
Karen Tompkins, of Milwaukee was the Manager of a Liberty Tax Service in Milwaukee and was sentenced March 25, 2019, to 12 months in federal prison and ordered to pay $384,528 in restitution. Tompkins and her co-conspirators artificially inflated tax filer’s claimed income, by inventing Schedule C business income for non-existent business, such as "hair braiding" or "dancing" businesses. They also claimed false W-2 income and Additional Child Tax Credits causing the IRS to pay out larger tax refunds than it otherwise would have. In return for these inflated tax refunds, Tompkins and her co-conspirators received kickbacks.
Susan Wenszell of Milwaukee was the president and owner of J. Wenszell Enterprises Inc., and pleaded guilty February 15, 2019 to failing to account for and pay federal payroll taxes to the IRS. From the second quarter of 2012 through fourth quarter of 2015, Wenszell withheld more than $1.2 million from employee wages but paid only $13,966.69 to the IRS. In addition, during the years 2010-2015, Wenszell failed to pay the employer’s share (or matching share) of payroll taxes that totaled almost $530,000.
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Pittsburgh Man Sentenced to 10 Years in Prison for Distributing Child PornographyRead the Press Release
PITTSBURGH - A resident of Pittsburgh, Pennsylvania, has been sentenced in federal court to a term of imprisonment of 10 years (120 months), to be followed by 10 years of supervised release, on his conviction of distribution of material depicting the sexual exploitation of a minor, United States Attorney Scott W. Brady announced today.
United States District Judge Cathy Bissoon imposed the sentence on Jeffrey E. Goehring, age 46.
According to information presented to the court, on July 3, 2016, Goehring uploaded approximately 13 images of child pornography to a Yahoo Flikr account. After investigators obtained a search warrant for Goehring’s residence, they discovered 111 videos and 862 images depicting child pornography on his electronic devices. Goehring admitted that he has had an addiction to pornography since the 1990s and that he has gradually switched to child pornography in the last 10 years.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Assistant United States Attorney Shanicka L. Kennedy prosecuted this case on behalf of the government.
The Federal Bureau of Investigation with assistance from the Allegheny County District Attorney’s Office conducted the investigation leading to the prosecution of this case.
Philadelphia Man Convicted of Narcotics Distribution, Weapons PossessionRead the Press Release
PHILADELPHIA – U.S. Attorney William M. McSwain announced that James Williams, 32, of Philadelphia, PA was convicted today at trial of distribution of heroin, possession with intent to distribute heroin and crack cocaine, and illegal possession of a firearm by a felon.
The defendant and his co-defendant, “A.J.,” became romantically involved in April 2017, after which the defendant began to supply A.J. with heroin to sell to her regular customers located in Bristol, PA. The defendant and A.J. shared the proceeds. Williams also sold narcotics to other customers outside of his relationship with A.J.
On July 18, 2017 A.J. arranged to meet a man, who was actually a confidential informant (“CI”) working with the Bensalem Township Police Department, in a shopping center in Bensalem, PA to sell him heroin and crack cocaine. A.J. and the defendant arrived together in the defendant’s Ford Mustang, and the CI got into the back seat of the defendant’s car to purchase the narcotics. The defendant and A.J. were immediately arrested. Bensalem Township Police officers then found a loaded firearm and more narcotics locked in the glovebox, and more narcotics hidden in the trunk of the defendant’s car. Williams had a prior felony conviction which prohibited him from legally possessing a firearm.
“Drug distribution and gun violence are an epidemic in Philadelphia and the federal government is aggressively prosecuting both and getting dangerous criminals off the streets,” said U.S. Attorney McSwain. “We want to thank our law enforcement partners in this case, ATF and the Bensalem Township Police Department, for their hard work and dedication.”
“There is no place in our community for those who use firearms for violent, criminal purposes,” said Donald Robinson, Special Agent in Charge of ATF’s Philadelphia Field Division. “ATF will continue to work with our law enforcement partners at the federal, state, and local levels to ensure those individuals are brought to justice.”
The case was investigated by Bensalem Township Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) and is being prosecuted by Assistant United States Attorneys Timothy Stengel and Eric Henson.
Palm Beach County Resident Sentenced to Prison in connection with a $1.4 Million Insurance Fraud SchemeRead the Press Release
A Palm Beach County resident was sentenced to prison in connection with a $1.4 million dollar insurance fraud scheme.
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida and Brian Swain, Special Agent in Charge, U.S. Secret Service (USSS), Miami Field Office, made the announcement.
Alexander Hartman, of Palm Beach County, pled guilty, on January 24, 2019, to four counts of wire fraud, in violation of Title 18, United States Code, Section 1343 (18-80236-CR-Rosenberg). On April 5, 2019, Hartman was sentenced by U.S. District Judge Robin L. Rosenberg to 33 months in prison, to be followed by three years of supervised release.
According to the court record, including the agreed upon factual proffer, Hartman was the sole owner and operator of Alexander Insurance Consultants (“AIC”). During the period of August 2014 through May 2017, Hartman, while operating as the insurance agent/broker of AIC, engaged in a fraudulent course of conduct aimed at enriching himself. Hartman submitted to Premium Assignment Corporation (“PAC”), via wire, false documentation in support of premium finance loans. Hartman falsely represented to PAC that Lloyds of London had issued insurance policies for companies, that these companies were using PAC’s financing services to finance their premium payments, and that AIC had brokered the contracts and was entitled to collect the premiums on behalf of the insured. None of the named companies were clients of AIC or Hartman and three of the companies did not exist.
Hartman defrauded PAC of approximately $1.4 million when he submitted false insurance obligations and used non-existent clients for which he sought premium financing.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the USSS in this matter. This case was prosecuted by Assistant U.S. Attorney Robin Waugh.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.
Owner of Woodbridge Group and Two Former Directors Charged with $1.3 Billion Investment Fraud (Ponzi) Scheme Involving 10k VictimsRead the Press Release
The owner of Woodbridge Group of Companies LLC and two former directors of investments have been charged criminally, in the Southern District of Florida, with orchestrating a massive investment fraud (Ponzi) scheme.
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Ronald L. Rubin, Commissioner, Florida Office of Financial Regulation (OFR), made the announcement.
Robert Shapiro, 61, of Sherman Oaks, California, Dane R. Roseman, a/k/a “Dayne Roseman,” 35, of Encino, California, and Ivan Acevedo, 42, of Chatsworth, California, were charged, by an indictment out of the Southern District of Florida that was unsealed today, with conspiracy to commit mail and wire fraud and substantive mail fraud counts (Case No. 19-20178-CR-Altonaga/Goodman). Shapiro and Roseman were also charged with substantive wire fraud counts. In addition, Shapiro was charged with conspiracy to commit money laundering and evasion of payment of federal income taxes. Shapiro, Roseman and Acevedo were arrested today in California and had their initial appearances before a U.S. Magistrate Judge in the Central District of California. Shapiro was ordered to be detained in prison. Roseman and Acevedo were ordered to appear in the Southern District Florida for their arraignment. An arraignment date has not yet been scheduled.
According to the indictment, the owner of Woodbridge Group of Companies LLC (Woodbridge) Shapiro, and his former Directors of Investments, Acevedo and Roseman, orchestrated a massive Ponzi scheme through the business. They ran their scheme through Woodbridge offices located throughout the United States, including Boca Raton, Florida and Sherman Oaks, California. The conspiracy ran from July 2012 to December 2017, and involved material misrepresentations and material omissions to investors in the sale of Woodbridge investments. Through telephone and in-person conversations, emails and website displays, Shapiro, Acevedo, Roseman and their co-conspirators promoted speculative and fraudulent securities to potential investors, targeting elderly investors who had Individual Retirement Accounts (IRAs). Shapiro hired sales agents to solicit potential investors from the Woodbridge “phone room” that Roseman and Acevedo managed. The phone room functioned as a “boiler room,” and featured high-pressure sales tactics, deception, material misrepresentations, and investor manipulation. Through telemarketing, Woodbridge sales agents contacted potential investors located throughout the United States, and solicited, offered, and sold Woodbridge investments to them. For the fraud-based investments, the defendants and their co-conspirators’ main business model was to solicit money from investors and, in exchange, issue investors promissory notes reflecting purported loans to Woodbridge that paid monthly interest and matured in twelve to eighteen months. The defendants claimed that the investments were tied to real property owned by third-party property owners.
The indictment alleges that Shapiro, Acevedo, Roseman and their co-conspirators, made and caused others to make materially false and fraudulent statements to induce investors to provide money, such as, that Woodbridge investments were “low risk,” “simpler,” “safe” and “conservative;” that Woodbridge was profitable, but in reality new Woodbridge investor money was used to pay prior Woodbridge investors, and that third-party affiliates were property owners, when in fact Shapiro owned nearly all of the real property at the center of every investment product offered by Woodbridge.
According to the indictment, Shapiro took approximately $35 million in investor money for his benefit, spending millions on personal expenditures, such as $3.1 million for chartering private planes and travel, $6.7 million on a personal home, $2.6 million on home improvements, $1.8 million on personal income taxes, $1.4 million to his ex-wife, and over $672,000 on luxury automobiles.
The indictment further alleges that Shapiro caused most of the Woodbridge companies to file Chapter 11 bankruptcy, which caused investors to suffer substantial losses, as they were owed close to $1 billion in principal.
At least 2,600 of these investor victims invested their retirement savings, totaling approximately $400 million.
According to information presented to the court, search warrants related to the indictment were executed today in California.
The U.S. Securities and Exchange Commission (SEC) filed parallel civil enforcement actions against Acevedo and Roseman related to the Ponzi scheme.
An indictment contains allegations. Every defendant is presumed innocent unless and until proven guilty in a court of law.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI, IRS-CI and OFR in this matter. She thanked the SEC Miami Regional Office and the U.S. Attorney’s Office for the Central District of California for their assistance. This case is being prosecuted by Assistant U. S. Attorneys Roger Cruz and Michael Sherwin.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.
New York City Man Pleads Guilty to Distributing Crack Cocaine and Fentanyl in PlattsburghRead the Press Release
ALBANY, NEW YORK – Stephen Jacques-Scott, age 33, of New York City, pled guilty yesterday to trafficking crack cocaine and fentanyl from New York City to Plattsburgh.
The announcement was made by United States Attorney Grant C. Jaquith, Special Agent in Charge Ray Donovan, U.S. Drug Enforcement Administration (DEA), New York Division, and Plattsburgh City Police Chief Levi J. Ritter.
Jacques-Scott pled guilty to two counts of distribution of a controlled substance and one count of conspiracy to possess with intent to distribute and to distribute a controlled substance.
Jacques-Scott admitted that on May 11, 2017, he distributed approximately 33.5 grams of crack cocaine, and that on May 15, 2017, he distributed approximately 27.9 grams of crack cocaine and approximately 14.5 grams of fentanyl ,in Plattsburgh. On May 18, 2017, Jacques-Scott was pulled over while travelling to Plattsburgh and police found approximately 27.9 grams of crack cocaine hidden on him that he intended to distribute in Plattsburgh. Jacques-Scott has been in custody since his arrest on May 18, 2017.
As a result of his conviction, Jacques-Scott faces at least 10 years and up to life in prison, when he is sentenced by Senior United States District Judge Frederick J. Scullin, Jr. on August 14, 2019. A defendant’s sentence is imposed by a judge based on the particular statutes the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
This case was investigated by the DEA and the Plattsburgh City Police Department, and is being prosecuted by Assistant U.S. Attorney Douglas Collyer.
Monroe resident pleads guilty to possessing two unregistered shotgunsRead the Press Release
MONROE, La. – United States Attorney David C. Joseph announced that Nelson Bell Jr., 51, of Monroe, pleaded guilty Tuesday before U.S. District Judge Terry Doughty for possessing two unregistered shotguns.
According to the guilty plea, Monroe Police went to Bell’s home on October 23, 2017 in response to a complaint. The officers determined that Bell had fired a gun in the living room, hitting a couch across from where his wife was sitting, and then went outside and fired a shot into the air. Officers found an ejected shell from the firearm on the living room floor and two shotguns, an Ithaca shotgun, Model 37, 12 gauge and a Browning shotgun, Model Light Twelve 12 gauge. Law enforcement agents measured the barrels of both shotguns and found they measured less than 18 inches in length, the minimum length required by law. Bell admitted to possessing the firearms and that he was aware they were not registered as required by law. Under federal law, shotguns with barrels shorter than 18 inches must be registered.
Bell faces up to 10 years in prison, three years of supervised release and a $250,000 fine. Doughty set the sentencing date for September 4, 2019.
The ATF and the Monroe Police Department conducted the investigation. Assistant U.S. Attorney Tennille M. Gilreath is prosecuting the case.
Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. Project Safe Neighborhoods is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Mississippi Man Pleads Guilty to Federal Hate Crime for CrossburningRead the Press Release
The Department of Justice today announced that Louie Bernard Revette pleaded guilty to federal charges related to his commission of a crossburning on Oct. 24, 2017, in Seminary, Mississippi. Specifically, Revette, 37, pleaded guilty to one count of interference with housing rights, a federal civil rights violation, and one count of using fire during the commission of a federal felony.
“The defendant’s racially motivated actions sought to threaten and intimidate the peaceful residents of this community,” said Assistant Attorney Eric Dreiband of the Civil Rights Division. “The Department of Justice will not tolerate abhorrent and hateful acts of intimidation, and we will continue to prosecute anyone who commits a hate crime to the fullest extent of the law.”
"Terrorizing our neighbors and entire communities based on race is a federal crime that will be vigorously prosecuted by this office. I applaud our law enforcement for quickly investigating and bringing this defendant to justice. There is no place in our state or our country for this type of hatred, and we will not tolerate individuals making others live in fear because of the color of their skin," said U. S. Attorney Mike Hurst for the Southern District of Mississippi.
“While wounds are still healing from Mississippi’s past, incidents such as this only serve as setbacks and should be fully condemned in every community,” said Special Agent in Charge of the FBI in Mississippi Christopher Freeze. “The FBI stands firm that those who commit these reprehensible crimes will be aggressively investigated and prosecuted.”
In his plea, Revette admitted that he traveled to what he knew to be a predominantly African-American residential area of Seminary, Mississippi. Revette admitted that he left the area, later recruiting a co-conspirator to build a cross to burn near the home of a juvenile victim identified as M.H. Revette and the co-conspirator constructed the cross using materials from in and around Revette’s residence, placed the cross near M.H.’s home, and lit it on fire. Revette further admitted that he built and burned the cross to threaten, frighten, and intimidate M.H. and other African-American residents because of their race and color, and because those individuals lived in and occupied residences in that area of Seminary, Mississippi. Revette acknowledged that he knew burning crosses have historically been used to threaten, frighten, and intimidate African-Americans.
Revette faces a maximum total sentence of 20 years in prison and a $500,000 fine on the two charges. Sentencing has been scheduled for Aug. 20.
This case was investigated by the FBI Jackson Division’s Hattiesburg Resident Agency. Assistant U.S. Attorney Candace Gregory Mayberry for the Southern District of Mississippi and Trial Attorney Julia Gegenheimer from the Justice Department’s Civil Rights Division are prosecuting the case.
For more information about DOJ’s work to combat and prevent hate crimes, visit www.justice.gov/hatecrimes: a one-stop portal with links to DOJ hate crimes resources for law enforcement, media, researchers, victims, advocacy groups, and other organizations and individuals.
Minnesota Man Charged with Possession of a Firearm by a FelonRead the Press Release
United States Attorney Ron Parsons announced that a Minnesota man has been indicted by a federal grand jury for Possession of a Firearm by a Felon.
Mark Schmidt, age 54, was indicted on January 23, 2019. He appeared before U.S. Magistrate Judge Mark A. Moreno on April 4, 2019, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in federal prison and/or a $250,000 fine, up to 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about December 5, 2018, Schmidt, a convicted felon, knowingly possessed a Smith & Wesson, model 28 Highway Patrolman, .357 Magnum caliber, double-action revolver and twenty-three rounds of Blazer brand, .357 Magnum caliber ammunition.
The charge is merely an accusation and Schmidt is presumed innocent until and unless proven guilty.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
The investigation is being conducted by the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney Cameron J. Cook is prosecuting the case.
Schmidt was released on bond pending trial. A trial date has not been set.
Members of Ouachita Parish methamphetamine distribution ring plead guiltyRead the Press Release
MONROE, La. – United States Attorney David C. Joseph announced that Matthew A. Beaudion, 30, and Jessica N. Davis, 34, both of Monroe, entered guilty pleas Wednesday before U.S. Magistrate Judge Karen Hayes for conspiring to distribute methamphetamine in Ouachita Parish.
According to the guilty pleas, Beaudion, Davis and co-defendant Justin D. Jenkins, 34, of Rayville, Louisiana, traveled to Houston, Texas, on August 14, 2017 so that Beaudion could purchase methamphetamine with plans to distribute it to Davis and other persons. Beaudion paid Jenkins to drive because he had a valid driver’s license. After returning to Monroe on August 15, 2017, law enforcement agents stopped the vehicle, and discovered 690.5 grams of methamphetamine hidden under the dashboard of the vehicle behind the radio.
The defendants face not less than 10 years in prison, at least five years of supervised release and a $10 million fine. Jenkins pleaded guilty to the conspiracy count on January 24, 2018. All three defendants are scheduled to be sentenced July 31, 2019.
The DEA and the Ouachita Parish Sheriff’s Office participated in the investigation. Assistant U.S. Attorney Seth D. Reeg is prosecuting the case.
Medicare Advantage Provider to Pay $30 Million to Settle Alleged Overpayment of Medicare Advantage FundsRead the Press Release
Sutter Health LLC, a California-based healthcare services provider, and several affiliated entities, Sutter East Bay Medical Foundation, Sutter Pacific Medical Foundation, Sutter Gould Medical Foundation, and Sutter Medical Foundation, have agreed to pay $30 million to resolve allegations that the affiliated entities submitted inaccurate information about the health status of beneficiaries enrolled in Medicare Advantage Plans, which resulted in the plans and providers being overpaid, the Justice Department announced today. Sutter Health is headquartered in Sacramento, California.
“The Medicare Advantage Program provides benefits to a significant portion of federal health care beneficiaries,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “The Department of Justice will help ensure that accurate information is supplied to the Medicare Advantage Program by plans and providers, and to pursue appropriate remedies when it is not.”
Under Medicare Advantage, also known as the Medicare Part C program, Medicare beneficiaries have the option of enrolling in managed healthcare insurance plans called Medicare Advantage Plans (“MA Plans”) that are owned and operated by private Medicare Advantage Organizations (“MAOs”). MA Plans are paid a capitated, or per-person, amount to provide Medicare-covered benefits to beneficiaries who enroll in one of their plans. The Centers for Medicare and Medicaid Services (“CMS”), which oversees the Medicare program, adjusts the payments to MA Plans based on demographic information and the health status of each plan beneficiary. The adjustments are commonly referred to as “risk scores.” In general, a beneficiary with more severe diagnoses will have a higher risk score, and CMS will make a larger risk-adjusted payment to the MA Plan for that beneficiary.
Sutter Health, a non-profit public benefit corporation that provides healthcare services through its affiliates, including hospitals and medical foundations, contracted with certain MAOs to provide healthcare services to California beneficiaries enrolled in the MAOs’ MA Plans. In exchange, Sutter received a share of the payments that the MAOs received from CMS for the beneficiaries under Sutter’s care.
Sutter submitted diagnoses to the MAOs for the MA Plan enrollees that they treated. The MAOs, in turn, submitted the diagnosis codes to CMS from the beneficiaries’ medical encounters, such as office visits and hospital stays. The diagnosis codes were used in CMS’ calculation of a risk score for each beneficiary.
The settlement announced today resolves allegations that Sutter and its affiliates submitted unsupported diagnosis codes for certain patient encounters of beneficiaries under their care. These unsupported diagnosis scores inflated the risk scores of these beneficiaries, resulting in the MAO plans being overpaid.
Earlier this month, the government filed a complaint against Sutter and a separate affiliated entity, Palo Alto Medical Foundation, alleging that they violated the False Claims Act by knowingly submitting unsupported diagnosis scores. That case is captioned United States ex rel. Ormsby v. Sutter Health, et al., Case No. 15-CV-01062-JD (N.D. Cal.), and is still ongoing.
“Misrepresenting patients’ risk results in higher payments and wasted Medicare funds,” said Steven J. Ryan, Special Agent in Charge with the Office of Inspector General for the U.S. Department of Health and Human Services. “With some one-third of people in Medicare now enrolled in managed care Advantage plans, large health systems such as Sutter can expect a thorough investigation of claimed enrollees’ health status.”
The settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the United States Attorney’s Office for the Northern District of California, and HHS-OIG.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Medicare Advantage Provider to Pay $30 Million to Settle Alleged Overpayment of Medicare Advantage FundsRead the Press Release
SAN FRANCISCO – Sutter Health LLC, a California-based healthcare services provider, and several affiliated entities, Sutter East Bay Medical Foundation, Sutter Pacific Medical Foundation, Sutter Gould Medical Foundation, and Sutter Medical Foundation, have agreed to pay $30 million to resolve allegations that the affiliated entities submitted inaccurate information about the health status of beneficiaries enrolled in Medicare Advantage Plans, which resulted in the plans and providers being overpaid, the Justice Department announced today. Sutter Health is headquartered in Sacramento, California.
“The Medicare Advantage Program provides benefits to a significant portion of federal health care beneficiaries,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “The Department of Justice will help ensure that accurate information is supplied to the Medicare Advantage Program by plans and providers, and to pursue appropriate remedies when it is not.”
Under Medicare Advantage, also known as the Medicare Part C program, Medicare beneficiaries have the option of enrolling in managed healthcare insurance plans called Medicare Advantage Plans (“MA Plans”) that are owned and operated by private Medicare Advantage Organizations (“MAOs”). MA Plans are paid a capitated, or per-person, amount to provide Medicare-covered benefits to beneficiaries who enroll in one of their plans. The Centers for Medicare and Medicaid Services (“CMS”), which oversees the Medicare program, adjusts the payments to MA Plans based on demographic information and the health status of each plan beneficiary. The adjustments are commonly referred to as “risk scores.” In general, a beneficiary with more severe diagnoses will have a higher risk score, and CMS will make a larger risk-adjusted payment to the MA Plan for that beneficiary.Sutter Health, a non-profit public benefit corporation that provides healthcare services through its affiliates, including hospitals and medical foundations, contracted with certain MAOs to provide healthcare services to California beneficiaries enrolled in the MAOs’ MA Plans. In exchange, Sutter received a share of the payments that the MAOs received from CMS for the beneficiaries under Sutter’s care.
Sutter submitted diagnoses to the MAOs for the MA Plan enrollees that they treated. The MAOs, in turn, submitted the diagnosis codes to CMS from the beneficiaries’ medical encounters, such as office visits and hospital stays. The diagnosis codes were used in CMS’ calculation of a risk score for each beneficiary.
The settlement announced today resolves allegations that Sutter and its affiliates submitted unsupported diagnosis codes for certain patient encounters of beneficiaries under their care. These unsupported diagnosis scores inflated the risk scores of these beneficiaries, resulting in the MAO plans being overpaid.
In March 2019, the government filed a separate complaint against Sutter and its affiliated entity, Palo Alto Medical Foundation, alleging that they violated the False Claims Act by knowingly submitting unsupported diagnosis scores. That case is captioned United States ex rel. Ormsby v. Sutter Health, et al., Case No. 15-CV-01062-JD (N.D. Cal.), and is still ongoing.
“Misrepresenting patients’ risk results in higher payments and wasted Medicare funds,” said Steven J. Ryan, Special Agent in Charge with the Office of Inspector General for the U.S. Department of Health and Human Services. “With some one-third of people in Medicare now enrolled in managed care Advantage plans, large health systems such as Sutter can expect a thorough investigation of claimed enrollees’ health status.”
The settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the United States Attorney’s Office for the Northern District of California, and HHS-OIG.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.This matter is being handled by Assistant United States Attorney Kimberly Friday and U.S. Department of Justice Trial Attorney Olga Yevtukhova, with assistance from Jonathan Birch and Tina Louie.
Man Who Pretended to Be Blind Sentenced to Year in Prison After Collecting Nearly $1.3 Million in Veterans Affairs DisabilityRead the Press Release
DENVER -- Mike Rodolfo Blea, of Northglenn, Colorado, was sentenced Wednesday by Senior U.S. District Court Judge Wiley Daniel to serve twelve months in prison, followed by three years on supervised release for defrauding the U.S. Department of Veterans Affairs (VA) out of nearly $1.3 million by pretending to be blind. Blea must also pay $1,273,180.44 in restitution to the agency. The announcement was made today by U.S. Attorney Jason Dunn. Blea appeared at the hearing free on bond. He was ordered by Judge Daniel to report to a Bureau of Prison Facility once designated.
According to the stipulated facts in the plea agreement, Blea was a Vietnam Veteran who began receiving VA disability payments in 1969 for a visual impairment. He did in fact have a minor visual impairment due to macular holes in his retinas, however at least by 1983 he began exaggerating how bad his eyesight was, with the result being that the VA was paying him 100% disabled rate when in fact his true rating was probably 10%. While the VA thought Blea was blind, he was deliberately getting eye exams outside the VA system that showed his vision was correctible to 20/30 in one eye and 20/40 in another. In fact, Blea had a driver’s license and drove regularly without any noticeable difficulties.
“Justice may be blind, but Mr. Blea isn’t,” said U.S. Attorney Jason Dunn. “He will now have a year in federal prison to think about his actions and see a better way going forward.”
Gregg Hirstein, Special Agent in Charge, VA Office of the Inspector General, said, “The Department of Veterans Affairs Office of Inspector General is committed to bringing justice to those who illegally enrich themselves at the expense of VA programs intended to help our nation’s disabled veterans. This case should serve as a deterrent to those who would seek to defraud the VA.”
Blea was charged by information on August 8, 2018, and pleaded guilty to a single count of concealment of a material fact on December 19, 2018. He was sentenced Wednesday, April 10, 2019.
This case was investigated by the VA’s Office of the Inspector General and prosecuted by Special Assistant U.S. Attorney Dan Burrows.