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8 April 2019
California Man Sentenced to Life in Prison for Methamphetamine ConspiracyRead the Press Release
Gulfport, Miss – Following a conviction at trial on October 31, 2018, Frederick Arayatanon, 35, of Westminister, California was sentenced today by U.S. District Judge Louis Guirola, Jr. to serve life in federal prison for conspiracy to possess with intent to distribute 500 grams or more of methamphetamine, announced United States Attorney Mike Hurst and Special Agent in Charge Brad L. Byerley with the Drug Enforcement Administration (DEA).
During the course of a drug investigation that began in 2017, DEA agents discovered that Arayatanon was shipping large quantities of methamphetamine from California to Tuyen Ngoc Le in Biloxi, Mississippi. Once Le received the methamphetamine shipments, she would give them to Demetrius Mason for distribution in the Ocean Springs area.
Le pled guilty for her role in the drug conspiracy and was sentenced by Judge Guirola to serve 262 months in federal prison. Mason pled guilty for his role and was sentenced by Judge Guirola on May 31, 2018 to serve 292 months. Both Le and Mason testified as witnesses for the United States during Arayatanon’s trial.
The case was investigated by the Drug Enforcement Administration. It was prosecuted by Assistant United States Attorneys Shundral H. Cole and Kathlyn Van Buskirk.
Burlington Woman Arrested and Charged with Mailing a Threatening CommunicationRead the Press Release
Bangor, Maine: United States Attorney Halsey B. Frank announced that Suzanne Muscara, 37, of Burlington, Maine, was arrested and charged by criminal complaint on Friday with mailing a threatening communication to Senator Susan Collins.
According to the complaint affidavit, the charge arose from an investigation into a suspicious letter processed by the U.S. Postal Service mail sorting facility in Hampden, Maine, in October 2018. The letter was leaking a fine white powder and it contained a threat. The white powder was tested and found not to contain toxic substances.
If convicted, the defendant faces up to 10 years in prison and a $250,000 fine.
The defendant will make an initial appearance today at 2:30 p.m. in U.S. District Court in Bangor, Courtroom 1.
The investigation is being conducted by the FBI, the U.S. Postal Inspector Service, the Office of Maine State Fire Marshal, and the Maine State Police.
A criminal complaint is merely an accusation, and a defendant is presumed innocent unless proven guilty in a court of law beyond a reasonable doubt.
Buffalo Man Indicted by Federal Grand Jury on Multiple Drug ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that a federal grand jury has returned an indictment charging Craig Lester, 32, of Buffalo, NY, with narcotics conspiracy; possession with intent to distribute, and distribution of, heroin, butyryl fentanyl, U-47700, and cocaine; and using and maintaining a drug premises. The charges carry a maximum penalty of 40 years in prison and a $5,000,000 fine.
Assistant U.S. Attorney Paul C. Parisi, who handled the case, stated that according to the indictment, between March and May 2017, the defendant conspired with others to possess and distribute multiple controlled substances, including heroin, butyryl fentanyl, U-47700, and cocaine. In addition, the defendant is accused of using 28 Echols Lane in Buffalo to store and distribute heroin, butyryl fentanyl, and U-47700.
The defendant made an initial appearance before U.S. Magistrate Judge H. Kenneth Schroeder and is being held pending a detention hearing on April 18, 2019, at 10:30 a.m.
The indictment is the result of an investigation by the Buffalo Police Department, under the direction of Commissioner Byron Lockwood, and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Bronx Man Admits Giving Drugs to Inmate at FCI-McKeanRead the Press Release
ERIE, Pa. - A resident of Bronx, New York, pleaded guilty in federal court to a charge of providing contraband in a federal prison, United States Attorney Scott W. Brady announced today.
Karlos Serrano pleaded guilty to one count before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that on December 19, 2009, Serrano provided a quantity of heroin and marijuana to Jorge Borges-Rosario, an inmate at the McKean Federal Correctional Institution in Bradford, Pennsylvania.
Judge Cercone scheduled sentencing for August 5, 2019 at 1:30 p.m. The law provides for a total sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued Serrano on bond.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
Officers of the McKean Correctional Institution and the Pennsylvania State Police conducted the investigation that led to the prosecution of Serrano.
Branson Sex Offender Sentenced to 15 Years for Child PornographyRead the Press Release
SPRINGFIELD, Mo. – A Branson, Mo., sex offender has been sentenced in federal court for receiving and distributing child pornography.
Bill Lawrence, Jr., 57, was sentenced by U.S. District Judge Roseann Ketchmark on Friday, April 5, to 15 years in federal prison without parole. The court also sentenced Lawrence to 15 years of supervised release following incarceration.
Lawrence, who pleaded guilty on Aug. 28, 2018, has prior convictions for possessing child pornography and promoting child pornography.
According to court documents, the investigation began with two CyberTips from the National Center for Missing and Exploited Children. Lawrence had attached images of child pornography to at least two emails that were sent from his Google account. The images depicted prepubescent children being sexually abused or in sexual poses.
Law enforcement officers executed a search warrant at Lawrence’s residence and seized his cell phone, which contained multiple images of child pornography. Lawrence admitted to officers that he used the Chat Hour application to both receive and distribute child pornography over the internet.
This case was prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the Southwest Missouri Cyber Crimes Task Force.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Bradford County Man Sentenced for Possessing Child PornographyRead the Press Release
ERIE, Pa. - A Braford County resident has been sentenced in federal court to 30 months in jail, 5 years supervised release and a $2,000 fine on his conviction of violating federal laws relating to the sexual exploitation of children, United States Attorney Scott W. Brady announced today.
United States District Judge David S. Cercone imposed the sentence on John David Martin, 62, of Towanda, Pennsylvania.
According to information presented to the court, Martin possessed computer images and movies depicting minors engaging in sexually explicit conduct.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
United States Attorney Brady commended the Federal Bureau of Investigation and the Erie County Detectives Bureau for the investigation leading to the successful prosecution of Martin.
Bitcoin Dealer Sentenced to Two Years in Prison and Ordered to Forfeit Ill-Gotten GainsRead the Press Release
Assistant U. S. Attorney Robert Ciaffa (619) 546-7748
NEWS RELEASE SUMMARY – April 8, 2019
SAN DIEGO – Jacob Burrell Campos of Rosarito, Mexico, was sentenced today by U.S. District Judge Marilyn L. Huff to serve two years in prison and forfeit $823,357 in illicit profits for operating an unlicensed money transmitting business in connection with his sale of hundreds of thousands of dollars in Bitcoin to over 1,000 customers throughout the United States.
Burrell, a U.S. citizen, has been in custody without bail since his arrest on August 13, 2018. He pleaded guilty on October 29, 2018, admitting that he operated a Bitcoin exchange without registering with the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury, and without implementing the required anti-money laundering safeguards.
According to the plea agreement, Burrell advertised his business on Localbitcoins.com, and communicated with his customers through email and text messages, often using encrypted applications. He negotiated a commission of 5 percent above the prevailing exchange rate, and accepted cash in person, through nationwide ATMs, and through MoneyGram. Burrell admitted that he had no anti-money laundering or “know your customer” program, and performed no due diligence on the source of his customers’ money.
Burrell admitted that, at first, he purchased his supply of Bitcoin through a U.S.-based, regulated exchange, but his account was soon closed because of the large number of suspicious transactions. He then resorted to a cryptocurrency exchange in Hong Kong, where he purchased a total of $3.29 million in Bitcoin, in hundreds of separate transactions, between March 2015 and April 2017.
Finally, Burrell admitted that he exchanged his U.S. cash, which he kept in Mexico, with Joseph Castillo, a San Diego-based precious metals dealer, and that between late 2016 and early 2018, he and others imported into the United States, on an almost daily basis, a total of over $1 million in U.S. currency, in amounts slightly below the $10,000 reporting requirement.
In a sentencing memorandum, prosecutors argued that unlicensed money transmitters pose a serious threat to the integrity of the U.S. financial system by creating a hole in the anti-money laundering regulatory scheme and allowing criminals to launder their cash proceeds without scrutiny. In this case, Burrell provided his clients with anonymity and privacy, and exchanged over $1 million in unregulated cash.
U.S. Attorney Robert Brewer said, “The federal government will continue to investigate and prosecute all white collar criminals who refuse to comply with the anti-money laundering laws of the United States, and who assist others in avoiding scrutiny of their ill-gotten gains. I applaud the excellent work of prosecutor Robert Ciaffa and federal agents who investigated these crimes.”
“Today’s sentencing of Burrell is a reminder to those illegal and unlicensed money transmitters that the laws and rules apply to crypto currency dealings just as they do to other types of financial transactions,” said David Shaw, Special Agent in Charge for Homeland Security Investigations in San Diego. “HSI Special Agents are proud to work with our law enforcement partners to ensure the integrity of the U.S. financial system, and we will continue to adapt to enforce laws across all borders, including cyberspace and the Darknet.”
DEFENDANT Case Number 18CR3554-H
Jacob Burrell-Campos Age: 22 Rosarito, Baja California, Mexico
Count 1: Conducting an unlicensed money transmitting business, 18 USC 1960.
Statutory maximum: 5 years prison, $250,000 fine.
AGENCIES
Homeland Security Investigations
Internal Revenue Service
Postal Inspection Service
Birmingham, Alabama Man Pleads Guilty to Marijuana DistributionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Lieutenant Skylare Holstick, age 37, of Birmingham, Alabama, entered a guilty plea to Possession With Intent To Distribute Marijuana, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(D) and Title 18, United States Code, Section 2, punishable by not more than 5 years imprisonment, up to a $250,000.00 fine, or both.
The Indictment alleges that on or about December 22, 2018, within the Eastern District of Oklahoma, the defendant, did knowingly and intentionally possess with intent to distribute less than 50 kilograms of marijuana, a Schedule I controlled substance.
The charges arose from an investigation by the Okmulgee County Sheriff’s Office and the Federal Bureau of Investigation.
The Honorable Kimberly E. West, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Dean Burris represented the United States.
Benicia Man Sentenced to 6 Months in Prison for Bankruptcy FraudRead the Press Release
SACRAMENTO, Calif. — U.S. District Judge Kimberly J. Mueller sentenced Steven Brian Homan, 62, of Benicia, today to six months in prison, to be followed by two years of supervised release, for one count of concealment of bankruptcy assets, U.S. Attorney McGregor W. Scott announced.
According to court documents, Homan sought protection from and discharge of more than $1.3 million in personal and business debt. He also wanted to preserve a non-exempt cabin in Redding from liquidation. To protect the cabin, Homan arranged to sell it from his bankruptcy estate to a relative for $100,000. However, Homan concealed from the bankruptcy trustee that the cabin had been destroyed by fire before the trustee accepted the offer.
After the fire, Homan filed an insurance claim that settled for more than $258,000 in losses associated with the cabin and personal property contained in the cabin at the time of the fire. That money constituted property of the bankruptcy estate, which Homan concealed from the trustee. After the sale of the cabin was complete, the bankruptcy trustee learned of the fire and concealed insurance settlement.
This case was the product of an investigation by the Federal Bureau of Investigation and the IRS Criminal Investigation. Assistant U.S. Attorney André M. Espinosa prosecuted the case.
Baton Rouge, Louisiana Man Pleads Guilty to Wire FraudRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Mike Douglas Nolan, age 59, of Baton Rouge, Louisiana, entered a guilty plea to Wire Fraud, in violation of Title 18, United States Code, Section 1343, punishable by not more than 20 years imprisonment, a fine up to $250,000.00, or both.
The Superseding Indictment alleges that from in or about June 2011, and continuing until in or about May 2012, the defendant, devised and intended to devise, executed and attempted to execute, a scheme to obtain money by means of materially false and fraudulent pretenses, representations and promises.
The charges arose from an investigation by the Federal Bureau of Investigation.
The Honorable Kimberly E. West, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Rob Wallace represented the United States.
Bakersfield Man Sentenced for Conspiring with Police Officers to Sell Methamphetamine and MarijuanaRead the Press Release
BAKERSFIELD, Calif. — Noel Carter, 45, of Bakersfield, was sentenced today for conspiring with Bakersfield police officers Damacio Diaz and Patrick Mara to distribute methamphetamine and marijuana that Diaz and Mara seized in the course of their duties as police officers, U.S. Attorney McGregor W. Scott announced.
U.S. District Judge Lawrence J. O’Neill sentenced Carter to seven and a half years in prison, to be followed by five years of supervised release. Carter was also ordered to pay $70,513 in restitution to his former employer and to forfeit $286,251 representing proceeds from his drug trafficking activity.
According to court documents, from April 2012 to August 2015, Carter conspired with Diaz and Mara, who deliberately failed to submit the seized drugs into the Bakersfield Police Department evidence room and instead provided the stolen narcotics to Carter so that Carter could sell those narcotics for profit.
In May 2016, Diaz pleaded guilty to possessing with the intent to distribute methamphetamine, as well as receiving bribes and making a false income tax return. In June 2016, Mara pleaded guilty to conspiring to distribute, and to possess with the intent to distribute, methamphetamine. Both were removed from active duty with the Bakersfield Police Department and are currently serving federal prison sentences.
According to the plea agreement in October 2018, Carter agreed to pay restitution to Pacific Workplaces, his former employer. Starting in September 2016 and up until his termination in September 2017, Carter was a contract manager for Pacific Workplaces, a virtual office and short-term office rental business. Carter admitted to embezzling money from the company and depositing the money into his personal account.
This case was the product of an investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, the IRS Criminal Investigation, and the Bakersfield Police Department. Assistant U.S. Attorneys Brian K. Delaney and Angela Scott prosecuted the case.
Bakersfield Man Charged with Shipping Heroin, Methamphetamine, Fentanyl, and CocaineRead the Press Release
FRESNO, Calif. — A federal grand jury returned a one-count indictment on Thursday, April 4, 2019, against Jose Luis Rivas Jr., 26, of Bakersfield, charging him with conspiracy to distribute and possess with intent to distribute, heroin, methamphetamine, cocaine and fentanyl, U.S. Attorney McGregor W. Scott announced.
According to court documents, between June 2016 and May 2018, Rivas conspired with another Bakersfield man, Juan Pina, 23, to use a national parcel service company to ship packages of narcotics to various distributors around the country. Records filed with the court indicate that Rivas and Pina made kilogram-quantity shipments of controlled substances on several occasions.
On May 3, 2018, search warrants were executed for Pina’s residence and vehicle. Pina was arrested while driving his vehicle and in the back seat was a three-foot-long rectangular box, similar in size to the earlier shipments. The package was searched and found to contain approximately 700 grams of cocaine. In a search of Pina’s home, agents recovered over 2 pounds of heroin, over 2 pounds of cocaine, approximately 70 grams of methamphetamine as well as a loaded handgun and three long guns all found within close proximity to the drugs.
On March 27, 2019, when search warrants were executed for Rivas’s residence, agents recovered 12 cellphones and arrested Rivas.
On April 8, 2019, Juan Pina plead guilty to conspiracy to distribute and possess with intent to distribute, cocaine, methamphetamine, and heroin.
This case is the product of an investigation by Homeland Security Investigations and Bakersfield Police Department. Assistant U.S. Attorneys Brian K. Delaney and Thomas Newman are prosecuting the case.
If convicted, Rivas faces a maximum statutory penalty of life in prison and a $10 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Pina is scheduled to be sentenced on August 12. He faces a maximum statutory penalty of life in prison and a $10 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
14 Defendants in College Admissions Scandal to Plead GuiltyRead the Press Release
BOSTON – Thirteen parents charged in the college admissions scandal will plead guilty to using bribery and other forms of fraud to facilitate their children’s admission to selective colleges and universities. One coach also agreed to plead guilty.
The defendants were arrested last month and charged with conspiring with William “Rick” Singer, 58, of Newport Beach, Calif., and others, to use bribery and other forms of fraud to secure the admission of students to colleges and universities. The conspiracy involved bribing SAT and ACT exam administrators to allow a test taker to secretly take college entrance exams in place of students, or to correct the students’ answers after they had taken the exam, and bribing university athletic coaches and administrators to facilitate the admission of students to elite universities as purported athletic recruits.
The following defendants were charged in an Information with one count of conspiracy to commit mail fraud and honest services mail fraud and have agreed to plead guilty pursuant to plea agreements:
- Gregory Abbott, 68, of New York, N.Y., together with his wife, Marcia, agreed to pay Singer $125,000 to participate in the college entrance exam cheating scheme for their daughter;
- Marcia Abbott, 59, of New York, N.Y.;
- Jane Buckingham, 50, of Beverly Hills, Calif., agreed to pay Singer $50,000 to participate in the college entrance exam cheating scheme for her son;
- Gordon Caplan, 52, of Greenwich, Conn., agreed to pay Singer $75,000 to participate in the college entrance exam cheating scheme for his daughter;
- Robert Flaxman, 62, of Laguna Beach, Calif., agreed to pay Singer $75,000 to participate in the college entrance exam cheating scheme for his daughter;
- Felicity Huffman, 56, of Los Angeles, Calif., agreed to pay Singer at least $15,000 to participate in the college entrance exam cheating scheme for her oldest daughter;
- Agustin Huneeus Jr., 53, of San Francisco, Calif., agreed to pay Singer $300,000 to participate in both the college entrance exam cheating scheme and the college recruitment scheme for his daughter;
- Marjorie Klapper, 50, of Menlo Park, Calif., agreed to pay Singer $15,000 to participate in the college entrance exam cheating scheme for her son;
- Peter Jan Sartorio, 53, of Menlo Park, Calif., agreed to pay Singer $15,000 to participate in the college entrance exam cheating scheme for his daughter;
- Stephen Semprevivo, 53, of Los Angeles, Calif., agreed to pay Singer $400,000 to participate in the college recruitment scheme for his son; and
- Devin Sloane, 53, of Los Angeles, Calif., agreed to pay Singer $250,000 to participate in the college recruitment scheme for his son.
In addition, Bruce Isackson, 61, and Davina Isackson, 55, of Hillsborough, Calif., were charged in a separate Information and have both agreed to plead guilty to one count of conspiracy to commit mail fraud and honest services mail fraud. Bruce Isackson will also plead guilty to one count of money laundering conspiracy and one count of conspiracy to defraud the IRS. The Isacksons agreed to pay Singer an amount, ultimately totaling $600,000, to participate in the college entrance exam cheating scheme for their younger daughter and the college recruitment scheme for both of their daughters. The Isacksons also underpaid their federal income taxes by deducting the bribe payments as purported charitable contributions. The Isacksons are cooperating with the government’s investigation.
Michael Center, 54, of Austin, Texas, the former head coach of men’s tennis at the University of Texas at Austin, was charged in a third Information and has agreed to plead guilty to one count of conspiracy to commit mail fraud and honest services mail fraud. In 2015, Center personally accepted $60,000 in cash from Singer, as well as $40,000 directed to the University of Texas tennis program, in exchange for designating the child of one of Singer’s clients as a tennis recruit, thereby facilitating his admission to the University of Texas.
All of the defendants who improperly took tax deductions for the bribe payments have agreed to cooperate with the IRS to pay back taxes.
Plea hearings have not yet been scheduled by the Court. Case information, including the status of each defendant, charging documents and plea agreements are available here: 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 maximum sentence of 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 maximum sentence of 20 years in prison, three years of supervised release, and a fine of $500,000 or twice the value of the property involved in the money laundering. The charge of conspiracy to defraud the United States provides for a maximum sentence of five years in prison, three years of supervised release, and a fine of $250,000. Sentences are imposed by a federal district court judge based 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 cases.
6 April 2019
Owner of Vancouver, Washington Precious Metals Firm Sentenced to Prison for Wire FraudRead the Press Release
A Vancouver, Washington, business owner who stole from later clients to pay off earlier ones in the style of a Ponzi scheme was sentenced today in U.S. District Court in Tacoma to four years in prison, announced U.S. Attorney Brian T. Moran. AARON MICHAEL SCOTT, 40, of Portland, Oregon, was indicted in October 2018 following state and federal investigations of his internet precious metals business, Blue Moon Coins. SCOTT began defrauding silver and gold purchasers as early as October 2013 and continued until Blue Moon Coins was shuttered by the Washington State Department of Financial Services in April 2014. At today’s sentencing hearing, U.S. District Judge Ronald B. Leighton said, “White collar crime is under-punished in the country. Drug addiction and white collar crime are two sides of a press that will destroy the fabric of society.”
According to records filed in the case, between October 2013 and April 2014, SCOTT repeatedly accepted customer money for the purchase of precious metals and coins and then used the money for his personal, company, and hobby expenses. SCOTT represented to customers that the money would be used immediately to purchase the coins and metals, but, instead, it was used for expenses or to fulfill earlier customer orders in the form of a Ponzi scheme. When customers complained about the delay in receiving their items, SCOTT used a plethora of excuses such as: weather delays; a supplier had gone bankrupt; a corporate buyout; ice and snow; delayed armored truck delivery; and a bad flu season.
In 2015, SCOTT declared bankruptcy revealing that he had a web of businesses involved in activities, such as producing rap albums and custom jewelry, including gold teeth or “grills.” During the fraud scheme, SCOTT owned a Maserati and a Porsche but transferred ownership of the luxury cars before the bankruptcy filing.
In all more than 139 customers were defrauded of more than $1.4 million. Losses to individual investors range from just over $2,000 to more than $154,000.
The case was investigated by the FBI, Vancouver Police Department and the U.S. Commodities Futures Trading Commission (CFTC). The CFTC has filed a civil enforcement action against SCOTT and Blue Moon Coins seeking restitution for the victims and a permanent registration and trading ban.
The case is being prosecuted by Assistant United States Attorney David Reese Jennings.
Justice Department Observes National Crime Victims’ Rights Week with Events Throughout the CountryRead the Press Release
RALEIGH – In observance of National Crime Victims’ Rights Week, April 7-13, 2019, the United States Attorney’s Office for the Eastern District of North Carolina will host a National Crime Victims’ Rights Week Ceremony on Tuesday, April 9, 2019 at 1:00 p.m. in the auditorium of the North Carolina Department of Natural and Cultural Resources’ Archives and History/State Library Building, located at 109 East Jones Street, Raleigh, North Carolina 27601. This event is open to the public. For more information, please visit https://www.justice.gov/usao-ednc/crime-victims-rights-week-2019.
This year’s event will feature a gripping presentation by victims of federal crimes impacted by the opioid epidemic. The keynote speakers, Ms. Jennifer Powell and Ms. Laura Parrish, were each compelled to speak out about opioid abuse and the opioid/heroin epidemic after losing a family member to a drug overdose. Ms. Powell lost her youngest sister on July 1, 2015, to a drug overdose. Ms. Parrish’s son Nick struggled with opiate addiction and died of a fentanyl overdose in April 2016. Both speakers are members of the United States Attorney’s Heroin Education Action Team in the Eastern District of Kentucky.
The shared mission of United States Attorneys’ Heroin Education Action Teams (HEAT), here in Eastern North Carolina, in Kentucky, and across the country, is to reduce the growing harm to families and communities caused by heroin/opiate abuse by increasing understanding of this epidemic. HEAT is a partnership between United States Attorneys’ Offices and families who have lost a loved one to opiate overdose. These courageous moms, dads, brothers, sisters and children share their story in order to help others avoid the grief of losing a family member from this dangerous epidemic.
“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.”
United States Attorney for the Eastern District of North Carolina, Robert J. Higdon, Jr., stated, “The harms caused to our communities by the opioid epidemic are devastating, far-reaching, and in many cases irreversible. Through the United States Attorney’s Heroin Education Action Team (HEAT), we are committed to educating our communities about heroin/opiate abuse. This is a crisis for which prevention vastly expands the reach of the net already cast by prosecuting those who distribute opioids and demonstrate a reckless disregard for human life and the safety of our communities. As we commemorate National Crime Victims’ Rights Week, a mother’s heartfelt message to me was ‘The most important words anyone can say to me, is calling my son’s name, and remembering him’ signifying the importance of the week. During the ceremony this coming Tuesday, victim advocates, law enforcement, allied professionals, and the community will stand together to remember and honor all victims of crime.”
Each year in April, the Department of Justice and U.S. Attorneys’ Offices observe National Crime Victims’ Rights Week nationwide by taking time to honor victims of crime and those who advocate on their behalf. In addition, the Justice Department and U.S. Attorneys’ Offices organize events to honor the victims and advocates, as well as bring awareness to services available to victims of crime. This year’s observance takes place April 7-13, with the theme: Honoring Our Past. Creating Hope for the Future. This year’s theme encourages commemoration, honor, and respect toward the crime victim advocates, allied professionals, and selfless volunteers who have courageously worked for increased rights for crime victims. The theme also invites us to look toward a future of inclusive, accessible, and innovative resources and services for survivors.
The U.S. Department of Justice will host the Office for Victims of Crime’s annual National Crime Victims’ Service Awards Ceremony in Washington, D.C. on April 12, 2019, to honor outstanding individuals and programs that serve victims of crime.
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.
The Office of Justice Programs provides innovative leadership to federal, state, local, and tribal justice systems, by disseminating state-of-the art knowledge and practices across America, and providing grants for the implementation of these crime-fighting strategies. Because most of the responsibility for crime control and prevention falls to law enforcement officers in states, cities, and neighborhoods, the federal government can be effective in these areas only to the extent that it can enter into partnerships with these officers. 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/. You may also contact the U.S. Attorney’s Office for the Eastern District of North Carolina’s Victim Witness Program at (919) 856-4530.
This year’s program in Raleigh is sponsored by the United States Attorney’s Office for the Eastern District of North Carolina, members of the Interagency Council, the City of Durham Police Department, Raleigh Police Department, Federal Bureau of Investigation, H.A.L.O.S., North Carolina Attorney General’s Office, North Carolina Department of Public Safety, North Carolina National Guard, North Carolina Victim Assistance Network, and the United States Postal Inspection Service.
5 April 2019
Wayne County Man Arrested on Cocaine ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y.- U.S. Attorney James P. Kennedy, Jr. announced today that Holsey Wedlow, 65, of Sodus, NY, was arrested and charged by criminal complaint with possession with intent to distribute cocaine. The charge carries a maximum penalty of 20 years, a life term of supervised release, and a $1,000,000 fine.
Assistant U.S. Attorney Cassie Kocher, who is handling the case, stated that according to the complaint, between September 19 and December 13, 2018, the defendant purchased cocaine on three separate occasions from individuals working with the Wayne County Sheriff’s Office and the Drug Enforcement Administration.
The defendant made an initial appearance before U.S. Magistrate Judge Marian W. Payson and is being held without bail.
The criminal complaint is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division; the Wayne County Sheriff’s Office, under the direction of Sheriff Barry Virts; and the Ontario County Sheriff’s Office, under the direction of Sheriff Kevin Henderson.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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Wallingford Man Sentenced to 2 Years in Prison for Distributing AmphetaminesRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that TIMOTHY ESTRIDGE, 38, of Wallingford, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 24 months of imprisonment, followed by four years of supervised release, for distributing amphetamines.
This matter stems from an ongoing statewide initiative targeting narcotics dealers who distribute heroin, fentanyl or opioids that cause death or serious injury to users.
According to court documents and statements made in court, on December 16, 2017, the Wallingford Police Department and emergency medical personnel responded to a Wallingford residence after a 9-1-1 call reported the untimely death of a 38-year-old male. The caller who reported the death did not leave contact information and was not on scene when responders arrived. The victim was pronounced dead at the scene. At the residence, investigators seized evidence of illicit drug use, including a small plastic baggy containing approximately eight suspected oxycodone pills, a glass dish with white powder residue, a broken credit card, pieces of wax folds commonly used as heroin packaging, a used plastic syringe, and prescription pill bottles.
One of the pill bottles recovered was an empty bottle, in Estridge’s name, for 30 10-milligram Adderall pills.
The State of Connecticut Chief Medical Examiner determined the victim’s cause of death to be intoxication of a combination of heroin, fentanyl, oxycodone, alprazolam, amphetamine, and ethanol.
The investigation revealed that, on December 1, 2017, Estridge filled a prescription for Adderall, which contains amphetamine, and subsequently distributed the pills to the victim.
The investigation further revealed that, on multiple occasions between July and December 2017, Estridge possessed and distributed heroin and amphetamines.
Estridge was arrested on April 3, 2018. On October 17, 2018, he pleaded guilty to one count of possession with intent to distribute, and distribution of, amphetamine.
Estridge has been detained since October 6, 2018.
This matter was investigated by the Drug Enforcement Administration’s New Haven Task Force and the Wallingford Police Department. The case was prosecuted by Assistant U.S. Attorney Natasha M. Freismuth.
VA Medical Center Nurse Sentenced for Tampering with Hospital PrescriptionsRead the Press Release
PROVIDENCE – A Veteran Affairs Medical Center nurse who admitted to tampering with and fraudulently obtaining morphine and other opioid prescriptions at the VA Medical Center in Providence has been ordered to serve 24 months in federal prison.
Jared Scott, 35, of West Warwick, admitted that on several occasions in October and November 2017, he accessed vials of liquid opioids designated for patient use. Scott admitted to removing the vials from a locked storage cart and stealing the prescriptions for his own personal use, leaving behind vials filled with saline.
Scott pleaded guilty on December 7, 2018, with tampering with a consumer product and acquiring a controlled substance by deception and subterfuge.
At sentencing today, U.S. District Court Chief Judge William E. Smith sentenced Scott to 24 months in federal prison followed by a term of supervised release of 2 years.
Scott’s sentence is announced by United States Attorney Aaron L Weisman, Special Agent in Charge of the Department of Veterans Affairs Office of Inspector General Sean J. Smith, Providence Veterans Affairs Medical Center Police Chief John M. Thibodeau, and Resident Agent in Charge of the United States Food and Drug Administration Office of Criminal Investigations Derek Roy.
The case was prosecuted by Assistant U.S. Attorney Terrence P. Donnelly.
The matter was investigated by the Department of Veterans Affairs Office of Inspector General, Providence Veterans Affairs Medical Center Police, and the United States Food and Drug Administration Office of Criminal Investigations.
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Unlicensed Lawyer Found Guilty of Federal Fraud and Tax Offenses for Bilking ‘Clients’ and Claiming Illegal Tax RefundsRead the Press Release
LOS ANGELES – A Pasadena man who falsely claimed to be a licensed attorney was remanded into custody this afternoon after a federal jury found him guilty of fraud charges related to his representation of “clients” in federal and state courts.
Kenneth Paul Ferreyro, 37, who resided in Glendale during most of the criminal conduct, was also convicted of tax offenses for seeking well over $100,000 in refunds on federal tax returns that falsely claimed substantial payroll taxes had been withheld and remitted to the Internal Revenue Service.
Following a four-day trial in United States District Court, the jury deliberated for about two hours before convicting Ferreyro of four counts of wire fraud and four counts of making false claims on his tax returns.
The evidence presented at trial showed that, from at least 2010 to 2017, Ferreyro told people, most of whom were affiliated with his father’s church, that he could represent them in United States Bankruptcy Court and other courts and that he could perform work related to real estate refinancing and tax liens. While Ferreyro did graduate from a law school, he never received a license to practice law.
In relation to several victims, Ferreyro prepared and/or filed bankruptcy petitions in Los Angeles, Sacramento and Phoenix. In relation to petitions filed in the Central District of California, Ferreyro concealed his participation by claiming that the victims were filing on their own behalf.
Ferreyro also “represented” a person in a child support dispute in a state court in Idaho, and he charged another person $5,000 based on false claims he could remove federal tax liens so the victim could refinance a residence.
Ferreyro, who at times described himself as a “tax attorney,” also defrauded the government by making false claims on tax returns he filed for the years 2013 through 2016. Ferreyro submitted tax returns to the IRS which falsely stated that he and his wife had already paid substantial amounts of payroll taxes and he fraudulently sought refunds totaling $126,826, some of which was paid by the IRS.
Ferreyro is scheduled to be sentenced by United States District Judge John F. Walter on June 24. As a result of today’s guilty verdicts, Ferreyro faces a statutory maximum sentence of 100 years in federal prison.
The investigation of Ferreyro was conducted by IRS Criminal Investigation, the Federal Bureau of Investigation, and the United States Postal Inspection Service. The United States Trustee Program offices in Los Angeles, Sacramento and Phoenix provided substantial assistance.
The matter is being prosecuted by Assistant United States Attorneys Monica E. Tait and Ashwin Janakiram of the Major Frauds Section.
Unlicensed Dentist Sentenced to 2 Years in Prison for Healthcare Fraud, Conspiracy to Commit Healthcare Fraud, and Conspiracy to Violate the Anti-Kickback StatuteRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that LUIS OMAR VARGAS, an unlicensed dentist, was sentenced to two years in prison for defrauding health insurance companies by billing for false claims, billing for claims performed by him as an unlicensed provider, and for conspiring to pay kickbacks to his patients. VARGAS was convicted after two-week jury trial before U.S. District Judge Ronnie Abrams, who imposed today’s sentence.
U.S. Attorney Geoffrey S. Berman said: “Luis Omar Vargas and his co-defendants devised a scheme to defraud insurance companies by charging them for services never performed. In addition, Vargas, who is not a licensed dentist, charged insurance companies for services he was not even licensed to perform. Now Vargas will spend time in prison for his financial crimes.”
According to allegations in the Indictment and evidence introduced at trial:
From 2012 through November 2017, in the Southern District of New York and elsewhere, VARGAS and others conspired and participated in a scheme to defraud insurance providers of more than $2 million. VARGAS and others induced patients to be seen at a dental clinic on the Upper West Side of Manhattan by offering patients a $25 cash kickback. Once the patients were in the door, VARGAS and his co-conspirators charged insurance companies for services that were never performed and for services performed by VARGAS that he was not licensed to perform.
* * *
In addition to the prison term, VARGAS, 46, of Roselle, New Jersey, was sentenced to two years of supervised release and ordered to pay $959,150 in restitution.
Co-defendant Dr. Mehmet Dikengil, 71, pled guilty on September 13, 2018, to one count of conspiracy to commit mail fraud, one count of health care fraud, and one count of conspiracy to violate the Anti-Kickback statute, and was sentenced on January 25, 2019, to two years in prison. Anna Jones, 60, pled guilty on August 14, 2018, to one count of theft of government funds, and was sentenced on February 14, 2019, to three years of probation.
Mr. Berman praised the outstanding investigative work of the U.S. Department of Health and Human Services-Office of Inspector General in this investigation.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Alexandra N. Rothman, Ryan B. Finkel, and Kristy J. Greenberg are in charge of the prosecution.
United States Attorney's Office Commemorates National Crime Victims' Rights Week, April 7-13, 2019Read the Press Release
St. Louis – The United States Attorney’s Office for the Eastern District of Missouri, in commemoration of National Crime Victims’ Rights Week (NCVRW), April 7–13, 2019, is supporting events throughout the community to raise awareness about crime victims’ issues and rights and introduce the community to the important resources and services available. According to the most recent Bureau of Justice Statistics’ National Crime Victimization Survey, U.S. residents age 12 or older experienced 3.1 million violent victimizations and U.S. households experienced an estimated 13.3 million property crimes in 2017.
Advancement of victims’ rights and issues surrounding victimization will occur throughout the week, including:
- Vigil for families of homicide victims and crime survivors on Saturday, April 6, 2019, from 10:30 a.m. to 12:30 p.m. at Saints Teresa & Bridget Church, 2401 N. Grand Boulevard, St. Louis, MO 63106
- MADD’s annual “Card Making Event” in support of victims of victims of drunk or drugged driving will be held on Saturday, April 6, from 10:00 a.m. to 12:00 p.m. at MADD’s Missouri State Office, 500 Northwest Plaza, # 705, Saint Louis, MO 63074
- Gun lock giveaway will be held on Monday, April 8, 2019, from 9:00 a.m. to 3:00 p.m. at the Crime Victim Center, 539 N. Grand Boulevard, Saint Louis, MO 63103
- Trivia night to benefit the Saint Louis Crime Victim Center is also scheduled for 7:00 p.m. on Saturday, April 27, 2019, at the JFK Community Center, 315 Howdershell Road, Florissant, MO 63031
- National Crime Victims’ Rights Week Closing Fair scheduled from 2 p.m. – 4:00 p.m. on Friday, April 12, 2019, at the Emerson Performance Center, 3026 Laclede Avenue, St. Louis, MO 63103
“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."
“Every crime victim deserves our honor and respect. This week is an important opportunity for each of us, as a member of this community, to show our unyielding support of all victims and renew our commitment to keeping our community and its members safe,” said U.S. Attorney Jeff Jensen. “This office is humbled by the strength of those who have survived a crime and those friends, family members, and victim advocates who support and fight for those members of our community who have been victimized. We stand with you each and every day.”
Each year in 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. In addition, the Justice Department and U.S. Attorneys’ offices organize events to honor the victims and advocates, as well as bring awareness to services available to victims of crime. This year’s observance takes place April 7-13, with the theme: Honoring Our Past. Creating Hope for the Future.
The United States Attorney’s Office encourages widespread participation in the week’s events and in other victim-related observances throughout the year. The U.S. Department of Justice will host the Office for Victims of Crime’s annual National Crime Victims’ Service Awards Ceremony in Washington, D.C. on April 12, 2019, to honor outstanding individuals and programs that serve victims of crime.
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.
The Office of Justice Programs provides innovative leadership to federal, state, local, and tribal justice systems, by disseminating state-of-the art knowledge and practices across America, and providing grants for the implementation of these crime-fighting strategies. Because most of the responsibility for crime control and prevention falls to law enforcement officers in states, cities, and neighborhoods, the federal government can be effective in these areas only to the extent that it can enter into partnerships with these officers. 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/ and via the Saint Louis Crime Victim Center at 314.652.3623 or visit the Crime Victim Center’s website at www.supportvictims.org. You may also contact the U.S. Attorney’s Office (Eastern District of Missouri) Victim Witness Program at (314) 539-2200.
U.S. Participant in Costa Rican Call Center Pleads Guilty for Role in “Sweepstakes Fraud” Aimed at ElderlyRead the Press Release
A U.S. citizen who resided in Costa Rica pleaded guilty today for his role in a “sweepstakes fraud” scheme that defrauded hundreds of U.S. residents, many of them elderly.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney R. Andrew Murray Rose of the Western District of North Carolina, Special Agent in Charge John Strong of the FBI’s Charlotte Field Office, Inspector in Charge David McGinnis of the U.S. Postal Inspection (USPIS) Service Charlotte Division and Special Agent in Charge Matthew D. Line of the Internal Revenue Service-Criminal Investigation (IRS-CI) Charlotte Field Office made the announcement.
Thomas Sniffen, 58, pleaded guilty today before U.S. Magistrate Judge David C. Keesler of the Western District of North Carolina to all 31 counts of an indictment charging one count of conspiracy to commit mail and wire fraud, two counts of mail fraud, 13 counts of wire fraud, one count of conspiracy to commit international money laundering and 14 counts of international money laundering. Sniffen was charged by indictment in September 2015 and was extradited from Costa Rica in July 2017.
As part of his guilty plea, Sniffen admitted that from approximately September 2010 through May 2014, he worked for a call center in Costa Rica that placed telephone calls to U.S. victims, falsely informing those victims that they had won a substantial cash prize in a “sweepstakes.” The victims, many of whom were elderly, were told that in order to receive the prize, they had to pay for a purported “refundable insurance fee,” Sniffen admitted. Sniffen knew that certain factual assertions that he and his co-conspirators made in their pitches to victims were false, he admitted. He also admitted that he and his co-conspirators kept the victims’ funds; never provided any prizes to victims; and used the victims’ funds to continue operating the call center for his and his co-conspirators’ benefit. Once Sniffen and his co-conspirators received the victims’ money, they allegedly contacted the victims again to tell them that they had to send additional money to pay for new purported fees, duties and insurance to receive the now larger sweepstakes prize. Sniffen and his co-conspirators allegedly continued their attempts to collect additional money from victims until those victims either ran out of money or discovered the fraudulent nature of the scheme.
USPIS, FBI and IRS-CI agents from Charlotte and Toledo, Ohio investigated the case, with support from the Federal Trade Commission and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Trial Attorneys William Bowne and Jennifer Farer of the Criminal Division’s Fraud Section are prosecuting the case.
U.S. Attorney: Victims of Crime Deserve JusticeRead the Press Release
WICHITA, KAN. – U.S. Attorney Stephen McAllister will take part in events this month to recognize the rights of crime victims.
“Crime can have a lasting impact on any person,” McAllister said. “Our office supports communities and victim service providers as they work to help victims to face their grief, loss and fear while seeking to find hope and renewal.”
National Crime Victims’ Rights Week, April 7-13, and Take Back the Night events this month focus on victims of crime as well as those who advocate on their behalf, McAllister said.
“Take Back the Night highlights efforts by victim advocates and law enforcement to build a community that is free of the threat of sexual assault and promote an atmosphere of healing for those impacted by it.”
The U.S. Department of Justice will host the Office for Victims of Crime’s annual National Crime Victims’ Service Awards Ceremony in Washington, D.C. on April 12, 2019, to honor outstanding individuals and programs that serve victims of crime.
“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."
U.S. Attorney Announces the Indictment of Fentanyl and Heroin Darknet Vendors, and the Results of Coordinated Federal Operation Targeting Darknet Drug TraffickingRead the Press Release
SACRAMENTO, Calif. — A Rancho Cordova woman was indicted on Thursday, charged with distribution of fentanyl and oxycodone and other opioids as a result of a coordinated operation by the U.S. Attorney’s Office, the Federal Bureau of Investigation, Homeland Security Investigations, the Drug Enforcement Administration, and the U.S. Postal Inspection Service that has identified, disrupted, and prosecuted illegal operators on the darknet.
U.S. Attorney McGregor W. Scott, FBI Special Agent in Charge Sean Ragan, HSI Special Agent in Charge Ryan L. Spradlin, DEA Special Agent in Charge Christopher Nielsen, and USPIS Inspector in Charge Rafael E. Nunez made the announcement today.
U.S. Attorney Scott stated: “Building on the seizure and shut-down of the AlphaBay criminal marketplace in 2017, the cases we are discussing today continue to send a clear message, that if you choose to engage in criminal transactions on the darknet, you will have federal law enforcement from every district and state across the nation pursuing you. There is no hiding, no safety, and no anonymity in the darknet.”
“The darknet supports an illegitimate commerce system where criminals think they can anonymously traffic dangerous substances and goods into the Unites States,” said Ryan L. Spradlin, Homeland Security Investigations Special Agent in Charge for northern California. “HSI is watching and taking down criminals by using innovative technology and uniquely trained analysts and special agents to uncover this type of illicit and dangerous activity. Our country is in the midst of a serious opioid addiction crisis; and some users will do anything to get their hands on drugs like fentanyl. Tens of thousands of people die every year from overdosing on opioids. We all need to do our part to police the streets and all corners of the internet to make sure people do not have unlimited access to these potentially deadly substances.”
“The darknet has become a one-stop shop for individuals peddling powerful opioids, like fentanyl, because of the anonymity it seemingly offers to those who seek to evade detection. As these investigations demonstrate, sophisticated technology is no match for law enforcement when resources and expertise are combined to achieve a common public-safety goal. We will identify and prosecute those who distribute drugs under this illusion of secrecy,” stated DEA Special Agent in Charge Chris Nielsen.
San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated, “Postal Inspectors are continuously working with the U.S. Attorney’s Office and our partners in law enforcement in operations just like this one to keep dangerous drugs out of the communities we serve.”
The operation, which was initiated in September of last year, has yielded 14 arrests, four indictments, and 40 search and tracking warrants. In addition, agents have seized $423,912 in U.S. currency, $1,937,410 in cryptocurrency, four vehicles, two pill presses, and six firearms. Agents have also made large seizures of narcotics, including heroin, cocaine, methamphetamine, LSD, psilocybin mushrooms, marijuana, and oxycodone.
Two recent cases exemplify the work of the coordinated operation.
United States v. Carrie Alaine Markis, et al. (Case No. 2:19-cr-062 JAM):
On April 4, 2019, a federal grand jury returned a six-count indictment against Carrie Alaine Markis, 42, of Rancho Cordova, charging her with distribution of fentanyl, distribution of oxycodone, and conspiracy.
According to court documents, Markis was a registered California nurse who sold more than 20,000 prescription opioid pills and products on various darknet sites, including Silk Road 2.0, Pandora, and AlphaBay. Between 2013 and 2016, she purchased legitimate prescriptions from willing sellers. Then, she resold these pills and patches through her darknet business, “Farmacy41,” which she ran from her Rancho Cordova home.
Markis’s business operated on Silk Road 2.0 from November 2013 through May 2014. During this time, Markis sent private messages to her customers revealing that she was a licensed California medical professional. She sold more than 8,500 hydrocodone pills and more than 2,500 oxycodone pills. In combination with other sales of morphine, hydromorphone, fentanyl, and methadone, Markis earned about $230,000 in Bitcoin at the time.
Markis’s Farmacy41 business operated on Pandora from December 2013 through August 2014. During this time, she again sold more than 2,500 hydrocodone and more than 2,000 oxycodone pills. In combination with other sales of morphine, hydromorphone, methadone, and fentanyl, she completed about 393 transactions and earned about $122,000 in Bitcoin at the time.
On AlphaBay, Markis operated her Farmacy41 business from November 2015 through April 2016. There, she completed about 262 transactions for hydrocodone, oxycodone, morphine, methadone, and fentanyl. At the time, her Bitcoin earnings were worth about $74,000.
Federal agents searched Markis’s residence on January 24, 2019, and found about $1.8 million in Bitcoin held on a cold storage cryptocurrency wallet. Agents also found about $234,000 in cash. Markis was arrested on a federal complaint and made her initial appearance in court on January 25, 2019.
Andrea Michelle Jordan, aka Jill Jordan, 52, was arrested April 4, 2019, in Elk Grove. According to court documents, Jordan allegedly purchased legitimate pill and patch prescriptions from sellers in the area and then provided these to Markis, who then sold them to customers through Markis’ Farmacy41 darknet storefronts.
Assistant U.S. Attorney Amanda Beck is prosecuting the case. If convicted, Markis faces a maximum statutory penalty of 20 years in prison and a $1 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
United States v. Jason Keith Arnold, et al. (Case No. 2:19-cr-043-MCE):
On March 7, 2019, a federal grand jury returned a five-count indictment against Jason Keith Arnold, 45, David Lee White, 49, and Alicia Marie McCoy, 30, all of Chandler, Arizona, charging them with distribution of heroin and methamphetamine, and conspiracy. According to court documents, Arnold, White, and McCoy operated the vendor accounts “TheSickness” and “SicknessVersion2” on Dream Marketplace, through which they conducted more than 3,000 transactions for heroin and methamphetamine to customers throughout the country.
Federal agents conducted several undercover purchases of heroin from SicknessVersion2 from May 2018 through October 2018. In the parcels received by agents, the purchased heroin was placed inside Haribo Gold gummy bear packages. All of the parcels were mailed from the Chandler, Arizona area. One of the undercover purchases was paid for with a postal account controlled by Arnold. Agents conducted surveillance of post offices in the Chandler, Arizona region and were able to determine that White and McCoy were mailing a large volume of parcels and were purchasing thousands of dollars in stamps. Arnold, White, and McCoy also held accounts at a cryptocurrency exchange company in which they exchanged hundreds of thousands of dollars in Bitcoins for U.S. currency.
On February 21, 2019, federal agents executed search and arrest warrants at Arnold’s residence, his tattoo shop, and a motel room occupied by White and McCoy. In the motel room, agents found heroin, and methamphetamine. Agents also found heroin at Arnold’s residence.
Assistant U.S. Attorneys Grant Rabenn and Paul Hemesath are prosecuting the case. Arnold made his initial appearance in Phoenix, Arizona on February 22, 2019. White made his initial appearance in Sacramento, on March 21, 2019. McCoy made her initial appearance in Sacramento, on March 7, 2019.
If convicted of conspiracy, Arnold, White, and McCoy face a maximum statutory penalty of life in prison, a mandatory minimum of 10 years in prison, and a $10 million fine. If convicted of distribution of a controlled substance, Arnold, White, and McCoy face a maximum statutory penalty of 20 years in prison and a $1 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
These and other cases are the product of investigations by the Northern California Illicit Digital Economy (NCIDE) task force, which is composed of the Federal Bureau of Investigation, Homeland Security Investigations, the Drug Enforcement Administration, and the United States Postal Inspection Service. The Rancho Cordova Police Department and Health and Human Services, Office of Inspector General assisted in U.S. v. Markis.
These cases were brought in conjunction with the Joint Criminal Opioid Darknet Enforcement (J-CODE) Team. Established within the FBI’s Hi-Tech Organized Crime Unit, J‑CODE is an initiative announced in January 2018, targeting drug trafficking, especially fentanyl and other opioids, on the darknet. Building on the work initiated with the takedowns of Silk Road and AlphaBay, the FBI’s J-CODE team brings together agents, analysts, and professional staff with expertise in drugs, gangs, health care fraud, and more, and our federal, state, and local law enforcement partners from across the U.S. Government, to focus on disrupting the sale of drugs via the Darknet and dismantling criminal enterprises that facilitate this trafficking.
Two Tulsa Doctors Settle with the U.S. Government for Allegedly Engaging in Illegal Kickback SchemesRead the Press Release
TULSA, Okla. – Two more Tulsa doctors have entered into settlement agreements with the U.S. Attorney’s Office for allegedly accepting illegal kickback payments from OK Compounding, LLC, announced U.S. Attorney Trent Shores.
Lam Nguyen, 47, a licensed doctor of osteopathic medicine, agreed to pay the government $124,139.98 for allegedly accepting illegal kickback payments from OK Compounding. In a separate settlement, Hugo Salguero, 44, a licensed medical doctor specializing in pain medicine, agreed to pay the government $228,301.76 for allegedly accepting illegal kickback payments from OK Compounding.
These civil settlements resulted from an investigation into numerous health care providers writing prescriptions for pain creams compounded and sold by OK Compounding in return for payments.
“Medical professionals in northern Oklahoma should know by now that my office is focused on stopping the exploitation of federal health care programs,” said U.S. Attorney Trent Shores. “We will hold accountable corrupt physicians and recoup the monies they stole from critical programs intended to support the elderly and those who have served our nation.”
"These settlements highlight the Defense Criminal Investigative Service (DCIS) and its law enforcement partners' commitment to aggressively investigate health care providers who defraud the Department of Defense (DoD) health care program known as TRICARE, to preserve American taxpayer dollars intended to care for our warfighters, their family members and military retirees," said DCIS Special Agent in Charge Michael C. Mentavlos.
Beginning in 2013, Dr. Nguyen and Dr. Salguero prescribed pain creams for their patients, facilitating the sale and distribution of the creams. As compensation for their services, OK Compounding paid the doctors based upon an hourly rate. However, the payments the two physicians received from the company were, in actuality, kickbacks. Because some of the patients were insured by Medicare, Tricare, and the Veterans Health Administration, the kickbacks were in violation of the False Claims Act.
It is illegal to pay or receive kickbacks in conjunction with federal health care insurance. Prohibitions against kickbacks are crucial to insure that financial motives do not undermine the medical judgment of physicians and other health care providers. The civil False Claims Act is an important tool used to protect the integrity of taxpayer-funded health care programs.
These settlements resolve allegations that Dr. Nguyen and Dr. Salguero had illegal financial relationships with OK Compounding concerning pain creams in 2013.
Since January 2019, seven medical professionals have settled for allegedly receiving kickback payments from the company.
To report fraud and abuse against the Federal government in the Northern District of Oklahoma, please contact the U.S. Attorney’s Office at 918-382-2700 and speak to a member of the Affirmative Civil Enforcement (ACE) Unit. The ACE Unit is responsible for filing civil lawsuits on behalf of the United States, to recover government money lost to fraud or other misconduct or to impose penalties for violations of Federal health, safety, civil rights or environmental laws.
Information regarding health care fraud to Medicare can also be reported to the Department of Health and Human Services, Office of Inspector General, at https://oig.hhs.gov/fraud/reportfraud/index.asp. Information for fraud against Tricare can be reported at https://health.mil/Military-Health-Topics/Access-Cost-Quality-and-Safety/Quality-And-Safety-of-Healthcare/Program-Integrity/Fraud-and-Abuse-Report-Submission-Form.
These matters were handled by Assistant U.S. Attorney Marianne Hardcastle, and are the product of a collaborative investigation by the Defense Criminal Investigative Service; Department of Labor–Office of Inspector General (OIG); IRS–Criminal Investigation; U.S. Postal Service–OIG; FBI, Department of Veterans Affairs–OIG and the Department of Health and Human Services–OIG.
The claims resolved by the settlements are allegations only; there has been no determination of liability.
Two Honolulu Police Officers Charged with Federal Civil Rights OffensesRead the Press Release
HONOLULU – Two Honolulu Police Department officers were arrested today pursuant to a federal indictment charging them with one count of conspiring to deprive a person of his civil rights, and one count of acting under color of law to deprive the same individual of his civil rights. The indictment alleges that on or about January 28, 2018, HPD Officers John Rabago and Reginald Ramones deprived an individual of his constitutional right to be free from an unreasonable seizure by a law enforcement officer.
The conspiracy charge carries a maximum term of 10 years imprisonment and a maximum fine of $250,000; and the deprivation of rights under color of law charge carries a maximum term of one-year imprisonment and a maximum fine of $100,000. The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by the Honolulu Division of the Federal Bureau of Investigation. It is being prosecuted by Trial Attorney Timothy Visser of the Justice Department’s Civil Rights Division and Assistant U.S Attorney Thomas Brady for the District of Hawaii.
Two Honolulu Police Department Officers Charged with Federal Civil Rights OffensesRead the Press Release
Two Honolulu Police Department officers were arrested today and charged in federal court with civil rights violations.
John Rabago, 43, and Reginald Ramones, 43, were charged in an indictment unsealed today with one count of conspiring to deprive a person of his civil rights, and one count of acting under color of law to deprive the same individual of his civil rights. Specifically, the indictment alleges that on Jan. 28, 2018, Officers Rabago and Ramones deprived an individual of his constitutional right to be free from an unreasonable seizure by a law enforcement officer.
An indictment is merely an accusation and the defendants are presumed innocent unless proven guilty. The indictment carries a maximum penalty of 10 years imprisonment and a $250,000 fine.
The case was investigated by the Honolulu Division of the FBI, and is being prosecuted by Trial Attorney Tim Visser of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Thomas J. Brady. Assistant U.S. Attorney Marion Percell also participated in the investigation.
Three Texas Men Arrested and Charged with Bribery ConspiracyRead the Press Release
McALLEN, Texas - Three Texas men, including a former Weslaco City Commissioner and a former Hidalgo County Commissioner, were arrested today on charges of conspiracy to commit honest services wire fraud and conspiracy to commit money laundering.
U.S. Attorney Ryan K. Patrick made the announcement along with Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Agent in Charge Christopher Combs of the FBI San Antonio Office and Acting Special Agent in Charge Sarah Kull of the IRS Criminal Investigation (CI) Houston Field office.
Criminal complaints were filed today in the Southern District of Texas against former Weslaco City Commissioner John Cuellar, 56, of Weslaco, and former Hidalgo County Commissioner Arturo Cuellar Jr., 65, of Hidalgo County. They are charged with conspiring to bribe a Weslaco City Commissioner in exchange for official actions favorable to three engineering companies and conspiracy to commit money laundering. Daniel Garcia, 40, an attorney based in Rio Grande City, was also charged with conspiracy to commit money laundering.
According to the complaint, starting in approximately March 2008, Cuellar agreed to accept bribes from three engineering companies that were funneled through Cuellar Jr. and others. Cuellar and another Weslaco City Commissioner would then allegedly take actions favorable to the three companies in relation to contracts to rehabilitate and rebuild Weslaco’s water treatment facilities.
According to the complaint, from approximately April 2008 through December 2015, Lopez received approximately $3.7 million from two engineering companies and shared approximately $1,398,000 with Cuellar Jr. The complaint further alleges Cuellar Jr. used a company he controlled to pay Cuellar approximately $405,000 disguised as legitimate legal expenses. In exchange for these payments, Cuellar allegedly took several official actions to benefit the three construction companies, including the award of a $38.5 million contract to rehabilitate Weslaco’s water treatment plant.
The complaint further alleges Lopez and Cuellar Jr. enlisted Garcia, an attorney, to launder approximately $90,000 in bribe payments to Cuellar through Garcia’s interest on lawyers trust account.
FBI and IRS-CI conducted the investigation. Assistant U.S. Attorney Roberto Lopez is prosecuting the case along with Trial Attorneys Peter M. Nothstein and Jessica C. Harvey of the Criminal Division’s Public Integrity Section.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Three Texas Men Arrested and Charged with Bribery ConspiracyRead the Press Release
Three Texas men, including a former Weslaco City Commissioner and a former Hidalgo County Commissioner, were arrested today on charges of conspiracy to commit honest services wire fraud and conspiracy to commit money laundering.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ryan K. Patrick for the Southern District of Texas, Special Agent in Charge Christopher Combs of the FBI San Antonio Office and Acting Special Agent in Charge Sarah Kull of the IRS Criminal Investigation (CI) Houston Field office, made the announcement.
Criminal complaints were filed today in the Southern District of Texas against former Weslaco City Commissioner John Cuellar, 56, of Weslaco, Texas, and former Hidalgo County Commissioner Arturo Cuellar Jr., 65, of Hidalgo County, Texas. They are charged with conspiring to bribe a Weslaco City Commissioner in exchange for official actions favorable to three engineering companies and conspiracy to commit money laundering. Daniel Garcia, 40, an attorney based in Rio Grande City, Texas, was also charged with conspiracy to commit money laundering.
According to the complaint, starting in approximately March 2008, Cuellar agreed to accept bribes from three engineering companies that were funneled through Cuellar Jr. and others. Cuellar and another Weslaco City Commissioner would then allegedly take actions favorable to the three companies in relation to contracts to rehabilitate and rebuild Weslaco’s water treatment facilities.
According to the complaint, from approximately April 2008 through December 2015, Lopez received approximately $3.7 million from two engineering companies, and shared approximately $1.398 million with Cuellar Jr. The complaint further alleges that Cuellar Jr. used a company he controlled to pay Cuellar approximately $405,000, disguised as legitimate legal expenses. In exchange for these payments, Cuellar allegedly took several official actions to benefit the three construction companies, including the award of a $38.5 million contract to rehabilitate Weslaco’s water treatment plant.
The complaint further alleges that Lopez and Cuellar, Jr. enlisted Garcia, an attorney, to launder approximately $90,000 in bribe payments to Cuellar through Garcia’s interest on lawyers trust (IOLTA) account.
A complaint contains only allegations. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
FBI and IRS-CI conducted the investigation. Trial Attorneys Peter M. Nothstein and Jessica C. Harvey of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Roberto Lopez of the Southern District of Texas are prosecuting the case.
Tampa Man Sentenced to More Than Eight Years for Tampering with A Federal WitnessRead the Press Release
Tampa, Florida – U.S. District Judge William F. Jung has sentenced William Beach (40, Tampa) to eight years and three months in federal prison for tampering with a federal witness.
Beach was found guilty following a jury trial on December 17, 2018.
According to court documents and trial testimony, Beach threatened to shoot a key federal witness in a case (United States v. Corey Damond Smith, Jr., involving a death caused by a fentanyl overdose), if that witness continued to cooperate with the investigation and prosecution of the defendant. Law enforcement immediately intervened to protect the safety of the federal witness.
This case was investigated by the Hillsborough County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Thomas N. Palermo. It is part of the Middle District of Florida’s anti-opioid strategy to combat opioid trafficking and abuse.
Swiftwater Man Sentenced to Six Months’ Imprisonment for Tax EvasionRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that James Famularo, age 61, of Swiftwater, Pennsylvania, was sentenced on April 2, 2019, by United States District Court Judge James M. Munley to six months’ imprisonment to be followed by six months home detention, as well as a two-year term of supervised release, for income tax evasion spanning tax years 2012 through 2015.
According to United States Attorney David J. Freed, 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. On November 26, 2018, Famularo pleaded guilty to a felony count of Income Tax Evasion that covered all four years of misconduct.
Judge Munley also ordered Famularo to pay restitution to the IRS of $196,119.
The case was investigated by the Internal Revenue Service’s Criminal Investigation. Assistant U.S. Attorneys Phillip J. Caraballo and Jeffery St. John prosecuted the case.
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Suburban Bank Fraud Schemers Sentenced to Prison and Ordered to Pay $14.3 Million in RestitutionRead the Press Release
CHICAGO — A federal judge in Chicago has sentenced several defendants in a bank fraud scheme to prison terms and ordered them to pay more than $14.3 million in restitution.
CHARNPAL GHUMAN, 39, of Palatine, and AGA KHAN, 39, of Bloomingdale, were business partners who “flipped” gas stations by purchasing them and re-selling to buyers whom Ghuman and Khan knew were not qualified to obtain bank financing. The pair conspired with a loan officer inside American Enterprise Bank to submit false application documents to obtain loans from the bank guaranteed by the U.S. Small Business Administration. An accountant participated in the scheme by furnishing AEB with false tax returns to help get more than half of the loan applicants qualified for financing. From 2006 to 2009, Ghuman and Khan obtained more than $40 million in loan proceeds as a result of the scheme.
Ghuman and Khan pleaded guilty to bank fraud charges, as did the loan officer, AKASH BRAHMBHATT, 44, of Spring, Texas, and the accountant, SHITAL MEHTA, 53, of Elk Grove Village.
U.S. District Judge John J. Tharp, Jr., on Thursday ordered restitution to AEB of $14,343,899. Judge Tharp had previously sentenced all four defendants to prison terms.
The sentences and restitution order were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago. The SBA and the Federal Deposit Insurance Corp. assisted in the investigation.
According to evidence in the case, Ghuman and Khan set up various corporate entities that purchased multiple gas stations in Illinois and other areas of the Midwest for immediate resale at a higher price. Ghuman and Khan arranged for the financing on behalf of the buyers through AEB loans, which were guaranteed by the SBA if certain requirements were met, including that the borrowers provide a percentage of equity. Ghuman and Khan worked with Brahmbhatt to falsify the loan applications, which included false statements regarding the buyers’ income, employment and experience, as well as false tax returns submitted by Mehta. Ghuman and Khan also falsified equity payments required by the buyers.
“Ghuman and Khan walked away with millions of dollars in loan proceeds, while the borrowers defaulted, leaving the bank’s loss in the millions of dollars,” Assistant U.S. Attorney Sheri H. Mecklenburg argued in the government’s sentencing memorandum. “This was not a one-time lapse in judgment. Defendants’ fraud was repeated and ongoing, over the course of years.”
Judge Tharp ordered prison terms and restitution for each of the defendants:
Ghuman: Five years and six months in prison; restitution of $11,843,899, of which $2 million is owed personally and the remainder owed jointly with Khan. Ghuman also received a concurrent sentence of three years in prison and was ordered to pay $1,952,653 to the IRS after also pleading guilty to filing a false tax return.
Khan: Three years in prison; restitution of $10,843,899, of which $1 million is owed personally and the remainder owed jointly with Ghuman.
Brahmbhatt: Three years in prison; restitution of $10,843,899, of which $1 million is owed personally and the remainder owed jointly with Ghuman.
Mehta: One year and one day in prison; restitution of $500,000, owed personally.
Steuben County Man Arrested, Charged with Threatening to Kill A U.S. CongresswomanRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Patrick W. Carlineo, Jr., 55, of Addison, NY, was arrested and charged by criminal complaint with threatening to assault and murder a United States official. The charge carries a maximum penalty of 10 years in prison, a $250,000 fine, or both.
Assistant U.S. Attorney Brett A. Harvey, who is handling the case, stated that according to the complaint, on March 21, 2019, at approximately 12:20 p.m., a telephone call was received by a staff member for Minnesota Congresswoman Ilhan Omar. During the call, an individual, eventually identified as the defendant, stated to the staff member, “Do you work for the Muslim Brotherhood? Why are you working for her, she's a (expletive) terrorist. I’ll put a bullet in her (expletive) skull.”
After receiving the call, the threat was referred to the United States Capitol Police, Threat Assessment Section, who began an investigation in coordination with the FBI.
The defendant made an initial appearance this afternoon before U.S. Magistrate Judge Marian W. Payson and is being held pending a detention hearing on April 10, 2019, at 10:30 a.m.The complaint is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert, and the United States Capitol Police, under the direction of Matthew R. Verderosa.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
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South Florida Health Care Facility Owner Convicted for Role in Largest Health Care Fraud Scheme Ever Charged by the Department of Justice, Involving $1.3 Billion in Fraudulent ClaimsRead the Press Release
A federal jury found a South Florida health care facility owner guilty today for his role in the largest health care fraud scheme ever charged by the Justice Department, involving over $1.3 billion in fraudulent claims to Medicare and Medicaid for services that were not provided, were not medically necessary or were procured through the payment of kickbacks.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Special Agent in Charge George Piro of the FBI’s Miami Field Office, Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office and Deputy Administrator and Director Alec Alexander of the Centers for Medicare and Medicaid Services Center for Program Integrity made the announcement.
After an eight-week trial, Philip Esformes, 50, of Miami Beach, Florida, was convicted of one count of conspiracy to defraud the United States, two counts of receipt of kickbacks in connection with a federal health care program, four counts of payment of kickbacks in connection with a federal health care program, one count of conspiracy to commit money laundering, nine counts of money laundering, two counts of conspiracy to commit federal program bribery, and one count of obstruction of justice before U.S. District Judge Robert N. Scola Jr. of the Southern District of Florida. Sentencing has not yet been scheduled.
“Philip Esformes orchestrated one of the largest health care fraud schemes in U.S. history, defrauding Medicare and Medicaid to the tune of over a billion dollars,” said Assistant Attorney General Benczkowski. “I commend our dedicated prosecutors and law enforcement partners for their professionalism and unyielding pursuit of justice on behalf of American taxpayers and vulnerable beneficiaries who, as a result of Esformes’s crimes, were denied the level of care that they needed and deserved.”
“Philip Esformes’s criminal scheme defrauded America’s health care system out of millions of dollars, that would have otherwise provided quality care to patients in need,” said U.S. Attorney Fajardo Orshan. “I commend the Assistant U.S. Attorneys from the Southern District of Florida, who worked tirelessly alongside their partners at the Department’s Criminal Division, the FBI and HHS-OIG to bring this case to justice. This massive fraud scheme, perpetuated in nursing and assisted living facilities in our South Florida communities, compromised the integrity of our local health care system. We remain united in our commitment to root out health care fraud and support quality patient care.”
“Philip Esformes is a man driven by almost unbounded greed,” said Assistant Special Agent in Charge Denise M. Stemen of FBI Miami. “The illicit road Esformes took to satisfy his greediness led to over $800 million in fraudulent health care claims, the largest amount ever charged by the Department of Justice. Along that road, Esformes cycled patients through his facilities in poor condition where they received inadequate or unnecessary treatment, then improperly billed Medicare and Medicaid. Taking his despicable conduct further, he bribed doctors and regulators to advance his criminal conduct and even bribed a college official in exchange for gaining admission for his son to that university. The FBI and its partners are constantly investigating health care fraudsters, big and small, who steal money from taxpayers at the expense of patients in need of quality medical care.”
“This largest ever healthcare fraud conviction highlights the awful toll criminal schemes take on federal health programs,” said HHS-OIG Special Agent in Charge Richmond. “Even beyond the vital dollars lost though, Esformes exploited and victimized patients by providing inadequate medical care and poor conditions in his nursing homes. Along with our law enforcement partners, we will continue the fight against such parasites.”
According to evidence presented at trial, from approximately January 1998 through July 2016, Esformes led an extensive health care fraud conspiracy involving a network of assisted living facilities and skilled nursing facilities that he owned. Esformes bribed physicians to admit patients into his facilities, and then cycled the patients through his facilities, where they often failed to receive appropriate medical services, or received medically unnecessary services, which were then billed to Medicare and Medicaid, the evidence showed. Several witnesses testified to the poor conditions in the facilities and the inadequate care patients received, which Esformes was able to conceal from authorities by bribing an employee of a Florida state regulator for advance notice of surprise inspections scheduled to take place at his facilities. The evidence further showed that Esformes used his criminal proceeds to make a series of extravagant purchases, including luxury automobiles and a $360,000 watch. Esformes also used criminal proceeds to bribe the basketball coach at the University of Pennsylvania in exchange for his assistance in gaining admission for his son into the university. Altogether, the evidence established that Esformes personally benefited from the fraud and received in excess of $37 million.
Esformes’s coconspirator, physician’s assistant Arnaldo Carmouze, previously pleaded guilty to conspiracy to commit health care fraud and is scheduled to be sentenced on April 10. Esformes’s coconspirator Odette Barcha also pleaded guilty to one count of conspiring to violate the anti-kickback statute. She was sentenced on April 3, 2019, to 15 months in prison.
This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida with assistance from Florida Attorney General’s Office Medicaid Fraud Control Unit. The case was prosecuted by Fraud Section Assistant Chiefs Allan Medina and Drew Bradylyons and Trial Attorneys James Hayes, Elizabeth Young and Jeremy Sanders, as well as Assistant U.S. Attorneys John Shipley and Dan Bernstein of the Southern District of Florida. Assistant U.S. Attorneys Alison Lehr, Nalina Sombuntham and Daren Grove of the Southern District of Florida are handling the forfeiture aspects of the case.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.
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.
South Florida Health Care Facility Owner Convicted for Role in Largest Health Care Fraud Scheme Ever Charged by the Department of Justice, Involving $1.3 Billion in Fraudulent ClaimsRead the Press Release
A federal jury found a South Florida health care facility owner guilty today for his role in the largest health care fraud scheme ever charged by the Justice Department, involving over $1.3 billion in fraudulent claims to Medicare and Medicaid for services that were not provided, were not medically necessary or were procured through the payment of kickbacks.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Special Agent in Charge George Piro of the FBI’s Miami Field Office, Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office and Deputy Administrator and Director Alec Alexander of the Centers for Medicare and Medicaid Services Center for Program Integrity made the announcement.
After an eight-week trial, Philip Esformes, 50, of Miami Beach, Florida, was convicted of one count of conspiracy to defraud the United States, two counts of receipt of kickbacks in connection with a federal health care program, four counts of payment of kickbacks in connection with a federal health care program, one count of conspiracy to commit money laundering, nine counts of money laundering, two counts of conspiracy to commit federal program bribery, and one count of obstruction of justice before U.S. District Judge Robert N. Scola Jr. of the Southern District of Florida. Sentencing has not yet been scheduled.
“Philip Esformes orchestrated one of the largest health care fraud schemes in U.S. history, defrauding Medicare and Medicaid to the tune of over a billion dollars,” said Assistant Attorney General Benczkowski. “I commend our dedicated prosecutors and law enforcement partners for their professionalism and unyielding pursuit of justice on behalf of American taxpayers and vulnerable beneficiaries who, as a result of Esformes’s crimes, were denied the level of care that they needed and deserved.”
“Philip Esformes’ criminal scheme defrauded America’s health care system out of millions of dollars, that would have otherwise provided quality care to patients in need,” said U.S. Attorney Fajardo Orshan. “I commend the Assistant U.S. Attorneys from the Southern District of Florida, who worked tirelessly alongside their partners at the Department’s Criminal Division, the FBI and HHS-OIG to bring this case to justice. This massive fraud scheme, perpetuated in nursing and assisted living facilities in our South Florida communities, compromised the integrity of our local health care system. We remain united in our commitment to root out health care fraud and support quality patient care.”
“Philip Esformes is a man driven by almost unbounded greed,” said Assistant Special Agent in Charge Denise M. Stemen of FBI Miami. “The illicit road Esformes took to satisfy his greediness led to over $800 million in fraudulent health care claims, the largest amount ever charged by the Department of Justice. Along that road, Esformes cycled patients through his facilities in poor condition where they received inadequate or unnecessary treatment, then improperly billed Medicare and Medicaid. Taking his despicable conduct further, he bribed doctors and regulators to advance his criminal conduct and even bribed a college official in exchange for gaining admission for his son to that university. The FBI and its partners are constantly investigating health care fraudsters, big and small, who steal money from taxpayers at the expense of patients in need of quality medical care.”
“This largest ever healthcare fraud conviction highlights the awful toll criminal schemes take on federal health programs,” said HHS-OIG Special Agent in Charge Richmond. “Even beyond the vital dollars lost though, Esformes exploited and victimized patients by providing inadequate medical care and poor conditions in his nursing homes. Along with our law enforcement partners, we will continue the fight against such parasites.”
According to evidence presented at trial, from approximately January 1998 through July 2016, Esformes led an extensive health care fraud conspiracy involving a network of assisted living facilities and skilled nursing facilities that he owned. Esformes bribed physicians to admit patients into his facilities, and then cycled the patients through his facilities, where they often failed to receive appropriate medical services, or received medically unnecessary services, which were then billed to Medicare and Medicaid, the evidence showed. Several witnesses testified to the poor conditions in the facilities and the inadequate care patients received, which Esformes was able to conceal from authorities by bribing an employee of a Florida state regulator for advance notice of surprise inspections scheduled to take place at his facilities. The evidence further showed that Esformes used his criminal proceeds to make a series of extravagant purchases, including luxury automobiles and a $360,000 watch. Esformes also used criminal proceeds to bribe the basketball coach at the University of Pennsylvania in exchange for his assistance in gaining admission for his son into the university. Altogether, the evidence established that Esformes personally benefited from the fraud and received in excess of $37 million.
Esformes’s coconspirator, physician’s assistant Arnaldo Carmouze, previously pleaded guilty to conspiracy to commit health care fraud and is scheduled to be sentenced on April 10. Esformes’s coconspirator Odette Barcha also pleaded guilty to one count of conspiring to violate the anti-kickback statute. Barcha was sentenced on April 3 to serve 15 months in prison followed by three years of supervised release. She was also ordered to pay $704,516.00 in restitution.
This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida with assistance from Florida Attorney General’s Office Medicaid Fraud Control Unit The case was prosecuted by Fraud Section Assistant Chiefs Allan Medina and Drew Bradylyons and Trial Attorneys James Hayes, Elizabeth Young and Jeremy Sanders, as well as Assistant U.S. Attorneys John Shipley and Dan Bernstein of the Southern District of Florida. Assistant U.S. Attorneys Alison Lehr, Nalina Sombuntham and Daren Grove of the Southern District of Florida are handling the forfeiture aspects of the case.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.
Slidell Man Indicted and Arrested for Theft of Government Funds and Making False Statements in an Application for a PassportRead the Press Release
NEW ORLEANS – United States Attorney Peter G. Strasser announced that DARRYL SANDERS, a/k/a Daryl Saunders (“SANDERS”), age 61, of Slidell, Louisiana, was indicted on March 28, 2019, by a federal grand jury for Theft of Government Funds, in violation of Title 18, United States Code, Section 641 and for False Statements in an Application for a Passport, in violation of Title 18, United States Code, Section 1542. The Indictment was unsealed Wednesday, April 3, 2019 after SANDERS was arrested by federal agents at the New Orleans Passport Office.
According to Count One of the Indictment, beginning in December 2013, and continuing until March 2019, SANDERS, did knowingly embezzle, steal, purloin, and convert to his use, money belonging to the Social Security Administration (“SSA”), to which he knew he was not entitled, when he submitted a fraudulent application for SSA benefits that contained a false name, false date of birth, and a fraudulently obtained Social Security number, and as a result, he was paid approximately $44,838.00 in SSA SSID benefits.
According to Count Two of the Indictment, on March 27, 2018, SANDERS, knowingly made false statements in an application for a 2018 U.S. Passport when he falsely claimed his name was Daryl Saunders, with a date of birth of 09/03/XXXX.
U.S. Attorney Strasser reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
If convicted, SANDERS faces a maximum penalty of ten (10) years imprisonment, followed by up to three (3) years of supervised release, a fine of up to $250,000.00, and a mandatory $100 special assessment as to each count.
On April 3, 2019, SANDERS appeared before U.S. Magistrate Judge Dana M. Douglas who detained SANDERS.
U.S. Attorney Strasser praised the work of the U.S. Department of State, Diplomatic Security Service and the Social Security Administration, Office of Inspector General. The prosecution of this case is being handled by Assistant U. S. Attorney Brian M. Klebba, Supervisor of the Financial Crimes Unit.
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Sherman Oaks Man Pleads Guilty to Conspiring to Launder Money from Illegal Gambling BusinessRead the Press Release
SACRAMENTO, Calif. — Atir Dadon, 34, of Sherman Oaks, pleaded guilty today to conspiring to launder money, U.S. Attorney McGregor W. Scott announced.
According to court documents, between October 2016 and November 2017, Dadon conspired to launder money with his co-defendants, Orel Gohar, 28, of San Francisco, and Bar Shani, 27, of San Francisco. Orel Gohar and co-defendant Yaniv Gohar, 35, of Berkeley, operated an illegal gambling business that placed and maintained video slot machines at businesses in Northern California, including locations in the Eastern District of California. Dadon, Shani, and Orel Gohar conspired to launder the proceeds of the illegal gambling business.
According to court documents, Dadon, Shani, and Orel Gohar agreed that Orel Gohar would give cash proceeds from the Gohars’ gambling business to Dadon and Shani, who would use the cash to pay the workers in their cosmetics business. They agreed that in exchange for the cash from Orel Gohar, Dadon and Shani would arrange for Orel to receive checks from the cosmetics business. To conceal the fact that the financial transactions involved the proceeds of illegal activity, Dadon, Shani, and Orel used code words in their conversations about the transactions, referring to the money as bottles of alcohol or other non-cash items. Dadon also put false memo lines on the checks to Orel Gohar, indicating that Gohar had providing consulting and training services, when in fact he had not done so. Between October 2016 and November 2017, Dadon laundered over $150,000 from the Gohars’ gambling business.
This case is the product of an investigation by the Federal Bureau of Investigation and the California Department of Justice – Bureau of Gambling Control. Assistant U.S. Attorneys Matthew M. Yelovich and Miriam R. Hinman are prosecuting the case.
Yaniv Gohar and Orel Gohar fled the United States upon their release in December 2017 and remain at large. Anyone with information about their whereabouts should call the Federal Bureau of Investigation at (916) 746-7000. Bar Shani is detained pending trial. Co-defendant Adam Atari, 35, of Sherman Oaks, charged with conspiring to launder money with Yaniv and Orel Gohar and with witness tampering, is also detained. Co-defendant Raz Razla, 48, of Sherman Oaks, charged with making false statements to the grand jury, is out of custody. Co-defendant Eran Buhbut, 33, of Oakland, charged with operating an illegal gambling business, is also out of custody. Co-defendant May Levy, 28, of Walnut Creek, charged with operating an illegal gambling business, pleaded guilty.
Dadon is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr., on July 12, 2019. Dadon faces a statutory maximum penalty of 20 years in prison and a fine of up to $500,000, or twice the value of the monetary instrument or funds involved, whichever is greater. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Selma Man Sentenced to Statutory Maximum on Firearms ChargeRead the Press Release
United States Attorney Richard W. Moore of the Southern District of Alabama announces that Jeffrey Bernard Harris, age 40, of Selma, Alabama, was sentenced to the statutory maximum sentence of 120 months this week after earlier pleading guilty to one count charging a violation of 18 USC Section 922(g)(1), Prohibited Person (felon) in Possession of a Firearm.
According to court records, on August 9, 2017, at approximately 4:55p.m., officers of the Selma Police Department responded to Wrenwood Trailer Park near lot #20 in reference to a fight call with one subject armed. The caller reported that Harris was beating a man with his fist and with a firearm. The assault victim was later a passenger in a vehicle that Harris fired into several times while the vehicle was leaving the trailer park.
When officers arrived at the trailer park, Harris was still there, near the entrance. Law enforcement interviewed several witnesses who recounted the beating Harris had inflicted, as well as the multiple rounds he fired. One round struck the victim in the jaw, exiting through his nose. Other rounds fired by Harris struck the front windshield and rear fender of the vehicle the victim was in. A tenant of the trailer park informed officers that she found a bullet lodged in the wall behind her refrigerator. The firearm Harris used was a Taurus PT 24/7 Pro .45 caliber semi-automatic handgun.
Prior to August 9, 2017, Harris had been convicted of two counts of Robbery, First Degree and, one count of Receiving Stolen Property, First Degree.
The Selma Police Department, and the Bureau of Alcohol, Tobacco and Firearms investigated this case.
Rwandan Man Convicted for Immigration Fraud and Perjury in Connection with the 1994 GenocideRead the Press Release
BOSTON – A man who fled Rwanda near the end of the 1994 genocide was convicted today by a federal jury for immigration fraud and perjury in connection with his application for asylum in the United States.
Jean Leonard Teganya, 48, was convicted of two counts of immigration fraud and three counts of perjury. U.S. District Court Judge F. Denis Saylor IV scheduled sentencing for July 1, 2019.
“For 25 years, Jean Leonard Teganya has been running away from the truth,” said United States Attorney Andrew E. Lelling. “Mr. Teganya hid the truth about atrocities he committed during the Rwandan genocide in order to seek asylum in the United States. Our asylum laws exist to protect true victims of violent crime – especially genocide – not the perpetrators.”
“Today’s guilty verdict is a true testament to the significant efforts, over many years and across two continents, of a committed team of Homeland Security Investigations Special Agents and Assistant U.S. Attorneys who valiantly pursued this investigation,” said Special Agent in Charge Peter C. Fitzhugh, Homeland Security Investigations, Boston. “This verdict is a victory, not just for the people of Rwanda, but for all Americans, as it serves as a reminder of our nation’s commitment to prevent human rights violators from exploiting America’s historic hospitality for immigrants by using it as a shield from accountability for their reprehensible war crimes.”
The Rwandan genocide began on April 6, 1994, and lasted for a period of 100 days. During the genocide, approximately 800,000 ethnic Tutsis were murdered, making it the deadliest genocide since the holocaust in World War II. Prior to the genocide, Teganya was enrolled as a medical student at the National University of Rwanda, in Butare. During that time, he was a member of the MRND political party, the ruling Hutu-dominated party that incited the genocide. Teganya was also a member of the Interahamwe, the MRND youth wing, where he participated in martial arts and weapons training.
During the genocide, Teganya remained at the hospital in Butare, where he led teams of soldiers and Interahamwe around the hospital to locate Tutsi patients and refugees hiding in the hospital. Once discovered, the Tutsis were taken and killed behind the maternity ward. Teganya also led teams of soldiers and Interahawme who took Tutsi women to be raped.
The evidence at trial demonstrated that Teganya participated in the murders of three Tutsi people at the hospital and two Tutsi students he discovered in the dormitory where he was living. Teganya also participated in five rapes of two Tutsi women who were hiding in the hospital.
At the end of the genocide in mid-July 1994, Teganya fled Butare, traveling to the Democratic Republic of Congo, Kenya, India, and then Canada. In 1999, Teganya applied for asylum in Canada. Canadian authorities twice determined that Teganya was not entitled to asylum because he had been complicit in atrocities committed at the Butare hospital during the genocide. After 15 years of asylum proceedings, Teganya evaded the Canadian deportation order and fled across the border into the United States. On Aug. 3, 2014, Teganya was encountered walking on foot after he had crossed from Canada into Houlton, Maine. Teganya was taken into custody and he formally applied for asylum. On the application for Asylum and Withholding of Removal, Teganya made false statements by failing to disclose his membership with MRND and his activities during the genocide.
The charge of immigration fraud provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. The charge of perjury provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Lelling and HSI SAC Fitzhugh made the announcement today. U.S. Customs and Border Protection, the U.S. State Department and the Revere Police Department provided valuable assistance. Assistant U.S. Attorneys Scott L. Garland, Deputy Chief of Lelling’s Nation Security Unit, and George P. Varghese, also of the National Security Unit, are prosecuting the case.
Rocky Mount Tax Return Preparer Charged with Aiding and Assisting the Preparation of a False ReturnRead the Press Release
RALEIGH – United States Attorney Robert J. Higdon, Jr. announced that MOSES WHITAKER has been charged with Aiding and Assisting in the Preparation of a False Income Tax Return. For the tax years 2010 through 2018, the Criminal Information alleges that WHITAKER transmitted or caused to be transmitted approximately 3,384 U.S. Individual Income Tax Returns. The Criminal Information further alleges that WHITAKER and others prepared and caused to be transmitted U.S. Individual Income Tax Returns, which contained false information, including false dependents, inflated witholdings, education credits, and unreimbursed business expenses, resulting in the issuance of refunds to which the taxpayers were not entitled.
WHITAKER is scheduled to appear in the New Bern federal courthouse on May 14, 2019, to enter his plea. The maximum penalty he faces is three years’ imprisonment and a $100,000 fine.
Investigation of this case was conducted by the Internal Revenue Service.
Rochester Man Sentenced Following Fentanyl and Gun ConvictionRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Devonte Mitchell, 21, of Rochester, NY, who was convicted of possession with intent to distribute fentanyl, and possession of a firearm in furtherance of a drug trafficking crime, was sentenced to serve 75 months in prison by U.S. District Judge Charles J. Siragusa.
Assistant U.S. Attorney Cassie Kocher, who handled the case, stated the defendant’s arrest followed a search of his residence by the Monroe County Probation Department. During the search, probation officers recovered a quantity of fentanyl packaged for sale and a loaded firearm. At the time of his arrest, Mitchell was on probation for a Criminal Possession of a Controlled Substance in the Fifth Degree conviction.
The sentencing is the result of an investigation by the Monroe County Probation Department, under the direction of Chief Probation Officer Larry Mattle, the Rochester Police Department, under the direction of Chief Mark Simmons, and the Bureau of Alcohol, Tobacco, Firearms & Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division.
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Repeat Sex Offender Sentenced to Ten Years in Prison for Possession of Images of Child Rape and MolestationRead the Press Release
A repeat federal felon, with prior state convictions for child molestation and child rape, was sentenced today in U.S. District Court in Seattle to ten years in prison for access with intent to view child pornography, announced U.S. Attorney Brian T. Moran. BRIAN KEVIN RUBENAKER, 59, of Everett, Washington, was on federal supervision following a nearly 13-year sentence for possession of child pornography when he was linked to a laptop computer hidden at another offender’s residence. Both men, convicted sex offenders, had their supervision revoked and were charged with new child pornography possession crimes. At the sentencing hearing, Chief U.S. District Judge Ricardo S. Martinez also imposed ten years of supervised release to follow his prison term.
“This defendant, already sent to state prison in 1998 for molestation and sexual abuse of minors, now faces a second significant federal sentence for acting on his sexual attraction to children,” said U.S. Attorney Brian T. Moran. “Those who collect and share images and videos of children being raped and tortured feed a market that thrives on the sexual abuse of children.”
According to records filed in the case, in October 2018, two federal probation officers made an unannounced visit to the Everett home of sex offender Mark Dreblow who was also on federal supervision. One of the probation officers noticed wires coming from a couch cushion. Under the cushion was a laptop computer, which Dreblow said belonged to RUBENAKER. Dreblow admitted the two men shared the computer and admitted it contained images of child sex abuse and exploitation. A forensic examination of the computer determined it contained multiple images of children being abused and exploited.
In 1998, RUBENAKER was convicted in Washington Superior Court of child molestation and rape of a child. In 2006, RUBENAKER was sentenced in federal court to nearly 13 years in prison for possession of child pornography. He was released in April 2016 on three years of supervised release. RUBENAKER was arrested in December 2018 for conspiracy to possess child pornography and pleaded guilty to access with intent to view child pornography in January 2019. Because of his status as a repeat offender, RUBENAKER was subject to a 10-year mandatory minimum sentence.
Repeat Sex Offender Sentenced to Ten Years in Prison for Possession of Images of Child Rape and MolestationRead the Press Release
A repeat federal felon, with prior state convictions for child molestation and child rape, was sentenced today in U.S. District Court in Seattle to ten years in prison for access with intent to view child pornography, announced U.S. Attorney Brian T. Moran. BRIAN KEVIN RUBENAKER, 59, of Everett, Washington, was on federal supervision following a nearly 13-year sentence for possession of child pornography when he was linked to a laptop computer hidden at another offender’s residence. Both men, convicted sex offenders, had their supervision revoked and were charged with new child pornography possession crimes. At the sentencing hearing, Chief U.S. District Judge Ricardo S. Martinez also imposed ten years of supervised release to follow his prison term.
“This defendant, already sent to state prison in 1998 for molestation and sexual abuse of minors, now faces a second significant federal sentence for acting on his sexual attraction to children,” said U.S. Attorney Brian T. Moran. “Those who collect and share images and videos of children being raped and tortured feed a market that thrives on the sexual abuse of children.”
According to records filed in the case, in October 2018, two federal probation officers made an unannounced visit to the Everett home of sex offender Mark Dreblow who was also on federal supervision. One of the probation officers noticed wires coming from a couch cushion. Under the cushion was a laptop computer, which Dreblow said belonged to RUBENAKER. Dreblow admitted the two men shared the computer and admitted it contained images of child sex abuse and exploitation. A forensic examination of the computer determined it contained multiple images of children being abused and exploited.
In 1998, RUBENAKER was convicted in Washington Superior Court of child molestation and rape of a child. In 2006, RUBENAKER was sentenced in federal court to nearly 13 years in prison for possession of child pornography. He was released in April 2016 on three years of supervised release. RUBENAKER was arrested in December 2018 for conspiracy to possess child pornography and pleaded guilty to access with intent to view child pornography in January 2019. Because of his status as a repeat offender, RUBENAKER was subject to a 10-year mandatory minimum sentence.
The case was investigated by Homeland Security Investigations with assistance from the Federal Probation Office. The case is being prosecuted by Assistant United States Attorney Matthew Hampton.
Real Estate Developer Sentenced to 6 Years in Prison for Defrauding Investors Out of $58 Million in Years-Long Real Estate Investment SchemeRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that MICHAEL D’ALESSIO was sentenced to 72 months in prison for operating a years-long scheme to defraud investors in his luxury real estate development projects in Manhattan, the Hamptons, Westchester, and elsewhere, and for making false claims and concealing assets in connection with his bankruptcy case. D’ALESSIO pled guilty on November 8, 2018, before U.S. District Judge Jesse M. Furman, who imposed today’s sentence.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Michael D’Alessio promised investors that he would develop and build luxury properties that would yield big returns. When the real estate market took a downturn, D’Alessio resorted to fraud. In the end, all he built was a Ponzi scheme that he used to rip off his investors of their hard-earned life savings to the tune of $58 million. Today, D’Alessio was sentenced to six years in prison for this brazen fraud. Others who would consider funding a life of luxury with the proceeds of fraud should take heed. We will continue to work with our law enforcement partners to see that such fraud is met with justice, and that those who would commit such crimes understand that crime doesn’t pay.”
According to the Indictment, Superseding Information, and statements made in court filings and proceedings:
D’ALESSIO, a real estate developer and general contractor, served as the president and chief executive officer of a real estate investment and development firm specializing in the design, construction, and management of both residential and commercial real estate properties (“Company-1”). D’ALESSIO and Company-1 developed, and purported to develop, luxury residential real estate properties in Manhattan, the Hamptons, Westchester, and elsewhere.
D’ALESSIO typically followed the same pattern in each real estate investment project: he sought investments by offering for sale shares in a newly formed limited liability company (“LLC”) named after the location of the parcel of real estate to be developed and sold (the “Target Property”). In exchange for a purchase of shares in the LLC, D’ALESSIO promised a guaranteed monthly interest payment and a share in the profits from the sale of the Target Property. In soliciting investors, D’ALESSIO made numerous representations to potential investors, including that investor funds would be used only to develop the relevant Target Property and to cover related business expenses of the relevant LLC.
However, in reality, from 2015 through April 2018, D’ALESSIO misappropriated investor funds for his own use and benefit, and made other material misrepresentations. For example, in the case of a purported luxury condominium development on the Upper East Side, D’Alessio represented to investors that the building would be delivered to him vacant. In reality, however, and as D’Alessio knew, the property was inhabited by rent-controlled tenants who could not be easily evicted. In contrast to his representations of a speedy development project and a viable investment opportunity, no substantial changes could be made to the property while those tenants remained in occupancy.
Upon receiving investor funds, D’ALESSIO typically channeled those funds through a series of bank accounts held in the names of shell companies owned and controlled by D’ALESSIO. D’ALESSIO then used much of those investor funds for his own benefit, including to pay off debts and prior investors, and to fund significant gambling and other personal expenses. D’ALESSIO took steps to conceal his fraud, including deceiving investors regarding the progress of various real estate projects and using money raised from investors to make monthly payments to investors in different projects in the manner of a Ponzi scheme. D’ALESSIO defrauded investors out of approximately $58 million.
In 2018, D’ALESSIO went into involuntary bankruptcy under Chapter 7 of Title 11 of the United States Code. In connection with this bankruptcy proceeding, captioned In re Michael D’Alessio, No. 18-22552 (Bankr. S.D.N.Y.), D’ALESSIO submitted forms that fraudulently omitted money and property belonging to his estate, and made a false declaration under penalty of perjury concerning his money and property. Specifically, at the time of D’Alessio’s arrest in August 2018, law enforcement agents found $44,000 in cash, including $30,000 in a gym bag alongside a firearm. Following the arrest, law enforcement agents also learned about a bank account controlled by D’Alessio — which had not been reported in the bankruptcy — that carried a cash balance of $3,047.16. D’Alessio’s cell phone also contained text messages between D’Alessio and another individual in which D’Alessio stated: “I need some of my money tomorrow for Italy” and “I need my 100k I gave you to hold.” All together, D’Alessio concealed at least $143,047.16 from the Bankruptcy Court.
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In addition to the prison term, D’ALESSIO, 53, of New York, New York, was sentenced to three years of supervised release and order to pay forfeiture in the amount of $58,090,047.
Mr. Berman praised the investigative work of the Federal Bureau of Investigation.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Amanda Kramer and Daniel G. Nessim are in charge of the prosecution.
Radio Talk Show Host Craig Carton Sentenced to 42 Months in Prison for Securities and Wire FraudRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that CRAIG CARTON was sentenced to 42 months in prison for securities fraud, wire fraud, and conspiracy to commit those offenses. CARTON was convicted after a one-week trial before Chief U.S. District Judge Colleen McMahon, who imposed today’s sentence.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Radio personality Craig Carton solicited investments for his ticket buying scheme by claiming to have an in with the operator of two New York-area arenas and a major concert promotion company. He talked of his ability to buy blocks of tickets to live events and sell them for a profit on the secondary market. But the talk-show host was all talk. Carton’s purported agreements to buy blocks of tickets were part of an elaborate fiction. Today he has learned that the price of defrauding investors is a term in prison.”
As set forth in the Complaint, Indictment, and the evidence presented at trial:
CARTON and Joseph Meli worked together to induce investors to provide them with millions of dollars, based on representations that the investor funds would be used to purchase blocks of tickets to concerts, which would then be resold on the secondary market. CARTON and Meli purportedly had access to those blocks of tickets based on agreements that Meli had with a company that promotes live music and entertainment events (the “Concert Promotion Company”) and that CARTON had with a company that operates two arenas in the New York metropolitan area (the “Sports and Entertainment Company”). In fact, neither the Concert Promotion Company nor the Sports and Entertainment Company had any such agreement with CARTON, co-defendant Michael Wright, Meli, or any entity associated with them. After receiving the investor funds, CARTON, Wright, and Meli misappropriated those funds, using them to, among other things, pay personal debts and repay prior investors as part of a Ponzi-like scheme.
In the fall of 2016, CARTON, Wright, and Meli exchanged emails and text messages regarding their existing debts. On September 5, 2016, for example, Wright emailed CARTON and Meli, “for the sake of our conversation tomorrow,” and outlined “the debt past due and due next week.” Wright listed several apparent creditors, to whom he, Meli, and/or CARTON were personally indebted for over $1 million. Wright listed eight possible options for repaying the debt, including “Run to Costa Rica, change name, and start life all over again – may not be an option.” CARTON responded to Wright and Meli, stating “don’t forget I have $1m coming tomorrow from ticket investor[.] will need to be discussed how to handle.” On September 7, 2016, CARTON emailed Wright and Meli, referenced a potential investor (“Investor-1”) in an upcoming holiday concert tour, and suggested “borrow[ing] against projected profits” on that investment.
Later in the fall of 2016, CARTON began negotiating with a hedge fund (the “Hedge Fund”) regarding a transaction in which the Hedge Fund would extend CARTON capital to finance CARTON’s purchase of event tickets, which CARTON would then resell at a profit. In early December 2016, Meli texted CARTON and Wright and discussed using the Hedge Fund’s capital “to repay debts,” and not for the purchase of tickets.
The next day, December 7, 2016, CARTON emailed the Hedge Fund five agreements between (i) Meli and a company controlled by Meli (the “Meli Entity”) and (ii) the Concert Promotion Company. In each of the purported agreements, the Concert Promotion Company agreed to sell the Meli Entity up $10 million worth of tickets to different concert tours. However, these agreements were fraudulent and had not, in fact, been entered into by the Concert Promotion Company.
The following day, the Hedge Fund and CARTON executed the revolving loan agreement (the “Revolving Loan Agreement”), under which the Hedge Fund agreed to provide CARTON with up to $10 million, for the purpose of funding investments in the purchase of tickets for events. The Revolving Loan Agreement provided, in sum and substance, that the proceeds of the loan would be used only to purchase tickets pursuant to agreements for the acquisition of tickets, including the agreements with the Concert Promotion Company, and for limited business expenses. The Hedge Fund would receive a share of the profits from the resale of the tickets.
The Hedge Fund then sent $700,000 to the Meli Entity to finance the purchase of tickets pursuant to the agreements between the Meli Entity and the Concert Promotion Company. Meli, however, then sent this money to a bank account controlled by Wright, who then, on December 12, sent $200,000 to CARTON’s personal bank account (the “CARTON Bank Account”), which CARTON then wired to a casino. Also on December 12, Wright sent another $500,000 to an individual who had previously lent CARTON $500,000, which was due to be repaid that day.
Later in December 2016, the Hedge Fund sent an additional $1.9 million to the Meli Entity, to finance the purchase of tickets pursuant to agreements between the Meli Entity and the Concert Promotion Company. Once again, the Concert Promotion Company had not entered into any such agreements. Meli, Wright, and CARTON engaged in text messages regarding the disposition of these funds. Some of the money was used by Meli to repay two individuals who had previously invested with Meli in a related scheme involving the purported investment in the resale of tickets, and by CARTON to pay casinos and to pay Investor-1 a purported return on an earlier investment in a ticket-related venture, among other things.
CARTON also induced the Hedge Fund to wire $2 million to the Sports and Entertainment Company, based on a purported agreement CARTON purportedly had with the Sports and Entertainment Company (the “Sports and Entertainment Company Agreement”). The Sports and Entertainment Company Agreement purportedly gave an entity controlled by CARTON (the “CARTON Entity”) the right to purchase $2 million of tickets to concerts at one of the venues operated by the Sports and Entertainment Company. CARTON, among other things, sent the Hedge Fund a copy of the Sports and Entertainment Company Agreement that purportedly had been signed by the chief executive officer of the Sports and Entertainment Company. However, this agreement was fraudulent and had never been entered into by the Sports and Entertainment Company or signed by the chief executive officer.
On December 20, 2016, when the Hedge Fund wired the $2 million to the Sports and Entertainment Company, CARTON contacted the Sports and Entertainment Company and told them, in sum and substance, that the wire had been sent in error and should be sent to the bank account for an entity operated by CARTON and Wright, for which Wright is the signatory. After the money was rewired to that account, Wright wired $966,000 to Wright’s personal bank account and $700,000 to the CARTON Bank Account. CARTON then wired approximately $188,000 from the CARTON Bank Account, including at least $133,000 in wires to several casinos.
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In addition to the prison term, CARTON, 50, of New York, New York, was sentenced to three years of supervised release and ordered to pay $4,835,186.56 in restitution and to forfeit $4,590,000. CARTON’S co-defendant, Michael Wright, pled guilty on September 27, 2018, to one count of wire fraud and was sentenced to 21 months in prison.
Joseph Meli pled guilty to securities fraud in October 2017 and is currently serving a 78-month sentence imposed by U.S. District Judge Kimba M. Wood in April 2018.
Mr. Berman praised the investigative work of the Federal Bureau of Investigation and thanked the Boston Regional Office of the U.S. Securities and Exchange Commission.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Brendan F. Quigley and Elisha J. Kobre are in charge of the prosecution.
Providence Gang Member Sentenced on Firearm ChargeRead the Press Release
PROVIDENCE, RI – A Project Safe Neighborhoods investigation and prosecution culminated today with the sentencing of a member of the Hanover Boyz street gang to 51 months in federal prison for being a felon in possession of a firearm.
Anthony Washburn, 33, of Providence was arrested by Cranston Police in July 2018 during a traffic stop, when officers seized from his vehicle a firearm and a stamp collection reported stolen from a Cranston residence.
At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Washburn to serve a term of supervised release of 3 years upon completion of his term of incarceration. Washburn pleaded guilty on January 14, 2019, to being a felon in possession of a firearm.
Washburn’s sentence is announced by United States Attorney Aaron L. Weisman, Cranston Police Chief Michael J. Winquist, and Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division.
According to court documents and information presented to the Court, on July 25, 2018, a Cranston Police patrolman pulled over a vehicle with an expired temporary license plate being driven by Washburn. As the officer approached the vehicle, he observed both the driver and a front seat passenger moving within the vehicle, appearing to reach for something in the center console area. The officer requested that Washburn exit the vehicle while telling the passenger to remain inside the vehicle.
Upon the arrival of a second officer, the passenger was removed from the vehicle and the vehicle was searched. Officers discovered a 12-pack box of beer on the floor behind the driver’s seat that contained an open bottle of alcohol, several beers, and a sock containing a loaded .40 caliber semi-automatic firearm.
Inside the center console officers discovered and seized a small digital scale consistent with use in narcotics trade. Inside the trunk of the vehicle officers discovered a large shopping bag containing a stamp collection. The passenger was found to be in possession of $3,400 in cash she said belonged to Washburn.
Further investigation by Cranston Police revealed that the firearm and stamp collection were reported stolen in a housebreak in Cranston, and that the expired temporary license plate was counterfeit.
According to court records, Washburn was previously convicted in Rhode Island state court on firearm and drug trafficking charges.
Project Safe Neighborhoods is a federal, state and local law enforcement collaboration to identify, investigate and prosecute individuals responsible for violent crimes in our neighborhoods. Project Safe Neighborhoods has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone.
The case was prosecuted by Assistant U.S. Attorney Zechariah Chafee, with the assistance of Assistant U.S. Attorney Terrence P. Donnelly.
United States Attorney Aaron L. Weisman acknowledges and thanks the FBI and the FBI Safe Street Task Force for their assistance in the preparation of this matter for prosecution.
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Pottawattamie County Man Sentenced to Prison for Possession of Child PornographyRead the Press Release
COUNCIL BLUFFS, Iowa - United States Attorney Marc Krickbaum announced on April 3, 2019, Salvatore Lawrence Bruno, age 68, was sentenced by United States District Court Judge Rebecca Goodgame Ebinger for Possession of Child Pornography. Bruno was sentenced to 97 months in prison to be followed by a term of supervised release for ten years. Bruno was ordered to pay $500 to each victim seeking restitution.
In January 2018, Council Bluffs Police received a referral from the Iowa Department of Human Services involving a child stating she was shown child pornography by the defendant. A search warrant was obtained for Bruno’s residence. Officers located a computer hard drive and memory card that contained over 5,700 images of child pornography. Bruno pleaded guilty to this charge in November 2018.
This matter was investigated by the Council Bluffs Police Department, Iowa Department of Human Services, Project Harmony and the Federal Bureau of Investigation. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Pottawattamie County Man Sentenced to Prison for Firearm OffenseRead the Press Release
COUNCIL BLUFFS, Iowa - United States Attorney Marc Krickbaum announced on April 3, 2019, Alexander Marcus Provencher, age 23, was sentenced by United States District Court Judge Rebecca Goodgame Ebinger for Prohibited Person in Possession of a Firearm. Provencher was sentenced to 60 months in prison, to be followed by a term of supervised release for three years.
On August 7, 2018, a motorist contacted 911 and advised Provencher had brandished a gun when the motorist tried to stop a domestic disturbance. Council Bluffs Police Officers arrived and made contact with Provencher and his girlfriend. Provencher initially denied having a firearm, but eventually admitted it was in his girlfriend’s purse. Provencher was prohibited from possessing firearms as he had prior felony convictions for robbery and theft in Pottawattamie County District Court.
This matter was investigated by the Council Bluffs Police Department and Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
This case is part of Project Safe Neighborhoods (PSN), a Department of Justice program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.
Pottawattamie County Man Sentenced to Prison for Drug and Firearms OffensesRead the Press Release
COUNCIL BLUFFS, Iowa - United States Attorney Marc Krickbaum announced on April 2, 2019, David Dylan Wuerfele, II, age 43, was sentenced by United States District Court Judge Stephanie M. Rose for Possession with Intent to Distribute Marijuana and Prohibited Person in Possession of a Firearm. Wuerfele was sentenced to 27 months in prison to be followed by a term of supervised release for three years.
In May and June 2018, Wuerfele sold marijuana, cocaine and a firearm to law enforcement, which caused the Council Bluffs Police Department to obtain a warrant to search Wuerfele’s residence. Officers located firearms, marijuana and assorted other drug paraphernalia in Wuerfele’s home.
This matter was investigated by the Council Bluffs Police Department. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Philadelphia man admits to fentanyl distributionRead the Press Release
MARTINSBURG, WEST VIRGINIA – David Anthony Richardson, of Philadelphia, Pennsylvania, has admitted to distributing fentanyl, United States Attorney Bill Powell announced.
Richardson, age 33, pled guilty to one count of “Possession with Intent to Distribute Fentanyl.” Richardson admitted to having more than 40 grams of a substance containing fentanyl in Ohio County in August 2018.
Richardson faces no less than five years and up to 40 years incarceration and a fine of up to $5,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Lara Omps-Botteicher is prosecuting the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Wheeling Police Department investigated.
The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
U.S. Magistrate Robert W. Trumble presided.