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20 February 2019
Utah Man Charged with Hate Crimes for Attacking Three Men with Metal PoleRead the Press Release
SALT LAKE CITY – A federal grand jury in Salt Lake City, Utah, returned a three- count indictment Wednesday morning charging Alan D. Covington with violating 18 U.S.C. § 249 (hate crime) for attacking three men with a metal pole because he believed the men were Mexican, announced Eric Dreiband, Assistant Attorney General for the Civil Rights Division; John W. Huber, United States Attorney for the District of Utah; and Paul Haertel, Special Agent in Charge for the Salt Lake City Field Office of the FBI.
The indictment alleges that on Nov. 27, 2018, Covington entered the premises of a tire store, shouted that he wanted to “kill Mexicans,” and then struck L.G.L in the head with a metal pole. The indictment alleges that the attack against L.G.L. included an attempt to kill. According to the indictment, Covington also struck J.L. with a metal pole. Both men suffered bodily injury. The indictment further alleges that Covington swung the metal pole at A.L. in an attempt to injure A.L.
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted, Covington faces a maximum sentence of life in prison and a $250,000 fine.
The case is being investigated by the Salt Lake City Field Office of the FBI, with the cooperation of the Salt Lake City Police Department. The case is being prosecuted by Assistant U.S. Attorney J. Drew Yeates of the United States Attorney’s Office in Utah and Trial Attorney Rose E. Gibson of the Civil Rights Division.
For more information about Department of Justice’s work to combat and prevent hate crimes, visit www.justice.gov/hatecrimes: a one-stop portal with links to Department of Justice hate crimes resources for law enforcement, media, researchers, victims, advocacy groups, and other organizations and individuals.
Utah Man Charged with Hate Crimes for Attacking Three Men with a Metal PoleRead the Press Release
A federal grand jury in Salt Lake City, Utah, returned a three count indictment charging Alan D. Covington with violating 18 U.S.C. § 249 for attacking three men with a metal pole because he believed the men were Mexican, announced Eric Dreiband, Assistant Attorney General for the Civil Rights Division; John W. Huber, United States Attorney for the District of Utah; and Paul Haertel, Special Agent in Charge for the Salt Lake City Field Office of the FBI.
The indictment alleges that on Nov. 27, 2018, Alan D. Covington entered the premises of a tire store, shouted that he wanted to “kill Mexicans,” and then struck L.G.L in the head with a metal pole. The indictment alleges that the attack against L.G.L. included an attempt to kill. According to the indictment, Covington also struck J.L. with a metal pole. Both men suffered bodily injury. The indictment further alleges that Covington swung the metal pole at A.L. in an attempt to injure A.L.
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted, Covington faces a maximum sentence of life in prison and a $250,000 fine.
The case is being investigated by the Salt Lake City Field Office of the FBI, with the cooperation of the Salt Lake City Police Department. The case is being prosecuted by Assistant U.S. Attorney J. Drew Yeates of the United States Attorney’s Office and Trial Attorney Rose E. Gibson of the Civil Rights Division.
For more information about Department of Justice’s work to combat and prevent hate crimes, visit www.justice.gov/hatecrimes: a one-stop portal with links to Department of Justice hate crimes resources for law enforcement, media, researchers, victims, advocacy groups, and other organizations and individuals.
United States Attorney Mike Stuart Forms Health Care Abuse, Recovery and Response Team ("ARREST") to Intensify Response to Opioid Epidemic and Health Care FraudRead the Press Release
ARREST Team is New Approach to Solving Crisis
Medicaid Fraud Estimated at More Than $150 Billion Annually in U.S.
CHARLESTON, W.Va. – United States Attorney Mike Stuart, joined by Assistant Special Agent in Charge Mary Ann Withrow, U.S. Department of Health and Human Services Office of Inspector General (OIG), Supervisory Senior Resident Agent Wes Quigley, Federal Bureau of Investigation (FBI), Group Supervisor Jim Hischar, Drug Enforcement Administration and Director Mike Malone and Investigative Supervisor Jason Fisher, West Virginia Medicaid Fraud Control Unit, announced the formation of a Health Care Fraud Abuse, Recovery and Response Team (ARREST), an innovative approach linking civil and criminal enforcement efforts together in a comprehensive attack on the opioid epidemic.
All health care related cases in the Southern District of West Virginia, whether they are the subject of criminal or civil investigation or enforcement, will be directed through ARREST. Included within the purview of the Team are the:
- Opioid Fraud and Abuse Detection Unit;
- Affirmative Civil Enforcement Unit;
- Appalachian Regional Prescription Opioid Task Force;
- Medicare and Medicaid Fraud; and
- Asset Forfeiture efforts related to all healthcare matters.
“The formation of ARREST is unique in the country,” said United States Attorney Mike Stuart. “To my knowledge, this is the first district in the country that has broken down all barriers between civil and criminal efforts to ensure a comprehensive and intense approach to ending the opioid crisis and rooting out health care related fraud. Health care and Medicaid fraud is a crisis in the country, for taxpayers, and for rate payers, with an estimated $150 billion in fraud annually. I intend to turn a microscope on fraudulent activities in the Southern District of West Virginia.”
“ARREST is simple,” continued United States Attorney Mike Stuart. “We are establishing a level of teamwork, cooperation, and communication that is an unparalleled approach to health care related enforcement efforts across all disciplines. The creation of ARREST formalizes our commitment to an aggressive, organized and strategic approach to attacking the opioid epidemic as well as targeting health care fraud and abuse both civilly and criminally.”
“The FBI and our partners are using every tool we have to fight health care fraud and opioid abuse in West Virginia,” said Special Agent in Charge Robert Jones. “The FBI works tirelessly to make sure medical professionals who contribute to the drug crisis tearing families apart and putting patients at risk are brought to justice."
“The newly formed team will combine the talents, dedication, and resources of federal law enforcement and the State of West Virginia to fight healthcare fraud and dismantle drug diversion,” said Maureen R. Dixon, Special Agent in Charge for the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “We look forward to working with the U.S. Attorney and our fellow law enforcement partners to take illegal prescriptions drugs off our streets, protect Medicare and Medicaid beneficiaries from harm, and ensure the integrity of U.S. taxpayer funds.”
“The Drug Enforcement Administration remains committed to fighting the opioid crisis with every available resource,” said D. Christopher Evans, Special Agent in Charge of DEA’s Louisville Field Division, which covers West Virginia, Kentucky, and Tennessee. “The strategic partnership created by the ARREST initiative will help DEA and our partners better channel those resources to great effect for the people of West Virginia,” Evans added.
“The Medicaid Fraud Control Unit of the Office of Inspector General within the West Virginia Department of Health and Human Resources is proud to be part of the U.S. Attorney’s Health Care Abuse, Recovery and Response Team,” said Michael Malone, Director of the Medicaid Fraud Control Unit. “We look forward to playing an important role in combating the opioid crisis and protecting the integrity of all health care programs for West Virginia citizens and their tax dollars.”
Assistant United States Attorney Alan McGonigal is serving as the Chair of ARREST. He will work in conjunction with Assistant United States Attorney Haley Bunn, who will head up the team’s criminal drug diversion efforts, and Assistant United States Attorney Meredith George Thomas, who will oversee the team’s criminal health care fraud matters. In addition, a Health Care Fraud Prevention Partnership is being established, which consists of voluntary public/private partnerships between the federal government, state agencies, law enforcement, private health insurance plans, employer organizations and health care anti-fraud associations. The purpose of the partnership is to exchange data and information between partners to help improve capabilities to fight fraud, waste and abuse in the health care system.
Follow us on Twitter: @SDWVNews and @USAttyStuart
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Tyler County man sentenced for connection to a drug distribution operation in Wetzel and Tyler CountiesRead the Press Release
WHEELING, WEST VIRGINIA – Joshua Cathers, of Sistersville, was sentenced today to 15 months incarceration for his involvement in methamphetamine, cocaine, and heroin distribution that spanned multiple states, United States Attorney Bill Powell announced.
Cathers, age 39, pled guilty to one count of “Distribution of Methamphetamine” in August 2018. Cathers admitted selling methamphetamine in November 2017 in Tyler County.
Assistant U.S. Attorneys Robert H. McWilliams, Jr., and Shawn M. Adkins prosecuted the cases on behalf of the government. The Drug Enforcement Administration; the Bureau of Alcohol; Tobacco, Firearms, and Explosives; the Marshall County Drug and Violent Crimes Task Force, a HIDTA-funded initiative; the West Virginia State Police; the Tyler County Sheriff’s Office; the Wetzel County Sheriff’s Office; the Sistersville Police Department; the Paden City Police Department; and the New Martinsville Police Department investigated. The Columbus, Ohio, Police Department Gang Crimes Unit assisted.
The investigation was funded in part by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
U.S. District Judge John Preston Bailey presided.
Two Navajo Men Sentenced to Seven Years in Federal Prison for AssaultRead the Press Release
PHOENIX – On Feb. 19, 2019, Harry Tsosie, 48, of Blue Gap, Ariz. and Jeremy Tsosie, 38, of Smoke Signal, Ariz., both members of the Navajo Nation, were each sentenced by U.S. District Judge Susan M. Brnovich to 84 months in prison, followed by a term of three years of supervised release. Harry and Jeremy Tsosie had previously pleaded guilty to assault with a dangerous weapon.
On Jan. 14, 2017, Harry and Jeremy Tsosie tracked down the victim in the Whippoorwill Housing area on the Navajo Nation Indian Reservation and shot the victim in the chest causing serious bodily injuries. The victim is also member of the Navajo Nation.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Navajo Nation Department of Law Enforcement. The prosecution was handled by Christina J. Reid-Moore, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-08259-PCT-SMB
RELEASE NUMBER: 2019-015_Tsosie
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Two Charged with Stealing Mail from Dubois Apartment ComplexRead the Press Release
PITTSBURGH, PA – Two former residents of DuBois, Pennsylvania, have been indicted by a federal grand jury in Pittsburgh on charges of conspiracy and mail theft, United States Attorney Scott W. Brady announced today.
The two-count Indictment, returned on Feb. 19, names David E. Moore Jr., 26, and Joshua J. Frantz, 25, as defendants.
According to the Indictment, from February through March of 2016, Moore and Frantz stole mail from mail receptacles at an apartment complex in the DuBois area.
The law provides for a maximum total sentence of 10 years in prison, a fine of $500,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Rebecca L. Silinski is prosecuting this case on behalf of the government.
The United States Postal Inspection Service and the DuBois Police Department conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Texas man pleads guilty to escaping from Lake Charles half-way houseRead the Press Release
LAKE CHARLES, La. – Mack Warner, 39, of North Silsbee, Texas, pleaded guilty today guilty before U.S. Magistrate Judge Kathleen Kay to one count of escape from custody while at a federal detention area in Lake Charles.
According to the guilty plea, Mack was a resident at the CINC II Halfway House in Lake Charles serving a sentence for charges from the Eastern District of Texas. His release date was December 15, 2018, but he left the facility without permission on October 25, 2018. He remained absent from the facility until his arrest on December 12, 2018 in Silsbee, Texas.
Warner was convicted on April 10, 2014 in the Eastern District of Texas of possession with intent to distribute methamphetamine and was sentenced to five years in prison followed by four years of supervised release. On January 12, 2018, Warner admitted to violating his supervised release and was sentenced to 14 months in prison. He reported to the halfway house on September 17, 2018.
Warner faces five years in prison, three years of supervised release and a $250,000 fine. The court set sentencing for June 13, 2019.
The U.S. Marshals Service, U.S. Bureau of Prisons, Harden County Sheriff’s Office and Beaumont Police Department in Texas conducted the investigation. Assistant U.S. Attorney Daniel J. Vermaelen is prosecuting the case.
Texas Man Sentenced for Engaging in Illicit Sexual Conduct in Foreign Places with a MinorRead the Press Release
BROWNSVILLE, Texas – A 63-year-old resident of Dallas has been ordered to federal prison following his multiple convictions related to his sexual conduct with a minor in foreign places, announced. U.S. Attorney Ryan Patrick.
Donald Frederic Bollinger pleaded guilty June 13, 2018, to engaging in illicit sexual conduct in foreign places with an individual less than 18 years of age, transportation of a minor with intent to engage in criminal sexual activity, coercion and enticement of a minor to travel in interstate and foreign commerce to engage in illicit sexual activity and travel in foreign commerce as well as engaging in illicit sexual activity with a minor.
Today, U.S. District Judge Rolando Olvera Jr. sentenced Bollinger to 121 months for his crimes. Bollinger was further ordered to pay a $30,000 fine and special assessments of $100 per count of conviction as well as $30,000 pursuant to the 2015 Justice for Victims Trafficking Act of 2015. Following the completion of his prison term, Bollinger will serve the rest of his life on supervised release during which time he will have to comply with numerous requirements designed to restrict his access to children and the internet. Bollinger will also be ordered to register as a sex offender.
In July 2016, a minor had crossed into the U.S. illegally and reported continuous sexual abuse that took place in Honduras and Mexico at the hands of Bollinger, a registered sex offender. The investigation led the agents to two other Honduran minors, also in the United States, that Bollinger victimized in Honduras.
The investigation revealed flight records, credit card information and money order records showing that Bollinger traveled to Honduras consistently for a period of two years from 2012 to 2014. The investigation demonstrated that Bollinger traveled to Reynosa, Mexico, and stayed at a hotel in the area at the end of March 2016 which corroborated one of the victim’s statements. Bollinger maintained a sexual relationship with the minors throughout this time period.
He was arrested Sept. 21, 2017, at the Hidalgo International Port of Entry in McAllen. He has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Immigration and Customs Enforcement’s Homeland Security Investigations Brownsville - Rio Grande Valley Child Exploitation Task Force conducted the investigation.
Assistant U.S. Attorneys Ana C. Cano and Jason Corley prosecuted the case which 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 Projects Safe Childhood, please visit www.usdoj.gov/psc.
Tabor City Man Sentenced on Charge for Felon in Possession of a FirearmRead the Press Release
RALEIGH – United States Attorney Robert J. Higdon, Jr. announced that in federal court, United States District Judge James C. Dever III sentenced BRIAN DAVID RIGGINS, 26, from Tabor City, North Carolina, to 84 months in prison, followed by 3 years of supervised release.
RIGGINS was charged in an indictment filed in the Eastern District of North Carolina June 6, 2018. On August 23, 2018 RIGGINS pled guilty to the Indictment, which charged him with possession of a firearm by a convicted felon.
RIGGINS was charged as a result of an incident that took place on September 7, 2017, when RIGGINS was identified as the driver of a stolen vehicle in the Green Acres community of Columbus County, North Carolina. When law enforcement officers activated their lights, RIGGINS attempted to flee by engaging in a high speed chase throughout the residential community. RIGGINS then fled on foot, dropping a Taurus .40 caliber semi-automatic handgun and a bag containing 2.6 grams of crack cocaine. He was quickly apprehended, and law enforcement identified the handgun as stolen.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Since 2017 the United States Department of Justice has reinvigorated the PSN program and has targeted violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
That effort has been implemented through the Take Back North Carolina Initiative of The United States Attorney’s Office for the Eastern District of North Carolina. This initiative emphasizes the regional assignment of federal prosecutors to work with law enforcement and District Attorney’s Offices on a sustained basis in those communities to reduce the violent crime rate, drug trafficking, and crimes against law enforcement.
The investigation of this case was conducted by the Columbus County Sheriff’s Office, Horry County (South Carolina) Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Laura Howard prosecuted the case on behalf of the United States.
St. Croix Man Pleads Guilty to Possession of Identification Document with Intent to DefraudRead the Press Release
St. Croix, USVI – United States Attorney Gretchen C.F. Shappert announced today that Zakee Abdur Rasheed, age 47, pleaded guilty on February 19, 2019 to possession of identification document with intent to defraud.
According to a plea agreement filed with the court, in or about 2012 Rasheed arranged to arranged to, and did, obtain a Virgin Islands driver’s license in the name of, and date of birth for, M. H. The license bore the photograph of Rasheed’s wife, Ameena Ali. Rasheed intended that the false driver’s license would be used in an application for a United States passport by Ameena Ali in the name M. H.
Rasheed faces a period of incarceration of up to one year and a fine of up to $100,000.00. No sentencing date has been set as yet.
The case was investigated by the U.S. Department of State - Diplomatic Security Service. It is being prosecuted by Assistant U.S. Attorney Alphonso Andrews, Jr.
Serial Bank Robber Pleads Guilty to IndictmentRead the Press Release
A Jupiter resident pled guilty yesterday to committing a string of robberies in Palm Beach and Martin Counties in 2017 and 2018.
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Bruce H. Colton, State Attorney for Indian River, Martin, Okeechobee, and Saint Lucie Counties, Dave Aronberg, State Attorney for Palm Beach County, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, William D. Snyder, Sheriff, Martin County Sheriff’s Office (MCSO), Ric Bradshaw, Sheriff, Palm Beach County Sheriff’s Office (PBSO) and Daniel J. Kerr, Chief, Jupiter Police Department (JPD), made the announcement.
On the scheduled trial date, Ronnie Montsdeoca, age 59, of Jupiter, Florida, pled guilty to the superseding indictment, which charged three counts of bank robbery and one count of attempted bank robbery. At sentencing, the defendant faces a combined maximum statutory sentence of 80 years in prison and a fine of $1,000,000.00. Montsdeoca is scheduled to be sentenced by U.S. District Judge Donald M. Middlebrooks on April 16, 2019, in Miami, Florida.
According to the court record, including the indictment and the defendant’s admissions at the time of the plea, Montsdeoca robbed a TD Bank in Jupiter Florida on April 21, 2017, a Wells Fargo Bank in West Palm Beach, Florida on August 27, 2018, and another TD Bank in Stuart, Florida, on September 10, 2018. Montsdeoca also attempted to rob a Bank United in Hobe Sound, Florida, shortly before the TD Bank robbery on September 10, 2018.
The defendant took, by means of intimidation during the course of the bank robberies, in excess of $37,000 from the institutions whose deposits were insured by the Federal Deposit Insurance Corporation.
U.S. Attorney Fajardo Orshan commended the investigative efforts of FBI, MCSO, PBSO and JPD in this matter. She thanked the State Attorney’s Office for Saint Lucie County and State Attorney’s Office for Palm Beach County for their assistance. The case is being prosecuted by Assistant U.S. Attorney Adam McMichael and Special Assistant U.S. Attorney Christopher Hudock.
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.
Salvadoran National Charged with Passport Fraud and Identity TheftRead the Press Release
BOSTON – A Salvadoran national residing in Worcester was charged in federal court in Worcester yesterday with passport fraud and aggravated identity theft.
Neemias Pacheco-Santamaria, 33, was charged with one count of passport fraud and one count of aggravated identity theft. He appeared in federal court in Worcester yesterday and was ordered detained.
According to the charging document, in July 2018, Pacheco-Santamaria entered a Worcester Post Office and falsely used the name, date of birth, and Social Security number of a United States citizen from Puerto Rico to apply for a United States Passport. It is alleged that Pacheco-Santamaria committed aggravated identity theft by using the Social Security number of another person when submitting a false application for a passport.
The charge of passport fraud provides for a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000. Aggravated identity theft carries a mandatory two-year sentence that must run consecutively to any other sentence imposed, one year of supervised release, and a fine of $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and William B. Gannon, Special Agent in Charge of the U.S. Department of State, Bureau of Diplomatic Security, Boston Field Office, made the announcement. Assistant U.S. Attorney Kristen M. Noto of Lelling’s Worcester Branch Office is prosecuting the case.
The details contained in the charging document are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Salem Man Sentenced to 78 Months in Prison for Dealing Methamphetamine and CockfightingRead the Press Release
PORTLAND, Ore. – Arturo Aispuro, 37, of Salem, Oregon, was sentenced today to 78 months in federal prison and 5 years’ of supervised release for conspiring to distribute methamphetamine. He also received a concurrent sentence of 60 months for abusing hundreds of roosters by raising and training them to participate in cockfights.
According to court documents, Aispuro was a member of a drug trafficking conspiracy operating in and around Salem. In April 2017, with the assistance of a co-conspirator, Aispuro sold 882 grams of methamphetamine to a confidential informant in Milwaukie, Oregon. Later, in May 2017, law enforcement intercepted Aispuro while he was transporting an additional 442 grams of methamphetamine for further distribution.
In June 2017, Drug Enforcement Administration (DEA) agents executed a search warrant on Aispuro’s home in Salem where they found marijuana, cocaine, body armor, a digital scale, vacuum sealers and more than 20 firearms. Agents also found and seized cockfighting literature, vitamins and supplements used to increase roosters’ stamina and sets of gaffs, sharp metal spurs that attach to a rooster’s legs.
Agents also executed a search warrant on Aispuro’s ranch in Scio, Oregon where they found more 200 roosters being raised and trained for fighting. The roosters’ combs and wattles had been removed to make them more effective fighting birds. Aispuro admitted to raising and selling roosters for use in cockfighting derbies for as much as $500 a bird.
Aispuro previously pleaded guilty to one count each of conspiring to distribute methamphetamine and training and selling of fighting animals on June 12, 2018.
This case was investigated by the DEA with the assistance of the U.S. Department of Agriculture, Office of Inspector General, and the Linn County Sheriff’s Office and prosecuted by Peter D. Sax, Assistant U.S. Attorney for the District of Oregon.
Rhode Island Man Guilty of Trafficking Heroin into Southeastern ConnecticutRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, today announced that a federal jury in Hartford has found EDDY PENA, 30, of Providence, Rhode Island, guilty of one count of conspiracy to distribute, and to possess with intent to distribute, one kilogram or more of heroin. The trial before U.S. District Judge Michael P. Shea began on February 11 and the jury returned the verdict this morning.
According to court documents, statements made in court and the evidence introduced during the trial, this matter stems from an investigation that began after several heroin overdoses in southeastern Connecticut, including two overdose deaths involving a heroin and fentanyl mix that occurred in January 2016. The investigation, which included court-authorized wiretaps and controlled purchases of narcotics, revealed that Pena regularly supplied Michael Luciano, of New London, with large quantities of heroin. Luciano, who also received heroin from sources in Rhode Island and Massachusetts, distributed the drug through a network of street-level dealers in southeastern Connecticut.
The evidence at trial in also indicated that Pena supplied heroin to individuals in Providence, Rhode Island, and Fall River, Massachusetts, as early as 2012.
Pena has been detained since his arrest on November 14, 2017. On that date, investigators executed 12 federal search warrants and seized more than three kilograms of heroin from other members of the conspiracy, and approximately $14,000 in cash from Pena.
On December 12, 2017, a grand jury in Hartford returned a 25-count superseding indictment charging Pena, Luciano and 19 other individuals with various heroin trafficking offenses.
Prior to his trial, on February 4, 2019, Pena pleaded guilty to two counts of possession of heroin with intent to distribute.
When he is sentenced, Pena faces a mandatory minimum term of imprisonment of 10 years and a maximum term of imprisonment of life. A sentencing date is not scheduled.
On June 27, 2018, Luciano pleaded guilty to one count of conspiracy to possess with intent to distribute one kilogram or more of heroin. On January 29, 2019, he was sentenced to 12 years of imprisonment.
This matter is being investigated by the Drug Enforcement Administration, U.S. Marshals Service, Internal Revenue Service – Criminal Investigation Division, Homeland Security Investigations, Connecticut State Police Statewide Narcotics Task Force East and the New London, Norwich, Waterford, Attleboro (Mass.) and Freetown (Mass.) Police Departments.
This case is being prosecuted by Assistant U.S. Attorneys S. Dave Vatti and Geoffrey M. Stone.
Possessing a Gun Leads to Nearly Four Years in Prison for Domestic Abuser with Six Previous Assault ConvictionsRead the Press Release
A man with a lengthy and violent criminal history who illegally possessed a handgun was sentenced today to nearly four years in federal prison.
Cleveland Dwayne Smith, age 32, from Cedar Rapids, Iowa, received the prison term after an August 9, 2018 guilty plea to one count of possessing a firearm after being convicted of a crime of domestic violence.
At the guilty plea and in a plea agreement, Smith admitted he was driving a car in Cedar Rapids on August 3, 2017, when police stopped the car for a traffic violation. At the time of the stop, Smith possessed a .380 caliber handgun and a magazine with five live rounds of ammunition. Smith was prohibited from possessing guns because he had previously been convicted of a crime of domestic violence.
Information at Smith’s sentencing hearing showed that his conviction for domestic violence was one of six assault convictions on his record. In sentencing Smith, the judge noted he had a long and violent criminal history and the victims of his violence were often women. In addition to the assault convictions, Smith also had five previous convictions for interference with official acts, where he interfered with police while officers were performing official duties.
Smith was sentenced in Cedar Rapids by United States District Court Judge Linda R. Reade. Smith was sentenced to 46 months’ imprisonment. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Smith is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Anthony Morfitt and investigated by the Cedar Rapids Safe Streets Task Force. The task force is composed of representatives from the Federal Bureau of Investigation and the Cedar Rapids Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 18-CR-63.
Follow us on Twitter @USAO_NDIA.
Pittsburgh Man Pleads Guilty to Committing Federal Drug and Gun Offenses in Project Safe Neighborhoods ProsecutionRead the Press Release
PITTSBURGH, PA – Marvin Dennis was convicted of committing heroin and crack cocaine trafficking and firearm crimes, United States Attorney Scott W. Brady announced today.
Dennis, age 23 of Pittsburgh, pled guilty to conspiring to distribute heroin and crack cocaine from September 2017 to April 3, 2018, and to possessing a firearm in furtherance of the drug trafficking conspiracy from September 2017 to April 3, 2018. He pled guilty before United States District Judge Arthur J. Schwab. Judge Schwab scheduled sentencing to occur on June 24, 2019, at 9:00 a.m.
The law provides for a maximum total sentence of at least 5 years and up to life in prison and a fine of up to $1,250,000. Under the Federal Sentencing Guidelines, the actual sentences imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Craig W. Haller is prosecuting this case on behalf of the United States.
The Pittsburgh Bureau of Police, the Federal Bureau of Investigation, and the Federal Bureau of Alcohol, Tobacco, Firearms, and Explosives conducted the investigation leading to the convictions in this case. This case was brought as part of Project Safe Neighborhoods (PSN). PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Okmulgee Man Sentenced to 24 Months for Assault with A Dangerous Weapon in Indian CountryRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Michael Shawn Mayberry, age 24, of Okmulgee, Oklahoma, was sentenced to 24 months imprisonment, and 3 years of supervised release for Assault With A Dangerous Weapon In Indian Country, in violation of Title 18, United States Code, Sections 113(a)(3) and 1153. The charges arose from an investigation by the Muscogee Creek Nation Lighthorse Police and the Federal Bureau of Investigation.
The Indictment alleged that beginning in or about December 2017, and continuing until in or about February 2018, within Indian County, as defined by Title 18, United States Code Section 1151, in the Eastern District of Oklahoma, the defendant, an Indian, assaulted another, with dangerous weapons, with intent to do bodily harm.
United States Attorney Brian J. Kuester said, “The United States Attorney’s Office and the FBI are committed to working with our tribal law enforcement partners to combat violent crime in Indian Country. With open lines of communication between agencies and strong, cooperative working relationships, together we will make a positive impact."
"The sentencing of Michael Mayberry is a direct result of the cooperative and vigilant law enforcement efforts being conducted within Indian Country territory. The FBI and our Safe Trails Task Force remain dedicated to identifying, investigating, and apprehending violent criminals within Indian Country." said Special Agent in Charge Kathryn Peterson of the FBI Oklahoma City Division.
The Honorable Ronald A. White, U.S. District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. Assistant United States Attorney Kristin Harrington represented the United States. The defendant will remain in custody pending transportation to the designated federal facility at which the non-paroleable sentence will be served.
Okemah Man Pleads Guilty to Possession of AmmunitionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that John Frazier Fish, age 38, of Okemah, Oklahoma, entered a guilty plea for Felon In Possession Of Ammunition, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2), punishable by not more than 10 years imprisonment, a fine up to $250,000.00, or both.
The Indictment alleges that on or about November 19, 2018, within the Eastern District of Oklahoma, the defendant, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, ammunition, to-wit: Five (5) rounds of Federal Brand .22 caliber ammunition, which had been shipped and transported in interstate commerce.
The charges arose from an investigation by the Muscogee Creek Nation Lighthorse Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The Honorable Steven P. Shreder, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Dean Burris represented the United States.
Ohio County man sentenced for child pornography chargeRead the Press Release
WHEELING, WEST VIRGINIA – Justin Giesey, of Wheeling, West Virginia, was sentenced today to 24 months incarceration for possessing child pornography, United States Attorney Bill Powell announced.
Giesey, age 32, pled guilty to one count of “Possession of Child Pornography” in October 2018. Giesey admitted to having child pornography depicting a minor under the age of 12 in June 2017 in Ohio County.
This case is prosecuted as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys’ Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Assistant U.S. Attorney David J., Perri prosecuted the case on behalf of the government. The Federal Bureau of Investigation, the West Virginia State Police, and the Wheeling Police Department investigated.
U.S. District Judge John Preston Bailey presided.
New York Man Sentenced for Failure to Register as a Sex OffenderRead the Press Release
BOSTON - A New York man, formerly residing in Massachusetts, was sentenced today in federal court in Boston for failing to register as a sex offender.
Angel Luis Morales, 31, was sentenced by U.S. District Court Judge Indira Talwani to 18 months in prison and five years of supervised release. In November 2018, Morales pleaded guilty to one count of failing to register as a sex offender.
Between 2013 and 2014, Morales was convicted in New York and Massachusetts of multiple sex offenses including open and gross lewdness and indecent assault and battery. These offenses involved multiple victims, and as a result, Morales was designated a Level III sex offender and required, among other things, to register for life with the Sex Offender Registry Board in any state in which he resided, worked, or attended school.
In 2017, Morales registered with the Sex Offender Registry Board in Massachusetts listing a Roxbury address. In March 2018, law enforcement in New York discovered that Morales had relocated to Rochester, N.Y. and had not updated his registration in New York or notified officials in Massachusetts of his relocation.
On May 18, 2018, Morales was arrested in Rochester and charged in the Western District of New York with failing to register as a sex offender. Morales was ordered detained without bail. He then requested that his case be transferred back to Massachusetts.
United States Attorney Andrew E. Lelling; United States Attorney for the Western District of New York James P. Kennedy Jr.; John Gibbons, U.S. Marshal for the District of Massachusetts; and Rochester (N.Y.) Police Chief Mark Simmons made the announcement. Assistant U.S. Attorney Kenneth G. Shine of Lelling’s Major Crimes Unit prosecuted the case.
New York Felon Found with Loaded Gun at New Haven Train Station Pleads GuiltyRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that MICHAEL LAWRENCE, 26, of Mount Vernon, New York, waived his right to be indicted and pleaded guilty today in Hartford federal count to one count of possession of a firearm by a convicted felon.
According to court documents and statements made in court, on August 22, 2018, the Drug Enforcement Administration, Department of Homeland Security, MTA Police Department, Connecticut State Police, New Haven Police Department and Orange Police Department conducted a criminal interdiction and enforcement operation at Union Station in New Haven. During the course of a random inspection of Lawrence, a DEA special agent found a loaded .38 caliber handgun, and a small quantity of marijuana, in Lawrence’s backpack. The gun was reported stolen in Alabama in July 2018.
In 2015, Lawrence was convicted in New York of criminal possession of a controlled substance in the fifth degree.
It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
Lawrence is scheduled to be sentenced by U.S. District Judge Michael P. Shea on May 15, 2019, at which time Lawrence faces a maximum term of imprisonment of 10 years.
Lawrence is currently incarcerated in New York for violating his probation.
This case is being prosecuted by Assistant U.S. Attorney Dave Vatti.
This prosecution is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make neighborhoods safer for everyone.
Missoula meth dealer sentenced to seven yearsRead the Press Release
MISSOULA—Missoula resident Canon Jack Byers, 32, who admitted to distributing more than seven pounds of methamphetamine in 2018, was sentenced today to seven years in prison and five years of supervised release, U.S. Attorney Kurt Alme said.
Byers pleaded guilty in October to conspiracy to distribute meth.
Chief U.S. District Judge Dana L. Christensen presided.
Prosecutors said evidence would show that in 2018, Byers was identified as a meth dealer by confidential informants. One informant bought about five pounds of meth from Byers from March to May. Byers, who was arrested on May 20, 2018 on an outstanding probation violation, admitted to law enforcement that he had obtained more than seven pounds of meth from March until his arrest.
Assistant U.S. Attorney Tara Elliott prosecuted the case, which was investigated by the Montana Regional Violent Crimes Task Force.
The case is part of Project Safe Neighborhoods (PSN), which is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
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Mississippi couple pleads guilty to transporting cocaine through Webster ParishRead the Press Release
SHREVEPORT, La. – United States Attorney David C. Joseph announced that Demyia S. Porter, 39, of Canton, Mississippi, pleaded guilty last week before U.S. Magistrate Judge Mark L. Hornsby to conspiracy to possess with the intent to distribute 5 kilograms or more of cocaine. The plea will become final when accepted by U.S. District Judge Elizabeth E. Foote.
On August 20, 2018, a Louisiana State trooper initiated a traffic stop on Interstate 20 in Webster Parish on a vehicle driven by Porter, according to the guilty plea. After questioning Porter and the passenger of the vehicle, Naquita N. Graves, also of Canton, Mississippi, the trooper obtained consent by Porter to search the vehicle. He found $2,647 in Graves’ purse and approximately 10 kilograms of suspected cocaine in a suitcase in the trunk of the car. Graves and Porter admitted to traveling to Dallas to pick up the illegal drugs for a third unnamed individual.
The defendants face 10 years in prison, at least five years of supervised release and a $10 million fine. Graves pleaded guilty on February 7, 2019 to the same charge. The sentencing date for both defendants is June 14, 2019.
The DEA and the Louisiana State Police conducted the investigation. Assistant U.S. Attorneys Seth D. Reeg and Jessica D. Cassidy are prosecuting the case.
Mississippi Woman Pleads Guilty to Health Care Fraud, Money Laundering and Tax Evasion Charges for Role in $200 Million Compounding Pharmacy SchemeRead the Press Release
A Hattiesburg, Mississippi woman pleaded guilty today for her role in a $200 million scheme to defraud health care benefit programs, including TRICARE, which is the program that covers U.S. military service members and their families.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; U.S. Attorney Mike Hurst of the Southern District of Mississippi; Special Agent in Charge Christopher Freeze of the FBI’s Jackson, Mississippi Field Division; Special Agent in Charge Thomas J. Holloman III of IRS Criminal Investigation’s (IRS-CI) Atlanta Field Office and Special Agent in Charge John F. Khin of the Defense Criminal Investigative Service’s (DCIS) Southeast Field Office made the announcement.
Hope E. Thomley, 52, pleaded guilty before U.S. District Judge Keith Starrett of the Southern District of Mississippi to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering and tax evasion. She is scheduled to be sentenced by Judge Starrett on July 2. Thomley was charged in May 2018 in a 26-count indictment and had been scheduled to begin trial on March 19.
“Hope Thomley and her co-conspirators stole millions of dollars from a federal health care program that serves our nation’s brave military personnel and their families,” said Assistant Attorney General Benczkowski. “The Department of Justice and our law enforcement partners will continue to target unscrupulous medical professionals, business owners, and pharmacies that steal from our nation’s vital health care programs.”
“Today’s guilty plea in one of the largest health care fraud schemes in Mississippi history brings us one step closer to justice for our veterans, our military and the American taxpayers,” said U.S. Attorney Hurst. “I commend the hard work and dedication of our prosecutors, investigative agents and other law enforcement partners for pursuing this important case. We will not stop until all those who were involved in this despicable scheme have been brought to justice.”
“Hope Thomley was charged in a very complex scheme to launder criminally derived proceeds resulting from a fraud scheme against TRICARE,” said IRS-CI Special Agent in Charge Holloman. “Her efforts to conceal the source of her ill-gotten gains and evade taxes were the precise reason why IRS-CI’s involvement was so essential to unraveling the criminal conspiracies involved in this case. IRS special agents are uniquely equipped to decipher this type of criminal activity, and levy the appropriate charges to address the criminal conduct. As a result of the collaborative efforts of the investigative team, Hope Thomley agreed to accept responsibility for her actions and will now be held accountable for the breadth of her criminal conduct in this matter.”
“The Defense Criminal Investigative Service, with our investigative partners, will thoroughly investigate anyone who defrauds TRICARE, the Department of Defense health care program, and bring them to justice,” said DCIS Special Agent in Charge Khin. “The egregious corruption uncovered in this complex and expansive fraud scheme wasted and diverted millions of dollars in limited taxpayer funds that should have been spent on critical medical care for our military members and their families.”
At her plea hearing today, Thomley admitted her role in a scheme to defraud health care benefit programs, including TRICARE, by marketing medications known as compounded medications, which ordinarily are medications that are specially combined or formulated to meet the individual needs of patients. Thomley owned and operated the exclusive marketing agency for Advantage Pharmacy of Hattiesburg, and in that role, was responsible for obtaining prescriptions for which the pharmacy could obtain reimbursement from health care benefit programs. Thomley’s marketing company received nearly 50 percent of the reimbursements that Advantage Pharmacy obtained from the compounded medications. Thomley admitted that co-conspirators formulated Advantage Pharmacy’s compounded medications without regard to the individual needs of the patients, but instead with the goal of increasing reimbursements paid by health care benefit programs, and that she had contemporaneous knowledge of this. In order to further increase her profit, Thomley admittedly obtained prescribers’ signatures on blank prescription forms, and then filled out those forms with the names of her children and TRICARE beneficiaries that she and her husband recruited from the community to receive these medications. Thomley knew that Advantage Pharmacy would fill and submit claims for those falsified prescriptions to health care benefit programs, including TRICARE, she admitted.
Thomley also admitted her role in a money laundering and tax evasion scheme that she and other co-conspirators used to conceal the fraudulent proceeds and evade taxes. Through the scheme, Thomley evaded paying approximately $6.6 million in income taxes, she admitted. From approximately April 2012 through January 2016, health care benefit programs, including TRICARE, reimbursed Advantage Pharmacy and other pharmacies involved in the scheme at least $200 million.
The government seized more than $15 million in cash and other assets from Thomley, which will be forfeited in connection with her guilty plea.
Since 2017, nine other individuals involved in this scheme have pleaded guilty, and one was convicted at trial.
This case is being investigated by the FBI, IRS-CI and DCIS, among other agencies. Trial Attorneys Kate Payerle and Jared Hasten of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mary Helen Wall of the Southern District of Mississippi and Sean Welsh of the Western District of Virginia, formerly of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), are prosecuting the case, with the support and assistance of Trial Attorney Amanda Wick of MLARS.
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.
Michigan Sex Offender Pleads Guilty to Traveling to Destin to Have Sex with a MinorRead the Press Release
PENSACOLA, FLORIDA – Ronald Roscoe, 56, of Traverse City, Michigan, pleaded guilty yesterday to attempted enticement of a minor, travel with intent to engage in illicit sexual conduct, and transporting material involving sexual exploitation of minors. The guilty plea was announced by Lawrence Keefe, United States Attorney for the Northern District of Florida.
In September 2018, an undercover investigator began chatting online to identify individuals interested in exploiting children. An individual, later identified as Roscoe, sent a private message via the social media platform KIK to the investigator, who was posing as a 12-year-old girl. Over the next month, Roscoe discussed sexual activity with the investigator posing as the girl and the possibility of meeting her in person.
During the week of October 15, 2018, Roscoe informed the investigator posing as the girl that he had purchased a plane ticket to fly from Michigan to Florida to engage in sexual contact with her over the weekend. Law enforcement located a hotel in Destin where Roscoe had reserved a room. Roscoe was arrested at the airport, and his cellular telephone contained child pornography, including children under age 12.
Roscoe faces the following potential penalties:
- Attempted enticement of a minor: a minimum of 10 years and a maximum of life;
- Travel to engage in sex with a minor: due to a prior sex offense conviction, a maximum of 60 years in prison; and
- Transporting material involving sexual exploitation of minors: due to a prior sex offense conviction, a minimum of 15 years in prison and a maximum of 40 years in prison.
Because Roscoe is a registered sex offender, he will receive a mandatory 10 years consecutive to imprisonment imposed for the attempted enticement and sex traveling charges.
The sentencing hearing is scheduled for May 6, 2019, at 10:00 a.m. at the United States Courthouse in Pensacola.
The case was investigated by United States Immigration and Customs Enforcement Homeland Security Investigations, the Okaloosa County Sheriff’s Office, and the North Florida Internet Crimes Against Children Task Force. The case was prosecuted by First Assistant United States Attorney Jeffrey M. Tharp.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Michigan Man Pleads Guilty in Multi-Jurisdictional Investigation into Drug TraffickingRead the Press Release
PITTSBURGH, PA - A Michigan resident pleaded guilty in federal court to a charge of violating federal narcotics laws, United States Attorney Scott W. Brady announced today.
Victor Burnett, Jr., 38, of Oak Park, Michigan, pleaded guilty to one count before United States District Judge Nora Barry Fischer.
In connection with the guilty plea, the court was advised that Burnett conspired to possess with intent to distribute and distribution of heroin. Specifically, the court was advised that Burnett, who was intercepted over a Title III wiretap, possessed approximately 1,366 grams of heroin, five firearms, ammunition, a money counter, multiple cell phones, and over $20,000 in US currency in his residence on the date of his arrest on September 1, 2016. In addition, the court was advised that approximately 100 grams of heroin, originally supplied by Burnett, was sent via the United States mail and seized by agents on August 22, 2016 prior to reaching its final destination in the Western District of Pennsylvania where it was to be further distributed.
Judge Fischer scheduled sentencing for July 18, 2019. The law provides for a total sentence of not less than 10 years and up to life in prison, a fine of up to $10,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense(s) and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Amy L. Johnston is prosecuting this case on behalf of the government.
An OCDETF task force headed by the Federal Bureau of Investigation and comprised of members drawn from the FBI Greater Pittsburgh Safe Street Task Force including the Pittsburgh Bureau of Police, Wilkinsburg Police Department, Allegheny County Sheriff’s Office, and the Allegheny County Police Department conducted the investigation leading to the prosecution. Substantial assistance was provided by FBI San Juan, Puerto Rico (St. Thomas Resident Agency, U.S. Virgin Islands) and the United States Postal Inspection Service. Numerous other FBI field offices, including Detroit, Cleveland, New York, and Atlanta, in addition to the Bureau of Alcohol, Tobacco, and Firearms, also assisted with this investigation. 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.
This investigation which utilized Title III wiretap intercepts and other investigative techniques that established the existence of a several overlapping and interrelated drug distribution networks with tentacles in the Western District of Pennsylvania, Northern District of Ohio, Eastern District of Michigan and the District of the Virgin Islands. The FBI Greater Pittsburgh Safe Streets
Task Force’s focus began in early 2015 investigating a drug trafficking organization operating on Pittsburgh’s North Side and thereafter they were able to track drug suppliers beyond the borders of the Western District of Pennsylvania and the Eastern District of Michigan and across the Caribbean Sea.
Miami Medical Clinic Owner Pleads Guilty to Health Care Fraud SchemeRead the Press Release
A Miami, Florida-area medical clinic owner pleaded guilty today for her role in a scheme to defraud Medicare by submitting fraudulent billings from the clinic and by supplying patients to three home health agencies that submitted fraudulent bills for home health services.
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 L. 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 (HHS-OIG) and Special Agent in Charge Brian Swain of the U.S. Secret Service’s (USSS) Miami Field Office made the announcement.
Juliette Anais Tamayo, 53, of Miami, pleaded guilty to count two of a superseding indictment charging her with conspiracy to commit health care fraud and wire fraud. Tamayo previously pleaded guilty to count one of the superseding indictment, charging a conspiracy to pay and receive kickbacks and to defraud the United States. Her sentencing has been scheduled for April 30, 2019 by U.S. District Judge Cecelia Altonaga of the Southern District of Florida, who accepted both pleas.
Tamayo owned Sunshine Medical Care Group Inc. (Sunshine), a medical clinic in Miami. According to admissions made as part of her separate pleas to the health care fraud and kickback conspiracies, Tamayo solicited and accepted kickbacks from patient recruiters and from the owners of several Miami-area home health agencies in exchange for providing prescriptions for home health services to patients at Sunshine. The prescriptions, in turn, were used by the home health agencies to bill Medicare for home health services purportedly provided to Medicare beneficiaries. Tamayo paid a portion of the kickbacks she received from the home health agencies to physicians who worked at Sunshine to induce them to write the fraudulent prescriptions, she admitted.
The superseding indictment alleged that the losses to Medicare as a result of the scheme were approximately $3.7 million.
The principals of the home health agencies and one of the Sunshine physicians who wrote fraudulent prescriptions previously pleaded guilty to conspiracy to commit health care fraud in separate matters.
The case was investigated by the FBI, HHS-OIG and the U.S. Secret Service. Trial Attorneys Adam G. Yoffie and Gary A. Winters of the Criminal Division’s Fraud Section are prosecuting the case.
The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.
Mexican citizen pleads guilty to illegally re-entering the United States for the seventh timeRead the Press Release
SHREVEPORT, La. – Andres Garcia-Mora, 32, of Mexico, pleaded guilty today before Chief Judge Maurice Hicks Jr. to one count of re-entry of a removed alien, U.S. Attorney David C. Joseph announced.
According to the guilty plea, Louisiana State Police arrested Garcia-Mora in Bossier Parish. Homeland Security Investigations discovered that Garcia-Mora was an illegal alien who had been removed from the United States six times between 2009 and 2016. During that time, Garcia-Mora used at least eight aliases in his attempts to enter the United States. The last removal took place on December 30, 2016 near Del Rio, Texas. Garci-Mora has three federal convictions for immigration offenses.
Garcia-Mora faces two years in prison, one year of supervised release, and a $250,000 fine. Hicks set the sentencing for May 30, 2019.
Homeland Security Investigations investigated the case. Assistant U.S. Attorney Leon H. Whitten is prosecuting the case.
Mexican National Who Was Smuggled into the United States Pleads Guilty to Reentry of Removed AlienRead the Press Release
St. Croix, USVI – On Monday, February 4, 2019, Manuel Alberto Fuentes-Acosta, a citizen of Mexico, pleaded guilty before U.S. Magistrate Judge George Cannon, Jr., to reentry of removed alien, United States Attorney Gretchen C.F. Shappert announced.
According to court documents, the defendant, a Mexican citizen, presented himself to Customs and border Protection (CBP) primary inspection at the St. Croix Rohlsen Airport on November 9, 2018, while attempting to board an American Airlines flight. The defendant told the CBP officer that he was illegally in the United States, and he was referred to secondary inspection where he repeated that he was in the United States illegally and did not have the requisite visa. The defendant was arrested. He informed Homeland Security Investigations (HSI) agents that he entered the United States in 1996 illegally and was deported in 2017 from Laredo, TX. The defendant also stated that he had remained in Mexico and later returned to the United States without inspection. He also told HSI agents that he paid a smuggler $2,000 to $3,000 to return to the United States by crossing the river from Mexico to Del Rio, TX in April 2018.
The investigation revealed the defendant was deported on June 1, 2017 from Laredo, TX to Nuevo Laredo, Mexico via foot and the defendant did not obtain consent from the Attorney General to re-enter the United States.
Fuentes-Acosta faces a maximum sentence of 10 years in prison and a $250,000 fine. A sentencing date has been set for June 5, 2019.
The case was investigated by U.S. Immigration and Customs Enforcement, Homeland Security Investigations. The case is being prosecuted by Assistant U.S. Attorney Rhonda Williams-Henry.
Massachusetts Man Sentenced to over Five Years on Fentanyl and Crack ChargesRead the Press Release
Portland, Maine: United States Attorney Halsey B. Frank announced that Fray Cayetano, 23, of Lawrence, Massachusetts was sentenced today in U.S. District Court by Judge D. Brock Hornby to 69 months in prison and three years of supervised release for distributing fentanyl and conspiring to distribute fentanyl and cocaine base, commonly known as, “crack.” Cayetano pled guilty on October 17, 2018.
Court records reveal that on May 29 and August 17, 2018, the defendant distributed fentanyl to person working with federal law enforcement. After the second transaction, agents arrested Cayetano and a co-conspirator, Anthony Reynoso, and seized crack from Reynoso’s vehicle that the defendant intended to distribute.
Reynoso pled guilty to conspiracy and aiding and abetting the distribution of fentanyl on October 29, 2018 and is awaiting sentencing.
This case was investigated by the U.S. Drug Enforcement Administration and the Kittery, York and Eliot Police Departments and prosecuted as part of the Department of Justice’s Strategy to Combat the Opioid Epidemic.
Many resident pleads guilty to distributing methamphetamine from his homeRead the Press Release
SHREVEPORT, La. – Marvin Ray Loucious, 54, of Many, Louisiana, pleaded guilty yesterday before U.S. District Judge Elizabeth E. Foote to possession with intent to distribute methamphetamine, U.S. Attorney David C. Joseph announced.
According to the guilty plea, law enforcement agents observed Loucious selling 5 grams of methamphetamine on July 20, 2018 and 6 grams on July 23, 2018 from his home. Agents executed a search warrant at his home on August 10, 2018 and found 160 grams of methamphetamine, digital scales, plastic baggies and approximately 100 glass smoking pipes. Agents also recovered 55 firearms, with the following five weapons being in close proximity to the methamphetamine: a Glock 32, .357-caliber SIG handgun, a Ruger P90, .45-caliber ACP handgun, a Taurus, TCP, .380-caliber handgun, a Davis Industries, Model DM-22, .22-caliber, 2-shot derringer handgun, and a Century Arms, Catamount Fury, 12-gauge semi-automatic shotgun.
Loucious faces up to 40 years in prison, at least four years of supervised release and a $5 million fine. Judge Foote set the sentencing date for June 18, 2019.
The DEA and the Tri-Parish Drug Task Force (DeSoto, Sabine and Red River parishes) conducted the investigation. Assistant U.S. Attorney Jessica D. Cassidy is prosecuting the case.
Manhattan U.S. Attorney Announces $5.3 Million Proposed Settlement of Lawsuit Against New York City for Fraudulently Obtaining FEMA Funds Following Superstorm SandyRead the Press Release
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Mark Tasky, Special Agent in Charge of the New York Regional Office of the Department of Homeland Security Office of Inspector General (“DHS-OIG”), and Margaret Garnett, Commissioner, New York City Department of Investigation (“DOI”), announced today that the United States filed a civil fraud lawsuit today against the CITY OF NEW YORK (the “City”) alleging that the NEW YORK CITY DEPARTMENT OF TRANSPORTATION (“NYCDOT”) fraudulently obtained millions of dollars from the Federal Emergency Management Agency (“FEMA”) by falsely claiming that numerous NYCDOT vehicles were damaged during Superstorm Sandy (“Sandy”). The United States also submitted a proposed settlement of the lawsuit to the U.S. District Court for review and approval. Under the proposed settlement, the City agreed to pay and revert to the United States a total of $5,303,624 and admitted to conduct alleged in the Government’s complaint, including seeking reimbursement from FEMA for vehicles that were not damaged by Sandy.
Manhattan U.S. Attorney Geoffrey S. Berman said: “FEMA serves a critical role in providing emergency relief to those who are tragically struck by disaster. When people lie to FEMA about the cause of property damage in order to reap a windfall, it compromises FEMA’s ability to provide financial assistance to legitimate disaster victims in desperate need. This Office will take decisive enforcement action to protect FEMA and its vital programs from fraud, waste, and abuse.”
DHS-OIG Special Agent in Charge Mark Tasky said: “Taking advantage of Federal funds intended for disaster relief misappropriates taxpayer dollars, reduces funds available to true victims, and erodes public confidence in relief efforts. Through DHS OIG’s criminal and civil investigative oversight function of DHS programs, and working closely with our partners in the New York City’s Department of Investigation and the United States Attorney’s Office for the Southern District of New York, we ensured that over $5.3 million in disaster relief funds were repaid to the United States, and ultimately the U.S. taxpayer. With so many New York residents impacted by Superstorm Sandy, it is critical to ensure every dollar of appropriated relief funds are properly used and accounted for.”
DOI Commissioner Margaret Garnett said: “Today’s settlement is the successful outcome of a joint investigation with our federal partners, which uncovered falsified submissions by the City to the federal government that allowed the City to wrongly obtain millions of dollars in federal emergency funds. Our investigation found that a lack of vigilant management and inadequate training of City personnel at the City Department of Transportation led to this wrongdoing in connection with a federal public assistance program. As New York City’s independent watchdog, DOI is grateful for our effective partnership with the United States Attorney’s Office for the Southern District of New York and the New York Regional Office of the United States Department of Homeland Security Office of the Inspector General on this investigation.”
According to the Government’s Complaint, the City participated in FEMA’s Public Assistance program, which allows municipalities to obtain indemnification funds from FEMA to repair or replace property damaged by natural disasters, such as Sandy. As part of the program, the City was required to certify that the property damage was incurred as a direct result of the disaster. The City was also required to provide training to employees on program rules and requirements, including the importance of ensuring that costs for which indemnification is sought are directly attributable to a disaster.
Following Sandy, the NYCDOT created a list of vehicles within the agency’s fleet that had been damaged by the storm and submitted it to FEMA for indemnification pursuant to the Public Assistance program. The NYCDOT personnel responsible for generating the list of damaged vehicles, to whom the City provided no training on the Public Assistance program, made no effort to inspect the vehicles or otherwise determine whether any reported damage was attributable to Sandy. In fact, a number of the vehicles included on this list were inoperable long before Sandy.
In 2014, based on this faulty list, the City submitted a request for indemnification to FEMA seeking to recover the full cost of replacing 132 NYCDOT vehicles. The City submitted a certification to FEMA as part of the program and a request for indemnification that falsely attested that all costs were incurred as a direct result of Sandy. Many of the vehicles for which the City sought full replacement costs had been nonoperational or not in use prior to the storm. As a result of these false certifications, FEMA paid the City millions of dollars to which it was not entitled.
As part of the proposed settlement, the City will pay the United States a total of $5,303,624. Specifically, the City will make a cash payment of $4,126,227.34 and relinquish rights to an additional $1,177,396.66 that FEMA had previously approved for disbursement. During this Office’s investigation, the City withdrew another $3,196,376 in indemnity requests, acknowledging that the costs were ineligible for reimbursement.
In connection with the proposed settlement, the City also admitted conduct alleged in the Complaint, including:
- The Deputy Commissioner from NYCDOT who signed the certification lacked personal knowledge about the vehicles sufficient to make a certification about how and when they were damaged and did not personally undertake or direct others to undertake any investigation of the vehicles prior to signing the certification.
- The list of vehicles for which the City was seeking reimbursement included a number of vehicles that were not damaged as a direct result of Sandy to a state beyond repair. A number of the vehicles that the City included had not been operational prior to Sandy.
- Prior to making the submission and certification to FEMA, neither the City nor NYCDOT undertook a sufficient review to ascertain whether all of the vehicles listed had been operational and in use prior to Sandy; or whether the amounts presented to FEMA for reimbursement accurately represented the losses the City incurred from Sandy.
- In June 2014, a NYCDOT employee notified the Deputy Commissioner that certain of the vehicles for which the City had sought reimbursement from FEMA were not eligible. Yet, it was not until after it became aware of this Office’s investigation that the City took steps to notify FEMA.
The proposed settlement must be approved by the District Court.
Mr. Berman praised the outstanding investigative work of DHS-OIG and DOI. This case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Jessica Jean Hu is in charge of the case.
- The Deputy Commissioner from NYCDOT who signed the certification lacked personal knowledge about the vehicles sufficient to make a certification about how and when they were damaged and did not personally undertake or direct others to undertake any investigation of the vehicles prior to signing the certification.
Manchester Man Sentenced to 85 Months in Prison for Fentanyl TraffickingRead the Press Release
CONCORD – Alvaro Garcia, 30, of Manchester, was sentenced to 85 months in prison for participating in a conspiracy to distribute fentanyl, announced United States Attorney Scott W. Murray.
According to court documents and statements made in court, the defendant participated with three co-defendants in a conspiracy to distribute fentanyl in New Hampshire. On several occasions, the defendant met in Nashua with his co-defendant suppliers from Massachusetts to obtain drugs that he then distributed in the Manchester area. The conspiracy involved in excess of 1.2 kilograms of fentanyl.
All of Garcia’s co-defendants also have been convicted. Migdalia Cintron was sentenced to 30 months in prison. Ramon Paniagua Perez was sentenced to 52 months in prison. David Alexander Arias was sentenced to 41 months in prison.
Alvaro Garcia previously pleaded guilty on August 30, 2018.
“Fentanyl traffickers who choose to operate in New Hampshire should expect to be arrested, prosecuted and imprisoned,” said U.S. Attorney Murray. “We are committed to working closely with enforcement agencies at all levels of government to end the distribution of this deadly drug. This case is a testament to the effectiveness of coordinated law enforcement efforts.”
“Fentanyl is causing deaths in record numbers and DEA’s top priority is to aggressively pursue anyone who distributes this poison,” said DEA Special Agent in Charge Brian D. Boyle. “Today’s sentence not only holds Mr. Garcia accountable for his crimes but serves as a warning to those traffickers who are fueling the opioid epidemic.”
This matter was investigated by the Drug Enforcement Administration with assistance from the New Hampshire State Police, the Manchester Police Department, the Nashua Police Department, the Massachusetts State Police, the United States Marshals Service, and the United States Probation Office. The case was prosecuted by Assistant U.S. Attorney Seth Aframe.
This case was supported by the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
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Maine Woman Sentenced to 36 Months for Participating in Fentanyl Trafficking ConspiracyRead the Press Release
CONCORD - Shannon Battle, 39, of Bangor, Maine was sentenced to 36 months in prison for participating in a fentanyl trafficking conspiracy, United States Attorney Scott W. Murray announced today.
According to court documents and statements made in court, on July 20, 2017, a New Hampshire State Police trooper patrolling I-95 stopped a vehicle due to a defective brake light. Battle was a passenger in the vehicle. Troopers ultimately discovered that the defendant was concealing a large package containing approximately 131 grams of fentanyl on her person. During questioning, the defendant admitted that she travelled to Waterbury, Connecticut to pick up the fentanyl, which she was transporting to sell in the Bangor, Maine area.
Co-Defendants Danyelle McGarr and Heather Telescon also have pleaded guilty and are awaiting sentencing. Battle previously pleaded guilty on September 27, 2018.
“Fentanyl trafficking carries significant damage to the health and safety of communities throughout New England,” said U.S. Attorney Murray. “I am grateful to the New Hampshire State Police for their vigilant enforcement work on this case. The troopers prevented a substantial amount of this deadly drug from being distributed.”
This matter was investigated by the New Hampshire State Police. The case is being prosecuted by Assistant U.S. Attorney Anna Dronzek.
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Mississippi Woman Pleads Guilty to Health Care Fraud, Money Laundering and Tax Evasion Charges for Role in $200 Million Compounding Pharmacy SchemeRead the Press Release
WASHINGTON – A Hattiesburg, Mississippi woman pleaded guilty today for her role in a $200 million scheme to defraud health care benefit programs, including TRICARE, which is the program that covers U.S. military service members and their families.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; U.S. Attorney Mike Hurst of the Southern District of Mississippi; Special Agent in Charge Christopher Freeze of the FBI’s Jackson, Mississippi Field Division; Special Agent in Charge Thomas J. Holloman III of IRS Criminal Investigation’s (IRS-CI) Atlanta Field Office and Special Agent in Charge John F. Khin of the Defense Criminal Investigative Service’s (DCIS) Southeast Field Office made the announcement.
Hope E. Thomley, 52, pleaded guilty before U.S. District Judge Keith Starrett of the Southern District of Mississippi to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering and tax evasion. She is scheduled to be sentenced by Judge Starrett on July 2. Thomley was charged in May 2018 in a 26-count indictment and had been scheduled to begin trial on March 19.
“Hope Thomley and her co-conspirators stole millions of dollars from a federal health care program that serves our nation’s brave military personnel and their families,” said Assistant Attorney General Benczkowski. “The Department of Justice and our law enforcement partners will continue to target unscrupulous medical professionals, business owners, and pharmacies that steal from our nation’s vital health care programs.”
“Today’s guilty plea in one of the largest health care fraud schemes in Mississippi history brings us one step closer to justice for our veterans, our military and the American taxpayers,” said U.S. Attorney Hurst. “I commend the hard work and dedication of our prosecutors, investigative agents and other law enforcement partners for pursuing this important case. We will not stop until all those who were involved in this despicable scheme have been brought to justice.”
“Hope Thomley was charged in a very complex scheme to launder criminally derived proceeds resulting from a fraud scheme against TRICARE,” said IRS-CI Special Agent in Charge Holloman. “Her efforts to conceal the source of her ill-gotten gains and evade taxes were the precise reason why IRS-CI’s involvement was so essential to unraveling the criminal conspiracies involved in this case. IRS special agents are uniquely equipped to decipher this type of criminal activity, and levy the appropriate charges to address the criminal conduct. As a result of the collaborative efforts of the investigative team, Hope Thomley agreed to accept responsibility for her actions and will now be held accountable for the breadth of her criminal conduct in this matter.”
“The Defense Criminal Investigative Service, with our investigative partners, will thoroughly investigate anyone who defrauds TRICARE, the Department of Defense health care program, and bring them to justice,” said DCIS Special Agent in Charge Khin. “The egregious corruption uncovered in this complex and expansive fraud scheme wasted and diverted millions of dollars in limited taxpayer funds that should have been spent on critical medical care for our military members and their families.”
At her plea hearing today, Thomley admitted her role in a scheme to defraud health care benefit programs, including TRICARE, by marketing medications known as compounded medications, which ordinarily are medications that are specially combined or formulated to meet the individual needs of patients. Thomley owned and operated the exclusive marketing agency for Advantage Pharmacy of Hattiesburg, and in that role, was responsible for obtaining prescriptions for which the pharmacy could obtain reimbursement from health care benefit programs. Thomley’s marketing company received nearly 50 percent of the reimbursements that Advantage Pharmacy obtained from the compounded medications. Thomley admitted that co-conspirators formulated Advantage Pharmacy’s compounded medications without regard to the individual needs of the patients, but instead with the goal of increasing reimbursements paid by health care benefit programs, and that she had contemporaneous knowledge of this. In order to further increase her profit, Thomley admittedly obtained prescribers’ signatures on blank prescription forms, and then filled out those forms with the names of her children and TRICARE beneficiaries that she and her husband recruited from the community to receive these medications. Thomley knew that Advantage Pharmacy would fill and submit claims for those falsified prescriptions to health care benefit programs, including TRICARE, she admitted.
Thomley also admitted her role in a money laundering and tax evasion scheme that she and other co-conspirators used to conceal the fraudulent proceeds and evade taxes. Through the scheme, Thomley evaded paying approximately $6.6 million in income taxes, she admitted. From approximately April 2012 through January 2016, health care benefit programs, including TRICARE, reimbursed Advantage Pharmacy and other pharmacies involved in the scheme at least $200 million.
The government seized more than $15 million in cash and other assets from Thomley, which will be forfeited in connection with her guilty plea.
Since 2017, nine other individuals involved in this scheme have pleaded guilty, and one was convicted at trial.
This case is being investigated by the FBI, IRS-CI and DCIS, among other agencies. Trial Attorneys Kate Payerle and Jared Hasten of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mary Helen Wall of the Southern District of Mississippi and Sean Welsh of the Western District of Virginia, formerly of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), are prosecuting the case, with the support and assistance of Trial Attorney Amanda Wick of MLARS.
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.
Lower Brule Woman Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Ron Parsons announced that a Lower Brule, South Dakota, woman convicted of Conspiracy to Distribute a Controlled Substance was sentenced on February 19, 2019, by U.S. District Judge Roberto A. Lange.
Shanna St. Cloud, age 21, was sentenced to 10 years in federal prison, followed by 5 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
St. Cloud was indicted by a federal grand jury on September 11, 2018. She pled guilty on November 27, 2018.
Beginning at a time unknown, but no later than December 1, 2015, through September 11, 2018, St. Cloud knowingly and intentionally conspired with others to distribute methamphetamine in the District of South Dakota, in and around the Crow Creek and Lower Brule Sioux Indian Reservations. The individuals who provided St. Cloud with methamphetamine knew that she intended to engage in further distribution. St. Cloud admitted that between 500 grams and 1.5 kilograms of methamphetamine was distributed during the course of the conspiracy.
This case was investigated by the Northern Plains Safe Trails Drug Enforcement Task Force and the Bureau of Indian Affairs. Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
St. Cloud was immediately turned over to the custody of the U.S. Marshals Service.
Lowell Man Charged with Illegal FirearmRead the Press Release
BOSTON - A Lowell man was arrested yesterday and charged in federal court in Boston with being a felon in possession of a firearm.
Pablo L. Rivera, 53, was charged with one count of being a felon in possession of a firearm.
According to the charging document, on Feb. 8, 2019, during a motor vehicle stop, law enforcement recovered a loaded P-38 Walther 9mm firearm and six rounds of ammunition from the vehicle Rivera was driving. Rivera is prohibited from possessing a firearm due to prior convictions punishable by more than one year in person.
The charging statute provides for a sentence of no greater than 10 years in prison, up to 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; Kelly Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police, made the announcement. Assistant U.S. Attorney Lucy Sun of Lelling’s Worcester Branch Office is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. PSN is part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Lowell Man Charged with Illegal FirearmRead the Press Release
BOSTON - A Lowell man was arrested yesterday and charged in federal court in Boston with being a felon in possession of a firearm.
Pablo L. Rivera, 53, was charged with one count of being a felon in possession of a firearm.
According to the charging document, on Feb. 8, 2019, during a motor vehicle stop, law enforcement recovered a loaded P-38 Walther 9mm firearm and six rounds of ammunition from the vehicle Rivera was driving. Rivera is prohibited from possessing a firearm due to prior convictions punishable by more than one year in person.
The charging statute provides for a sentence of no greater than 10 years in prison, up to 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; Kelly Brady, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police, made the announcement. Assistant U.S. Attorney Lucy Sun of Lelling’s Worcester Branch Office is prosecuting the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. PSN is part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Louisiana Teacher Pleads Guilty to Child EnticementRead the Press Release
BOSTON - A Louisiana teacher pleaded guilty today in federal court in Boston to child enticement related offenses.
Logan Procell, 25, pleaded guilty to one count of coercion and enticement of a minor and one count of transfer of obscene material to a minor. U.S. District Court Judge Denise J. Casper scheduled sentencing for June 3, 2019. Procell was indicted in October 2017 and has been in custody since.
Procell first contacted an 11-year-old Massachusetts girl via Snapchat after seeing her on a different online application that allows users to publish videos in real time. After obtaining her phone number, Procell began communicating with her by text. The child’s parent discovered approximately one month’s worth of their communications in September 2017. The exchange of more than 1600 messages contained sexually explicit images and messages sent by Procell to the child, including pictures of his penis, requests for her to send him pornographic images of herself, and discussions about meeting her to have sex. At the time of the offense, Procell was a chemistry teacher at a high school in Noble, La.
The charge of coercion and enticement of a minor carries a minimum sentence of 10 years and up to life in prison, at least five years and up to a lifetime of supervised release, and a fine of up to $250,000. The charge of transfer of obscene material to a minor provides for a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000. Sentences are imposed by a federal district judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office, made the announcement today. Valuable assistance was provided by the Louisiana State Police and the Waltham Police Department. Assistant U.S. Attorneys Anne Paruti and Mackenzie Queenin are prosecuting the case.
The case was brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Jamestown Man Pleads Guilty for His Role in Methamphetamine RingRead 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 Ernest Clayburn Cauley, Jr., 27, of Jamestown, NY, pleaded guilty before U.S. District Judge Lawrence J. Vilardo to conspiracy to possess with intent to distribute five grams or more of methamphetamine. The charge carries a mandatory minimum penalty of five years in prison, a maximum of 40 years, and a fine of $5,000,000.
Assistant U.S. Attorney Paul C. Parisi, who is handling the case, stated that between March 2017 and November 7, 2017, the defendant conspired with co-defendant Zakiel Fields, and others, to sell methamphetamine in the Jamestown, NY area. Cauley and Fields were the main suppliers of methamphetamine to a drug trafficking organization that was being investigated by the Federal Bureau of Investigation and the Jamestown Metro Drug Task Force (JMDTF).
On April 26, 2017, Cauley met with an individual working with the task force, and exchanged methamphetamine for $120.00 in cash. The defendants were subsequently arrested on November 6, 2017, following a drug transaction during which Cauley and Field received a quantity of methamphetamine. Cauley and Fields, driving in separate cars, were pulled over by police and arrested. Methamphetamine was found in the car in which Fields was riding.
Co-defendant Zakiel Leonard Fields, Jr. was previously convicted and is awaiting sentencing.
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert, and the Jamestown Police Department, under the direction of Chief Harry Snellings.
Cauley is scheduled to be sentenced on July 2, 2019, at 9:30 am before Judge Vilardo.
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James Fitzgerald “Boogie” Simonton Sentenced to 330 Months for Crack Cocaine, Firearms and Witness Intimidation OffensesRead the Press Release
GREENEVILLE, Tenn. - On February 20, 2019, James Fitzgerald Simonton, a/k/a “Boogie,” 51, of Kingsport, Tennessee, was sentenced by the Honorable J. Ronnie Greer, Senior U.S. District Judge, to serve 330 months in federal prison. There is no parole in the federal system.
Simonton was convicted by a jury, in March 2018, following a three-day trial, for conspiracy to distribute 280 grams or more of crack cocaine; possession of firearms in furtherance of a drug trafficking offense; three counts of being felon in possession of firearms; and, witness intimidation. Evidence presented at trial revealed that an investigation began following the May 2016 appearance of two young males with gunshot wounds at Indian Path Hospital, one of whom was Simonton’s son. Detectives developed Simonton as a suspect in the shooting of the two. When officers went to his residence, they found a Glock pistol with extended magazine, which was traced by the Alcohol, Tobacco, Firearms, and Explosives (ATF) to Simonton’s neighbor. Through the trace, detectives learned the firearm had been purchased at Academy Sports in Johnson City. Academy provided paperwork for the transaction and surveillance video from its store, which reflected Simonton had been present along with a codefendant during the purchase of the firearm. Additional surveillance video showed that Simonton was present when another firearm was purchased by his then girlfriend. As the investigation progressed, two codefendants, one of whom was another son of Simonton, were arrested for possession of crack cocaine, leading to information about Simonton’s involvement in trafficking of crack cocaine from a source in Georgia into Sullivan County, Tennessee. Ultimately, the investigation successfully uncovered the firearm used in the shooting of the two young males, an AK63, 7.62 caliber rifle.
After his arrest, and while in federal custody, Simonton threatened a cooperating witness against him in an effort to influence that witness’ testimony. The jury found him guilty of intimidation of that witness.
Law enforcement agencies participating in this joint investigation were the Kingsport Police Department, Sullivan County Sheriff’s Office, and ATF. Assistant U.S. Attorney J. Gregory Bowman represented the United States in court proceedings.
This case was brought as part of Project Safe Neighborhoods (PSN), a comprehensive national strategy that creates local partnerships with law enforcement agencies to effectively enforce existing gun laws. It provides more options to prosecutors, allowing them to utilize local, state, and federal laws to ensure that criminals who commit gun crime face tough sentences. PSN gives each federal district the flexibility it needs to focus on individual challenges that a specific community faces.
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Hudson County Man Sentenced to 10 Years in Prison for Role in Conspiracy to Distribute CocaineRead the Press Release
NEWARK, N.J. – A Jersey City, New Jersey, man was sentenced today to 120 months in prison for his role in a cocaine distribution conspiracy operating in Jersey City, U.S. Attorney Craig Carpenito announced.
Rayfael Roman, 34, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of conspiracy to distribute and to possess with intent to distribute 500 grams or more of cocaine. Judge McNulty imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Roman admitted that from September 2017 through Feb. 7, 2018, he conspired with others to distribute cocaine. Roman also admitted that in February 2018 he spoke on the telephone with a conspirator and agreed to sell that person one kilogram of cocaine for $29,500. Law enforcement officials intercepted these conversations using a court order to intercept wire and electronic communications on Roman’s cellular phone.
Before Roman and the conspirator could complete the cocaine sale, law enforcement officers obtained and executed a search warrant for Roman’s apartment in Jersey City. They found approximately 2.5 kilograms of cocaine, approximately $30,000 in cash, and various other materials commonly associated with drug distribution, such as an electronic money-counting machine, a digital scale, and drug-packaging materials.
In addition to the prison term, Judge McNulty sentenced Roman to five years of supervised release.
U.S. Attorney Carpenito credited the Hudson County Prosecutor’s Office under the leadership of Prosecutor Esther Suarez, and special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jonathan W. Romankow of the U.S. Attorney’s Office Violent Crimes Unit in Newark.
Home Health Nurse Sentenced to Federal Prison for Tampering with Patients' MedicationRead the Press Release
Kristie Mollohan Stole and Diluted Seizure Medication From Disabled Patients
GRAND RAPIDS, MICHIGAN —Kristie Ann Mollohan, 42, formerly of Kalamazoo, Michigan and currently of Cosby, Tennessee, was sentenced to 82 months in prison for drug tampering, U.S. Attorney Andrew Birge announced today. In addition to the prison term, U.S. District Judge Gordon J. Quist imposed a 2-year term of supervised release that will commence once Mollohan is released from federal prison.
Mollohan pled guilty on May 10, 2018, to two counts of drug tampering, involving liquid diazepam (Valium), a Schedule IV controlled substance. Mollohan, who was a licensed practical nurse working for a home health company, admitted to stealing Valium from three patients in two homes in August of 2016. All three patients relied on Valium to suppress life-threatening seizure activity, were completely disabled, and required 24-hour care by their families or other caregivers at the time of the thefts. Mollohan replaced the Valium that she stole with water or saline solution, leaving the patients’ medication 90-99% diluted. Mollohan acknowledged that her conduct resulted in one of the patients having a life-threatening seizure.
In imposing sentence, Judge Quist called Mollohan’s conduct "reprehensible." He emphasized that patients must rely on medical professionals to be honest and act professionally, to administer patients’ drugs and not steal them. Judge Quist remanded Mollohan to begin serving her federal sentence at the end of the sentencing hearing.
In its sentencing memorandum, the U.S. Attorney’s Office noted that federal drug tampering involves the "reckless disregard for the risk that another person will be placed in danger of death or bodily injury and under circumstances manifesting extreme indifference to such risk." The U.S. Attorney’s Office emphasized that Mollohan was previously investigated for stealing a patient’s medication and argued that Mollohan "used that experience to devise a plan to steal medication in a manner that would be both harder to uncover and more dangerous to her patients."
U.S. Attorney Birge stated: "Licensed health care professionals who not only steal drugs but then render those drugs dangerous or ineffective are committing a heinous offense. Patients may not know – and in this case may not be able to express -- that something is wrong with their medication until it is too late and they suffer a serious consequence. My office will continue to work with the Food and Drug Administration as well as state and local investigators to punish and deter professionals who engage in such deceitful and dangerous conduct."
"Patients deserve to have confidence that they are receiving the proper treatment from those entrusted with providing their medical care," said Special Agent in Charge William P. Conway, FDA Office of Criminal Investigations’ Chicago Field Office. "However, we must hold medical personnel accountable when they take advantage of their unique position and tamper with drugs needed by their patients, especially when such tampering causes unnecessary pain and suffering for those who are unable to care for themselves."
This matter was investigated by the Food and Drug Administration, Office of Criminal Investigations, the U.S. Department of Health and Human Services, Office of Inspector General, the Michigan State Police, and the Allegan Police Department. The Barry and Allegan County Prosecutors’ Offices also cooperated with the investigation. Assistant U.S. Attorney Raymond E. Beckering III prosecuted the case.
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Fredericksburg Woman Sentenced to Federal Prison on Bank Fraud ChargeRead the Press Release
In San Antonio today, a federal judge sentenced 52-year-old Stacey A. Sanders, the former office manager of Memorial Presbyterian Church, located in Fredericksburg, TX, to 27 months imprisonment in connection with a scheme to write and sign unauthorized checks on the church’s bank accounts, announced U.S. Attorney John F. Bash and FBI Special Agent in Charge Christopher Combs.
In addition to the prison term, U.S. District Judge Xavier Rodriguez ordered Sanders to pay a total of $420,306.69 in restitution, $20,219.43 to Security State Bank and $400,087.26 to Memorial Presbyterian Church. Judge Rodriguez also ordered that Sanders be placed on supervised release for a period of five years after completing her prison term. Judge Rodriguez allowed Sanders to remain on bond pending notification from the U.S. Bureau of Prisons regarding the date and location to report in order to begin serving her prison term, to be no later than May 31, 2019.
On March 22, 2018, Sanders pleaded guilty to one count of bank fraud. By pleading guilty, Sanders admitted that without authorization she moved large sums of money from the church’s trust account to its operating account on numerous occasions by writing forged checks on the trust account and depositing them in the operating account. In so doing, Defendant eventually depleted the trust account as its balance went from $194,439.23 in 2009 to $178 by December 2016. Defendant then wrote herself numerous, unauthorized, forged checks from the operating account from the latter part of 2009 to December 2016. To conceal her activity, Defendant wrote various false statements on the checks’ memo line, such as “social security offset,” “additional payroll,” or “cleaning supplies.”
“It’s hard to believe that this has to be said, but stealing from houses of worship is really, really wrong. When you defraud a bank to do it, it can become a federal case,” stated U.S. Attorney Bash.
Special Agents of the FBI investigated this case, which was prosecuted by Assistant U.S. Attorney William R. Harris on behalf of the Government.
Former school IT manager sentenced to 11 years in prison for having child pornographyRead the Press Release
A Massillon man who worked as a school information technology manager was sentenced to 11 years in prison for possessing child pornography.
Andrew A. Shonk, 37, previously pleaded guilty to receiving and possessing visual depictions of minors engaged in sexually explicit conduct.
Shonk knowingly received numerous computer files which contained visual depictions of real minors engaged in sexually explicit conduct. This took place between 2013 and 2018. Shonk also possessed two USB storage devices that contained child pornography, according to court documents.
Shonk worked as an IT manager at Rootstown and then Hudson schools during the time of his crimes, according to court documents.
This case is being prosecuted by Assistant U.S. Attorney Carol M. Skutnik following an investigation by the Federal Bureau of Investigation Child Exploitation Task Force, the Canton Police Department and the Jackson Township Police Department.
Former Utica Man Sentenced on Marijuana and Money Laundering ConvictionsRead the Press Release
SYRACUSE, NEW YORK – Gary Velletto, age 38, formerly of Utica, New York, and Las Vegas, Nevada, was sentenced today to 57 months in prison for his roles in marijuana and money laundering conspiracies.
The announcement was made by United States Attorney Grant C. Jaquith and James N. Hendricks, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
Between January 2011 and August 2015, in the Northern District of New York, the District of Nevada, and elsewhere, Velletto conspired with Las Vegas resident Anthony Wills and others to possess with intent to distribute and distribute 100 kilograms or more of marijuana. As part of the conspiracy, Velletto, together with Wills and other co-conspirators, frequently obtained distribution-sized amounts of marijuana from different sources of supply in California and shipped or caused to be shipped the marijuana to various parts of the United States including the Utica area. Velletto admitted that as a result of his participation in the marijuana conspiracy, he was personally responsible for more than 100 but less than 400 kilograms of marijuana.
To pay for the marijuana that was shipped to Velletto in Utica, Velletto deposited or caused others to deposit money into various bank accounts, some held in the names of third-party nominees, in and around Utica. The cash was then withdrawn immediately in Las Vegas by Wills, or by others at his direction, and the money was used in part to purchase more marijuana from sources of supply in Northern California to be shipped back to Utica for or on behalf of Velletto.
Velletto also mailed, or caused others to mail on his behalf, cash or blank money orders to Las Vegas as payment for the marijuana, which cash and blank money orders were deposited by Wills or by others at Wills’s direction into bank accounts, often held by third-party nominees, and which money was used to purchase more marijuana.
Velletto admitted that as a result of his participation in the money laundering conspiracy, he was responsible for $1,274,310.00, in that he laundered this amount or the laundering of this amount by others was reasonably foreseeable to him.
Velletto, who has been incarcerated since his arrest in January 2016, entered his guilty pleas on September 13, 2016. After he finishes his term of imprisonment, Velletto will be placed on supervised release for 5 years. Chief United States District Judge Glenn T. Suddaby also ordered that Velletto pay a $1,274,310 money judgment.
This case was investigated by the FBI, the Oneida County District Attorney’s Office, the New York State Police, the Internal Revenue Service (IRS), the Bureau of Alcohol, Tobacco, and Firearms & Explosives (ATF), and was prosecuted by Assistant U.S. Attorney Carl Eurenius and Oneida County Assistant District Attorney Grant Garramone, who also serves as a Special Assistant U.S. Attorney.
Former Executive Director of Mississippi River Corridor-Tennessee Inc. Facing Federal Fraud ChargesRead the Press Release
NASHVILLE, Tenn. – February 20, 2019 – An indictment was unsealed today, charging Diana Threadgill, 66, of Memphis, Tennessee, with three counts of mail fraud, announced U.S. Attorney Don Cochran for the Middle District of Tennessee. Threadgill was arrested by federal agents this morning and will appear before a U.S. Magistrate Judge in Memphis later today.
According to the indictment, Threadgill was the Executive Director of Mississippi River Corridor – Tennessee Inc. (MRCT), a Memphis-based non-profit organization whose mission was to “identify, conserve and enhance the region’s natural, cultural and recreational resources to improve the quality of life and prosperity in West Tennessee.”
The indictment alleges that beginning in October 2011 and continuing until March 29, 2017, Threadgill obtained grants on behalf of MRCT from federally funded government agencies, such as the Tennessee Department of Transportation (TDOT), the Tennessee Department of Environment & Conservation (TDEC), and the Tennessee Valley Authority (TVA). In 2013, Threadgill applied for and received one such grant from TDOT in the amount of $1,512,000 for the purpose of building an interpretive visitor center at Reelfoot Lake. The Tennessee State Building Commission (SBC) provided an additional matching grant in the amount of $372,000. Threadgill submitted reimbursement requests for expenses, which had previously been sought or reimbursed and obtained more than $133,000 in additional reimbursement, which she used for her own personal benefit.
The indictment further alleges that Threadgill submitted fraudulent checks to TDOT, seeking and receiving reimbursements by representing that the checks had been cashed by vendors when, in reality, they had never been provided to the vendors.
Finally, the indictment alleges that Threadgill sought funding from TVA in March 2017, knowing that the MRCT Board of Directors had previously voted to dissolve the organization. She obtained $41,749.94 in addition to the duplicated funds that she had previously received from the federally funded agencies. The total loss amount in federal funds was $174,921.84.
If convicted, Threadgill faces up to 20 years in prison and a $250,000 fine on each count.
This case was investigated by the U.S. Department of Transportation, Office of Inspector General; the TVA, Office of Inspector General; and the Tennessee Comptroller’s Office. Assistant U.S. Attorney Sara Beth Myers is prosecuting the case.
An indictment is merely an accusation. The defendant is presumed innocent until proven guilty in a court of law.
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Former Bank Employee Pleads Guilty to EmbezzlementRead the Press Release
BOSTON – A former bank employee pleaded guilty today in federal court in Worcester in connection with embezzling money from client accounts held by the bank by which she was employed.
Jessica Vargas, 35, of Athol, pleaded guilty to one count of bank fraud and two counts of bank embezzlement. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for May 15, 2019. Vargas was charged by criminal complaint and arrested in March 2018.
Vargas was an employee of a federally-insured bank when she embezzled approximately $108,000 by making unauthorized cash withdrawals from customer accounts. Bank documentation showed that Vargas made unauthorized withdrawals from the accounts of various customers, including more than $53,000 from the account of an 84-year-old bank customer and almost $13,000 from the account of an 88-year-old customer.
For each count, Vargas faces a sentence of no greater than 30 years in prison, five years of supervised release, and a fine of $1 million. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistant U.S. Attorneys Bill Abely and Kristen Noto of Lelling’s Criminal Division are prosecuting the case.
Floridian Charged with Removing Mail from a U.S. Mail Authorized Depository in McMurray, PARead the Press Release
PITTSBURGH - A resident of Pembroke Pines, Florida, has been indicted by a federal grand jury in Pittsburgh on a charge of theft of mail, United States Attorney Scott W. Brady announced today.
The one-count Indictment, returned on Feb. 19, named Cassio Orville Donald Slowden, 27, as the sole defendant.
According to the Indictment, on or about February 11, 2019, Slowden abstracted and removed mail from a United States mail authorized depository in McMurray, PA.
For Slowden’s offense, the law provides for a maximum total sentence of not more than five years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney David Lew is prosecuting this case on behalf of the government.
The U.S. Postal Inspection Service and U.S. Department of Homeland Security, Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Florida Man Sentenced to One Year in Prison for Insider Trading Scheme Based on Confidential Information Misappropriated from an Investment BankRead the Press Release
Geoffrey S. Berman, United States Attorney for the Southern District of New York, announced that ROBERTO RODRIGUEZ was sentenced today one year and one day in prison for his involvement in an insider trading scheme based on material, nonpublic information misappropriated from an investment bank by Daniel Rivas, a former employee at the bank. RODRIGUEZ pled guilty on September 7, 2018, to one count of conspiracy to commit securities fraud and fraud in connection with a tender offer before Magistrate Judge Henry B. Pitman. His plea was thereafter accepted by U.S. District Judge Alison J. Nathan, who also imposed today’s sentence.
U.S. Attorney Geoffrey Berman said: “Roberto Rodriguez reaped millions of dollars trading on confidential corporate information stolen by a longtime friend at an investment bank. Our Office is committed to identifying and prosecuting insider trading networks that undermine our nation’s securities markets.”
According to the Indictment, other filings in Manhattan federal court, and statements made in court filings and proceedings:
In August 2017, RODRIGUEZ, Michael Siva, Rodolfo Sablon, Jhonatan Zoquier, and Jeffrey Rogiers were arrested and charged in a 54-count Indictment for their involvement in three overlapping insider trading schemes, generating more than $5 million in illicit profits, all stemming from information misappropriated by Rivas. Prior to the unsealing of the Indictment last year, Rivas and an additional participant, James Moodhe, pled guilty and both have been cooperating with the Government in this investigation. Since the unsealing of the Indictment, all of the charged defendants have pled guilty.
The Investment Bank and Rivas
From August 2013 through May 2017, Rivas was employed as a technology consultant in the Research and Capital Markets Technology Group of an investment bank (the “Investment Bank”). In this role, Rivas had access to an internal, proprietary system maintained by the Investment Bank (the “Deal Tracking System”) containing material, nonpublic information (“Inside Information”) about potential and unannounced merger and acquisition transactions, including tender offers, involving the Investment Bank. The Investment Bank’s written policies prohibited the unauthorized disclosure of confidential information, which included Inside Information. Rivas had a duty, among other obligations, to maintain the confidentiality of all of the Investment Bank’s confidential information, including the Inside Information.
Overview of Insider Trading Schemes
From August 2014 through April 2017, Rivas violated the duties of confidentiality he owed to the Investment Bank by serially misappropriating material, nonpublic information from the Investment Bank’s Deal Tracking System and passing that information along to friends so that they could utilize it to make profitable trades. On more than 50 occasions between August 2014 and April 2017, Rivas provided Inside Information about contemplated but unannounced merger and acquisition transactions and tender offer transactions involving clients and prospective clients of the Investment Bank to friends who used that information to purchase and sell securities. In total, the insider trading based on Inside Information misappropriated by Rivas resulted in illicit profits of more than $5 million through trading in more than two dozen securities. The Inside Information was passed through three tipping chains.
The Rodriguez Tipping Chain
RODRIGUEZ was a member of the second of three tipping chains outlined in the Indictment. In this tipping chain, Rivas passed inside information to RODRIGUEZ, a childhood friend of Rivas with whom Rodriguez had maintained a close relationship as adults, and Sablon.
Since 2014, RODRIGUEZ lived and worked in Miami, Florida, with Sablon, with whom he was also friends. In 2015, RODRIGUEZ introduced Rivas to Sablon. Rivas and Sablon then communicated with each other directly and developed an independent relationship.
In the fall of 2015, Rivas disclosed to RODRIGUEZ that Rivas had access to Inside Information by virtue of his position as a corporate insider at the Investment Bank. At RODRIGUEZ’s request, Rivas also agreed to share Inside Information with Sablon. While Rivas had originally agreed to divulge Inside Information to RODRIGUEZ because of their history of friendship, Rivas also learned that RODRIGUEZ and Sablon intended to start an investment fund with the proceeds of the insider trading scheme. Rivas understood that in exchange for the Inside Information Rivas was providing to RODRIGUEZ and Sablon, Rivas would be invited to join the investment fund as a partner once it was successfully launched.
At first, Rivas communicated with RODRIGUEZ and Sablon primarily via phone and text message. As the scheme progressed, however, RODRIGUEZ and Sablon increased their efforts to hide their illegal activity. On several occasions, Rivas met personally with RODRIGUEZ and/or Sablon in Miami in order to provide them with Inside Information. Rivas also provided RODRIGUEZ and Sablon with Inside Information using an encrypted mobile messaging application, which allows users to set a timer to messages to irretrievably “self-destruct.”
In order to maximize the illicit profits that could be earned using Rivas’s Inside Information, RODRIGUEZ and Sablon, in consultation with Rivas, initiated an aggressive strategy of purchasing short-term, out-of-the money call options. In total, from 2015 through April 2017, RODRIGUEZ and Sablon earned more than $2 million in illicit profits through insider trading in more than two dozen securities based on Inside Information divulged by Rivas.
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In addition to the prison term, RODRIGUEZ, 34, of Miami, Florida, was sentenced to two years of supervised release.
Mr. Berman praised the investigative work of the Federal Bureau of Investigation, and thanked the Securities and Exchange Commission for their assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorneys Andrea M. Griswold and Samson Enzer are in charge of the prosecution.